Document:

Exhibit 10.17

                            REVOLVING LOAN AGREEMENT

                                     between

                           HUDSON TECHNOLOGIES COMPANY

                                       and

                          KELTIC FINANCIAL PARTNERS, LP

                               Dated: May 30, 2003

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                                    i) REVOLVING LOAN AGREEMENT

            This Revolving Loan Agreement is made this 30th day of May, 2003,
between HUDSON TECHNOLOGIES COMPANY ("Borrower"), a corporation organized and
existing pursuant to the laws of the State of Tennessee having an address at 275
North Middletown Road, Pearl River, New York 10965.

            and KELTIC FINANCIAL PARTNERS, LP ("Lender"), a Delaware limited
partnership, with a place of business at 555 Theodore Fremd Avenue, Suite C-207,
Rye, New York 10580 (this "Agreement").

                              W I T N E S S E T H:

            WHEREAS, Borrower has requested that Lender extend a FOUR MILLION
SIX HUNDRED THOUSAND and 00/100 Dollars ($4,600,000.00) revolving credit
facility, the proceeds of which will be used to repay existing indebtedness to
CIT Small Business Lending Corporation and to also provide Borrower with working
capital support.

            WHEREAS, Borrower has requested that Lender extend a FOUR HUNDRED
THOUSAND and 00/100 Dollars ($400,000.00) term loan, the proceeds of which will
be used to repay existing indebtedness to CIT Small Business Lending Corporation
and to provide Borrower with working capital support.

            WHEREAS, Lender is willing to extend the credit facilities on the
terms and subject to the conditions set forth in this Agreement.

                                    ii) AGREEMENT

            B. DEFINITIONS. As used herein, the following terms shall have the
      following meanings (terms defined in the singular to have the same meaning
      when used in the plural and vice versa):

                  i. "Account Debtor" shall mean any Person who is or may become
      obligated under or on account of any Receivable.

                  ii. "Advance" shall mean any loan or advance made by Lender in
      connection with the Revolving Loan.

                  iii. "Affiliate" shall mean any Person: (i) which directly or
      indirectly through one or more intermediaries controls, or is controlled
      by, or is under common control with, Borrower including, without
      limitation, Hudson Holdings, Inc. and Hudson Technologies, Inc.; (ii)
      which beneficially owns or holds 5% or more of any class of the voting
      stock or other equity interest in Borrower; or (iii) 5% or more of the
      voting stock or other equity interest of which is beneficially owned or
      held by Borrower. For purposes hereof, "control" means the possession,
      directly or indirectly, of the power to direct or cause the direction of
      the management and policies of a Person, whether through the ownership of
      voting stock or other equity interests, by contract or otherwise.

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                  iv. "Authenticate" shall mean to sign or to execute or
      otherwise adopt a symbol, or encrypt or similarly process a record in
      whole or in part, with the present interest of the authenticating person
      to identify the person and adopt or accept a Record.

                  v. "Bank Accounts" shall have the meaning set forth in Section
      5.23 of this Agreement.

                  vi. "Banking Day" shall mean any day on which commercial banks
      are not authorized or required to close in New York State.

                  vii. "Borrower" shall mean Hudson Technologies Company.

                  viii. "Borrowing Capacity" shall have the meaning set forth in
      Section 2.1 of this Agreement.

                  ix. "Borrowing Base Certificate" shall mean a borrowing base
      certificate substantially in the form of Exhibit D attached hereto.

                  x. "Capital Expenditure" shall mean, as determined in
      accordance with GAAP, the dollar amount of gross expenditures (including
      obligations under capital leases) made or incurred for fixed assets, real
      property, plant and equipment, and all renewals, improvements and
      replacements thereto (but not repairs thereof) during any period.

                  xi. "Code" shall mean the Internal Revenue Code of the United
      States.

                  xii. "Collateral" shall mean all of the Property and interests
      in Property described in the General Security Agreement, and all other
      personal property of Borrower and interests of Borrower in personal
      property that now or hereafter secures the payment and performance of any
      of the Obligations pursuant to any of the Loan Documents or otherwise
      including, without limitation, any proceeds and insurance proceeds of the
      foregoing.

                  xiii. "Contract Year" shall mean, during the term of the
      Loans, each consecutive twelve (12) month period commencing on the date
      hereof and, in each case, ending on the date, which is one day prior to
      the applicable anniversary date hereof.

                  xiv. "Default" shall mean an event or condition the occurrence
      of which would, with the lapse of time or the giving of notice, or both,
      become an Event of Default, whether or not Lender has declared an Event of
      Default to have occurred.

                  xv. "EBITDA" shall mean Borrower's total income before
      interest expense, taxes, depreciation and amortization, all calculated in
      accordance with GAAP.

                  xvi. "Eligible Inventory" shall mean Inventory which has been
      identified and described to Lender's satisfaction, is represented by
      Borrower (by its

