Document:

WARRANT  AGREEMENT  (the  "Agreement"),  dated as of December 15, 1999,  between
Hvide Marine Incorporated,  a Delaware corporation (together with any successors
and  assigns,  the  "Company"),  and  STATE  STREET  BANK AND TRUST  COMPANY,  a
Massachusetts chartered trust company, as Warrant Agent (the "Warrant Agent").

WHEREAS,  the  Company  proposes  to  issue  and  sell  pursuant  to a  Purchase
Agreement,  dated as of December 15, 1999,  among the  Company,  the  Guarantors
named  therein  (the   "Guarantors")  and  the  Purchasers  named  therein  (the
"Purchasers"),  $95,000,000  in  aggregate  principal  amount at maturity of the
Company's 12 1/2% Senior Secured Notes due 2007, issued under an Indenture dated
as of the date hereof among the Company,  the  Guarantors  and STATE STREET BANK
AND TRUST COMPANY,  as Trustee (the  "Indenture"),  along with 536,193  Warrants
(each,  including any additional  Warrants as described  below, a "Warrant," and
collectively, the "Warrants") for the purchase of an aggregate of 536,193 shares
of the Company's Common Stock, par value $.01 per share (the "Common Stock," and
the shares of Common Stock issuable upon exercise of the Warrants, including any
additional warrants as described below, being referred to herein as the "Warrant
Shares");  and the Company has also  delivered on the date hereof an  additional
187,668  Warrant  to  purchase  187,668  Warrant  Shares  to the  Purchasers  as
compensation  for certain  advisory fees; and

WHEREAS,  the Company  desires the Warrant Agent to act on behalf of the Company
and the  Warrant  Agent is  willing  to act in  connection  with  the  issuance,
transfer, exchange and exercise of Warrants as provided herein; and

WHEREAS,  the holders of Warrants and Warrant  Shares shall,  from time to time,
have certain  rights and  obligations  with respect  thereto as set forth in the
Common Stock Registration Rights Agreement, dated as of December 15, 1999, among
the Company and the Purchasers;

NOW,  THEREFORE,  in consideration of the premises and mutual agreements herein,
the Company and the Warrant Agent hereby agree as follows:

SECTION 1. Appointment of Warrant Agent. The Company hereby appoints the Warrant
Agent  to act as agent  for the  Company  in  accordance  with the  instructions
hereinafter  set forth in this  Agreement,  and the Warrant Agent hereby accepts
such appointment.

SECTION 2. Warrant Certificates. The Warrants will initially be issued either in
global  form (the  "Global  Warrants"),  substantially  in the form of Exhibit A
hereto  (including  footnote  1 thereto)  or in  registered  form as  definitive
Warrant certificates (the "Definitive  Warrants"),  substantially in the form of
Exhibit A hereto  (excluding  footnote 1 thereto).  Such Global  Warrants  shall
represent  such of the  outstanding  Warrants as shall be specified  therein and
each shall provide that it shall  represent the aggregate  amount of outstanding
Warrants  from time to time endorsed  thereon and that the  aggregate  amount of
outstanding  Warrants  represented  thereby  may from time to time be reduced or
increased,  as  appropriate.  Any endorsement of a Global Warrant to reflect the
amount  of any  increase  or  decrease  in the  amount of  outstanding  Warrants
represented  thereby  shall be made by the  Warrant  Agent  and  Depository  (as
defined below) in accordance with instructions given by the holder thereof.  The
Depository  Trust Company (the  "Depository")  shall act as the Depository  with
respect to the Global  Warrants  until a  successor  shall be  appointed  by the
Company.  Upon written request, a Warrant holder may receive from the Depository
and Warrant Agent Definitive Warrants as set forth in Section 6 below.

SECTION  3.   Execution   of  Warrant   Certificates.   Certificates   ("Warrant
Certificates")  evidencing the Global Warrants or the Definitive  Warrants to be
delivered pursuant to this Agreement shall be signed on behalf of the Company by
its  Chairman of the Board or its  President,  Chief  Executive  Officer,  Chief
Operating  Officer,  Chief  Financial  Officer  or a Vice  President  and by its
Secretary  or an  Assistant  Secretary.  Each such  signature  upon the  Warrant
Certificates  may be in the form of a facsimile  signature of the present or any
future  Chairman  of  the  Board,  President,  Chief  Executive  Officer,  Chief
Operating  Officer,  Chief Financial  Officer,  a Vice  President,  Secretary or
Assistant Secretary and may be imprinted or otherwise  reproduced on the Warrant
Certificates  and for that  purpose the Company may adopt and use the  facsimile
signature  of any  person  who shall  have been  Chairman  of the  Board,  Chief
Executive Officer,  President, Chief Financial Officer, Chief Operating Officer,
Vice President, Secretary or Assistant Secretary,  notwithstanding the fact that
at the time the Warrant  Certificates  shall be  countersigned  and delivered or
disposed  of such  person  shall have  ceased to hold such  office.  In case any
officer of the Company  who shall have  signed any of the  Warrant  Certificates
shall cease to be such officer before the Warrant  Certificates  so signed shall
have been  countersigned  by the Warrant  Agent,  or disposed of by the Company,
such Warrant  Certificates  nevertheless may be  countersigned  and delivered or
disposed  of as though  such  person  had not  ceased to be such  officer of the
Company;  and any Warrant  Certificate may be signed on behalf of the Company by
any person who, at the actual date of the execution of such Warrant Certificate,
shall be a proper  officer  of the  Company  to sign such  Warrant  Certificate,
although at the date of the execution of this Warrant  Agreement any such person
was  not  such  officer.  Warrant  Certificates  shall  be  dated  the  date  of
countersignature by the Warrant Agent.

SECTION 4. Registration and Countersignature. The Warrants shall be numbered and
shall be  registered  on the books of the Company  maintained  at the  principal
office of the Warrant Agent in the Borough of  Manhattan,  City of New York (the
"Warrant Register") as they are issued.  Warrant  Certificates shall be manually
countersigned by the Warrant Agent and shall not be valid for any purpose unless
so  countersigned.  The Warrant Agent shall,  upon written  instructions  of the
Chairman of the Board, the President,  Chief Executive Officer,  Chief Operating
Officer,  Chief  Financial  Officer,  a  Vice  President,  the  Secretary  or an
Assistant Secretary of the Company,  initially  countersign and deliver Warrants
entitling  the holders  thereof to purchase  not more than the number of Warrant
Shares  referred  to above in the first  recital  hereof  and  shall  thereafter
countersign and deliver  Warrants as otherwise  provided in this Agreement.  The
Company and the  Warrant  Agent may deem and treat the  registered  holders,(the
"Holders",  as listed on Schedule 1) of the Warrant Certificates as the absolute
owners  thereof  (notwithstanding  any notation of  ownership  or other  writing
thereon  made by anyone)  for all  purposes,  and  neither  the  Company nor the
Warrant Agent shall be affected by any notice to the contrary.

SECTION 5. Transfer and Exchange of Warrants.  The Warrant Agent shall from time
to time,  subject to the  limitations of Section 6, register the transfer of any
outstanding  Warrants  upon the records to be maintained by it for that purpose,
upon surrender  thereof duly endorsed or accompanied (if so required by it) by a
written instrument or instruments of transfer in form reasonably satisfactory to
the Warrant Agent,  duly executed by the registered Holder or Holders thereof or
by the duly  appointed  legal  representative  thereof  or by a duly  authorized
attorney.  Subject to the terms of this Agreement,  each Warrant Certificate may
be  exchanged  for another  certificate  or  certificates  entitling  the Holder
thereof to purchase a like aggregate number of Warrant Shares as the certificate
or  certificates  surrendered  then entitle each Holder to purchase.  Any Holder
desiring  to  exchange a Warrant  Certificate  or  Certificates  shall make such
request in writing  delivered to the Warrant Agent,  and shall  surrender,  duly
endorsed or  accompanied  (if so  required  by the  Warrant  Agent) by a written
instrument or instruments of transfer in form satisfactory to the Warrant Agent,
the Warrant Certificate or Certificates to be so exchanged. Upon registration of
transfer,  the Warrant Agent shall countersign and deliver by certified or first
class mail a new Warrant  Certificate or  Certificates  to the persons  entitled
thereto.  The Warrant  Certificates may be exchanged at the option of the Holder
thereof,  when surrendered at the office or agency of the Company maintained for
such purpose,  which initially will be the corporate trust office of the Warrant
Agent in New York, New York for another  Warrant  Certificate,  or other Warrant
Certificates of different  denominations,  of like tenor and representing in the
aggregate  the right to  purchase a like  number of Warrant  Shares.  No service
charge  shall be made for any  exchange or  registration  of transfer of Warrant
Certificates,  but the Company may require  payment of a sum sufficient to cover
any  stamp  or  other  tax or  other  governmental  charge  that is  imposed  in
connection with any such exchange or registration of transfer. The Warrant Agent
shall  have no  obligation  or duty  to  monitor,  determine  or  inquire  as to
compliance  with any  restrictions  on transfer  imposed under this Agreement or
under applicable law with respect to any transfer of any interest in any Warrant
(including any transfers between or among Depository  participants or beneficial
owners of interests  in any Global  Warrant)  other than to require  delivery of
such certificates and other  documentation or evidence as are expressly required
by, and to do so if and when  expressly  required by the terms of this Agreement
and to examine the same to determine substantial  compliance as to form with the
express requirements thereof.

SECTION 6. Registration of Transfers and Exchanges. (a) Transfer and Exchange of
Definitive Warrants. When Definitive Warrants are presented to the Warrant Agent
with a request:

         (i)  to register the transfer of the Definitive Warrants; or
         (ii) to  exchange  such  Definitive  Warrants  for an equal  number  of
Definitive Warrants of other authorized  denominations,  the Warrant Agent shall
register the  transfer or make the  exchange as  requested  if its  requirements
under this Agreement are met; provided,  however,  that the Definitive  Warrants
presented or surrendered for registration of transfer or exchange:

                  (x)  shall  be  duly  endorsed  or  accompanied  by a  written
         instruction of transfer in form reasonably  satisfactory to the Warrant
         Agent,  duly  executed  by  the  Holder  thereof  or by  such  Holder's
         attorney, duly authorized in writing; and

                  (y) in the case of Warrants (the  "Restricted  Warrants") that
         constitute  Restricted  Securities  (as such  term is  defined  in Rule
         144(a)(3) of the  Securities  Act of 1933, as amended (the  "Securities
         Act")),  such Warrants shall be accompanied,  in the sole discretion of
         the Company, by the following additional information and documents,  as
         applicable;  it being understood,  however, that the Warrant Agent need
         not determine whether any Warrants are Restricted  Warrants and, if so,
         which clause (A) through (C) below is applicable:

(A)  if such  Restricted  Warrant is being  delivered to the Warrant  Agent by a
     Holder for  registration in the name of such Holder,  without  transfer,  a
     certification from such holder to that effect (in substantially the form of
     Exhibit B hereto); or

(B)  if  such   Restricted   Warrant  is  being   transferred   to  a  qualified
     institutional  buyer (as defined in Rule 144A under the  Securities  Act, a
     "QIB") in accordance with Rule 144A under the Securities Act or pursuant to
     an  exemption  from  registration  in  accordance  with  Rule 144 under the
     Securities  Act or Regulation S under the  Securities Act or pursuant to an
     effective  registration statement under the Securities Act, a certification
     to that effect (in  substantially  the form of Exhibit B hereto) and,  with
     respect to transfers  pursuant to Rule 144 or  Regulation  S, an opinion of
     counsel  reasonably  acceptable to the Company and the Warrant Agent to the
     effect  that  such  transfer  does  not  require   registration  under  the
     Securities Act; or

(C)  if such  Restricted  Warrant is being  transferred  in  reliance on another
     exemption  from the  registration  requirements  of the  Securities  Act, a
     certification  to that  effect  (in  substantially  the form of  Exhibit  B
     hereto) and an opinion of counsel reasonably  acceptable to the Company and
     to the  Warrant  Agent to the effect  that such  transfer  does not require
     registration  under the Securities  Act. (b)  Restrictions on Transfer of a
     Definitive  Warrant  for a  Beneficial  Interest  in a  Global  Warrant.  A
     Definitive  Warrant may not be  exchanged  for a  beneficial  interest in a
     Global  Warrant  except upon  satisfaction  of the  requirements  set forth
     below.  Upon  receipt by the Warrant  Agent of a Definitive  Warrant,  duly
     endorsed or  accompanied by  appropriate  instruments of transfer,  in form
     satisfactory to the Warrant Agent, together with:

(A)  if such Definitive Warrant constitutes Restricted Warrants,  certification,
     substantially in the form of Exhibit B hereto, that such Definitive Warrant
     is being  transferred  to a QIB in  accordance  with  Rule  144A  under the
     Securities Act; and

(B)  written instructions  directing the Warrant Agent to make, or to direct the
     Depository  to make,  an  endorsement  on the Global  Warrant to reflect an
     increase in the aggregate amount of the Warrants  represented by the Global
     Warrant,  then the Warrant Agent shall cancel such  Definitive  Warrant and
     cause,  or direct the Depository to cause,  in accordance with the standing
     instructions and procedures existing between the Depository and the Warrant
     Agent, the number of Warrant Shares represented by the Global Warrant to be
     increased  accordingly,  or, if no Global Warrant is then outstanding,  the
     Company  shall issue and the Warrant  Agent shall  countersign a new Global
     Warrant in the appropriate amount.

(c)  Transfer  and  Exchange of Global  Warrants.  The  transfer and exchange of
     Global Warrants or beneficial  interests  therein shall be effected through
     the  Depository,   in  accordance   with  this  Agreement   (including  the
     restrictions  on  transfer  set forth  herein)  and the  procedures  of the
     Depository  therefor.

(d)  Transfer  of a  Beneficial  Interest in a Global  Warrant for a  Definitive
     Warrant.

         (i) Any person  having a  beneficial  interest in a Global  Warrant may
upon request exchange such beneficial  interest for a Definitive  Warrant.  Upon
receipt  by the  Warrant  Agent of  written  instructions  or such other form of
instructions  as is customary  for the  Depository  from the  Depository  or its
nominee on behalf of any person having a beneficial interest in a Global Warrant
and upon receipt by the Warrant  Agent of a written  order or such other form of
instructions as is customary for the Depository or the person  designated by the
Depository  as  having  such  a  beneficial  interest  containing   registration
instructions and, in the case of a beneficial  interest in Restricted  Warrants,
the  following  additional  information  and  documents;  it  being  understood,
however,  that the Warrant Agent need not determine which clause (A) through (C)
below is applicable:

(A)  If such beneficial  interest is being  transferred to the person designated
     by the Depository as being the beneficial owner, a certification  from such
     person to that effect (in substantially the form of Exhibit B hereto); or

(B)  if such  beneficial  interest is being  transferred  to a QIB in accordance
     with Rule 144A under the  Securities  Act or pursuant to an exemption  from
     registration  in  accordance  with  Rule  144 or  Regulation  S  under  the
     Securities Act or pursuant to an effective registration statement under the
     Securities Act, a certification  to that effect from the transferee  and/or
     transferor (in substantially the form of Exhibit B hereto), as requested by
     the Company and the Warrant Agent, and, with respect to transfers  pursuant
     to Rule 144 or Regulation S, an opinion of counsel reasonably acceptable to
     the Company and the Warrant Agent to the effect that such transfer does not
     require registration under the Securities Act; or

(C)  if such  beneficial  interest is being  transferred  in reliance on another
     exemption  from the  registration  requirements  of the  Securities  Act, a
     certification  to that effect from the  transferee  and/or  transferor,  as
     requested by the Company and the Warrant Agent (in  substantially  the form
     of Exhibit B hereto),  and an opinion  of counsel  from the  transferee  or
     transferor reasonably acceptable to the Company and to the Warrant Agent to
     the effect  that such  transfer  does not  require  registration  under the
     Securities  Act, then the Warrant Agent will cause,  in accordance with the
     standing  instructions  and procedures  existing between the Depository and
     the Warrant Agent, the aggregate amount of the Global Warrant to be reduced
     and,  following such reduction,  the Company will execute and, upon receipt
     of appropriate  instructions  in the form of an Officers'  Certificate  (as
     defined in the Indenture),  the Warrant Agent will  countersign and deliver
     to the transferee a Definitive Warrant.

         (ii) Definitive  Warrants issued in exchange for a beneficial  interest
in a Global  Warrant  pursuant to this Section 6(d) shall be  registered in such
names  and in such  authorized  denominations  as the  Depository,  pursuant  to
instructions  from its  direct or  indirect  participants  or  otherwise,  shall
instruct  the  Warrant  Agent  in  writing,  provided  such  designation  is  in
accordance  with this  Section  6(d).  The  Warrant  Agent  shall  deliver  such
Definitive  Warrants to the persons in whose names such Definitive  Warrants are
registered.  (e)  Restrictions  on Transfer  and  Exchange  of Global  Warrants.
Notwithstanding  any other provisions of this Warrant  Agreement (other than the
provisions  set forth in subsection (f) of this Section 6), a Global Warrant may
not be  transferred  as a whole  except by the  Depository  to a nominee  of the
Depository  or by a nominee  of the  Depository  to the  Depository  or  another
nominee  of  the  Depository  or by the  Depository  or any  such  nominee  to a
successor Depository or a nominee of such successor Depository.

(f)  Authentication of Definitive Warrants in Absence of Depository.  If at any
time:

         (i) the  Depository for the Global  Warrants  notifies the Company that
the  Depository is unwilling or unable to continue as depository  for the Global
Warrant and a successor  depository  for the Global  Warrant is not appointed by
the Company within 90 days after delivery of such notice; or

         (ii) the Company, at its sole discretion, notifies the Warrant Agent in
writing that it elects to cause the issuance of Definitive  Warrants  under this
Warrant  Agreement,  then the Company will execute,  and the Warrant Agent, upon
receipt of an Officers' Certificate (as defined in the Indenture) requesting the
countersignature  and delivery of  Definitive  Warrants,  will  countersign  and
deliver  Definitive  Warrants,  in an aggregate  number  equal to the  aggregate
number of Warrants  represented  by the Global  Warrant,  in  exchange  for such
Global Warrant.

