GUARANTY
                                   (Unlimited)

    In consideration of State Street Bank and Trust Company (the "Bank") making
extensions of credit or extending other financial or banking accommodations to
Hagler Bailly Consulting, Inc. (the "Obligor"), the undersigned (the
"Guarantor") hereby guarantees full and punctual payment, performance and
fulfillment to the Bank of all liabilities, obligations and undertakings of the
Obligor to the Bank, whether direct or indirect, absolute or contingent, due or
to become due, now existing or hereafter arising or acquired, and whether
consisting of obligations to pay money or to perform the Obligor's obligations
to the Bank under all present or future agreements of the Obligor in favor of
the Bank (the "Obligations"). *

    This agreement shall operate as a continuing, unconditional and absolute
guaranty (this "Guaranty") of the due and punctual payment of the Obligations,
and not of their collectability only. If the Obligor defaults in the payment or
performance of the Obligations, the obligations of the Guarantor under this
Guaranty shall become immediately due and payable to the Bank, without demand or
notice of any kind, all of which are expressly waived. The Guarantor waives any
right that the Guarantor may have to require the Bank first to proceed against
the Obligor or against any other guarantor or any other person. The Guarantor
also waives any right that the Guarantor may have to require the Bank to realize
on any security held by the Bank before proceeding against the Guarantor for the
enforcement of this Guaranty. The Guarantor further waives any right that the
Guarantor may have against the Obligor arising as a result of payment or other
performance by the Guarantor under this Guaranty, whether arising by way of any
right of subrogation, contribution, reimbursement or otherwise.


The liability of the Guarantor under this Guaranty shall be unlimited.

    The Guarantor agrees, as the principal obligor and not as a guarantor only,
to pay to the Bank, on demand, all costs and expenses paid or incurred by the
Bank (including court costs and attorneys' fees) in connection with the
Obligations, this Guaranty and the enforcement thereof

    The Guarantor waives presentment, demand, protest, notice of acceptance,
notice of the Obligations incurred and all other notices of any kind and all
defenses which may be available to the Guarantor. The Guarantor agrees to the
provisions of any instrument, security or other writing evidencing or securing
any of the Obligations and agrees that the obligations of the Guarantor
hereunder shall not be released or discharged, in whole or in part, by (i) any
renewals, extensions or postponements of the time of payment of any of the
Obligations or any other forbearance or indulgence with respect thereto; (ii)
any rescissions, waivers, amendments or modifications of any of the terms of any
agreement evidencing, securing or otherwise executed in connection with the
Obligations; or (iii) the substitution or release of any security for the
Obligations or of any other person primarily or secondarily liable on any of the
Obligations, whether or not notice thereof shall be given to the Guarantor. The
enforcement of this Guaranty shall not be affected by the delay, neglect or
failure of the Bank to take any action with respect to any security, right,
obligation, endorsement, guaranty or other means of collecting the Obligations
which it may at any time hold, including perfection or enforcement thereof, or
by any change with respect to the Obligor in the form or manner of doing
business. The Guarantor agrees that the Guarantor shall be and remain bound upon
this Guaranty irrespective of any action, delay or omission by the Bank in
dealing with the Obligor, any of the Obligations, any collateral therefor, or
any person at any time liable with respect to the Obligations.

<PAGE>

    If for any reason the Obligor has no legal existence or is under no legal
obligation to discharge any of the Obligations, or if any of the Obligations
shall have become irrecoverable from the Obligor by operation of law or for any
other reason, or if any security or other guaranty shall be found invalid, the
Guarantor shall nonetheless be and remain bound upon this Guaranty.

    Any deposits or other sums at any time credited by or due from the Bank to
the Guarantor, and any securities or other property of the Guarantor at any time
held by the Bank may at all times be held and treated as security for all
obligations of the Guarantor under this Guaranty. Regardless of the adequacy of
the security, the Bank may apply or set off such deposits or other sums against
such obligations at any time, without notice to the Guarantor.

*Without limiting the generality of the foregoing, the term "Obligations" shall
be deemed to include the joint and several obligations of the Obligor and Hagler
Bailly Services, Inc. to the Bank.

        This Guaranty shall remain in full force and effect until receipt by the
Bank of written notice of the revocation of this Guaranty at its head office at:
295 Franklin Street, Boston, Massachusetts 02110, and such notice is
acknowledged by an officer of the Bank. Such notice shall not affect any
Obligations incurred prior to receipt of such notice or Obligations incurred
pursuant to any contract or commitment in existence prior to receipt of such
notice, and all checks, drafts, notes, instruments and writings made by or for
the account of the Obligor and drawn on the Bank or any of its agents purporting
to be dated on or before the date of receipt of such notice, although presented
to and paid or accepted by the Bank after that date, shall form part of the
Obligations. This Guaranty shall continue to be effective or be reinstated,
notwithstanding any termination, if at any time any payment made or value
received with respect to any of the Obligations is rescinded or must otherwise
be returned by the Bank due to the insolvency, bankruptcy or reorganization of
the Obligor, or otherwise, all as though such payment had not been made or value
received. Rider A attached hereto is incorporated herein and is a part hereof.