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            acceptance of Revolving Loans thereon) as meeting all of the
            following criteria on the date of any Revolving Loan based thereon
            and thereafter while any Obligation is outstanding, and is in all
            other respects acceptable to Lender:

                        a. Borrower is the sole owner of the Inventory; none of
                  the Inventory is being held or shipped by Borrower on a
                  consignment or approval basis; Borrower has not sold, assigned
                  or otherwise transferred all or any portion thereof; and none
                  of the Inventory is subject to any claim, lien or security
                  interest;

                        b. If any of the Inventory is represented or covered by
                  any document of title, instrument or chattel paper, Borrower
                  is the sole owner of all such documents, instruments and
                  chattel paper, all thereof are in the possession of Borrower,
                  none thereof has been sold, assigned or otherwise transferred,
                  and none thereof is subject to any claim, lien or security
                  interest;

                        c. The Inventory consists of refrigerants which have
                  been processed in accordance with all Governmental Rules, or
                  finished goods consisting of saleable cylinders to hold
                  refrigerants acquired by Borrower in the ordinary course of
                  its business, as conducted on the date hereof, subject to its
                  contract or sole possession and, located in compliance with
                  Section 5.15 of this Agreement or at locations approved by
                  Lender in writing for which landlord or bailee waivers in form
                  and substance acceptable to Lender have been executed and
                  delivered by such landlord or bailee to Lender.

                  xvii. "Eligible Receivables" shall mean and include only
      Receivables of Borrower, the records and accounts of which are located in
      compliance with Section 5.14 of this Agreement, are acceptable to Lender
      in Lender's sole and absolute discretion, arise out of sales in the
      ordinary course of Borrower's business as currently conducted, made by
      Borrower to a Person which is not an Affiliate of Borrower nor an employee
      of Borrower nor controlled by an Affiliate of Borrower, which are not in
      dispute and which do not then violate any warranty with respect to
      Eligible Receivables set forth in the General Security Agreement, and the
      Inventory which is the subject matter of such Receivable, must have been
      shipped to the customer on or prior to the invoice date, or the services
      described in any such invoice must have been provided on or prior to the
      invoice date. No Receivable shall be an Eligible Receivable if more than
      ninety (90) days have passed since the original invoice date. Lender may
      treat any Receivable as ineligible if:

                        a. any warranty contained in this Agreement or in the
                  General Security Agreement with respect to Eligible
                  Receivables or any warranty with respect to such Receivable
                  contained in this Agreement or in the General Security
                  Agreement has been breached; or

                        b. the Account Debtor or any Affiliate of the Account
                  Debtor has disputed liability, or made any claim with respect
                  to such Receivable

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                  or with respect to any other Receivable due from such customer
                  or Account Debtor to Borrower, with respect to any Receivable
                  which Lender, in its sole and absolute discretion, deems
                  material; or

                        c. the Account Debtor or any Affiliate of the Account
                  Debtor has filed a case for bankruptcy or reorganization under
                  the Bankruptcy Code, or if any case under the Bankruptcy Code
                  has been filed against the Account Debtor or any Affiliate of
                  the Account Debtor, or if the Account Debtor or any Affiliate
                  of the Account Debtor has made an assignment for the benefit
                  of creditors, or if the Account Debtor or any Affiliate of the
                  Account Debtor has failed, suspended business operations,
                  become insolvent, or had or suffered a receiver or a trustee
                  to be appointed for all or a significant portion of its assets
                  or affairs; or

                        d. if the Account Debtor is also a supplier to or
                  creditor of Borrower or if the Account Debtor has or asserts
                  any right of offset with respect to any Receivable or asserts
                  any claim or counterclaim against Borrower with respect to any
                  Receivable or otherwise (so long as the Account Debtor does
                  not assert any right of set off or counterclaim, Lender,
                  subject to all the other provisions of this Agreement, will
                  only consider the Receivable ineligible in an amount equal to
                  the amount owed such Account Debtor by Borrower); or

                        e. the sale is to an Account Debtor outside the United
                  States, unless the sale is secured by a letter of credit or
                  acceptance acceptable to Lender in its sole discretion, or is
                  insured by a credit risk insurance policy acceptable to Lender
                  in its sole discretion or on other terms acceptable to Lender
                  in its sole discretion; or

                        f. fifty percent (50%) or more of the Receivables of any
                  Account Debtor and its Affiliates are ineligible, then all the
                  Receivables of such Account Debtor and its Affiliates may be
                  deemed ineligible by Lender under this Agreement; or