(g)  Legends.
         (i) Except as permitted by the following  paragraph  (ii), each Warrant
Certificate  evidencing the Global Warrants and the Definitive Warrants (and all
Warrants  issued in exchange  therefor  or  substitution  thereof)  shall bear a
legend substantially as set forth in Exhibit C.

         (ii) Upon any sale or transfer of a Warrant  pursuant to Rule 144 under
the Securities Act or an effective  registration  statement under the Securities
Act:

(A)  in the case of any Warrant that is a Definitive Warrant,  the Warrant Agent
     shall permit the Holder thereof to exchange such  Restricted  Warrant for a
     Definitive  Warrant that does not bear the legend set forthin Exhibit C and
     rescind any related  restriction on the transfer of such Warrant (i) in the
     case of a sale or  transfer  pursuant  to Rule 144,  after  delivery by the
     Holder thereof of a certificate to that effect  (substantially  in the form
     of Exhibit B hereto) and  accompanied by an opinion of counsel,  reasonably
     satisfactory  to the Company and the Warrant Agent, to the effect that such
     transfer does not require  registration under the Securities Act or (ii) in
     the  case of a sale  or  transfer  pursuant  to an  effective  registration
     statement,  after  delivery  of  evidence  of such  effective  registration
     statement; and

(B)  any such Warrant  represented  by a Global  Warrant shall not be subject to
     the  provisions  set  forth in (i) above  (such  sales or  transfers  being
     subject only to the provisions of Section 6(c) hereof); provided,  however,
     that with  respect to any  request  for an  exchange  of a Warrant  that is
     represented by a Global Warrant for a Definitive Warrant that does not bear
     the legend set forth in Exhibit C, which  request is made in reliance  upon
     Rule 144, the Holder  thereof shall certify in writing to the Warrant Agent
     that such request is being made pursuant to Rule 144 (such certification to
     be  substantially  in the form of  Exhibit  B hereto)  and shall  obtain an
     opinion of counsel,  reasonably  acceptable  to the Company and the Warrant
     Agent, to the effect that such transfer does not require registration under
     the Securities Act.

 (h) Cancellation  and/or Adjustment of a Global Warrant. At such
time as all beneficial  interests in a Global Warrant have either been exchanged
for Definitive Warrants, redeemed, repurchased or cancelled, such Global Warrant
shall be returned to or retained and cancelled by the Warrant Agent. At any time
prior to such  cancellation,  if any beneficial  interest in a Global Warrant is
exchanged for  Definitive  Warrants,  redeemed,  repurchased  or cancelled,  the
number of Warrants  represented  by such Global  Warrant shall be reduced and an
endorsement  shall  be made on such  Global  Warrant,  by the  Warrant  Agent to
reflect such reduction.  (i) Obligations with Respect to Transfers and Exchanges
of Definitive Warrants.

         (i) To permit  registrations  of transfers  and exchanges in accordance
with the terms of this  Agreement,  the Company shall  execute,  and the Warrant
Agent,  upon  receipt of  appropriate  instructions  in the form of an Officers'
Certificate, shall countersign, Definitive Warrants and Global Warrants.

         (ii) All  Definitive  Warrants  and  Global  Warrants  issued  upon any
registration,  transfer or exchange of  Definitive  Warrants or Global  Warrants
shall be the valid  obligations  of the Company,  entitled to the same  benefits
under this  Warrant  Agreement  as the  Definitive  Warrants or Global  Warrants
surrendered upon the registration of transfer or exchange.

         (iii)  Prior to due  presentment  for  registration  of transfer of any
Warrant,  the  Warrant  Agent and the  Company  may deem and treat the person in
whose name any Warrant is registered as the absolute owner of such Warrant,  and
neither  the Warrant  Agent nor the  Company  shall be affected by notice to the
contrary.  SECTION 7. Terms of  Warrants;  Exercise of  Warrants  Subject to the
terms of this Agreement,  each Warrant Holder shall have the right, which may be
exercised commencing on or after the original date of issue of the Warrants (the
"Issue  Date") and until 5:00 p.m.,  New York City time,  on June 30,  2007 (the
"Expiration  Date"),  to receive  from the  Company the number of fully paid and
nonassessable  Warrant  Shares  that the Holder may at the time be  entitled  to
receive on  exercise of such  Warrants  and  payment of the  Exercise  Price (as
defined  below)  then in effect  for such  Warrant  Shares.  Subject to the next
paragraph of this Section,  each Warrant not exercised  prior to the  Expiration
Date  shall  become  void and all  rights  thereunder  and all rights in respect
thereof  under this  Agreement  and  otherwise  shall cease as of such time.  No
adjustments  as to dividends  will be made upon  exercise of the  Warrants.  The
initial  price per  share at which  Warrant  Shares  shall be  purchasable  upon
exercise of Warrants (the "Exercise Price") shall be $.01. The number of Warrant
Shares for which a Warrant may be exercised is subject to adjustment as provided
in Section 12 hereof. A Warrant may be exercised upon surrender at the office or
agency of the Company  maintained for such purpose,  which initially will be the
corporate  trust  office  of the  Warrant  Agent in New York,  New York,  of the
certificate  or  certificates  evidencing  the Warrants to be exercised with the
form of election to purchase on the reverse  thereof  duly filled in and signed,
which signature  shall be guaranteed by a participant in a recognized  Signature
Guarantee  Medallion  Program,  and upon  payment to the  Warrant  Agent for the
account of the Company of the Exercise  Price,  as adjusted as herein  provided,
for the number of Warrant  Shares in  respect  of which such  Warrants  are then
exercised.  Payment of the Exercise Price may be made, in the sole discretion of
the  Holder,  in the form of any of the  following:  (a) cash or a check or bank
draft in New York Clearing House funds,  (b) by the surrender to the Company for
cancellation  of a portion of the Warrants  held by a Holder  representing  that
number of unissued  Warrant  Shares  having a Current  Market Value equal to the
aggregate  Exercise  Price of the Warrant  Shares  being  obtained or (c) by the
surrender  of the  applicable  Warrant and  without the payment of the  Exercise
Price in cash, for such number of Warrant Shares equal to the product of (1) the
number of Warrant Shares for which such Warrants are exercisable with payment in
cash of the  Exercise  Price as of the  date of  exercise  and (2) the  Cashless
Exercise Ratio or (d) by any combination of (a), (b) and (c) above. For purposes
of this Agreement,  the "Cashless  Exercise  Ratio" shall equal a fraction,  the
numerator of which is the excess of the Current Market Value of the Common Stock
on the date of  exercise  over the  Exercise  Price  Per Share as of the date of
exercise and the  denominator of which is the Current Market Value of the Common
Stock on the date of exercise.  An exercise of a Warrant in accordance  with the
immediately  preceding  sentences through the surrender of Warrants and not with
cash is  herein  called a  "Cashless  Exercise."  Upon  surrender  of a  Warrant
Certificate  representing  more than one Warrant in connection with the Holder's
option to elect a Cashless  Exercise,  the number of Warrant Shares  deliverable
upon a  Cashless  Exercise  shall be equal to the  number of  Warrants  that the
holder specifies is to be exercised  pursuant to a Cashless Exercise  multiplied
by the Cashless  Exercise  Ratio.  All  provisions  of this  Agreement  shall be
applicable  with respect to an exercise of a Warrant  Certificate  pursuant to a
Cashless Exercise for less than the full number of Warrants represented thereby.
"Exercise  Price Per Share"  means the Exercise  Price  divided by the number of
Warrant Shares for which a Warrant is then exercisable (without giving effect to
the Cashless Exercise option).

Subject to the  provisions of Section 6 hereof,  upon such surrender of Warrants
and  payment of the  Exercise  Price,  the  Company  shall issue and cause to be
delivered  with all  reasonable  dispatch  to or upon the  written  order of the
Holder  and in such  name  or  names  as the  Warrant  Holder  may  designate  a
certificate or certificates  for the number of full Warrant Shares issuable upon
the  exercise  of such  Warrants  together  with cash as provided in Section 13;
provided, however, that if any consolidation,  merger or lease or sale of assets
and  subsequent  liquidation  of the  Company is  proposed to be effected by the
Company as described in subsection  (k) of Section 12 hereof,  or a tender offer
or an exchange  offer for shares of Common Stock of the Company  shall have been
made and not  terminated,  upon such  surrender  of Warrants  and payment of the
Exercise Price as aforesaid,  the Company shall, as soon as possible, but in any
event not later than  three  days,  other than a Saturday  or Sunday or a day on
which  banking  institutions  in the State of New York are not open for business
("Business Day") thereafter,  issue and cause to be delivered the full number of
Warrant  Shares  issuable  upon the  exercise  of such  Warrants  in the  manner
described in this  sentence  together  with cash as provided in Section 13. Such
certificate or  certificates  shall be deemed to have been issued and any person
so named  therein  shall be  deemed  to have  become a holder  of record of such
Warrant  Shares as of the date of the  surrender of such Warrants and payment of
the Exercise Price.

The  Warrants  shall be  exercisable,  at the  election of the Holders  thereof,
either in full or from time to time in part and, in the event that a certificate
evidencing  Warrants  is  exercised  in respect of fewer than all of the Warrant
Shares  issuable on such exercise at any time prior to the date of expiration of
the Warrants,  a new  certificate  evidencing the remaining  Warrant or Warrants
will be  issued,  and the  Warrant  Agent is hereby  irrevocably  authorized  to
countersign and to deliver the required new Warrant  Certificate or Certificates
pursuant to the  provisions  of this Section 7 and of Section 3 hereof,  and the
Company,  whenever  required  by the Warrant  Agent,  will  promptly  supply the
Warrant Agent with Warrant  Certificates  duly executed on behalf of the Company
for such purpose.

All  Warrant  Certificates  surrendered  upon  exercise  of  Warrants  shall  be
cancelled by the Warrant Agent. Such cancelled Warrant  Certificates  shall then
be  disposed  of by the Warrant  Agent in a manner  consistent  with the Warrant
Agent's  customary  procedure  for  such  disposal  and in a  manner  reasonably
satisfactory  to the Company.  The Warrant Agent shall  account  promptly to the
Company with respect to Warrants  exercised and  concurrently pay to the Company
all monies  received by the Warrant Agent for the purchase of the Warrant Shares
through the exercise of such Warrants.

The Warrant Agent shall keep copies of this  Agreement  available for inspection
by the Holders  during normal  business  hours at its office.  The Company shall
supply the Warrant  Agent from time to time with such  numbers of copies of this
Agreement as the Warrant Agent may request.

SECTION 8. Payment of Taxes.  The Company will pay all  documentary  stamp taxes
attributable  to the  initial  issuance of Warrant  Shares upon the  exercise of
Warrants;  provided,  however, that the Company shall not be required to pay any
tax or taxes that may be payable in  respect  of any  transfer  involved  in the
issue of any Warrant  Certificates or any  certificates  for Warrant Shares in a
name  other  than  that  of  the  registered  Holder  of a  Warrant  Certificate
surrendered  upon the  exercise  of a  Warrant,  and the  Company  shall  not be
required  to issue or  deliver  such  Warrant  Certificates  unless or until the
person or persons requesting the issuance thereof shall have paid to the Company
the  amount of such tax or shall have  established  to the  satisfaction  of the
Company that such tax has been paid.

SECTION 9. Mutilated or Missing Warrant Certificates. In case any of the Warrant
Certificates shall be mutilated,  lost, stolen or destroyed,  the Company may in
its discretion  issue and the Warrant Agent upon written  instructions  from the
Company in the form of an Officers'  Certificate,  may countersign,  in exchange
and substitution for and upon cancellation of the mutilated Warrant Certificate,
or in lieu of and  substitution  for the  Warrant  Certificate  lost,  stolen or
destroyed,  a  new  Warrant  Certificate  of  like  tenor  and  representing  an
equivalent number of Warrants, but only upon receipt of evidence satisfactory to
the Company and the Warrant  Agent of such loss,  theft or  destruction  of such
Warrant Certificate and a bond or indemnity, if requested,  also satisfactory to
them. Applicants for such substitute Warrant Certificates shall also comply with
such other reasonable  regulations and pay such other reasonable  charges as the
Company or the Warrant Agent may prescribe.

SECTION 10. Reservation of Warrant Shares. The Company will at all times reserve
and keep  available,  free from preemptive  rights,  out of the aggregate of its
authorized  but unissued  Common Stock or its authorized and issued Common Stock
held in its treasury,  for the purpose of enabling it to satisfy any  obligation
to issue Warrant Shares upon exercise of Warrants,  the maximum number of shares
of  Common  Stock  which  may  then be  deliverable  upon  the  exercise  of all
outstanding Warrants.

The Company or, if appointed,  the transfer agent for the Common Stock and every
subsequent transfer agent for any shares of the Company's capital stock issuable
upon the  exercise of any of the rights of  purchase  aforesaid  (the  "Transfer
Agent") will be  authorized  and directed at all times to reserve such number of
authorized shares as shall be required for such purpose. The Company will keep a
copy of this Agreement on file with the Transfer Agent and with every subsequent
transfer  agent for any shares of the Company's  capital stock issuable upon the
exercise  of the rights of purchase  represented  by the  Warrants.  The Warrant
Agent is hereby  irrevocably  authorized to  requisition  from time to time from
such  Transfer  Agent  the  stock  certificates  required  to honor  outstanding
Warrants upon exercise  thereof in accordance  with the terms of this Agreement.
The Company will supply such Transfer Agent with duly executed  certificates for
such purposes and will provide or otherwise make available any cash which may be
payable as provided in Section 13. The Company will furnish such Transfer  Agent
a  copy  of  all  notices  of  adjustments  and  certificates   related  thereto
transmitted to each Holder pursuant to Section 14 hereof.

The Company  covenants that all Warrant Shares which may be issued upon exercise
of Warrants  will,  upon payment of the Exercise  Price  therefor and issue,  be
validly  authorized and issued,  fully paid,  nonassessable,  free of preemptive
rights and free from all taxes,  liens,  charges  and  security  interests  with
respect to the issuance thereof. The Company will take no action to increase the
par value of the Common Stock to an amount in excess of the Exercise Price,  and
the Company  will not enter into any  agreements  inconsistent  in any  material
respect  with  the  rights  of  Holders  hereunder.  The  Company  will  use its
reasonable  best  efforts  to  obtain  all such  authorizations,  exemptions  or
consents from any public regulatory body having  jurisdiction  thereof as may be
necessary to enable the Company to perform its obligations under this Agreement.

SECTION 11. Public Equity Offering of Common Stock;  PORTAL.  In the event that,
at any time during the period in which the Warrants are exercisable,  the Common
Stock is not listed on any principal  securities or exchanges or markets  within
the United States of America,  the Company will use its reasonable  best efforts
to permit the Warrant  Shares to be designated  PORTAL  securities in accordance
with the rules and regulations adopted by the National Association of Securities
Dealers, Inc. relating to trading in the Private Offerings,  Resales and Trading
through Automated Linkages market.

SECTION 12.  Adjustment of Exercise Price and Number of Warrant Shares Issuable.
The Exercise  Price and the number of shares of Common Stock  issuable  upon the
exercise of each Warrant (the  "Exercise  Rate") is subject to  adjustment  from
time to time upon the occurrence of the events enumerated in this Section 12.

(a)  Adjustment for Change in Capital Stock.  If the Company:

         (1) pays a dividend  or makes a  distribution  on its  Common  Stock in
         shares of its Common Stock or other  capital  stock of the Company;  or

         (2)  subdivides,  combines or reclassifies  its  outstanding  shares of
         Common Stock,

then the  Exercise  Rate in effect  immediately  prior to such  action  shall be
proportionately  adjusted so that the Holder of any Warrant thereafter exercised
may  receive  the  aggregate  number and kind of shares of capital  stock of the
Company that such Holder would have owned  immediately  following such action if
such Warrant had been exercised  immediately prior to such action or immediately
prior to the record date applicable  thereto,  if any (regardless of whether the
Warrants are then exercisable and without giving effect to the Cashless Exercise
Option).  The Exercise Price in effect immediately prior to such action shall be
adjusted to a price  determined  by  multiplying  the  Exercise  Price in effect
immediately prior to such action by a fraction,  the numerator of which shall be
the number of shares of Common Stock  outstanding  before  giving effect to such
action  and the  denominator  of which  shall be the  number of shares of Common
Stock and/or such other capital stock  outstanding  referred to in the foregoing
clause (a)(1) after giving effect to such action.

The adjustment shall become effective  immediately  after the record date in the
case of a dividend or distribution  and immediately  after the effective date in
the  case  of a  subdivision,  combination  or  reclassification.  If  after  an
adjustment a Holder of a Warrant upon  exercise of it may receive  shares of two
or more classes of capital  stock of the Company,  the board of directors of the
Company shall  determine the  allocation of the adjusted  Exercise Price between
the classes of capital stock. After such allocation,  the exercise privilege and
the Exercise Price of each class of capital stock shall thereafter be subject to
adjustment  on terms  comparable  to those  applicable  to Common  Stock in this
Section 12.

Such adjustment shall be made successively whenever any event listed above shall
occur.  (b)  Adjustment  for Certain  Issuances of Common Stock.  If the Company
issues  or sells to any  holder of its  Common  Stock or any  Affiliate  of such
holder or  distributes to any holder or any Affiliate of such holder any rights,
options or  warrants  entitling  them to  purchase  shares of Common  Stock,  or
securities convertible into or exchangeable for Common Stock, in each case, at a
price per share  less  than the  Current  Market  Value on the  record  date for
determining  entitlements  of any such holder of Common Stock to  participate in
such issuance, sale or distribution (the "Time of Determination"),  the Exercise
Rate shall be adjusted in accordance with the formula:

and the Exercise Price shall be adjusted in accordance with the following
formula:
where:

                  E'  =      the adjusted Exercise Rate.