    This Guaranty shall be binding upon and inure to the benefit of the
Guarantor and the Bank and their respective successors and assigns. No provision
of this Guaranty may be amended or waived except in writing signed by the Bank.
The invalidity or unenforceability of any one or more phrases, clauses or
sections of this Guaranty shall not affect the validity or enforceability of the
remaining portions of it.

                                       2
<PAGE>

    This Guaranty is intended to take effect as a sealed instrument and shall be
construed in accordance with and governed by the laws (other than the conflict
of laws rules) of The Commonwealth of Massachusetts.

Dated: September 30 , l997

Witness:                                 Guarantor:
                                         HB CAPITAL, INC .
                                         /s/  Daniel M. Rouse
                                         ------------------------------------
                                         CFO, Treasurer and Secretary

                                         Address. 1530 Wilson Blvd., Suite 900
                                         Arlington, VA 22209- 2406

           Note: A separate guaranty must be signed by each guarantor.

                                       3
<PAGE>



             Rider A to Guaranty ("Guaranty") from Hagler Bailly, Inc.
                  ("Guarantor") to State Street Bank and Trust Company ("Bank")

(a)     The provisions of this Rider A are incorporated in and made a part of
        the above referenced Guaranty for all purposes thereof.

(b)     Upon the written request of the Guarantor to the Bank, this Guaranty
        shall terminate upon satisfaction of each of the following conditions:

        (a)    The Credit Agreement dated September 30, 1997 (as amended from
               time to time, the "Credit Agreement") among Hagler Bailly
               Consulting, Inc., Hagler Bailly Services, Inc. and the Bank shall
               have been amended in a manner satisfactory to the Bank so as to:

               (i)     eliminate the right of the Obligor to make loans and
                       advances to the Guarantor ("Intercompany Loans"); and

               (ii)    eliminate the Guarantor from financial calculations which
                       are made on an "Adjusted Consolidated Basis" (as defined
                       in the Credit Agreement);

 (b)    No Intercompany Loans shall be outstanding;

(c)     No Event of Default (as defined in the Credit Agreement) shall have
        occurred and be continuing; and

(d)     No amounts shall then be owed by the Guarantor to the Bank pursuant to
        this Guaranty.


                              HB CAPTIAL,  INC.

                              By:  /s/  Daniel M. Rouse
                                     --------------------------------------
                                   CFO, Treasurer and Secretary (Title)

                              STATE STREET BANK AND TRUST AND COMPANY

                              By:  /s/  Linda Moulton
                                     -------------------------------------
                                      Vice President                (Title)

                                       4

<PAGE>


                                    GUARANTY
                                   (Unlimited)

    In consideration of State Street Bank and Trust Company (the "Bank") making
extensions of credit or extending other financial or banking accommodations to
Hagler Bailly Services, Inc. (the "Obligor"), the undersigned (the "Guarantor")
hereby guarantees full and punctual payment, performance and fulfillment to the
Bank of all liabilities, obligations and undertakings of the Obligor to the
Bank, whether direct or indirect, absolute or contingent, due or to become due,
now existing or hereafter arising or acquired, and whether consisting of
obligations to pay money or to perform the Obligor's obligations to the Bank
under all present or future agreements of the Obligor in favor of the Bank (the
"Obligations"). *

    This agreement shall operate as a continuing, unconditional and absolute
guaranty (this "Guaranty") of the due and punctual payment of the Obligations,
and not of their collectability only. If the Obligor defaults in the payment or
performance of the Obligations, the obligations of the Guarantor under this
Guaranty shall become immediately due and payable to the Bank, without demand or
notice of any kind, all of which are expressly waived. The Guarantor waives any
right that the Guarantor may have to require the Bank first to proceed against
the Obligor or against any other guarantor or any other person. The Guarantor
also waives any right that the Guarantor may have to require the Bank to realize
on any security held by the Bank before proceeding against the Guarantor for the
enforcement of this Guaranty. The Guarantor further waives any right that the
Guarantor may have against the Obligor arising as a result of payment or other
performance by the Guarantor under this Guaranty, whether arising by way of any
right of subrogation, contribution, reimbursement or otherwise.

The liability of the Guarantor under this Guaranty shall be unlimited.

    The Guarantor agrees, as the principal obligor and not as a guarantor only,
to pay to the Bank, on demand, all costs and expenses paid or incurred by the
Bank (including court costs and attorneys' fees) in connection with the
Obligations, this Guaranty and the enforcement thereof

    The Guarantor waives presentment, demand, protest, notice of acceptance,
notice of the Obligations incurred and all other notices of any kind and all
defenses which may be available to the Guarantor. The Guarantor agrees to the
provisions of any instrument, security or other writing evidencing or securing
any of the Obligations and agrees that the obligations of the Guarantor
hereunder shall not be released or discharged, in whole or in part, by (i) any
renewals, extensions or postponements of the time of payment of any of the
Obligations or any other forbearance or indulgence with respect thereto; (ii)
any rescissions, waivers, amendments or modifications of any of the terms of any
agreement evidencing, securing or otherwise executed in connection with the
Obligations; or (iii) the substitution or release of any security for the
Obligations or of any other person primarily or secondarily liable on any of the
Obligations, whether or not notice thereof shall be given to the Guarantor. The
enforcement of this Guaranty shall not be affected by the delay, neglect or
failure of the Bank to take any action with respect to any security, right,
obligation, endorsement, guaranty or other means of collecting the Obligations
which it may at any time hold, including perfection or enforcement thereof, or
by any change with respect to the Obligor in the form or manner of doing
business. The Guarantor agrees that the Guarantor shall be and remain bound upon
this Guaranty irrespective of any action, delay or omission by the Bank in
dealing with the Obligor, any of the Obligations, any collateral therefor, or
any person at any time liable with respect to the Obligations.