                        g. the total unpaid Receivables of the Account Debtor
                  exceed twenty percent (20%) of the net amount of all
                  Receivables, to the extent of such excess, except that with
                  respect to NRP/COOLGAS, INC., USA/ B & B and GENUINE PARTS
                  COMPANY, the percentage shall be twenty-five percent (25%),
                  provided the credit worthiness of any such Account Debtor is
                  acceptable to Lender in its sole discretion and credit
                  insurance coverage is in existence covering such Account
                  Debtor's Receivables acceptable to Lender in its sole and
                  absolute discretion; or

                        h. it relates to a sale of goods or services to the
                  United States of America, or any agency or department thereof,
                  unless Borrower assigns its right to payment of such
                  Receivable to Lender, in form and substance

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                  satisfactory to Lender, so as to comply with the Assignment of
                  Claims Act of 1940, as amended; or

                        i. it relates to a sale of goods or services to a state
                  or local governmental authority or an agency or department
                  thereof in excess of $50,000.00 in the aggregate; or

                        j. it relates to intercompany sales, employee sales or
                  any Receivable due from an Affiliate of Borrower; or

                        k. it consists of a sale to an Account Debtor on
                  consignment, bill and hold, guaranteed sale, sale or return,
                  sale on approval, payment plan, scheduled installment plan,
                  extended payment terms or any other repurchase or return
                  basis; or

                        l. the Account Debtor is located in a state in which
                  Borrower is deemed to be doing business under the laws of such
                  state and which denies creditors access to its courts in the
                  absence of qualifications to transact business in such state
                  or of the filing of any reports with such state, unless
                  Borrower has qualified as a foreign corporation authorized to
                  do business in such state or has filed all required reports;
                  or

                        m. the Receivable is evidenced by chattel paper or an
                  instrument of any kind, or has been reduced to judgment; or

                        n. the Receivable arises from a sale of goods or
                  services to an individual who is purchasing such goods
                  primarily for personal, family or household purposes;

                        o. if Lender believes, in its sole and absolute
                  judgment, that collection of such Receivable is insecure or
                  that such Receivable may not be paid by reason of the Account
                  Debtor's financial inability to pay.

                  xviii. "Environment" shall mean any water or water vapor, any
      land surface or subsurface, air, fish, wildlife, biota and all other
      natural resources.

                  xix. "Environmental Laws" shall mean all federal, state and
      local environmental, land use, zoning, health, chemical use, safety and
      sanitation laws, statutes, ordinances and codes relating to the protection
      of the Environment and/or governing the use, storage, treatment,
      generation, transportation, processing, handling, production or disposal
      of "hazardous substances" and the rules, regulations, policies,
      guidelines, interpretations, decisions, orders and directives of federal,
      state and local governmental agencies and authorities with respect
      thereto.

                  xx. "ERISA" shall mean the Employee Retirement Income Security
      Act of 1974, as amended.

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                  xxi. "Events of Default" shall have the meaning set forth in
      Article 12 of this Agreement.

                  xxii. "Fiscal Year" shall mean with respect to any Person, a
      year of 365 or 366 days, as the case may be, ending on the last day of
      December in any calendar year.

                  xxiii. "Fixed Charge Coverage Ratio" shall mean, for any
      period, the ratio of EBITDA over the sum of (i) interest and fees due in
      respect of Indebtedness for such period, excluding the commitment and
      closing fees payable pursuant to Section 3.3 of this Agreement, (ii)
      principal payments due on any Loan during such period, (iii) principal
      payments on any other Indebtedness during such period, (iv) capital
      expenditures for such period, (v) taxes due for such period, (vi) cash
      dividends declared during such period, and (vii) distributions paid on
      subordinated debt or equity during such period.

                  xxiv. "GAAP" shall mean generally accepted accounting
      principles consistently applied and maintained throughout the period
      indicated and consistent with the prior financial practice of Borrower,
      except for changes mandated by the Financial Accounting Standards Board or
      any similar accounting authority of comparable standing. Whenever any
      accounting term is used herein which is not otherwise defined, it shall be
      interpreted in accordance with GAAP.

                  xxv. "General Security Agreement" shall mean the general
      security agreement dated the date hereof executed and delivered by
      Borrower to Lender.

                  xxvi. "Governmental Rules" shall have the meaning given to
      such term in Section 5.24 of this Agreement.

                  xxvii. "Indebtedness" shall mean and include all obligations
      for borrowed money of any kind or nature, including funded debt and
      unfunded liabilities, contingent obligations under guaranties or letters
      of credit, and all obligations for the acquisition or use of any fixed
      asset, including capitalized leases, or improvements which are payable
      over a period longer than one year, regardless of the term thereof or the
      Person or Persons to whom the same is payable and the Obligations.

                  xxviii. "Inventory" shall have the meaning given to such term
      in the General Security Agreement.

                  xxix. "LIBOR" shall mean the London Inter-Bank Offered Rate as
      quoted by Citibank, N.A. in New York City at 11:00 a.m. (New York time)
      based upon Citibank, N.A.'s or an affiliated agency's or branch's quotes
      to prime banks in the London Inter-Bank Euro-currency Market for
      Eurodollar deposits.

                  xxx. "Loan Documents" shall mean this Agreement, the General
      Security Agreement and all other documents and instruments to be delivered
      by Borrower or any other Person under this Agreement or in connection with
      the Loans or any other Indebtedness or Obligations of Borrower to Lender,
      as the same may be amended, modified or supplemented from time to time.