                  E          = the Exercise Rate  immediately  prior to the Time
                             of  Determination  for any such  issuance,  sale or
                             distribution.

                  EP' =      the adjusted Exercise Price.

                  EP         = the Exercise Price  immediately prior to the Time
                             of  Determination  for any such  issuance,  sale or
                             distribution.

                  O          = the number of Fully  Diluted  Shares (as  defined
                             below) outstanding immediately prior to the Time of
                             Determination  for  any  such  issuance,   sale  or
                             distribution.

                  N          = the number of  additional  shares of Common Stock
                             issued,  sold or  issuable  upon  exercise  of such
                             rights, options or warrants.

                  P          = the offering price per share received in the case
                             of any  issuance or sale of Common Stock or rights,
                             options or warrants inclusive of the exercise price
                             per share of Common Stock  payable upon exercise of
                             such rights, options or warrants.

                  M          = the  Current  Market  Value  per  share of Common
                             Stock  on the  Time of  Determination  for any such
                             issuance, sale or distribution.

For purposes of this Section 12 the term "Fully  Diluted  Shares" shall mean (i)
the shares of Common  Stock  outstanding  as of a specified  date,  and (ii) the
shares of Common  Stock into or for which  rights,  options,  warrants  or other
securities  outstanding as of such date are  exercisable  or convertible  (other
than the Warrants). The adjustments shall be made successively whenever any such
rights,  options or warrants are issued and shall become  effective  immediately
after the relevant Time of  Determination.  Notwithstanding  the foregoing,  the
Exercise  Rate and the  Exercise  Price  shall not be subject to  adjustment  in
connection  with (i) the issuance of any shares of Common Stock upon exercise of
any such rights,  options or warrants which (x) have previously been the subject
of an adjustment under this Agreement for which the required adjustment has been
made or (y) are outstanding on the date hereof and have already been included in
the number of Fully Diluted Shares and (ii) the exercise of the Warrants.  If at
the end of the period  during  which any such  rights,  options or warrants  are
exercisable,  not all rights, options or warrants shall have been exercised, the
Warrant  shall be  immediately  readjusted  to what it would have been if "N" in
each of the above formulas had been the number of shares actually issued.

No adjustment  shall be made under this paragraph (b) if the  application of the
formula stated above in this paragraph (b) would result in a value of E' that is
lower than the value of E. (c) Adjustment for Other Distribution. If the Company
distributes  to any holder of its Common  Stock or any  Affiliate of such holder
(i) any  evidences of  indebtedness  of the Company or any of its  subsidiaries,
(ii) any  assets of the  Company  or any of its  subsidiaries  (other  than cash
dividends or other cash  distributions  that do not constitute an  Extraordinary
Cash Dividend),  or (iii) any rights,  options or warrants to acquire any of the
foregoing or to acquire any other  securities of the Company,  the Exercise Rate
shall be adjusted in accordance with the formula:

                                                  E' = E x   M
                                                           M - F

and the Exercise Price shall be decreased (but not increased) in accordance with
the following formula:

                                                   EP' = EP x E
                                                                  E'
where:

                  E'  =      the adjusted Exercise Rate.

                  E = the current  Exercise  Rate on the record date referred to
in this paragraph (c) below.

                  EP' =      the adjusted Exercise Price.

                  EP         = the  current  Exercise  Price on the record  date
                             referred to in this paragraph (c) below.

                  M          = the  Current  Market  Value  per  share of Common
                             Stock  on  the  record  date  referred  to in  this
                             paragraph (c) below.

                  F          = the fair market value on the record date referred
                             to in this paragraph (c) below of the indebtedness,
                             assets,  rights,  options or warrants distributable
                             in respect of one share of Common Stock.

The adjustments  shall be made  successively  whenever any such  distribution is
made and  shall  become  effective  immediately  after the  record  date for the
determination  of  stockholders  entitled  to receive the  distribution.  If any
adjustment  is made pursuant to clause (iii) above of this  subsection  (c) as a
result of the  issuance  of rights,  options or  warrants  and at the end of the
period during which any such rights,  options or warrants are  exercisable,  not
all such  rights,  options or warrants  shall have been  exercised,  the Warrant
shall be  immediately  readjusted  as if "F" in the above  formula  was the fair
market  value  on  the  record  date  of the  indebtedness  or  assets  actually
distributed  upon  exercise of such rights,  options or warrants  divided by the
number of shares of Common Stock outstanding on the record date.

This  subsection  does not apply to rights,  options or warrants  referred to in
subsection  (b) of this Section 12. (d) Current  Market Value.  "Current  Market
Value" per share of Common Stock or of any other security  (herein  collectively
referred to as a "Security") at any date shall be:

         (1) if the Security is not registered under the Securities Exchange Act
         of 1934, as amended (the "Exchange Act"), (i) the value of the Security
         determined  in good faith by the board of  directors of the Company and
         certified in a board resolution,  based on the most recently  completed
         arm's length transaction between the Company and a person other than an
         Affiliate  of the Company and the closing of which  occurs on such date
         or shall have  occurred  within the six months  preceding  such date or
         (ii) if no such transaction  shall have occurred on such date or within
         such six-month  period,  the value of the Security  preceding such date
         determined  by the  disinterested  members of the board of directors of
         the  Company  and  certified  in a  board  resolution  adopted  by  the
         disinterested  members of the Company's board of directors delivered to
         the  Holders  unless  the  Holders  of at least 33 1/3  percent  of the
         outstanding  Warrants shall object to such  determination in which case
         the value shall be determined by an  Independent  Financial  Expert (as
         defined  below)  in all  other  instances,  or (2) if the  Security  is
         registered under the Exchange Act, the average of the daily closing bid
         prices for each  Business Day during the period  commencing 15 Business
         Days before such date and ending on the date one day prior to such date
         or, if the Security has been registered under the Exchange Act for less
         than 15 consecutive Business Days before such date, then the average of
         the daily closing bid prices (as defined below) for all of the Business
         Days before such date for which daily closing bid prices are available.
         If the closing bid price is not  determinable  for at least 10 Business
         Days in such period,  the Current Market Value of the Security shall be
         determined  as if the  Security was not  registered  under the Exchange
         Act.

The "closing bid price" for any Security on each Business Day means: (A) if such
Security  is listed or  admitted  to trading  on any  securities  exchange,  the
closing price,  regular way, on such day on the principal exchange on which such
Security is traded,  or if no sale takes  place on such day,  the average of the
closing  bid and  asked  prices on such day,  (B) if such  Security  is not then
listed or admitted to trading on any securities exchange, the last reported sale
price on such day, or if there is no such last  reported sale price on such day,
the average of the closing bid and the asked  prices on such day, as reported by
a reputable  quotation source designated by the Company or (C) if neither clause
(A) nor (B) is  applicable,  the average of the reported  high bid and low asked
prices on such day, as reported by a reputable quotation service, or a newspaper
of  general  circulation  in  the  Borough  of  Manhattan,  City  of  New  York,
customarily  published on each Business Day, designated by the Company. If there
are no such  prices  on a  Business  Day,  then the  market  price  shall not be
determinable for such Business Day.

"Independent  Financial Expert" shall mean any nationally  recognized investment
banking firm  reasonably  acceptable to the Warrant Agent (i) that does not (and
whose  directors,  officers,  employees and  Affiliates do not) have a direct or
indirect  material  financial  interest in the Company,  (ii) that has not been,
and, at the time it is called upon to serve as an Independent  Financial  Expert
under this Agreement is not (and none of whose directors, officers, employees or
Affiliates  is) a promoter,  director or officer of the Company,  (iii) that has
not been  retained  by the  Company  for any  purpose,  other than to perform an
equity  valuation,  within the  preceding  twelve  months and (iv) that,  in the
reasonable  judgment of the board of  directors of the Company  (certified  by a
board resolution),  is otherwise qualified to serve as an independent  financial
advisor. Any such person may receive customary  compensation and indemnification
by the Company for opinions or services it provides as an Independent  Financial
Expert.

"Affiliate"  of any  specified  person means any other person which  directly or
indirectly through one or more  intermediaries  controls or is controlled by, or
is under common control with,  such specified  person.  For the purposes of this
definition,   "control"   (including  with  correlative   meanings,   the  terms
"controlling,"  "controlled  by" and "under common  control  with") as used with
respect to any person,  means the  possession,  directly or  indirectly,  of the
power to direct or cause the  direction of the  management  and policies of such
person,  whether  through the  ownership of voting  securities,  by agreement or
otherwise.

"Extraordinary  Cash  Dividend"  means any cash  dividends  with  respect to the
Common  Stock the  aggregate  amount of which in any  fiscal  year  exceeds  the
greater of (i) 5.0% of the net income of the  Company and its  subsidiaries  for
the fiscal year  immediately  preceding  the payment of such  dividend  and (ii)
$100,000.  (e) When De Minimis Adjustment May Be Deferred.  No adjustment in the
Exercise Rate or Exercise Price need be made unless the adjustment would require
an increase or decrease of at least 1% in the Exercise  Rate or Exercise  Price,
as the case may be. Notwithstanding the foregoing,  any adjustments that are not
made  shall  be  carried  forward  and  taken  into  account  in any  subsequent
adjustment,  provided that no such adjustment  shall be deferred beyond the date
on which a Warrant is exercised.

All  calculations  under  this  Section  12  shall be made to the  nearest  cent
(one-half a cent being rounded up) or to the nearest  1/100th (5/1000 of a share
being  rounded  up) of a  share,  as the case  may be.  (f)  When No  Adjustment
Required. If an adjustment is made upon the establishment of a record date for a
distribution subject to subsections (a), (b) or (c) hereof and such distribution
is subsequently  cancelled,  the Exercise Rate and Exercise Price then in effect
shall be  readjusted,  effective  as of the date  when  the  board of  directors
determines to cancel such distribution,  to that which would have been in effect
if such  record date had not been fixed.  If the  Company  includes  the Warrant
Holders in any  distribution  subject to  subsection  (a), (b) or (c) hereof and
such  inclusion  results in the  Warrant  Holders  maintaining  their  ownership
percentage of the Company on a fully diluted basis,  then no adjustment shall be
necessary.  If an adjustment  would be required  under two or more of paragraphs
(a), (b) and (c), such adjustments will be determined  without  duplication.  To
the extent the Warrants become convertible into cash, no adjustment need be made
thereafter  as to the amount of cash into which such  Warrants are  exercisable.
Interest  will not accrue on the cash.  (g) Notice of  Adjustment.  Whenever the
Exercise  Rate or Exercise  Price is  adjusted,  the Company  shall  provide the
notices required by Section 14 hereof.

(h) Voluntary Reduction. The Company from time to time may increase the Exercise
Rate  or  reduce  the  Exercise  Price  by any  amount  for any  period  of time
(including,  without  limitation,  permanently)  if the  period  is at  least 20
Business Days.

An increase of the Exercise  Rate or reduction of the Exercise  Price under this
subsection (h) (other than a permanent increase or reduction) does not change or
adjust the Exercise Rate or Exercise  Price  otherwise in effect for purposes of
subsections (a), (b) or (c) of this Section 12.

(i) Minimum Exercise Price.  Notwithstanding  anything to the contrary contained
in this Agreement, if the Exercise Price, as adjusted pursuant to this Agreement
(other than this Section 12(i)),  shall be less than the aggregate par values of
the related  Warrant Shares,  then such Exercise Price, as so adjusted,  for all
purposes of this Agreement,  shall be an amount equal to the aggregate par value
of such related Warrant Shares. (j) When Issuance or Payment May Be Deferred. In
any case in which  this  Section  12 shall  require  that an  adjustment  in the
Exercise  Rate or  Exercise  Price be made  effective  as of a record date for a
specified  event,  the Company may elect to defer until the  occurrence  of such
event (i) issuing to the Holder of any Warrant  exercised after such record date
the Warrant Shares and other capital stock of the Company, if any, issuable upon
such exercise  over and above the Warrant  Shares and other capital stock of the
Company,  if any,  issuable upon such exercise on the basis of the Exercise Rate
prior to such  adjustment,  and (ii) paying to such Holder any amount in cash in
lieu of a fractional share pursuant to Section 13; provided,  however,  that the
Company shall deliver to the Warrant Agent and shall cause the Warrant Agent, on
behalf of and at the  expense of the  Company,  to deliver to such  Holder a due
bill or other appropriate  instrument  evidencing such Holder's right to receive
such additional Warrant Shares, other capital stock and cash upon the occurrence
of the event requiring such adjustment.

(k) Reorganizations.  In case of any capital  reorganization,  other than in the
cases referred to in Sections 12(a), (b) or (c) hereof,  or the consolidation or
merger of the Company with or into another  corporation  (other than a merger or
consolidation in which the Company is the continuing  corporation and which does
not result in any  reclassification  of the  outstanding  shares of Common Stock
into shares of other stock or other securities or property)  (collectively  such
actions being hereinafter referred to as "Reorganizations"),  or the sale of the
property of the Company as an entirety or  substantially  as an entirety,  there
shall  thereafter  be  deliverable  upon exercise of any Warrant (in lieu of the
number of shares of Common Stock  theretofore  deliverable) the number of shares
of stock or other  securities  or  property,  if any,  to which a holder  of the
number of shares of Common Stock that would otherwise have been deliverable upon
the exercise of such Warrant would have been  entitled upon such  Reorganization
or sale if such  Warrant had been  exercised in full  immediately  prior to such
Reorganization.  In case of any Reorganization or sale, appropriate  adjustment,
as  determined  in good faith by the board of directors  of the  Company,  whose
determination  shall be described in a duly adopted resolution  certified by the
Company's Secretary or Assistant Secretary,  shall be made in the application of
the  provisions  herein set forth with  respect to the rights and  interests  of
Holders so that the provisions set forth herein shall  thereafter be applicable,
as nearly as  possible,  in relation to any such shares or other  securities  or
property thereafter deliverable upon exercise of Warrants.

The  Company  shall  not  effect  any  such  Reorganization  unless  prior to or
simultaneously with the consummation thereof the successor corporation (if other
than the Company) resulting from such Reorganization or the corporation or other
appropriate  corporation  or entity  purchasing  such assets shall (i) expressly
assume, by a supplemental warrant agreement or other acknowledgment executed and
delivered to the Warrant  Agent the  obligation  to deliver to the Warrant Agent
and to cause the  Warrant  Agent to deliver to each such  Holder  such shares of
stock,  securities  or assets as, in accordance  with the foregoing  provisions,
such Holder may be entitled to purchase,  and the due and  punctual  performance
and observance of each and every covenant,  condition,  obligation and liability
under this  Agreement to be performed  and observed by the Company in the manner
prescribed  herein and (ii) enter into an  agreement  providing  to the  Holders
rights and benefits  substantially similar to those enjoyed by the Holders under
the Common  Stock  Registration  Rights  Agreement  of even date  herewith.  The
foregoing   provisions   of  this  Section   12(k)  shall  apply  to  successive
Reorganization  transactions.   (l)  Form  of  Warrants.   Irrespective  of  any
adjustments in the number or kind of shares purchasable upon the exercise of the
Warrants,  Warrants theretofore or thereafter issued may continue to express the
same price and number and kind of shares as are stated in the Warrants initially
issuable pursuant to this Agreement. (m) Warrant Agent's Disclaimer. The Warrant
Agent has no duty to determine  when an adjustment  under this Section 12 should
be made,  how it should be made or what it should be. The  Warrant  Agent has no
duty to determine  whether any  provisions of a supplemental  warrant  agreement
under subsection (k) of this Section 12 are correct.  The Warrant Agent makes no
representation  as to the validity or value of any  securities  or assets issued
upon exercise of Warrants.  The Warrant Agent shall not be  responsible  for the
Company's failure to comply with this Section 12.

(n) Miscellaneous. (i) For purpose of this Section 12 the term "shares of Common
Stock" shall mean (a) the Company's  Common Stock,  par value $.01 per share, as
of the  date of this  Agreement,  and (b)  shares  of any  other  class of stock
resulting from successive changes or  reclassification of such shares consisting
solely of changes in par  value,  or from par value to no par value,  or from no
par  value to par  value.  In the  event  that at any  time,  as a result  of an
adjustment  made  pursuant to this  Section  12, the  Holders of Warrants  shall
become  entitled to purchase any  securities  of the Company  other than,  or in
addition to,  shares of Common  Stock,  thereafter  the number or amount of such
other  securities so purchasable  upon exercise of each Warrant shall be subject
to adjustment from time to time in a manner and on terms as nearly equivalent as
practicable  to the provisions  with respect to the Warrant Shares  contained in
subsections (a) through (m) of this Section 12, inclusive, and the provisions of
Sections 7, 8, 10 and 13 with respect to the Warrant  Shares or the Common Stock
shall apply on like terms to any such other securities generally.

(ii) The Company shall provide Holders,  within 15 days after it files them with
the SEC, copies of its annual report and of the information, documents and other
reports (or copies of such  portions of any of the  foregoing  as the SEC may by
rules and  regulations  prescribe) that the Company is required to file with the
SEC pursuant to Section 13(a) or 15(d) of the Exchange Act. Notwithstanding that
the Company may not be required to remain subject to the reporting  requirements
of Section 13 or 15(d) of the Exchange Act, the Company  shall  continue to file
such annual  reports and  information,  documents and other reports with the SEC
and to provide  the  Holders  with such  annual  reports  and such  information,
documents and other reports as the Company provides to the holders of its Common
Stock or other securities.