<PAGE>


    If for any reason the Obligor has no legal existence or is under no legal
obligation to discharge any of the Obligations, or if any of the Obligations
shall have become irrecoverable from the Obligor by operation of law or for any
other reason, or if any security or other guaranty shall be found invalid, the
Guarantor shall nonetheless be and remain bound upon this Guaranty.

    Any deposits or other sums at any time credited by or due from the Bank to
the Guarantor, and any securities or other property of the Guarantor at any time
held by the Bank may at all times be held and treated as security for all
obligations of the Guarantor under this Guaranty. Regardless of the adequacy of
the security, the Bank may apply or set off such deposits or other sums against
such obligations at any time, without notice to the Guarantor.

*Without limiting the generality of the foregoing, the term "Obligations" shall
be deemed to include the joint and several obligations of the Obligor and Hagler
Bailly Services, Inc. to the Bank.

        This Guaranty shall remain in full force and effect until receipt by the
Bank of written notice of the revocation of this Guaranty at its head office at:
295 Franklin Street, Boston, Massachusetts 02110, and such notice is
acknowledged by an officer of the Bank. Such notice shall not affect any
Obligations incurred prior to receipt of such notice or Obligations incurred
pursuant to any contract or commitment in existence prior to receipt of such
notice, and all checks, drafts, notes, instruments and writings made by or for
the account of the Obligor and drawn on the Bank or any of its agents purporting
to be dated on or before the date of receipt of such notice, although presented
to and paid or accepted by the Bank after that date, shall form part of the
Obligations. This Guaranty shall continue to be effective or be reinstated,
notwithstanding any termination, if at any time any payment made or value
received with respect to any of the Obligations is rescinded or must otherwise
be returned by the Bank due to the insolvency, bankruptcy or reorganization of
the Obligor, or otherwise, all as though such payment had not been made or value
received. Rider A attached hereto is incorporated herein and is a part hereof.

    This Guaranty shall be binding upon and inure to the benefit of the
Guarantor and the Bank and their respective successors and assigns. No provision
of this Guaranty may be amended or waived except in writing signed by the Bank.
The invalidity or unenforceability of any one or more phrases, clauses or
sections of this Guaranty shall not affect the validity or enforceability of the
remaining portions of it.

                                       2
<PAGE>

    This Guaranty is intended to take effect as a sealed instrument and shall be
construed in accordance with and governed by the laws (other than the conflict
of laws rules) of The Commonwealth of Massachusetts.

Dated: September 30 , l997

Witness:                                 Guarantor:
                                         HB CAPITAL, INC .
                                         /s/  Daniel M. Rouse
                                         ---------------------------------------
                                             CFO, Treasurer and Secretary

                                         Address. 1530 Wilson Blvd., Suite 900
                                         Arlington, VA 22209- 2406

           Note: A separate guaranty must be signed by each guarantor.

                                       3

<PAGE>


             Rider A to Guaranty ("Guaranty") from Hagler Bailly, Inc.
                 ("Guarantor") to State Street Bank and Trust Company ("Bank")

 (a)    The provisions of this Rider A are incorporated in and made a part of
        the above referenced Guaranty for all purposes thereof.

 (b)    Upon the written request of the Guarantor to the Bank, this Guaranty
        shall terminate upon satisfaction of each of the following conditions:

        (a)    The Credit Agreement dated September 30, 1997 (as amended from
               time to time, the "Credit Agreement") among Hagler Bailly
               Consulting, Inc., Hagler Bailly Services, Inc. and the Bank shall
               have been amended in a manner satisfactory to the Bank so as to:

               (i) eliminate the right of the Obligor to make loans and advances
to the Guarantor ("Intercompany Loans"); and

               (ii) eliminate the Guarantor from financial calculations which
are made on an "Adjusted Consolidated Basis" (as defined in the Credit
Agreement);

 (b)    No Intercompany Loans shall be outstanding;

(c)     No Event of Default (as defined in the Credit Agreement) shall have
        occurred and be continuing; and

 (d) No amounts shall then be owed by the Guarantor to the Bank pursuant to this
Guaranty.

                                     HB CAPITAL, INC.


                                     By:  /s/  Daniel M. Rouse
                                          --------------------------------------
                                          CFO, Treasurer and Secretary (Title)

                                     STATE STREET BANK AND TRUST AND
COMPANY

                                     By:  /s/  Linda Moulton
                                          --------------------------------------
                                          Vice President                (Title)

                                       4