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                  xxxi. "Loan Interest Rate" shall mean, at the option of
      Lender, the greater of: (a) the prime rate published in the "Money Rates"
      column of The Wall Street Journal from time to time or, in the event that
      The Wall Street Journal is not available at any time, such rate published
      in another publication as determined by Lender plus two hundred (200)
      basis points per annum, or (b) six and one-half percent (6-1/2%) per
      annum.

                  xxxii. "Loans" shall mean the loans and advances made by
      Lender hereunder, including all Advances and the Term Loan.

                  xxxiii. "Lockbox" shall mean the account established by
      Borrower pursuant to the lockbox agreement among Borrower, Lender and a
      financial institution with which Borrower maintains a depository account
      into which the proceeds of all Collateral are to be deposited.

                  xxxiv. "Material Adverse Effect" shall mean any material
      adverse effect, as determined in Lender's sole and absolute discretion, on
      (a) the business, assets, operations, prospects or condition, financial or
      otherwise, of Borrower or any guarantor; (b) Borrower's or any guarantor's
      ability to pay or perform the Obligations in accordance with their terms;
      (c) the value, collectability or salability of the Collateral or the
      perfection or priority of Lender's liens; (d) the validity or
      enforceability of this Agreement or any of the Loan Documents; or (e) the
      practical realization of the benefits, rights and remedies inuring to
      Lender under this Agreement or under the other Loan Documents.

                  xxxv. "Maximum Facility" shall mean Five Million and 00/100
      Dollars ($5,000,000.00).

                  xxxvi. "Notice of Borrowing" shall mean a borrowing request in
      a Record substantially in the form of Exhibit C attached hereto.

                  xxxvii. "Obligations" shall mean and include all loans
      (including the Loans), advances, debts, liabilities, obligations,
      covenants and duties owing by Borrower to Lender or any Affiliate of
      Lender of any kind or nature, present or future, whether or not evidenced
      by any note, guaranty or other instrument, whether arising under this
      Agreement, the other Loan Documents or under any other agreement or by
      operation of law, whether or not for the payment of money, whether arising
      by reason of an extension of credit, opening, guaranteeing or confirming
      of a letter of credit, loan, guaranty, indemnification or in any other
      manner, whether direct or indirect (including those acquired by purchase
      or assignment), absolute or contingent, due or to become due, now due or
      hereafter arising and howsoever acquired including, without limitation,
      all interest, charges, expenses, commitment, facility, collateral
      management or other fees, attorneys' fees and expenses, consulting fees
      and expenses and any other sum chargeable to Borrower under this
      Agreement, the other Loan Documents or any other agreement with Lender.

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                  xxxviii. "Person" shall mean an individual, partnership,
      limited liability company, limited liability partnership, corporation,
      joint venture, joint stock company, land trust, business trust or
      unincorporated organization, or a government or agency or political
      subdivision thereof.

                  xxxix. "Plan" shall mean an employee benefit plan or other
      plan now or hereafter maintained for employees of Borrower or any
      subsidiary of Borrower and covered by Title IV of ERISA.

                  xl. "Property" shall have the meaning set forth in the General
      Security Agreement.

                  xli. "Receivables" shall have the meaning set forth in the
      General Security Agreement.

                  xlii. "Reconciliation Report" shall mean a report in form
      satisfactory to Lender, reconciling Borrower's month-end Receivable
      agings, payable agings and Inventory listings to Borrower's monthly
      financial statements, and including bank reconciliations.

                  xliii. "Record" shall mean information that is inscribed on a
      tangible medium or which is stored in an electronic or other medium and is
      retrievable in perceivable form. If Lender so specifies with respect to a
      particular type of Record, that type of Record shall be signed or
      otherwise authenticated by Borrower.

                  xliv. "Reportable Event" shall have the meaning assigned to
      that term in Title IV of ERISA.

                  xlv. "Revolving Loan" shall mean the Advances to be made by
      Lender to Borrower pursuant to Section 2.1 of this Agreement, and all
      interest thereon and all fees, costs and expenses payable by Borrower in
      connection therewith.

                  xlvi. "Revolving Note" shall mean, the promissory note
      substantially in the form annexed hereto as Exhibit A, to be given by
      Borrower to Lender to evidence the Revolving Loan.

                  xlvii. "Solvent" shall mean when used with respect to any
      Person, such Person (i) owns property the fair value of which is greater
      than the amount required to pay all of such Person's Indebtedness
      (including contingent debts), (ii) owns property the present fair salable
      value of which is greater than the amount that will be required to pay the
      probable liabilities of such Person on its then existing Indebtedness as
      such become absolute and matured, (iii) is able to pay all of its
      Indebtedness as such Indebtedness matures, and (iv) has capital sufficient
      to carry on its then existing business.

                  xlviii. "Tangible Net Worth" shall mean the net worth of
      Borrower less the value of intangible assets and other assets whose value,
      in the sole opinion of Lender, are less than the stated value carried on
      the balance sheet of Borrower.