SECTION 13.  Fractional  Interests.  The Company  shall not be required to issue
fractional Warrant Shares on the exercise of Warrants.  If more than one Warrant
shall be presented for exercise in full at the same time by the same Holder, the
number of full Warrant Shares which shall be issuable upon the exercise  thereof
shall be  computed  on the  basis of the  aggregate  number  of  Warrant  Shares
purchasable  on exercise  of the  Warrants so  presented.  If any  fraction of a
Warrant Share would,  except for the  provisions of this Section 13, be issuable
on the exercise of any  Warrants (or  specified  portion  thereof),  the Company
shall pay an amount in cash equal to the excess of the value (as  determined  by
the Board of Directors in good faith) of a Warrant Share over the Exercise Price
on the day immediately preceding the date the Warrant is presented for exercise,
multiplied by such fraction.

SECTION 14. Notices to Warrant Holders.  Upon any adjustment pursuant to Section
12 hereof,  the Company shall give prompt written  notice of such  adjustment to
the Warrant  Agent and shall cause the  Warrant  Agent,  on behalf of and at the
expense of the  Company,  within 10 days after  notification  is received by the
Warrant Agent of such adjustment,  to mail by first class mail, postage prepaid,
to each Holder a notice of such  adjustment(s)  and shall deliver to the Warrant
Agent a certificate of the Chief Financial  Officer of the Company setting forth
in  reasonable  detail  (i) the number of Warrant  Shares  purchasable  upon the
exercise  of each  Warrant and the  Exercise  Price of such  Warrant  after such
adjustment(s),  (ii) a brief statement of the facts requiring such adjustment(s)
and  (iii)  the  computation  by  which  such   adjustment(s)  was  made.  Where
appropriate,  such notice may be given in advance and  included as a part of the
notice required under the other provisions of this Section 14. In case:

(a)  the Company shall authorize the issuance to all holders of shares of Common
     Stock of rights, options or warrants to subscribe for or purchase shares of
     capital stock of the Company; or

(b)  the Company shall  authorize the  distribution  to all holders of shares of
     Common Stock of evidences of its indebtedness or assets; or

(c)  of any  consolidation  or merger to which  the  Company  is a party and for
     which approval of any  shareholders  of the Company is required,  or of the
     conveyance  or  transfer  of the  properties  and  assets  of  the  Company
     substantially  as an  entirety,  or of any  reclassification  or  change of
     Common Stock issuable upon exercise of the Warrants (other than a change in
     par value,  or from par value to no par value,  or from no par value to par
     value, or as a result of a subdivision or  combination),  or a tender offer
     or exchange offer for shares of capital stock of the Company; or

(d)  of the voluntary or involuntary  dissolution,  liquidation or winding up of
     the Company; or

(e)  the Company proposes to take any action that would require an adjustment to
     the Exercise Rate and/or Exercise Price pursuant to Section 12;

then the Company shall give prompt  written notice to the Warrant Agent at least
ten days prior to the date the Warrant  Agent  should give notice to the holders
of the Warrant Certificate,  and shall cause the Warrant Agent, on behalf of and
at the expense of the Company,  to give to each of the registered holders of the
Warrant Certificates at his or its address appearing on the Warrant Register, at
least 20 days prior to the applicable record date hereinafter specified,  or the
date of the event in the case of events for which  there is no record  date,  by
first-class mail,  postage prepaid,  a written notice stating (i) the date as of
which the holders of record of shares of Common  Stock to be entitled to receive
any such rights, options, warrants or distribution are to be determined, or (ii)
the initial  expiration date set forth in any tender offer or exchange offer for
shares of  Common  Stock,  or (iii)  the date on which  any such  consolidation,
merger, conveyance, transfer, dissolution, liquidation or winding up is expected
to become effective or consummated, and the date as of which it is expected that
holders of record of shares of Common  Stock shall be entitled to exchange  such
shares  for  securities  or  other  property,  if  any,  deliverable  upon  such
reclassification,  consolidation,  merger,  conveyance,  transfer,  dissolution,
liquidation  or winding up. The  failure by the Company or the Warrant  Agent to
give such notice or any defect therein shall not affect the legality or validity
of any distribution, right, option, warrant, consolidation,  merger, conveyance,
transfer, dissolution, liquidation or winding up, or the vote upon any action.

The Company shall give prompt written notice to the Warrant Agent,  at least ten
days prior to the date the  Warrant  Agent  should give notice to the holders of
the Warrant  Certificate  and shall cause the Warrant Agent, on behalf of and at
the  expense  of the  Company,  to give to each  Holder  written  notice  of any
determination  to make a distribution or dividend to the holders of any class of
its Common Stock of any assets  (including  cash),  debt  securities,  preferred
stock, or any rights or warrants to purchase debt  securities,  preferred stock,
assets or other  securities  (other than Common Stock,  or rights,  options,  or
warrants to purchase Common Stock) of the Company,  which notice shall state the
nature and amount of such planned  dividend or distribution  and the record date
therefor, and shall be sent to the Holders at least 20 days prior to such record
date therefor. Nothing contained in this Agreement or in any Warrant Certificate
shall be  construed  as  conferring  upon the  Holders  the  right to vote or to
consent or to receive  notice as  shareholders  in  respect of the  meetings  of
shareholders or the election of directors of the Company or any other matter, or
any rights whatsoever as shareholders of the Company.

In all  cases,  the text of any  notice to  Holders  provided  pursuant  to this
Section  shall be prepared  by the  Company and the Warrant  Agent shall have no
responsibility with regard to such notice being accurate. SECTION 15. Notices to
the Company and Warrant Agent. Any notice or demand authorized by this Agreement
to be given or made by the  Warrant  Agent or by any Holder to or on the Company
shall be  sufficiently  given or made when received at the office of the Company
expressly designated by the Company as its office for purposes of this Agreement
(until the Warrant Agent is otherwise  notified in accordance  with this Section
15 by the Company), as follows:

                           Hvide Marine Incorporated
                           2200 Eller Drive
                           P.O. Box 13038
                           Fort Lauderdale, Florida 33316

                           Attention: Robert B. Lamm
                           Fax Number: (954) 527-1772

                           with a copy to:

                           Kronish Lieb Weiner & Hellman LLP
                           1114 Avenue of the Americas
                           New York, New York 10036-7798

                           Attention:  Robert J. Feinstein, Esq.
                           Fax Number: (212) 479-6275

                           and to:

                           Dyer Ellis & Joseph
                           Watergate, Eleventh Floor
                           600 New Hampshire Ave., N.W.
                           Washington, D.C. 20034
                           Attention: James B. Ellis, Esq.
                           Fax Number: 202-944-3068

Any  notice  pursuant  to this  Agreement  to be given by the  Company or by any
Holder(s) to the Warrant Agent shall be sufficiently  given when received by the
Warrant  Agent at the address  appearing  below  (until the Company is otherwise
notified in accordance with this Section by the Warrant Agent).

                           STATE STREET BANK AND TRUST COMPANY
                           Goodwin Square
                           225 Asylum Street, 23rd Floor
                           Hartford, CT 06103
                           Attention:  Cauna Silva
                           Fax Number: (860) 244-1881

SECTION 16.  Supplements and  Amendments.  The Company and the Warrant Agent may
from time to time supplement or amend this Agreement without the approval of any
holders of Warrants in order to cure any  ambiguity or to correct or  supplement
any provision  contained herein which may be defective or inconsistent  with any
other provision  herein, or to make any other provisions in regard to matters or
questions  arising  hereunder  which the Company and the Warrant  Agent may deem
necessary or desirable and all other  supplements  or  amendments,  except those
that have a material  adverse effect on the interests of any holder of Warrants.
Any amendment or supplement to this Agreement that has a material adverse effect
on the  interests of holders  shall  require the written  consent of  registered
holders of a majority  of the then  outstanding  Warrants.  Notwithstanding  the
foregoing,  the consent of each holder of a Warrant  affected  shall be required
for any amendment pursuant to which the Exercise Price would be increased or the
number  of  Warrant  Shares  purchasable  upon  exercise  of  Warrants  would be
decreased (not including adjustments contemplated hereunder).  The Warrant Agent
shall be  entitled to receive and shall be fully  protected  in relying  upon an
Officers'  Certificate  and opinion of counsel as  conclusive  evidence that any
such  amendment or supplement is authorized or permitted  hereunder,  that it is
not  inconsistent  herewith,  and that it will be  valid  and  binding  upon the
Company in accordance with its terms.

SECTION 17.  Concerning  the Warrant  Agent.  The Warrant Agent  undertakes  the
duties and  obligations  imposed by this Agreement upon the following  terms and
conditions,  by all of which the Company and the Holders, by their acceptance of
Warrants, shall be bound:

                  (a)  The  statements  contained  herein  and  in  the  Warrant
         Certificate  shall be  taken  as  statements  of the  Company,  and the
         Warrant Agent assumes no  responsibility  for the correctness of any of
         the same except such as describe the Warrant  Agent or any action taken
         by it. The Warrant Agent assumes no responsibility  with respect to the
         distribution of the Warrants except as herein otherwise provided.

                  (b) The Warrant Agent shall not be responsible for any failure
         of the Company to comply with the covenants contained in this Agreement
         or in the Warrants to be complied with by the Company.

                  (c) The  Warrant  Agent may execute  and  exercise  any of the
         rights or powers  hereby  vested in it or  perform  any duty  hereunder
         either itself (through its employees) or by or through its attorneys or
         agents  (which  shall  not  include  its  employees)  and  shall not be
         responsible for the misconduct of any agent appointed with due care.

                  (d) The  Warrant  Agent may  consult  at any time  with  legal
         counsel  satisfactory  to it (who may be counsel for the Company),  and
         the Warrant  Agent shall incur no  liability or  responsibility  to the
         Company or to any Holder in respect of any action  taken,  suffered  or
         omitted  by it  hereunder  in good  faith  and in  accordance  with the
         opinion or the advice of such counsel.

                  (e)  Whenever  in the  performance  of its  duties  under this
         Agreement the Warrant  Agent shall deem it necessary or desirable  that
         any fact or matter be proved or  established  by the  Company  prior to
         taking or suffering any action  hereunder,  such fact or matter (unless
         such evidence in respect thereof be herein specifically prescribed) may
         be deemed to be  conclusively  proved and  established by a certificate
         signed by the  Chairman  of the Board,  Chief  Executive  Officer,  the
         President, Chief Financial Officer, Chief Operating Officer, one of the
         Vice Presidents, the Treasurer, the Secretary or an Assistant Secretary
         of the Company and delivered to the Warrant Agent; and such certificate
         shall be full  authorization  to the Warrant Agent for any action taken
         or suffered in good faith by it under the  provisions of this Agreement
         in reliance upon such certificate.

                  (f) The  Company  agrees to pay the Warrant  Agent  reasonable
         compensation  for all  services  rendered by the  Warrant  Agent in the
         performance  of its  duties  under this  Agreement,  to  reimburse  the
         Warrant  Agent for all  expenses  and  governmental  charges  and other
         charges of any kind and nature incurred by the Warrant Agent (including
         reasonable fees and expenses of the Warrant Agent's counsel and agents)
         in the performance of its duties under this Agreement, and to indemnify
         the Warrant Agent and its officers, directors, employees and agents and
         save  them  harmless  against  any  and  all   liabilities,   including
         judgments,  costs and counsel fees, for anything done or omitted by the
         Warrant Agent in the  performance  of its duties under this  Agreement,
         except as a result  of the  Warrant  Agent's  gross  negligence  or bad
         faith.

                  (g) The Warrant Agent and any stockholder,  director,  officer
         or employee of the  Warrant  Agent may buy,  sell or deal in any of the
         Warrants  or other  securities  of the  Company  or become  pecuniarily
         interested in any  transactions in which the Company may be interested,
         or contract with or lend money to the Company or otherwise act as fully
         and freely as though it were not Warrant Agent under this  Agreement or
         such stockholder,  director,  officer or employee. Nothing herein shall
         preclude  the Warrant  Agent from acting in any other  capacity for the
         Company or for any other legal entity  including,  without  limitation,
         acting as Transfer Agent, Trustee under the Indenture or as a lender to
         the Company or an affiliate thereof.

                  (h) The Warrant Agent shall act hereunder solely as agent, and
         its duties shall be determined  solely by the  provisions  hereof.  The
         Warrant  Agent  shall not be  liable  for  anything  which it may do or
         refrain from doing in connection with this Agreement except for its own
         gross negligence or bad faith.

                  (i)  The  Warrant  Agent  will  not  incur  any  liability  or
         responsibility  to the Company or to any Holder for any action taken in
         reliance   on  any  notice,   resolution,   waiver,   consent,   order,
         certificate, or other paper, document or instrument reasonably believed
         by it to be genuine and to have been  signed,  sent or presented by the
         proper party or parties.

                  (j) The Warrant Agent shall not be under any responsibility in
         respect of the validity of this Agreement or the execution and delivery
         hereof  (except the due  execution  hereof by the Warrant  Agent) or in
         respect  of the  validity  or  execution  of any  Warrant  (except  its
         countersignature  thereof);  nor  shall  the  Warrant  Agent by any act
         hereunder  be deemed to make any  representation  or warranty as to the
         authorization  or reservation of any Warrant Shares (or other stock) to
         be issued  pursuant to this Agreement or any Warrant,  or as to whether
         any Warrant  Shares (or other  stock)  will,  when  issued,  be validly
         issued,  fully paid and  nonassessable,  or as to the Exercise Price or
         the number or amount of  Warrant  Shares or other  securities  or other
         property issuable upon exercise of any Warrant.

                  (k) The Warrant  Agent is hereby  authorized  and  directed to
         accept  instructions  with  respect  to the  performance  of its duties
         hereunder from the Chairman of the Board, Chief Executive Officer,  the
         President, Chief Financial Officer, Chief Operating Officer, one of the
         Vice Presidents, the Treasurer, the Secretary or Assistant Secretary of
         the Company,  and to apply to such officers for advice or  instructions
         in connection  with its duties,  and shall not be liable for any action
         taken or  suffered  to be taken by it in good faith and  without  gross
         negligence  in  accordance  with  instructions  of any such  officer or
         officers.

                  The   provisions   of  this  Section  17  shall   survive  the
         termination  of this  Agreement and any  resignation  or removal of the
         Warrant Agent.

SECTION 18.  Change of Warrant  Agent.  The Warrant Agent may resign at any time
and be discharged  from its duties under this Agreement by giving to the Company
30 days' notice in writing.  The Warrant  Agent may be removed by like notice to
the Warrant  Agent from the  Company.  If the Warrant  Agent shall  resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a  successor  to the  Warrant  Agent.  If the  Company  shall  fail to make such
appointment  within a period of 60 days after such  removal or after it has been
notified  in writing of such  resignation  or  incapacity  by the  resigning  or
incapacitated  Warrant Agent or by any Holder (who shall with such notice submit
his Warrant for inspection by the Company), then the Warrant Agent or any Holder
may  apply to any  court of  competent  jurisdiction  for the  appointment  of a
successor  to the Warrant  Agent.  Pending  appointment  of a successor  warrant
agent,  either by the Company or by such court,  the duties of the Warrant Agent
shall be carried  out by the  Company.  Any  successor  warrant  agent,  whether
appointed  by the Company or such a court,  shall be a bank or trust  company in
good  standing,  incorporated  under the laws of the United States of America or
any State  thereof or the  District  of  Columbia  and having at the time of its
appointment  as  warrant  agent a  combined  capital  and  surplus  of at  least
$10,000,000. After appointment, the successor warrant agent shall be vested with
the  same  powers,  rights,  duties  and  responsibilities  as  if it  had  been
originally  named as Warrant Agent without  further act or deed;  but the former
Warrant  Agent shall  deliver and transfer to the  successor  warrant  agent any
property at the time held by it  hereunder,  and execute and deliver any further
assurance,  conveyance,  act or deed necessary for such purpose. Failure to file
any notice  provided for in this  Section 18,  however,  or any defect  therein,
shall not affect the legality or validity of the  resignation  or removal of the
Warrant Agent or the appointment of the successor warrant agent, as the case may
be. In the event of such  resignation  or removal,  the Company or the successor
warrant agent shall mail by first class mail,  postage prepaid,  to each Holder,
written notice of such removal or  resignation  and the name and address of such
successor warrant agent.

SECTION 19.  Identity of Transfer  Agent.  Forthwith upon the appointment of any
Transfer  Agent  for the  Common  Stock,  or any other  shares of the  Company's
capital  stock  issuable  upon the exercise of the  Warrants,  the Company shall
promptly  file with the  Warrant  Agent a statement  setting  forth the name and
address of such Transfer Agent.

SECTION 20.  Registration  Rights.  The Holders  shall be entitled to all of the
benefits under that certain Common Stock Registration Rights Agreement among the
Company and the parties named therein dated as of December 15, 1999.

SECTION 21. Successors. All the covenants and provisions of this Agreement by or
for the  benefit of the  Company,  the  Warrant  Agent or any holder of Warrants
shall bind and inure to the benefit of their  respective  successors and assigns
hereunder.

SECTION 22.  Termination.  This Agreement  shall terminate at 5:00 p.m. New York
City time on June 30, 2007.  Notwithstanding the foregoing,  this Agreement will
terminate on any earlier date if all  Warrants  have been  exercised or redeemed
pursuant to this Agreement.

SECTION 23.  GOVERNING LAW. THIS AGREEMENT AND EACH WARRANT  CERTIFICATE  ISSUED
HEREUNDER  SHALL BE DEEMED TO BE A CONTRACT  MADE UNDER THE LAWS OF THE STATE OF
NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN  ACCORDANCE  WITH THE LAWS OF
SAID STATE, WITHOUT REGARD TO THE CONFLICT OF LAW RULES THEREOF.

SECTION  24.  Benefits of This  Agreement.  Nothing in this  Agreement  shall be
construed  to give to any  person or  corporation  other than the  Company,  the
Warrant Agent and the registered  Holders of the Warrant  Certificates any legal
or equitable  right,  remedy or claim under this  Agreement;  but this Agreement
shall be for the sole and  exclusive  benefit of the Company,  the Warrant Agent
and  the   registered   Holders  of  the  Warrant   Certificates.

SECTION  25.  Counterparts.  This  Agreement  may be  executed  in any number of
counterparts and each of such  counterparts  shall for all purposes be deemed to
be an original,  and all such counterparts shall together constitute but one and
the same instrument.