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                  xlix. "Termination Date" shall mean the earlier of the date
      that is three (3) years from the date hereof, or the date on which Lender
      terminates this Agreement pursuant to Section 12.1 of this Agreement.

                  l. "Termination Notice" shall have the meaning set forth in
      Section 3.7 of this Agreement.

                  li. "Term Loan" shall mean the term loan made by Lender to
      Borrower pursuant to Section 2.2 of this Agreement.

                  lii. "Term Note" shall mean the promissory note substantially
      in the form annexed hereto as Exhibit B to be given by Borrower to Lender
      to evidence the Term Loan.

                  liii. "UCC" means the Uniform Commercial Code as in effect
      from time to time.

            C. THE REVOLVING LOAN.

                  i. Advances. Subject to the terms and conditions of this
      Agreement and relying upon the representations and warranties set forth in
      this Agreement, for so long as no Default or Event of Default exists,
      Lender shall lend in its discretion to Borrower on its request, a sum
      ("Borrowing Capacity") equal to the lesser of:

                        a. Four Million Six Hundred Thousand and 00/100 Dollars
                  ($4,600,000.00), or

                        b. the sum of (i) up to eighty-five percent (85%) of the
                  net face amount of Borrower's Eligible Receivables and (ii) up
                  to fifty percent (50%) of the Value of Borrower's Eligible
                  Inventory. Value shall mean the lesser of cost or the fair
                  market value of such Inventory.

            Within the limits of the Borrowing Capacity, and subject to the
limitations set forth in this Agreement, Borrower may borrow, repay and reborrow
Advances.

                  ii. Term Loan. Lender shall make a loan to Borrower on the
      date hereof in the amount of Four Hundred Thousand and 00/100 Dollars
      ($400,000.00), the proceeds of which will be used to refinance the
      indebtedness of Borrower to CIT Small Business Lending Corporation and the
      balance for Borrower's working capital needs (the "Term Loan"). The Term
      Loan shall be payable as follows: equal monthly principal installments
      each in the amount of $6,666.67, commencing July 1, 2003 payable on the
      first day of each month thereafter until May 30, 2006 on which date the
      entire unpaid principal balance of the Term Loan together with all accrued
      but unpaid interest shall be immediately due and payable. Notwithstanding
      the foregoing, the Term Loan must be repaid in full if Borrower prepays
      all or substantially all of the Revolving Advances.

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                  iii. Overline. Borrower acknowledges that Lender has advised
      Borrower that Lender does not intend to permit Borrower to incur
      Obligations at any time in an outstanding principal amount exceeding
      either the Borrowing Capacity or the Maximum Facility; however, it is
      agreed that should the Obligations of Borrower to Lender incurred under
      the Loans or otherwise exceed either, then such excess Obligations shall
      (a) constitute Obligations under this Agreement, (b) be entitled to the
      benefit of all security and protection under this Agreement and the other
      Loan Documents, (c) be secured by the Collateral and (d) be payable
      immediately without notice or demand by Lender.

                  iv. Reserves. The Borrowing Capacity shall be subject to such
      reserves, as Lender shall deem necessary and proper in Lender's sole and
      absolute discretion. Reserves may be established by Lender from time to
      time in such manner (including reduction of the advance rates set forth in
      Subsection 2.1(b) above) and for such reasons as Lender may determine from
      time to time in Lender's sole and absolute discretion. Payments, deposits,
      guaranties or indemnifications made by Lender under any reimbursement
      agreement, guaranty or similar instrument made in respect of any such
      instrument may be treated by Lender as Advances to Borrower under this
      Agreement.

                  v. Manner of Borrowing.

                  (a) Each Advance shall be requested in an Authenticated Record
sent via facsimile or electronic transmission including, without limitation, via
e-mail by a Notice of Borrowing executed by an authorized officer of Borrower,
not later than 11:00 a.m. Eastern Time on any Banking Day on which an Advance is
requested. Provided that Borrower shall have satisfied all conditions precedent
set forth in this Agreement, including the reaffirmation of the representations
and warranties and covenants provided in Article 10 of this Agreement, and
Borrower shall have sufficient Borrowing Capacity to permit an Advance under
this Agreement in accordance with Section 2.1 of this Agreement, Lender shall
make the Advance to Borrower in the amount requested in the Record by Borrower
in immediately available funds for credit to any account of Borrower (other than
a payroll account) at a bank in the United States of America as Borrower may
specify (provided, however, that Borrower shall pay Lender its usual and
customary fees for such transfer). Lender shall not be responsible for any
failure of any amount so transferred to be credited to any such account, unless
such failure is due to Lender's gross negligence or willful misconduct.

                  (b) The Term Loan shall be advanced in a single advance on the
date of this Agreement.

                  vi. Evidence of Borrower's Obligations. Borrower's obligation
      to pay the principal of, and interest on, the Advances made to Borrower
      shall be evidenced by the Revolving Note executed by Borrower and
      delivered to Lender. Borrower's obligation to pay the principal of, and
      interest on, the Term Loan shall be evidenced by the Term Note.

                  vii. Payments. All payments with respect to the Obligations
      shall either be charged by Lender to Borrower's account pursuant to
      Section 2.8 hereof,

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      charged as an Advance or made by Borrower to Lender in U.S. currency and
      without any defense, offset or counterclaim of any kind, at 555 Theodore
      Fremd Avenue, Suite C-207, Rye, New York 10580, or to such other address
      as Lender shall specify, by 12:00 noon New York, New York time on the date
      when due. Whenever any payment to be made shall otherwise be due on a day
      that is not a Banking Day, such payment shall be made on the next
      succeeding Banking Day and such extension of time shall be included in
      computing interest in connection with any such payment. Lender may make an
      Advance to reimburse itself for any payments on the Obligations (including
      fees and expenses payable by Borrower), which are not paid when due,
      without notice or demand to Borrower. Any delay or failure by Lender in
      submitting any invoice for such interest or fee or in the making of an
      Advance against the Revolving Loan shall not discharge or relieve Borrower
      of its obligation to make such interest or fee payment.

                  viii. Collections/Balance/Statements/etc.

            (a)   Collection and Remittance.

                  (i)   Borrower covenants and agrees to enter into a depository
                        account service agreement with Fleet Bank, F.A. to
                        establish a depository account for the benefit of
                        Borrower over which Lender shall have the sole power of
                        withdrawal.

                  (ii)  All proceeds of Collateral whether cash, checks, drafts,
                        notes, acceptances or other forms of payment, if
                        received by Borrower, shall be received by Borrower in
                        trust for Lender, and Borrower agrees to deliver or
                        cause to be delivered, such payments forthwith, in the
                        identical form in which received, to Lender or into a
                        depository account established for the benefit of
                        Borrower, as Lender shall require from time to time.

                  (iii) Collected funds in the depository account for the
                        benefit of Borrower shall be swept daily and the
                        proceeds deposited to an account of Lender or as Lender
                        shall otherwise elect.

            (b)   Determination of balance of Revolving Loans. In determining
                  the outstanding balance of the Revolving Loans, (i)
                  available/collected funds received from the depository account
                  for the benefit of Borrower in the Lender's account at Fleet
                  Bank, F.A. CT (Keltic Financial Partners, L.P. f/b/o Fleet
                  Capital Corp.) account number 9428395446 ABA 011900571 (or
                  such other account as Lender may direct from time to time),
                  before 2 p.m. Eastern Time of a Banking Day will be credited
                  on that Banking Day, and thereafter on the following Banking
                  Day, as follows: (A) First, to unpaid interest, (B) second to
                  unpaid fees and expenses; (C) third to the outstanding
                  principal balance of the Revolving Loan, and (D) fourth to all
                  other Obligations in such order as Lender shall elect; (ii)
                  any other form of funds received by Lender will be credited on
                  the Banking Day when Lender has received notification that
                  such funds are collected/available to Lender if before 2 p.m.
                  (Eastern Time), and thereafter on the following Banking Day;
                  (iii) all credits shall be conditional upon final payment to
                  Lender in cash or solvent credits of the items giving rise to
                  them and, if any item is not so paid, the amount of any credit
                  given for it shall be charged to the balance of the Revolving
                  Loan whether or not the item is returned; and (iv) for the
                  purpose of computing interest on the

                                       11
<PAGE>

                  Revolving Loan and other Obligations, interest shall continue
                  to accrue on the amount of any payment credited to Borrower's
                  Revolving Loan balance by Lender for a period of three (3)
                  Banking Days after the date so credited.

                  ix. Payment on Termination Date. Notwithstanding anything
herein to the contrary, the entire outstanding principal balance of the Loans,
plus all accrued and unpaid interest thereon and all fees and other amounts
payable under this Agreement and the other Loan Documents, shall be due and
payable in full, on the Termination Date.