SECTION 26.  Headings.  The headings in this  Agreement are for  convenience  of
reference only and shall not limit or otherwise affect the meaning hereof.

<PAGE>

IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be duly
executed, as of the day and year first above written.

                            HVIDE MARINE INCORPORATED

                            By:______________________________
                                     Name:
                                     Title:

                           STATE STREET BANK AND TRUST COMPANY, as Warrant Agent

                            By:______________________________
                                     Name:
                                     Title:<PAGE>
                                                                    Exhibit 10.4

        ________________________________________________________________

        ________________________________________________________________

                                 LOAN AGREEMENT

                                     between

                               ASTeX REALTY CORP.

                                       and

                         CITIZENS BANK OF MASSACHUSETTS

                                 March 6, 2000

        ________________________________________________________________

        ________________________________________________________________

                                      -1-
<PAGE>

                               TABLE OF CONTENTS

     Section
     -------

1.        DEFINITIONS AND RULES OF INTERPRETATION ......................       6

   1.1    Definitions ..................................................       6
   1.2    Rules of Interpretation ......................................      11

2.        AGREEMENT TO MAKE LOAN .......................................      12

   2.1    Agreement to Make Loan .......................................      12
   2.2    Purpose of Loan ..............................................      12
   2.3    Advances Do Not Constitute a Waiver ..........................      12

3.        THE NOTE, INTEREST RATE OPTIONS, REPAYMENT OF LOAN ...........      12

   3.1    The Note .....................................................      12
   3.2    The Record ...................................................      12
   3.3    Interest on the Loan .........................................      13
   3.4    Interest Rate Selection; Conversion ..........................      13
   3.5    Default Interest/Late Charge .................................      13
   3.6    Prepayment ...................................................      13
   3.7    Maturity .....................................................      13
   3.8    Payments of Principal of Loan ................................      13

4.        PAYMENTS AND COMPUTATIONS ....................................      14

   4.1    Payments .....................................................      14
   4.2    Additional Costs, Etc ........................................      14
   4.3    Capital Adequacy .............................................      15
   4.4    Certificate ..................................................      16

5.        COLLATERAL SECURITY ..........................................      16

6.        REPRESENTATIONS, WARRANTIES AND COVENANTS ....................      16

   6.1    Organization; Authority, Etc .................................      16
   6.2    Availability of Utilities ....................................      17
   6.3    Condition of Project .........................................      17
   6.4    Compliance with Requirements .................................      17
   6.5    Project Approvals ............................................      17
   6.6    Violations ...................................................      18

7.        AFFIRMATIVE COVENANTS OF THE BORROWER ........................      18

                                      -2-
<PAGE>

   7.1    Records and Accounts .........................................      18
   7.2    Maintenance of Properties ....................................      18
   7.3    Insurance ....................................................      18
   7.4    Compliance with law ..........................................      18
   7.5    Inspection ...................................................      18
   7.6    Liens and Other Charges ......................................      18
   7.7    Reporting Information ........................................      19
   7.8    Compliance with Covenants ....................................      19
   7.9    Maintenance of Corporate Existence ...........................      19
   7.10   Compliance with other obligations ............................      19
   7.11   Compliance with Obligations ..................................      19
   7.12   Use of Proceeds ..............................................      20
   7.13   Further Assurance of Title ...................................      20
   7.14   Notices ......................................................      20

8.        NEGATIVE COVENANTS OF THE BORROWER ...........................      20

   8.1    Borrower's Assets ............................................      20
   8.2    Restrictions on Easements, Covenants and Restrictions ........      20
   8.3    Liens ........................................................      20
   8.4    Mergers ......................................................      21
   8.5    Leases .......................................................      21
   8.6    Additional Indebtedness ......................................      22
   8.7    Loans, Advances ..............................................      22

9.        FINANCIAL COVENANTS ..........................................      22

10.       CONDITIONS TO CLOSING AND ADVANCE OF LOAN PROCEEDS .... ......      22

   10.1   Loan Documents ...............................................      22
   10.2   Certified Copies of Organization Documents ...................      22
   10.3   Resolutions ..................................................      22
   10.4   Incumbency Certificate; Authorized Signers ...................      22
   10.5   Validity of Liens ............................................      23
   10.6   Deliveries ...................................................      23
   10.7   Legal and Other Opinions .....................................      24
   10.8   Lien Search ..................................................      24
   10.9   Performance; No Default ......................................      24
   10.10  Representations and Warranties ...............................      24
   10.11  Proceedings and Documents ....................................      24
   10.12  Waiver .......................................................      25

11.       EVENTS OF DEFAULT AND REMEDIES ...............................      25

   11.1   Events of Default ............................................      25
   11.2   Termination of Advances and Acceleration .....................      28
   11.3   Remedies .....................................................      28
   11.4   Distribution of Collateral Proceeds ..........................      28

                                      -3-
<PAGE>

   11.5   Power of Attorney ............................................      29
   11.6   Waivers ......................................................      29

12.       SETOFF .......................................................      29

13.       EXPENSES .....................................................      30

14.       INDEMNIFICATION ..............................................      30

15.       LIABILITY OF THE LENDER ......................................      31

16.       RIGHTS OF THIRD PARTIES ......................................      31

17.       SURVIVAL OF COVENANTS, ETC. ..................................      32

18.       ASSIGNMENT AND PARTICIPATION .................................      32

   18.1   Conditions to Assignment by Lender ...........................      32
   18.2   New Notes, Agreement .........................................      32
   18.3   Participations ...............................................      33
   18.4   Pledge by the Lender .........................................      33
   18.5   No Assignment by the Borrower ................................      33

19.       RELATIONSHIP .................................................      33

20.       NOTICES ......................................................      33

21.       GOVERNING LAW ................................................      35

22.       CONSENT TO JURISDICTION; WAIVERS .............................      35

23.       HEADINGS .....................................................      35

24.       COUNTERPARTS .................................................      35

25.       ENTIRE AGREEMENT, ETC. .......................................      35

26.       CONSENTS, AMENDMENTS, WAIVERS, ETC. ..........................      36

27.       TIME OF THE ESSENCE ..........................................      36

28.       SEVERABILITY .................................................      36

                                      -4-
<PAGE>

                                    EXHIBITS
                                    --------

     A -  Interest Terms and Provisions

                                      -5-
<PAGE>

                                 LOAN AGREEMENT
                                 --------------

     This LOAN AGREEMENT is made as of the 6th day of March, 2000, by and
among ASTeX REALTY CORP. (the "Borrower"), a corporation organized under the
laws of the Commonwealth of Massachusetts, having its principal place of
business at 35 Cabot Road, Woburn, Massachusetts 01801 and CITIZENS BANK OF
MASSACHUSETTS (the "Lender"), a Massachusetts bank, having its principal
executive offices at 28 State Street, Boston, Massachusetts 02109.

     1.   DEFINITIONS AND RULES OF INTERPRETATION.
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     1.1  Definitions.  The following terms as used in this Agreement, any
Exhibit hereto, or in any other Loan Document (unless otherwise defined therein)
shall have the meanings set forth in this (S)1.  Further, any and all terms
which are defined in Exhibit A, annexed hereto, shall when used herein have the
meaning as set forth in such Exhibit A.

     Advance.  Any disbursement of the proceeds of the Loan made or to be made
by the Lender pursuant to the terms of this Agree  ment.

     Agreement.  This Loan Agreement, including the Schedules and Exhibits
hereto.

     Balance Sheet Date.  December 25, 1999.

     Business Day.  Any day on which the Lender is open for the transaction of
banking business in Boston, Massachusetts.

     Closing Date.  The first date on which the conditions set forth in (S)10
have been satisfied.

     Code.  The Internal Revenue Code of 1986 and the regulations thereunder,
all as amended and in effect from time to time.

     Collateral.  All of the property, rights and interests of the Borrower that
are or are intended to be subject to the security interests, assignments, and
mortgage liens created by the Security Documents.

     Consolidated or consolidated.  With reference to any term defined herein,
that term as applied to the Guarantor and its Subsidiaries, consolidated in
accordance with generally accepted accounting principles.  At the option of the
Lender, any financial reports required hereunder shall be submitted, and any
financial covenants established hereunder shall be calculated, on a Consolidated
basis by the Guarantor.

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     Default.  A condition or event which would, with either the giving of
notice or lapse of time or both, constitute an Event of Default.

     Default Rate.  See (S)35.

     Distribution.  The (i) declaration or payment of any dividend, (ii)
distribution of cash or other property, (iii) purchase, redemption, or other
retirement (directly or indirectly), or (iv) other distribution, in each case,
of, on or in respect of any shares of any class of capital stock, partnership
interests, or other beneficial or ownership interests of the Borrower; provided
however, a stock split shall not be deemed a distribution hereunder.

     Environmental Laws.  As specifically defined in the Security Deed.

     Environmental Report.  That certain Phase I Environmental Site Assessment
and Report dated as of February 1, 2000 as prepared by Vertex Engineering
Services, Inc. with respect to the Project.

     Event of Default.  See (S)111.

     Financing Statements.  Uniform Commercial Code Form 1 Financing
Statement(s) from the Borrower in favor of the Lender.

     Generally accepted accounting principles.  Principles that are (a)
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, as in effect from time to time
and (b) consistently applied with past financial statements of the Borrower
adopting the same principles; provided that a certified public accountant would,
insofar as the use of such accounting principles is pertinent, be in a position
to deliver an unqualified opinion (other than a qualification regarding changes
in generally accepted accounting principles) as to financial statements in which
such principles have been properly applied.

     Governmental Authority.  The United States of America, the State in which
the Land is located, the city or town in which the Land is located, and any
political subdivision, agency, authority, department, commission, board, bureau,
or instrumentality of any of them.

     Guarantor. Applied Science and Technology, Inc., a Delaware corporation
having a usual place of business at 35 Cabot Road, Woburn, Massachusetts 01801.

     Guaranty. The Unconditional Guaranty of Payment and Per formance, dated
or to be dated on or prior to the Closing Date, made by the Guarantor in favor
of the Lender.

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     Improvements.  That certain building contain approximately 118,000 square
feet of space located on the Land.

     Indebtedness.  All obligations, contingent and otherwise, that in
accordance with generally accepted accounting principles should be classified
upon the obligor's balance sheet as liabil  ities, or to which reference should
be made by footnotes thereto, including in any event and whether or not so
classified:  (a) all debt and similar monetary obligations, whether direct or
indi  rect; (b) all liabilities secured by any mortgage, pledge, security
interest, lien, charge, or other encumbrance existing on property owned or
acquired subject thereto, whether or not the liability secured thereby shall
have been assumed; (c) all liabilities under capitalized leases; and (d) all
guaranties, endorsements and other contingent obligations whether direct or
indirect in respect of indebtedness of others, including the obligations to
reimburse the issuer in respect of any letters of credit.

     Indemnity Agreement.  The Indemnity Agreement Regarding Hazardous
Materials, dated or to be dated on or prior to the Closing Date, made by the
Borrower and the Guarantor in favor of the Lender.

     Investments.  All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect to any guaranties (or other commitments as described under
Indebtedness), or obliga  tions of, any Person.

     Land.  The real property located in Wilmington, Middlesex (Northern
District) County, Massachusetts, and described in Exhibit A to the Security
Deed.

     Loan.  The loan or any portion thereof which is the subject of this
Agreement.

     Loan Amount.  $10,000,000.

     Loan Documents.  This Agreement, the Note, the Indemnity Agreement, the
Guaranty, and the Security Documents, and all other agreements, documents and
instruments now or hereafter evidencing, securing or otherwise relating to the
Loan.

     Maturity Date. March 6, 2007.

     Note.  The Note in the principal face amount of the Loan Amount dated as of
the date hereof, made by the Borrower to the order of the Lender, together with
any extension, renewal, replacement, substitution, or modification thereof.

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     Obligations.  All indebtedness, obligations and liabilities of the Borrower
to the Lender, existing on the date of this Agreement or arising thereafter,
direct or indirect, joint or several, absolute or contingent, matured or
unmatured, liquidated or unliquidated, secured or unsecured, arising by
contract, operation of law or otherwise, including, without limitation, the
Project Obligations.

     Obligor(s). The Borrower and the Guarantor.

     Organizational Documents.  For any corporation, partnership, trust, limited
liability company, limited liability partnership, unincorporated association,
business or other legal entity, the documents pursuant to which such entity has
been established or organized, as such documents may be amended from time to
time.

     Outstanding.  With respect to the Advances or the Loan, the aggregate
unpaid principal thereof as of any date of determina  tion.

     Person.  Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivi  sion thereof.

     Personal Property.  All materials, furnishings, fixtures, furniture,
machinery, equipment and all items of tangible or intangible personal property
now or hereafter owned or acquired by the Borrower, in which the Lender has
been, or will be granted an interest to secure the Project Obligations.

     Project.  The Land, Improvements and Personal Property.

     Project Approvals.  All approvals, consents, waivers, orders, agreements,
acknowledgments, authorizations, permits and licenses required under applicable
Requirements or under the terms of any restriction, covenant or easement
affecting the Project, or otherwise necessary and obtainable, for the ownership,
acquisition, use, occupancy and operation of the Project and the Improvements,
whether obtained from a Governmental Authority or any other Person.

     Project Obligations.  All indebtedness, obligations and liabilities of the
Borrower to the Lender existing on the date of this Agreement or arising
thereafter, direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
by contract, operation of law or otherwise, arising or incurred under this
Agreement or any of the other Loan Documents or in respect of any of the
Advances or the Note.

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     Record.  Any record, including computer records, maintained by the Lender
with respect to the balance due under the Loan.

     Requirements.  Any law, ordinance, code, order, rule or regulation of any
Governmental Authority relating in any way to the acquisition, ownership, use,
occupancy and operation of the Project and the Improvements.

     Revolving Loan Arrangement.  That certain loan arrangment by and between
the Lender and the Guarantor evidenced by, amongst other documents, instruments
and agreements that certain Unsecured Committed Revolver Loan Agreement dated as
of May 1, 1997, as amended by that certain First Amendment to Unsecured
Committed Revolver Loan Agreement dated as of March 6, 2000 and that certain
Unsecured Committed Revolver Promissory Note dated as of May 1, 1997, as amended
by that certain First Amendment to Unsecured Committed Revolver Promissory Note
dated March 6, 2000.

     Security Deed.  The Mortgage and Security Agreement, dated or to be dated
as of the date hereof made by the Borrower in favor of the Lender.

     Security Documents.  The Security Deed, the Assignment of Leases and Rents
dated as of the date hereof, the Financing Statements and the Guaranty, and any
other agreement, document or instrument now or hereafter securing the Project
Obligations.

     Subsidiary.  Any corporation, partnership, association, trust, or other
business entity of which the designated parent shall at any time own directly,
or indirectly through a Subsidiary or Subsidiaries at least a majority (by
number of votes) of the outstanding voting interests therein.

     Survey.  An instrument survey of the Land and the Improve ments prepared in
accordance with the Lender's survey require  ments, such survey to be
satisfactory to the Lender in form and substance.

     Surveyor Certificate.  With respect to any Survey, a cer tificate executed
by the surveyor who prepares such Survey dated as of a recent date and
containing such information relating to the Project as the Lender or the Title
Insurance Company may require, such certificate to be satisfactory to the Lender
in form and substance.

     Taking.  Any condemnation for public use of, or damage by reason of, the
action of any Governmental Authority, or any transfer by private sale in lieu
thereof, either temporarily or permanently.

     Title Insurance Company. First American Title Insurance Company.

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     Title Policy.  An ALTA standard form title insurance policy issued by the
Title Insurance Company in an amount not less than the Loan Amount insuring the
priority of the Security Deed and that the Borrower holds marketable fee simple
title to the Project, subject only to such exceptions as the Lender may approve,
and shall contain such endorsements and affirmative insurance as the Lender in
its discretion may require.

     Type; Type of Loan. Any type of Loan available to the Borrower as set forth
in Exhibit A, attached hereto.

     1.2  Rules of Interpretation.

          (a) A reference to any Loan Document, agreement, budget, document or
     schedule shall include such agreement, budget, document or schedule as
     revised, amended, modified or supplemented from time to time in accordance
     with its terms and the terms of this Agreement.

          (b) A reference to any Exhibit hereto shall be deemed to specifically
     incorporate the terms and provisions of such Exhibit herein.

          (c) The singular includes the plural and the plural includes the
     singular.

          (d) A reference to any law includes any amendment or modification to
     such law.

          (e) A reference to any Person includes its permitted successors and
     permitted assigns.

          (f) Accounting terms not otherwise defined herein have the meaning
     assigned to them by generally accepted accounting principles applied on a
     consistent basis by the accounting entity to which they refer.

          (g) The words "approval" and "approved", as the context so determines,
     means an approval in writing given to the party seeking approval after full
     and fair disclosure to the party giving approval of all material facts
     necessary in order to determine whether approval should be granted.

          (h) Reference to a particular "(S)" refers to that section of this
     Agreement unless otherwise indicated.

     2.   AGREEMENT TO MAKE LOAN.

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     2.1  Agreement to Make Loan.  Subject to the terms and conditions of this
Agreement, the Lender agrees to lend to the Borrower and the Borrower agrees to
borrow from the Lender, on the Closing Date, a maximum aggregate principal
amount equal to the Loan Amount.

     2.2  Purpose of Loan.  The proceeds of the Loan shall be used to acquire
the Project.

     2.3  Advances Do Not Constitute a Waiver.  No Advance made by the Lender
shall constitute a waiver of any of the terms and conditions of this Agreement,
nor, in the event the Borrower fails to satisfy any such condition, shall any
such Advance have the effect of precluding the Lender from thereafter declaring
such failure to satisfy a condition to be an Event of Default.