            D. LENDER'S COMPENSATION.

                  i. Interest on Advances. Borrower shall pay interest monthly,
      in arrears, on the first day of each month, commencing June 1, 2003, on
      the average daily, unpaid principal amount of the Revolving Loans at a
      fluctuating rate, which is equal to the Loan Interest Rate.
      Notwithstanding the foregoing, on and after the occurrence of a Default or
      Event of Default, Borrower shall pay interest on the Revolving Loan at a
      rate which is three and one-half percent (3.50%) per annum above the Loan
      Interest Rate; provided, however, in no event shall any interest to be
      paid under this Agreement or under any Loan Document that would exceed the
      maximum rate permitted by law.

                  ii. Interest on the Term Loan. Borrower shall pay interest
      monthly, in arrears, on the first day of each month, commencing June 1,
      2003 on the unpaid principal amount of the Term Loan at a fluctuating rate
      which is equal to the Loan Interest Rate. Notwithstanding the foregoing,
      after the occurrence of an Event of Default hereunder, Borrower shall pay
      interest on the unpaid principal balance of the Term Loan at a rate which
      is three and one-half percent (3.5%) per annum above the interest rate
      which would otherwise be applicable to the Term Loan; provided, however,
      in no event shall any interest to be paid hereunder or under any Loan
      Document that would exceed the maximum rate permitted by law.

                  iii. Commitment and Closing Fee. Borrower has paid to Lender
      Seventy-Five Thousand and 00/100 Dollars ($75,000.00) as a commitment and
      closing fee which fee has been fully earned by Lender.

                  iv. Facility Fee. Borrower shall pay to Lender monthly, in
      arrears, on the first day of each month a facility fee in an amount equal
      to one percent (1.0%) per annum of the Maximum Facility, which facility
      fee is deemed earned in full for each year on the date hereof and on each
      anniversary hereof.

                  v. Collateral Management Fee. Borrower shall pay to Lender
      monthly, in arrears, on the first day of each month, a collateral
      management fee in the amount of Two Thousand and 00/100 Dollars
      ($2,000.00). Upon the occurrence of a Default or an Event of Default and
      during the continuance of such Default or Event of Default, the fee shall,
      in the sole discretion of Lender, be increased by $1,000.00 per month.

                  vi. Field Examination Fees. Borrower shall promptly reimburse
      Lender for all reasonable costs and expenses associated with periodic
      field examinations and fixed asset appraisals performed by Lender and its
      agents, as deemed necessary by Lender.

                                       12
<PAGE>

                  vii. Liquidated Damages. If Borrower prepays the principal of
      the Revolving Loan to Borrower (other than from time to time from working
      capital) or if the outstanding Obligations become due prior to the
      Termination Date for any reason or no reason, Borrower shall pay to Lender
      at the time of such prepayment, liquidated damages in an amount equal to:
      (a) five percent (5.0%) of the Maximum Facility if the prepayment is made
      prior to June 1, 2004; (b) three percent (3.0%) of the Maximum Facility if
      the prepayment is made on or after June 1, 2004, but prior to June 1,
      2005; and (c) one percent (1.0%) of the Maximum Facility if the prepayment
      is made after June 1, 2005. Borrower shall give Lender at least ninety
      (90) days' advance written notice ("Termination Notice") of Borrower's
      election to terminate the availability of Revolving Loans under this
      Agreement prior to the Termination Date. The Termination Notice shall be
      irrevocable and shall specify the effective date of such termination,
      which effective date shall not be less than ninety (90) days after the
      giving of the Termination Notice and shall in no event be later than the
      Termination Date. After the Termination Date, Lender shall have no
      obligation to make any Advance(s) to Borrower.

                  viii. Computation of Interest and Fees. All interest and fees
      under this Agreement shall be computed on the basis of a year consisting
      of three hundred sixty (360) days for the number of days actually elapsed.

            E. APPLICATION OF PROCEEDS. The proceeds of the Term Loan and the
      Advances shall be used solely by Borrower to affect the acquisition of
      certain assets, to repay existing indebtedness incurred in connection
      therewith, for working capital needed in the normal operation of
      Borrower's business and as provided in Section 9.6 of this Agreement.

            F. INDUCING REPRESENTATIONS. In order to induce Lender to make the
      Loans, Borrower makes the following representations and warranties to
      Lender:

                  i. Organization and Qualifications. Borrower is and always has
      been a corporation duly organized and validly existing under the laws of
      the State of Tennessee. Borrower's tax identification number is
      62-1478695. Borrower is qualified to do business in every jurisdiction
      where the nature of its business requires it to be so qualified.

                  ii. Name and Address. During the preceding five (5) years,
      Borrower has not been known by nor has used any other name whether
      corporate, fictitious or otherwise, except as set forth on Schedule 5.2
      attached hereto. Borrower's chief executive office is 275 North Middletown
      Road, Pearl River, New York 10965.