     3.   THE NOTE, INTEREST RATE OPTIONS, REPAYMENT OF LOAN.

     3.1  The Note.  The obligation of the Borrower to pay the Loan Amount or,
if less, the aggregate unpaid principal amount of all Advances made by the
Lender hereunder plus accrued interest thereon, shall be evidenced by the Note.
In the event the Note is lost, destroyed or mutilated at any time prior to
payment in full of the indebtedness evidenced thereby, the Borrower shall
execute a new note substantially in the form of the Note.  The Note shall not be
necessary to establish the indebtedness of the Borrower to the Lender on account
of Advances made under this Agreement.

     3.2  The Record.  The Borrower irrevocably authorizes the Lender to make or
cause to be made, at or about the time of any Advance or at the time of receipt
of any payment of the principal of the Note, an appropriate notation on the
Lender's Record reflecting the making of such Advance or (as the case may be)
the receipt of such payment.  The outstanding amount of the Loan set forth on
the Lender's Record shall be prima facie evidence in the absence of manifest
error of the principal amount thereof owing and unpaid to the Lender, but the
failure to record, or any error in so recording, any such amount on the Lender's
Record shall not limit or otherwise affect the obligations of the Borrower here
under or under the Note to make payments of principal or interest on the Note
when due.  Further, the outstanding amount of the Loan as reflected on the
Record from time to time shall be considered correct and binding on the Borrower
unless within ten (10) Business Days after receipt of any notice by the Borrower
of such outstanding amount, the Borrower shall notify the Lender to the
contrary.

     3.3  Interest on the Loan.  The Loan shall bear interest at the interest
rates, and such interest shall be payable, as set forth in Exhibit A.

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     3.4  Interest Rate Selection; Conversion.  The Borrower shall have such
rights as are set forth in Exhibit A to select and, as applicable, Convert Loans
from one Type of Loan to another Type of Loan.

     3.5  Default Interest/Late Charge.

          (1) Upon the occurrence of an Event of Default, at the Lender's
     option, the Loan and all other amounts payable hereunder or under any of
     the other Loan Documents shall bear interest payable on demand at a rate
     per annum equal to four percent (4%) above the then applicable highest rate
     of interest under the Note until such amount shall be paid in full (after
     as well as before judgment) (the "Default Rate").

          (2) In addition to other charges described in the Loan Documents, and
     without derogating from the right of the Lender to accelerate the
     Obligations upon the occurrence of an Event of Default, the Borrower shall
     pay to the Lender a late charge equal to one (1%) percent of any payment
     due under the Note which is not paid within ten (10) days of the due date
     thereof.

     3.6  Prepayment.  The Borrower shall not have the right at any time to
prepay the Note on or before the Maturity Date, as a whole, or in part, except
as set forth in Exhibit A.

     3.7  Maturity.  The Borrower promises to pay on the Matu rity Date, and
there shall become absolutely due and payable on the Maturity Date, all
principal of the Loan outstanding on such date, together with any and all
accrued and unpaid interest thereon.

     3.8  Payments of Principal of Loan.  The Borrower promises to pay to the
Lender the principal amount of the Loan in eighty-four (84) consecutive monthly
installments of $119,848, such installments to be due and payable on the first
day of each calendar month, commencing on April 1, 2000, with a final payment
on the Initial Maturity Date in an amount equal to the unpaid balance of the
Loan.

     4.   PAYMENTS AND COMPUTATIONS.

     4.1  Payments.

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          (1) All payments of principal, interest, fees and any other amounts
     due under the Note or under any of the other Loan Documents shall be sent
     to the Lender at Citizens Bank of Massachusetts, 28 State Street, Boston,
     Massachusetts, or at such other location in the Boston, Massachusetts area
     that the Lender may from time to time designate, in the billing invoice or
     otherwise, in immediately available funds in lawful money of the United
     States.  Prior to the occurrence of an Event of Default, the Lender will
     provide the Borrower with an invoice of the principal, interest and fees
     due under the Note at least five (5) days prior to the due date.

          (2) All payments by the Borrower under the Note and under any of the
     other Loan Documents shall be made without setoff or counterclaim and free
     and clear of and without deduction for any taxes, levies, imposts, duties,
     charges, fees, deductions, withholdings, compulsory loans, restrictions or
     conditions of any nature now or hereafter imposed or levied by any
     jurisdiction or any political subdivision thereof or taxing or other
     authority therein unless the Borrower is compelled by law to make such
     deduction or withholding.

     4.2  Additional Costs, Etc.  If any present or future applicable law, which
expression, as used herein, includes statutes, rules and regulations thereunder
and interpretations thereof by any competent court or by any governmental or
other regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at any
time or from time to time hereafter made upon or otherwise issued to the Lender
by any central bank or other fiscal, monetary or other authority (whether or not
having the force of law), shall:

          (a) subject the Lender to any tax, levy, impost, duty, charge, fee,
     deduction or withholding of any nature with respect to this Agreement, the
     other Loan Documents, or the Loans (other than taxes based upon or measured
     by the income or profits of the Lender), or

          (b) materially change the basis of taxation (except for changes in
     taxes on income or profits) of payments to the Lender of the principal of
     or the interest on any Loans or any other amounts payable to the Lender
     under this Agreement or the other Loan Documents, or

          (c) impose or increase or render applicable (other than to the extent
     specifically provided for elsewhere in this Agreement) any special deposit,
     reserve, assessment, liquidity, capital adequacy or other similar
     requirements (whether or not having the force of law) against assets held

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     by, or deposits in or for the account of, or loans by, or commitments of an
     office of the Lender, or

          (d) impose on the Lender any other conditions or re quirements with
     respect to this Agreement, the other Loan Documents, the Loan, or any class
     of loans or commitments of which any Loan forms a part;

and the result of any of the foregoing is

          (i) to increase the cost to the Lender of making, funding, issuing,
     renewing, extending or maintaining any of the Loans, or

          (ii) to reduce the amount of principal, interest or other amount
     payable to the Lender hereunder on account of any of the Loans, or

          (iii)  to require the Lender to make any payment or to forego any
     interest or other sum payable hereunder, the amount of which payment or
     foregone interest or other sum is calculated by reference to the gross
     amount of any sum receivable or deemed received by the Lender from the
     Borrower hereunder,

then, and in each such case, the Borrower will, upon demand made by the Lender
at any time and from time to time and as often as the occasion therefor may
arise, pay to the Lender such additional amounts as will be sufficient to
compensate the Lender for such additional cost, reduction, payment or foregone
interest or other sum.

     4.3  Capital Adequacy.  If the Lender shall have determined that the
adoption of any applicable law, rule, regulation, guideline, directive or
request (whether or not having force of law) regarding capital requirements, or
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Lender with any of the foregoing
imposes or increases a requirement by the Lender to allocate capital resources
to the Loans made, or to be made, hereunder, which has or would have the effect
of reducing the return on the Lender's capital to a level below that which the
Lender could have achieved (taking into consideration the Lender's then existing
policies with respect to capital adequacy and assuming full utilization of the
Lender's capital) but for such adoption, change or compliance, by any amount
deemed by the Lender to be material: (i) the Lender shall promptly after its
determination of such occurrence give notice thereof to the Borrower; and (ii)
the Borrower shall pay to the Lender as an additional fee from time-to-time on
demand such amount as the Lender certifies to be the amount that will

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compensate it for such reduction. In determining such amounts, the Lender may
use any reasonable averaging and attribution methods.

     4.4  Certificate.  A certificate setting forth any addi tional amounts
payable pursuant to (S)42 or (S)43 and a brief explanation of such amounts which
are due, submitted by the Lender to the Borrower, shall be prima facie evidence
that such amounts are due and owing.

     5.   COLLATERAL SECURITY.  The Obligations shall be secured by a perfected
first priority mortgage lien and security in the Collateral pursuant to the
terms of the Security Documents to which the Borrower is a party.

     6.   REPRESENTATIONS, WARRANTIES AND COVENANTS.  The Borrower represents,
warrants, and covenants to the Lender as follows:

     6.1  Organization; Authority, Etc.

          (1) Organization; Good Standing.  The Borrower is a corporation duly
     organized under the laws of the Commonwealth pursuant to the Borrower's
     Organizational Documents, and is, and will at all times be, validly
     existing and in good standing under the laws of such State. The Borrower
     is, and will at all times be, duly organized and is, and will at all times
     be, validly existing, in good standing, and qualified to do business in
     each jurisdiction where required.  The Borrower has, and will at all times
     have, all requisite power to own its property and conduct its business as
     now conducted and as presently contemplated.

          (2) Authorization.  The execution, delivery and performance of this
     Agreement and the other Loan Documents to which the Borrower is or is to
     become a party and the transactions contemplated hereby and thereby (i) are
     within the authority of the Borrower, (ii) have been duly authorized by all
     necessary proceedings on the part of the Borrower, (iii) to the best of the
     Borrower's knowledge, do not conflict with or result in any breach or
     contravention of any provision of law, statute, rule or regulation to which
     Borrower is subject or any judgment, order, writ, injunction, license or
     permit applicable to Borrower, (iv) do not conflict with any provision of
     the Organizational Documents of the Borrower, and (v) do not require the
     approval or consent of, or filing with, any governmental agency or
     authority other than those already obtained and the filing of the Security
     Documents and the Financing Statements in the appropriate public records
     with respect thereto.

          (3) Enforceability.  The execution and delivery of

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     this Agreement and the other Loan Documents to which each Obligor is or
     is to become a party will result in valid and legally binding
     obligations of such Obligor enforceable against it in accordance with
     the respective terms and provisions hereof and thereof, except as
     enforceability is limited by bankruptcy, insolvency, reorganization,
     moratorium or other laws relating to or affecting generally the
     enforcement of creditors' rights and except to the extent that
     availability of the remedy of specific performance or injunctive relief
     is subject to the discretion of the court before which any proceeding
     therefor may be brought.

     6.2  Availability of Utilities.  All utility services necessary and
sufficient for the use and operation of the Project are presently, and will at
all times be, available to the boundaries of the Land through dedicated public
rights of way or through perpetual private easements, approved by the Lender,
with respect to which the Security Deed creates a valid and enforceable first
lien.

     6.3  Condition of Project.  Except as otherwise disclosed in the
Environmental Report, neither the Project nor any part thereof is now damaged or
injured as result of any fire, explosion, accident, flood or other casualty or
has been the subject of any Taking, and to the knowledge of the Borrower, no
Taking is pending or contemplated.

     6.4  Compliance with Requirements.  To the best of the Borrower's knowledge
and except as otherwise disclosed in the Environmental Report, the use and
occupancy of the Project complies with, and will at times comply with, all
Requirements. The Borrower will give all such notices to, and take all such
other actions with respect to, such Governmental Authority as may be required
under applicable Requirements to use, occupy and operate the Project.

     6.5  Project Approvals.

          (1) To the best of the Borrower's knowledge, all necessary and
     required Project Approvals have been obtain by the Borrower or its
     predecessors in title to the Project, and such Project Approvals have been
     validly issued and are in full force and effect.  To the best of the
     Borrower's knowledge, no Project Approvals will terminate, or become void
     or voidable or terminable, upon any sale, transfer or other disposition of
     the Project, including any transfer pursuant to foreclosure sale under the
     Security Deed.

          (2) The Borrower will duly perform and comply with all of the terms
     and conditions of all Project Approvals obtained at any time.

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     6.6  Violations.  The Borrower has received no notices of, or has any
knowledge of, any violations of any applicable Re  quirements or Project
Approvals.

     7.   AFFIRMATIVE COVENANTS OF THE BORROWER.  The Borrower covenants and
agrees to, so long as the Loan is outstanding:

     7.1  Records and Accounts. Keep adequate records and books of account, in
which complete entries will be made in accordance with GAAP consistently
applied, subject to year end adjustments, reflecting all financial transactions
of the Borrower, including complete records of all accounts of Borrower, as
defined in the Massachusetts Uniform Commercial Code.

     7.2  Maintenance of Properties.  Maintain, keep and preserve the Project
(tangible and intangible) necessary or useful in the proper conduct of its
business in good working order and condition, ordinary wear and tear excepted.
Borrower shall use its best efforts to maintain in full force and effect all
rights, patents, privileges necessary for the proper conduct of its business at
the Project.

     7.3  Insurance.  Maintain insurance with financially sound and reputable
insurance companies or associations in such amounts and covering such risks as
the Lender shall reasonably require and as are usually carried by companies
engaged in the same or a similar business and similarly situated, which
insurance may provide for reasonable deductibility from coverage thereof.

     7.4  Compliance with law.  Comply in all material respects with applicable
laws, rules, regulations, and orders, such compliance to include, without
limitation, paying before the same become delinquent all taxes, assessments, and
governmental charges imposed upon it or upon its property, noncompliance with
which would have a material and adverse effect on the business and operations of
the Borrower.

     7.5  Inspection.    At any reasonable time during business hours and from
time to time, permit the Lender or any agent or representative thereof to
examine and make copies of and abstracts from the records and books of account
of, and visit the properties of the Borrower and to discuss the affairs,
finances, and accounts of the Borrower with any of their respective officers and
directors and the Borrower's independent accountants.  Such visits will be
conducted in a manner which does not interfere with the normal operations of the
Borrower.

     7.6  Liens and Other Charges.  The Borrower will duly pay and discharge, or
cause to be paid and discharged, before the same shall become overdue all claims
for labor, materials, or supplies that if unpaid might by law become a lien or
charge upon any of its property.

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     7.7  Reporting Information. The Borrower hereby agrees to deliver, or cause
to be delivered, to Lender as soon as practicable and in any event within ninety
(90) days after the end of each fiscal year of Borrower, the  balance sheet of
Borrower as of the end of such year (accompanied by supplementary schedules
indicating the total debt on any assets shown on a net investment basis), and
the related statements of income, retained earnings, changes in capital and cash
flows for such year, each setting forth in comparative form the figures for the
previous fiscal year and all such statements to be in reasonable detail,
prepared in accordance with generally accepted accounting principles, and
certified without qualification by Borrower's independent certified public
accountants (who shall be satisfactory to Lender) as fairly presenting
Borrower's financial condition as of the end of such year.

     7.8  Compliance with Covenants.  Conform, adhere to, and observe all
covenants and warranties contained in any other agreement between the Lender and
the Borrower, or instrument furnished by the Borrower to the Lender.

     7.9  Maintenance of Corporate Existence.   Preserve and maintain its
corporate existence and good standing in the jurisdiction of its incorporation,
and qualify and remain qualified as a foreign corporation in each jurisdiction
in which such qualification is required.

     7.10  Compliance with other obligations. The Borrower will punctually and
promptly make all payments and perform all other obligations which may be
required of it with respect to any indebtedness (whether for money borrowed,
goods purchased, services rendered or however such indebtedness may otherwise
arise) owing to persons, firms or corporations other than the Lender, including,
without limitation, indebtedness which may be secured by a security interest in
assets of the Borrower or property of the Borrower, and all obligations under
the terms of any lease in which the Borrower is the lessee.  The provisions of
this section shall not preclude the Borrower from contesting in good faith and
diligently defending against any such indebtedness or obligation.

     7.11  Compliance with Obligations. Pay and/or perform promptly when due all
of the Obligations and liabilities of Borrower including, without limitation,
the payment of all sales, use, excise, personal property, income, withholding,
corporate, franchise, and other taxes, assessments, and governmental charges
upon or relating to its ownership or use of any of its assets or its income, or
the operation of its business or otherwise for which Borrower is or may be
liable except to the extent the same are being diligently contested in good
faith and adequate

                                      -19-
<PAGE>

provision has been made for payment and upon such request shall submit to Lender
proof satisfactory to Lender that such payments and/or deposits have been made.

     7.12  Use of Proceeds.  The Borrower will use the proceeds of the Loan
solely for the purposes of the acquisition of and the paying for the purchase of
the Project.

     7.13 Further Assurance of Title. If at any time the Lender or the Lender's
counsel has reason to believe that any Advance is not secured or will or may not
be secured by the Security Deed as a first lien or security interest on the
Project, then the Borrower shall, within ten (10) days after written notice from
the Lender, do all things and matters necessary, to assure to the satisfaction
of the Lender and the Lender's counsel that any Advance previously made
hereunder or to be made hereunder is secured or will be secured by the Security
Deed as a first lien or security interest on the Project, and the Lender, at its
option, may decline to make Advances hereunder until the Lender has received
such assurance, but nothing in this Section shall limit the Lender's right to
require endorsements extending the effective date of the Title Policy as herein
set forth.

     7.14  Notices.  The Borrower will promptly notify the Lender in writing of
(i) the occurrence of any Default or Event of Default; (ii) the occurrence of
any other event which may have an adverse effect on the Project or the business
or financial condition of any Obligor; or (iii) the receipt by the Borrower of
any notice of default or notice of termination with respect to any contract or
agreement relating to the ownership, operation, or use of the Project.

     8.   NEGATIVE COVENANTS OF THE BORROWER.  The Borrower covenants and agrees
not to, so long as the Loan is outstanding:

     8.1  Borrower's Assets.  Sell or convey all or substantially all of the
Borrower's assets.

     8.2  Restrictions on Easements, Covenants and Restric tions.  The Borrower
will not create or suffer to be created or to exist any easement, right of way,
restriction, covenant, condition, license or other right in favor of any person
which affects or might affect title to the Project or the use and occupancy of
the Project or any part thereof without obtaining the prior approval of the
Lender.

     8.3  Liens.  Create, incur, assume, or suffer to exist, or permit any
Subsidiary to create, incur, assume, or suffer to exist, any lien upon or with
respect to the Project, now owned or hereafter acquired, except:

                                      -20-
<PAGE>

          (1) Liens in favor of the Lender;

          (2) Liens for taxes or assessments or other government charges or
     levies if not yet due and payable or, if due and payable, if they are being
     contested in good faith by appropriate proceedings and for which
     appropriate reserves are maintained;

          (3) Judgment and other similar liens arising in connection with court
     proceedings, provided the execution or other enforcement of such liens is
     effectively stayed and the claims secured thereby are being actively
     contested in good faith and by appropriate proceedings, provided they do
     not adversely affect the Borrower in a material way;

          (4) Purchase-money liens on any property hereafter acquired or the
     assumption of any lien on property existing at the time of such
     acquisition, or a lien incurred in connection with any conditional sale or
     other title retention agreement of a capital lease;

          (5) Permitted encumbrances, as identified on the Title Policy;

          (6) Any lien existing on any asset of any corporation at the time such
     corporation becomes a consolidated subsidiary of Borrower;

          (7) Any lien on any asset of any corporation existing at the time such
     corporation is merged or consolidated with or into the Borrower or a
     consolidated Subsidiary;

          (8) Any lien existing on any asset prior to the acquisition thereof by
     the Borrower or a consolidated subsidiary and not created in contemplation
     of such acquisition;

     8.4  Mergers.  Redeem any shares of the Borrower, merge or consolidate with
(unless it is the survivor corporation) or sell, assign, lease, or otherwise
dispose of (whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether, now owned or hereafter acquired) to
any person.

     8.5  Leases.  Except for the lease by and between the Borrower and
Guarantor dated as of March 6, 2000, the Borrower will not, without the
Lender's consent, which consent shall not be unreasonably withheld, create,
incur, assume, or suffer to exist, or permit any Subsidiary to create, incur,
assume or suffer to exist, any obligation as lessee for the rental or hire of
any real or personal property, except: (1) leases existing on the date of this
Agreement and any extensions or renewals

                                      -21-
<PAGE>

thereof; (2) leases, of which the total annual obligation under any such lease
is not more than $600,000.

     8.6  Additional Indebtedness.  Except as otherwise provided above, issue
evidence of indebtedness or create, assume, become contingently liable for, or
suffer to exist Lender debt in addition to Obligations to the Lender; provided,
however, that the Borrower may incur liabilities which are incurred or arise in
the ordinary course of Borrower's business other than indebtedness arising with
respect to money borrowed or the issuance of standby letters of credit for the
account of the Borrower both of which shall be prohibited.

     8.7  Loans, Advances.  Make any loan, advance, pay any bonus, or grant any
extension of credit to any corporation, partnership, person or other entity,
except extensions of credit to customers or otherwise in the ordinary course of
business.

     9.   FINANCIAL COVENANTS.

     9.1   The Guarantor will comply with all of the financial covenants set
forth in the Guaranty.

     10.  CONDITIONS TO CLOSING AND ADVANCE OF LOAN PROCEEDS. The obligation of
the Lender to make any Advance shall be subject to the satisfaction of the
following conditions precedent:

     10.1  Loan Documents.  Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to the Lender.

     10.2  Certified Copies of Organization Documents.  The Lender shall have
received from each of the Parties a certified copy of its Organization Documents
as in effect on such date of certification, such Organizational Documents to be
in form and substance satisfactory to the Lender.

     10.3  Resolutions.  All action necessary for the valid execution, delivery
and performance by the Borrower of this Agreement and the other Loan Documents
to which it is or is to become a party shall have been duly and effectively
taken, and evidence thereof satisfactory to the Lender shall have been provided
to the Lender.  The Lender shall have received from each such Person true copies
of the resolutions authorizing the transactions described herein, each certified
as of a recent date to be true and complete.

     10.4  Incumbency Certificate; Authorized Signers.  The Lender shall have
received from the Borrower an incumbency certificate, dated as of the Closing
Date, giving the name and bearing a specimen signature of each individual who
shall be

                                      -22-
<PAGE>

authorized: (a) to sign, in the name and on behalf of such Person each of the
Loan Documents to which such Person is or is to become a party; (b) in the case
of the Borrower, to make Draw Requests; and (c) to give notices and to take
other action on its behalf under the Loan Documents.

     10.5  Validity of Liens.  The Security Documents shall be effective to
create in favor of the Lender a legal, valid and enforceable first lien and
security interest in the Collateral. All filings, recordings, deliveries of
instruments and other actions necessary or desirable in the opinion of the
Lender to protect and preserve such lien and security interest shall have been
duly effected.  The Lender shall have received evidence thereof in form and
substance satisfactory to the Lender.

     10.6  Deliveries.  The following items or documents shall have been
delivered to the Lender by the Borrower and shall be in form and substance
satisfactory to the Lender:

          (1) Title Policy.  The Title Policy, together with proof of payment of
     all fees and premiums for such policy and true and accurate copies of all
     documents listed as exceptions under such policy.

          (2) Other Insurance.  Duplicate originals or certified copies of all
     policies of insurance required by the Security Deed or hereunder to be
     obtained and maintained.

          (3) Evidence of Access, Availability of Utilities, Project Approvals.
     Evidence as to:

               (1)  the methods of access to and egress from the Project, and
          nearby or adjoining public ways, meeting the reasonable requirements
          of the Project;

               (2)  the availability of water supply and storm and sanitary
          sewer facilities meeting the reasonable requirements of the Project;

               (3)  the availability of all other required utilities, in
          location and capacity sufficient to meet the reasonable needs of the
          Project; and

               (4)  the obtaining of all Project Approvals which are required,
          necessary or desirable for the use and operation of the Improvements
          and the access thereto, together with copies of all such Project
          Approvals.

          (4) Environmental Report.  An environmental site assessment report or
     reports of one or more qualified environmental engineering or similar
     inspection firms

                                      -23-
<PAGE>

     approved by the Lender, which report or reports shall indicate a
     condition of the Land and any existing improve ments thereon in
     compliance with all Requirements and in all respects satisfactory to the
     Lender in its sole discretion and upon which report or reports the
     Lender is expressly entitled to rely.

          (5) Soils Report.  A soils report for the Land pre pared by a soils
     engineer approved by the Lender, which report shall indicate that, based
     upon actual surface and subsurface examinations of the Land, the soils
     conditions are fully satisfactory for the use and operation of the
     Improvements.

          (6) Survey and Taxes.  A Survey of the Land (and any existing
     improvements thereon) and Surveyor's Certificate, and evidence of payment
     of all real estate taxes and munic  ipal charges on the Land (and any
     existing improvements thereon) which were due and payable prior to the
     Closing Date.

     10.7  Legal and Other Opinions.  The Lender shall have received favorable
opinions in form and substance satisfactory to the Lender and the Lender's
counsel, addressed to the Lender and dated as of the Closing Date, from counsel
to the Borrower and the Guarantor acceptable to the Lender.

     10.8  Lien Search.  The Lender shall have received a certification from
Title Insurance Company or counsel satisfac  tory to the Lender (which shall be
updated from time to time at the Borrower's expense upon request by the Lender)
that a search of the public records disclosed no conditional sales contracts,
security agreements, chattel mortgages, leases of personalty, financing
statements or title retention agreements which affect the Collateral.

     10.9  Performance; No Default.  The Borrower shall have performed and
complied with all terms and conditions herein required to be performed or
complied with by it on or prior to the Advance of the proceeds of the Loan, and
there shall exist no Default or Event of Default.

     10.10  Representations and Warranties.  The representations of warranties
made by the Obligors in the Loan Documents or otherwise made by or on behalf of
the Obligors in connection therewith shall have been true and correct in all
respects when made and shall be true and correct in all respects on the date of
any Advances.

     10.11  Proceedings and Documents.  All proceedings in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be satisfactory to the Lender

                                      -24-
<PAGE>

and the Lender's counsel in form and substance, and the Lender shall have
received all information and such counterpart origi nals or certified copies of
such documents and such other cer tificates, opinions or documents as the Lender
and the Lender's counsel may reasonably require.

     10.12  Waiver.  Any waiver by the Lender of any of the conditions precedent
contained herein for the Closing and any Advance shall not be deemed to be a
waiver by the Lender of such conditions precedent for any subsequent Advance, if
any, or any other obligation of the Lender hereunder.

     11.  EVENTS OF DEFAULT AND REMEDIES.

     11.1 Events of Default. The occurrence of any one or more of the following
conditions or events shall constitute an "Event of Default":

          (1) any failure by the Borrower to pay, within ten (10) Business Days
     of the due date, any interest on or principal of or other sum payable under
     the Note; or

          (2) any failure by the Borrower to pay as and when due and payable any
     other sums to be paid by the Borrower to the Lender under this Agreement
     and the continuance of such failure for a period of ten(10) Business Days
     after notice thereof from the Lender; or

          (3) title to the Collateral becomes unsatisfactory to the Lender by
     reason of any lien, charge, encumbrance, title condition or exception
     (including without limitation, any mechanic's, materialman's or similar
     statutory or common law lien), and such matter causing title to be or
     become unsatisfactory is not cured or removed (including by bonding) within
     twenty (20) days after notice thereof from the Lender to the Borrower; or

          (4) any refusal by the Title Insurance Company to insure any Advance
     as being secured by the Security Deed as a valid first lien and security
     interest on the Project and continuance of such refusal for a period of
     twenty (20) days after notice thereof by the Lender to the Borrower; or

          (5) the Project or any material part thereof is injured by fire,
     explosion, accident, flood or other casualty as to which is not covered by
     insurance; or

          (6) the Project or any material part thereof is subject to a Taking
     such that subsequent to the Taking, the Project can no longer be used and
     operated in its intended manner; or

                                      -25-
<PAGE>

          (7) any failure by the Guarantor to duly observe or perform any term,
     covenant, condition or agreement contained in the Guaranty; or

          (8) any representation or warranty made or deemed to be made by or on
     behalf of Borrower in this Agreement or in any of the other Loan Documents,
     or in any report, certificate, financial statement, document or other
     instrument delivered pursuant to or in connection with this Agreement, any
     Advance or any of the other Loan Documents, shall prove to have been false
     or incorrect in any material respect upon the date when made or deemed to
     be made or repeated; or

          (9) any suit or proceeding shall be filed against any Obligor or the
     Project which, if adversely determined, would have a materially adverse
     affect on the ability of any Obligor to perform each and every one of their
     respective obligations under and by virtue of the Loan Documents; or

          (10) any failure by the Borrower to obtain any Project Approvals, or
     the revocation or other invalidation of any Project Approvals previously
     obtained; or

          (11) any failure by the Guarantor to maintain ownership of less than
     fifty one (51%) percent of the Borrower; or

          (l2) any Obligor or Subsidiary thereof shall file a voluntary petition
     in bankruptcy under Title 11 of the United States Code, or an order for
     relief shall be issued against any such Person in any involuntary petition
     in bankruptcy under Title 11 of the United States Code, or  any such Person
     shall file any petition or answer seeking or acquiescing in any
     reorganization, arrangement, composition, readjustment, liquidation,
     dissolution or similar relief for itself under any present or future
     federal, state or other law or regulation relating to bankruptcy,
     insolvency or other relief of debtors, or such Person shall seek or consent
     to or acquiesce in the appointment of any custodian, trustee, receiver,
     conservator or liquidator of such Person, or of all or any substantial part
     of its respective property, or such Person shall make an assignment for the
     benefit of creditors, or such Person shall give notice to any governmental
     authority or body of insolvency or pending insolvency or suspension of
     operation; or

          (13) an involuntary petition in bankruptcy under Title 11 of the
     United States Code shall be filed against any Obligor or Subsidiary thereof
     and such petition shall not be dismissed within sixty (60) days of the
     filing thereof; or

          (14) a court of competent jurisdiction shall enter any

                                      -26-
<PAGE>

     order, judgment or decree approving a petition filed against any Obligor or
     any Subsidiary thereof seeking any reorganization, arrangement,
     composition, readjustment, liquidation or similar relief under any present
     or future federal, state or other law or regulation relating to bankruptcy,
     insolvency or other relief for debtors, or appointing any custodian,
     trustee, receiver, conservator or liquidator of all or any substantial part
     of its property and such order, judgment or decress shall not be vacated
     within thirty (30) days thereof; or

          (15) any uninsured final judgment shall be rendered against any
     Obligor or any Subsidiary in excess of an aggregate of One Million
     ($1,000,000.00) Dollars and shall remain in force, undischarged,
     unsatisfied and unstayed, for more than thirty (30) days, whether or not
     consecutive, unless such judgement is being contested or appealed in good
     faith in appropriate proceedings; or

          (16) The service of process on the Lender attaching by trustee process
     any assets of any Obligor held by the Bank in an amount greater than Two
     Hundred and Fifty Thousand ($250,000.00) Dollars; or

          (17) any of the Loan Documents shall be cancelled, terminated, revoked
     or rescinded otherwise than in accor  dance with the terms thereof or with
     the express prior approval of the Lender, or any action at law, suit in
     equity or other legal proceeding to cancel, revoke or rescind any of the
     Loan Documents shall be commenced by or on behalf of the Borrower or any
     Obligor which is a party thereto or any of their respective stockholders,
     partners or beneficiaries, or any court or any other governmental or
     regulatory authority or agency of competent jurisdiction shall make a
     determination that, or issue a judgment, order, decree or ruling to the
     effect that, any one or more of the Loan Documents is illegal, invalid or
     unenforceable in accordance with the terms thereof; or

          (18) any Obligor or any Subsidiary thereof shall be indicted for a
     federal crime, a punishment for which could include the forfeiture of any
     of its assets; or

          (19) any failure by the Borrower to duly observe or perform any other
     term, covenant, condition or agreement under this Agreement (including
     without limitation, the requirements of Section 8.2 herein) and continuance
     of such failure for a period of thirty (30) days after notice thereof from
     the Lender; provided however if the Borrower diligently pursues to cure
     such failure, such period shall be extended for a period not to exceed an
     additional sixty (60) days; or

                                      -27-
<PAGE>

          (20) The occurrence of any "Event of Default" under the Revolving Loan
     Arrangement.

          (21) any "Event of Default", as defined or otherwise set forth in any
     of the other Loan Documents, shall occur, or any failure by the Borrower to
     duly observe or perform any other term, covenant, condition or agreement
     under the other Loan Documents.

     11.2  Termination of Advances and Acceleration.  If any one or more of the
Events of Default shall occur, the Lender may by notice to the Borrower declare
its obligations to make Advances hereunder to be terminated, whereupon the same
shall terminate and the Lender shall be relieved of all obligations to make
Advances to the Borrower, and/or declare all unpaid principal of and accrued
interest on the Note, together with all other amounts owing under the Loan
Documents, to be immediately due and payable, whereupon same shall become and be
immediately due and payable, anything in the Loan Documents to the contrary
notwith  standing, and without presentment, protest, demand or other notice of
any kind, all of which are hereby expressly waived by the Borrower.

     11.3  Remedies.  If any one or more of the Events of Default shall have
occurred, and whether or not the Lender shall have terminated its obligations to
make Advances or accelerated the maturity of the Loan pursuant to (S)112, the
Lender may proceed to protect and enforce its rights and remedies under this
Agreement, the Note or any of the other Loan Documents by suit in equity, action
at law or other appropriate proceeding, whether for the specific performance of
any covenant or agreement con  tained in this Agreement and the other Loan
Documents or any instrument pursuant to which the Obligations are evidenced,
including as permitted by applicable law the obtaining of the ex parte
appointment of a receiver, and, if any amount owed to the Lender shall have
become due, by declaration or otherwise, proceed to enforce the payment thereof
or any other legal or equitable right of the Lender.  No remedy conferred upon
the Lender or the holder of the Note in this Agreement or in any of the other
Loan Documents is intended to be exclusive of any other remedy and each and
every remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or thereunder or now or hereafter existing at law or in equity
or by statute or any other provision of law.

     11.4 Distribution of Collateral Proceeds. In the event that, following the
occurrence or during the continuance of any Default or Event of Default, the
Lender receives any monies in connection with the enforcement of any the
Security Documents, or otherwise with respect to the realization upon any of the
Collateral, such monies shall be distributed for application as follows:

                                      -28-
<PAGE>

          (1) First, to the payment of, or (as the case may be) the
     reimbursement of the Lender for or in respect of all reasonable costs,
     expenses, disbursements and losses which shall have been incurred or
     sustained by the Lender in connection with the collection of such monies by
     the Lender, for the exercise, protection or enforcement by the Lender of
     all or any of the rights, remedies, powers and privileges of the Lender
     under this Agreement or any of the other Loan Documents or in respect of
     the Collateral or in support of any provision of adequate indemnity to the
     Lender against any taxes or liens which by law shall have, or may have,
     priority over the rights of the Lender to such monies;

          (2) Second, to all other Obligations in such order or preference as
     the Lender may determine; provided, however, that the Lender may in its
     discretion make proper allowance to take into account any Obligations not
     then due and payable;

          (3) Third, upon payment and satisfaction in full or other provisions
     for payment in full satisfactory to the Lender of all of the Obligations,
     to the payment of any obligations required to be paid pursuant to (S)9-
     504(1)(c) of the Uniform Commercial Code of the Commonwealth of Massa
     chusetts; and

          (4) Fourth, the excess, if any, shall be returned to the Borrower or
     to such other Persons as are entitled thereto.

     11.5  Power of Attorney.  For the purposes of carrying out the provisions
and exercising the rights, remedies, powers and privileges granted by or
referred to in this Article, the Borrower hereby irrevocably constitutes and
appoints the Lender its true and lawful attorney-in-fact, with full power of
substitution, to execute, acknowledge and deliver any instruments and do and
perform any acts which are referred to in this Article, in the name and on
behalf of the Borrower.  The power vested in such attorney-in-fact is, and shall
be deemed to be, coupled with an interest and irrevocable.

     11.6  Waivers.  The Borrower hereby waives to the extent not prohibited by
applicable law (a) all presentments, demands for performance, notices of
nonperformance (except to the extent required by the provisions hereof or of any
of the other Loan Documents), protests and notices of dishonor, (b) any
requirement of diligence or promptness on the Lender's part in the enforce  ment
of its rights (but not fulfillment of its obligations) under the provisions of
this Agreement or any of the other Loan Docu  ments, and (c) any and all notices
of every kind and description

                                      -29-
<PAGE>

which may be required to be given by any statute or rule of law and any defense
of any kind which the Borrower may now or here after have with respect to its
liability under this Agreement or under any of the other Loan Documents.

     12.  SETOFF.  Regardless of the adequacy of any collateral, during the
continuance of any Event of Default, any deposits (general or specific, time or
demand, provisional or final, regardless of currency, maturity, or the branch of
the Lender where such deposits are held) or other sums credited by or due from
the Lender to the Borrower and any securities or other property of the Borrower
in the possession of the Lender may be applied to or set off against the payment
of the Project Obligations and any and all other Obligations.

     13.  EXPENSES.  The Borrower agrees to pay (a) the reason able costs of
producing and reproducing this Agreement, the other Loan Documents and the other
agreements and instruments mentioned herein, (b) any taxes (including any
interest and penalties in respect thereto) payable by the Lender (other than
taxes based upon the Lender's net income), including any recording, mortgage or
intangibles taxes in connection with the Security Deed, or other taxes payable
on or with respect to the transactions contemplated by this Agreement, including
any taxes payable by the Lender after the Closing Date (the Borrower hereby
agreeing to indemnify the Lender with respect thereto), (c) all title insurance
premiums, and the reasonable fees, expenses and dis  bursements of the Lender's
counsel or any local counsel to the Lender incurred in connection with the
preparation, administra  tion or interpretation of the Loan and the Loan
Documents and other instruments mentioned herein, the making of each Advance
hereunder, and amendments, modifications, approvals, consents or waivers hereto
or hereunder, (d) the fees, expenses and disbursements of the Lender incurred in
connection with the preparation, administration or interpretation of the Loan
and the Loan Documents and other instruments mentioned herein, and the making of
each Advance hereunder (including all fees paid to the Appraisal fees, and
surveyor fees) (e) all reasonable out-of-pocket expenses (including reasonable
attorneys' fees and costs, which attorneys may be employees of the Lender) and
the reasonable fees and costs of consultants, accountants, auctioneers,
receivers, brokers, property managers, appraisers, investment bankers or other
experts retained by the Lender in connection with (i) the enforcement of or
preservation of rights under any of the Loan Documents against the Borrower or
any Obligor or the administration thereof after the occurrence of a Default or
Event of Default and (ii) any litigation, proceeding or dispute whether arising
hereunder or otherwise, in any way related to the Lender's relationship with the
Borrower, and (f) all reasonable fees, expenses and disbursements of the Lender
in  curred in connection with UCC searches, UCC filings, title rundowns, title
searches or mortgage recordings.  The covenants

                                      -30-
<PAGE>

of this Section shall survive payment or satisfaction of payment of all amounts
owing with respect to the Note. All references to fees and expenses as set forth
in this section shall mean those out-of-pocket fees and expenses incurred by the
Lender.

     14.  INDEMNIFICATION.  The Borrower agrees to indemnify and hold harmless
the Lender from and against any and all claims, actions and suits, whether
groundless or otherwise, and from and against any and all liabilities, losses,
damages and expenses of every nature and character arising out of this Agreement
or any of the other Loan Documents or the transactions contemplated hereby and
thereby including, without limitations, (a) any brokerage, leasing, finders or
similar fees, (b) any disbursement of the proceeds of any of the Advances, (c)
any condition of the Project whether related to the quality of construction or
other  wise, (d) any actual or proposed use by the Borrower of the proceeds of
any of the Advances, (e) any actual or alleged violation of any Requirements or
Project Approvals, or (f) the Borrower entering into or performing this
Agreement or any of the other Loan Documents, in each case including, without
limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation, litigation or other proceeding.  In
litigation, or the preparation therefor, the Lender shall be entitled to select
its own counsel and, in addition to the foregoing indemnity, the Borrower agrees
to pay promptly the reasonable fees and expenses of such counsel.  The
obligations of the Borrower under this Section shall survive the repayment of
the Loan and shall continue in full force and effect so long as the possibility
of such claim, action or suit exists. If, and to the extent that the obligations
of the Borrower under this Section are unenforceable for any reason, the
Borrower hereby agrees to make the maximum contribution to the payment in
satisfaction of such obligations which is permissible under applicable law.

     15.  LIABILITY OF THE LENDER.  The liability of the Lender to the Borrower
for any breach of the terms of this Agreement by the Lender shall not exceed a
sum equal to the amount which the Lender shall be determined to have failed to
advance in consequence of a breach by the Lender of its obligations under this
Agreement, together with interest thereon at the rate payable by the Borrower
under the terms of the Note for Advances which the Borrower is to receive
hereunder, computed from the date when the Advance should have been made by the
Lender to the date when the Advance is, in fact, made by the Lender, and, upon
the making of any such payment by the Lender to the Borrower, the same shall be
treated as an Advance under this Agreement, in the same fashion as any other
Advance under the terms of this Agreement.  In no event shall the Lender be
liable to the Borrower, or anyone claiming by, under or through the Borrower,
for any special, exemplary, punitive or consequential damages, whatever the
nature of the breach of the terms of this Agreement

                                      -31-
<PAGE>

by the Lender, such damages and claims therefor being expressly WAIVED by the
Borrower.

     16.  RIGHTS OF THIRD PARTIES.  All conditions to the per formance of the
obligations of the Lender under this Agreement, including the obligation to make
Advances, are imposed solely and exclusively for the benefit of the Lender and
no other Person shall have standing to require satisfaction of such conditions
in accordance with their terms or be entitled to assume that the Lender will
refuse to make Advances in the absence of strict compliance with any or all
thereof and no other Person shall, under any circumstances, be deemed to be a
beneficiary of such conditions, any and all of which may be freely waived in
whole or in part by the Lender at any time if in its sole discretion it deems it
desirable to do so.  In particular, the Lender makes no representations and
assumes no obligations as to third parties concerning the quality of the
construction by the Borrower of the Improvements or the absence therefrom of
defects.

     17.  SURVIVAL OF COVENANTS, ETC.  All covenants, agreements,
representations and warranties made herein, in the Note, in any of the other
Loan Documents or in any documents or other papers delivered by or on behalf of
the Borrower pursuant hereto and thereto shall be deemed to have been relied
upon by the Lender, notwithstanding any investigation heretofore or hereafter
made by it, and shall survive the making by the Lender of the Advances, as
herein contemplated, and shall continue in full force and effect either (i) so
long as any amount due under this Agreement or the Note or any of the other Loan
Documents remains outstanding or the Lender has any obligation to make any
Advances or (ii) for such longer period as may be provided for herein or in any
other Loan Document.  All statements contained in any certificate or other paper
delivered to the Lender at any time by or on behalf of the Borrower or any
Subsidiary thereof pursuant hereto or in connection with the transactions
contemplated hereby shall constitute representations and warranties by such
Person.

     18.  ASSIGNMENT AND PARTICIPATION.

     18.1  Conditions to Assignment by Lender.  Except as provided herein, the
Lender may assign to one or more banks or other entities all or a portion of its
interests, rights and obligations under this Agreement.  From and after the
effective date of any such assignment, (i) the assignee thereunder shall be
deemed to be a party hereto and, to the extent agreed to by the Lender, have the
rights and obligations of a Lender hereunder, and (ii) the Lender shall, to the
extent of its interest assigned as provided herein, be released from its
obligations under this Agreement.

     18.2  New Notes, Agreement.  Upon any such assignment by the Lender, the
Borrower, at its own expense, shall execute and

                                      -32-
<PAGE>

deliver to the Lender (a) in exchange for the Note, a new Note to the order of
such assignee in an amount equal to the amount assumed by such assignee and, if
the Lender has retained some portion of its obligations hereunder, a new Note to
the order of the Lender in an amount equal to the amount retained by it
hereunder and (b) an amendment to this Agreement and any other Loan Documents,
as may be reasonably requested by the Lender, to evidence the assignment,
provide for the rights and interest of the assignee, and establish the rights,
responsibilities and obligations of the Lender as agent for itself and any such
assignee. Such new Notes shall provide that they are replacements for the
surrendered Notes, shall be in an aggregate principal amount equal to the
aggregate principal amount of the surrendered Notes, shall be dated the
effective date of such assignment and shall otherwise be in substantially the
form of the assigned Notes. Within five (5) days of issuance of any new Notes
pursuant to this (S)182, the Borrower shall deliver an opinion of counsel,
addressed to the Banks and the Agent, relating to the due authorization,
execution and delivery of such new Notes and the legality, validity and binding
effect thereof, in form and substance satisfactory to the Banks. The surrendered
Notes shall be cancelled and returned to the Borrower.

     18.3  Participations.  The Lender may sell participations to one or more
banks or other entities in all or a portion of the Lender's rights and
obligations under this Agreement and the other Loan Documents; provided that (a)
any such sale of partic ipations shall not affect the rights and duties of the
Lender hereunder to the Borrower and (b) the only rights granted to the
participant pursuant to such participation arrangements with respect to waivers,
amendments or modifications of the Loan Documents shall be the right to approve
waivers, amendments or modifications that would reduce the principal of or the
interest rate on the Loan, extend the term or increase the amount of the Loan or
extend any regularly scheduled payment date for principal or interest.

     18.4  Pledge by the Lender.  The Lender may at any time pledge all or any
portion of its interest and rights under this Agreement (including all or any
portion of the Note) to any of the twelve Federal Reserve Banks organized under
(S)4 of the Federal Reserve Act, 12 U.S.C. (S)341.  No such pledge or the
enforcement thereof shall release the Lender from its obligations hereunder or
under any of the other Loan Documents.

     18.5  No Assignment by the Borrower.  The Borrower shall not assign or
transfer any of its rights or obligations under any of the Loan Documents
without the prior approval of the Lender.

     19.  RELATIONSHIP.  The relationship between the Lender and the Borrower is
solely that of a lender and borrower, and nothing contained herein or in any of
the other Loan Documents shall in

                                      -33-
<PAGE>

any manner be construed as making the parties hereto partners, joint venturers
or any other relationship other than lender and borrower.

     20.  NOTICES.  Except as otherwise provided herein or in any other Loan
Document, each notice, demand, election or request provided for or permitted to
be given pursuant to this Agreement or any other Loan Document (hereinafter in
this Section referred to as "Notice") must be in writing and shall be deemed to
have been properly given or served by personal delivery or by sending same by
overnight courier or by depositing same in the United States Mail, postpaid and
registered or certified, return receipt requested, and addressed as follows:

          If to the Lender;

               Citizens Bank of Massachusetts
               28 State Street
               Boston, Massachusetts 02109
               Attn: Ms. Suzanne Dwyer, Vice President

          With a copy to:

               Riemer & Braunstein LLP
               Three Center Plaza
               Boston, Massachusetts 02108
               Attn: Jonathan D. Yellin, Esquire

          If to the Borrower:

               ASTeX Realty Corp.
               35 Cabot Road
               Woburn, Massachusetts 01801
               Attn: William S. Hurley

          With a copy to:

               Mintz Levin Cohn Ferris Glovsky & Popeo, PC
               1 Financial Center
               Boston, Massachusetts 02111
               Attn: Stephen T. Langer, Esquire

Each Notice shall be effective upon being personally delivered or upon being
sent by recognized overnight courier or upon being deposited in the United
States Mail as aforesaid.  The time period in which a response to such Notice
must be given or any action taken with respect thereto (if any), however, shall
commence to run from the date of receipt if personally delivered or sent by
overnight courier, or if so deposited in the United States Mail, the earlier of
three (3) Business Days following such deposit or the date of receipt as
disclosed on the return receipt.  Rejection or other refusal to accept or the
inability

                                      -34-
<PAGE>

to deliver because of changed address for which no Notice was given
shall be deemed to be receipt of the Notice sent.  By giving at least thirty
(30) days' prior Notice thereof, the Borrower or the Lender shall have the right
from time to time and at any time during the term of this Agreement to change
their respective addresses and each shall have the right to specify as its
address any other address within the United States of America.

     21.  GOVERNING LAW.  This Agreement and each of the other Loan Documents,
except as otherwise specifically provided there  in, are contracts under the
laws of The Commonwealth of Massa  chusetts and shall for all purposes be
construed in accordance with and governed by the laws of said Commonwealth
(excluding the laws applicable to conflicts or choice of law).

     22.  CONSENT TO JURISDICTION; WAIVERS.  THE BORROWER HEREBY IRREVOCABLY AND
UNCONDITIONALLY (A) SUBMITS TO PERSONAL JURIS  DICTION IN THE COMMONWEALTH OF
MASSACHUSETTS OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, AND (B) WAIVES ANY AND ALL
PERSONAL RIGHTS UNDER THE LAWS OF ANY STATE (I) TO THE RIGHT, IF ANY, TO TRIAL
BY JURY, WHICH RIGHT IS ALSO WAIVED BY THE LENDER (II) TO OBJECT TO JURISDICTION
WITHIN THE COMMONWEALTH OF MASSACHUSETTS OR VENUE IN ANY PARTICULAR FORUM WITHIN
THE COMMONWEALTH OF MASSACHUSETTS, AND (III) TO THE RIGHT, IF ANY, TO CLAIM OR
RECOVER ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES
OTHER THAN ACTUAL DAMAGES. THE BORROWER AGREES THAT, IN ADDITION TO ANY METHODS
OF SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE OF PROCESS
IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE MADE BY CERTIFIED OR REGISTERED
MAIL, RETURN RECEIPT REQUESTED DIRECTED TO THE BORROWER AT THE ADDRESS SET FORTH
IN (S)20 ABOVE, AND SERVICE SO MADE SHALL BE COMPLETE FIVE (5) DAYS AFTER THE
SAME SHALL BE SO MAILED.  NOTHING CONTAINED HEREIN, HOWEVER, SHALL PREVENT THE
LENDER FROM BRINGING ANY SUIT, ACTION OR PROCEEDING OR EXERCISING ANY RIGHTS
AGAINST ANY COLLATERAL AND AGAINST THE BORROWER, AND AGAINST ANY PROPERTY OF THE
BORROWER, IN ANY OTHER STATE.  INITIATING SUCH SUIT, ACTION OR PROCEEDING OR
TAKING SUCH ACTION IN ANY STATE SHALL IN NO EVENT CONSTITUTE A WAIVER OF THE
AGREEMENT CONTAINED HEREIN THAT THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
SHALL GOVERN THE RIGHTS AND OBLIGATIONS OF THE BORROWER, AND THE LENDER
HEREUNDER OR THE SUBMISSION HEREIN BY THE BORROWER TO PERSONAL JURISDICTION
WITHIN THE COMMONWEALTH OF MASSACHUSETTS.

     23.  HEADINGS.  The captions in this Agreement are for convenience of
reference only and shall not define or limit the provisions hereof.

     24.  COUNTERPARTS.  This Agreement and any amendment hereof may be executed
in several counterparts and by each party on a

                                      -35-
<PAGE>

separate counterpart, each of which when so executed and deliv ered shall be an
original, and all of which together shall constitute one instrument. In proving
this Agreement it shall not be necessary to produce or account for more than one
such counterpart signed by the party against whom enforcement is sought.

     25.  ENTIRE AGREEMENT, ETC.  The Loan Documents and any other documents
executed in connection herewith or therewith express the entire understanding of
the parties with respect to the transactions contemplated hereby.  Neither this
Agreement nor any term hereof may be changed, waived, discharged or terminated,
except as provided in Article 26.

     26.  CONSENTS, AMENDMENTS, WAIVERS, ETC.  Except as other wise expressly
set forth in any particular provision of this Agreement, any consent or approval
required or permitted by this Agreement to be given by the Lender may be given,
and any term of this Agreement or of any other instrument related hereto or
mentioned herein may be amended, and the performance or obser  vance by the
Borrower of any terms of this Agreement or such other instrument or the
continuance of any Default or Event of Default may be waived (either generally
or in a particular instance and either retroactively or prospectively) with, but
only with, the written consent of the Lender.  No waiver shall extend to or
affect any obligation not expressly waived or impair any right consequent
thereon.  No course of dealing or delay or omission on the part of the Lender in
exercising any right shall operate as a waiver thereof or otherwise be
prejudicial thereto. No Advance made by the lender hereunder during the
continuance of any Default or Event of Default shall constitute a waiver there
of.  No notice to or demand upon the Borrower shall entitle the Borrower to
other or further notice or demand in similar or other circumstances.

     27.  TIME OF THE ESSENCE.  Time is of the essence with respect to each and
every covenant, agreement and obligation of the Borrower under this Agreement
and the other Loan Documents.

     28.  SEVERABILITY.  The provisions of this Agreement are severable, and if
any one clause or provision hereof shall be held invalid or unenforceable in
whole or in part in any juris  diction, then such invalidity or unenforceability
shall affect only such clause or provision, or part thereof, in such juris
diction, and shall not in any manner affect such clause or provision in any
other jurisdiction, or any other clause or provision of this Agreement in any
jurisdiction.

     29.  COLLATERALIZATION.  Notwithstanding anything else stated in this
Agreement or in any other Loan Document, the Lender hereby acknowledges and
agrees that the liens granted to the Lender pursuant to the Security Deed and
the Assignment of

                                      -36-
<PAGE>

Leases and Rents have been granted solely to secure the Obligations. The Lender
further agrees and acknowledges that the liens granted to the Lender pursuant to
the Security Deed and the Assignment of Leases and Rents shall not secure, nor
are intended to secure, either the Revolving Loan Arrangement or the Guaranty;
provided however, nothing stated within this paragraph shall in any manner be
deemed to constitute a waiver or limitation of any other rights or remedies of
the Lender available under applicable law against the Borrower or the Guarantor.

     IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as a
sealed instrument as of the date first set forth above.

                                    ASTeX REALTY CORP.

                                By: /s/ William S. Hurley
                                   ------------------------------
                                    Name:     William S. Hurley
                                    Title:    Treasurer and Clerk

                                    Citizens Bank of Massachusetts

                                By: /s/ Suzanne Dwyer
                                   -------------------------------
                                    Name:     Suzanne Dwyer
                                    Title:    Vice President

                                      -37-

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