                  iii. Structure. Borrower has no subsidiaries or Affiliates,
      except as set forth on Schedule 5.3 attached hereto.

                  iv. Legally Enforceable Agreement. The execution, delivery and
      performance of this Agreement, each and all of the other Loan Documents
      and each and all other instruments and documents to be delivered by
      Borrower or its Affiliates under this Agreement and the creation of all
      liens and security interests provided for herein are

                                       13
<PAGE>

      within Borrower's corporate power, have been duly authorized by all
      necessary or proper corporate action (including the consent of
      shareholders where required), are not in contravention of any agreement or
      indenture to which Borrower is a party or by which it is bound, or of the
      Certificate of Incorporation or By-Laws of Borrower, and are not in
      contravention of any provision of law and the same do not require the
      consent or approval of any governmental body, agency, authority or any
      other Person which has not been obtained and a copy thereof furnished to
      Lender.

                  v. Solvent Financial Condition. Borrower is Solvent.

                  vi. Financial Statements. The audited financial statements of
      Borrower as of December 31, 2002, copies of which have been delivered to
      Lender, fairly present Borrower's financial condition and results of
      operations in accordance with GAAP, and as of such dates and there have
      been no changes since such dates. Borrower has no contingent liabilities,
      liabilities for taxes, unusual forward or long-term commitments, or
      unrealized or unanticipated losses from any unfavorable commitments, which
      were not disclosed in such financial statements or the notes thereto.

                  vii. Joint Ventures. Borrower is not engaged in any joint
      venture or partnership with any other Person.

                  viii. Real Estate. Attached hereto as Schedule 5.8 is a list
      showing all real property owned or leased by Borrower, and if leased, the
      correct name and address of the landlord and the date and term of the
      applicable lease.

                  ix. Intellectual Property. Borrower owns or possesses all the
      patents, trademarks, service marks, trade names, copyrights, licenses and
      other intellectual property necessary for the present and planned future
      conduct of its business without any conflict with the rights of others.
      All such patents, trademarks, service marks, trade names, copyrights,
      licenses and other similar rights are listed on Schedule 5.9 attached
      hereto, if any.

                  x. Existing Business Relationship. There exists no actual or
      threatened termination, cancellation or limitation of, or any adverse
      modification or change in, the business relationship of Borrower with any
      supplier, customer or group of customers whose purchases individually or
      in the aggregate could effect the operations or the financial condition of
      Borrower.

                  xi. Investment Company Act: Federal Reserve Board Regulations.
      Borrower is not an "investment company", or an "affiliated person" of, or
      "promoter" or "principal underwriter" for, an "investment company"; as
      such terms are defined in the Investment Company Act of 1940, as amended
      (15 U.S.C. ss. 80(a)(1), et seq.). The making of the Loans under this
      Agreement by Lender, the application of the proceeds and repayment thereof
      by Borrower and the performance of the transactions contemplated by this
      Agreement will not violate any provision of such Act, or any rule,
      regulation or order issued by the Securities and Exchange Commission
      thereunder. Borrower does not own any margin security as that term is
      defined in Regulation U of the Board of Governors of

                                       14
<PAGE>

      the Federal Reserve System and the proceeds of the Loans made pursuant to
      this Agreement will be used only for the purposes contemplated under this
      Agreement. None of the proceeds will be used, directly or indirectly, for
      the purpose of purchasing or carrying any margin security or for the
      purpose of reducing or retiring any Indebtedness which was originally
      incurred to purchase or carry margin security or for any other purpose
      which might constitute any of the Loans under this Agreement a "purpose
      credit" within the meaning of said Regulation U or Regulations T or X of
      the Federal Reserve Board. Borrower will not take, or permit any agent
      acting on its behalf to take, any action which might cause this Agreement
      or any document or instrument delivered pursuant hereto to violate any
      regulation of the Federal Reserve Board.

                  xii. Tax Returns. Borrower and the guarantor have filed all
      tax returns (Federal, state or local) required to be filed and paid all
      taxes shown thereon to be due including interest and penalties or has
      provided adequate reserves therefor. No assessments have been made against
      Borrower or any guarantor by any taxing authority nor has any penalty or
      deficiency been made by any such authority. To the best of Borrower's
      knowledge, no Federal income tax return of Borrower or any guarantor is
      presently being examined by the Internal Revenue Service nor are the
      results of any prior examination by the Internal Revenue Service or any
      state or local tax authority being contested by Borrower or any guarantor.

                  xiii. Litigation. Except as disclosed in Schedule 5.13, no
      action or proceeding is now pending or, to the knowledge of Borrower,
      threatened against Borrower or any guarantor, at law, in equity or
      otherwise, before any court, board, commission, agency or instrumentality
      of the Federal or state government or of any municipal government or any
      agency or subdivision thereof, or before any arbitrator or panel of
      arbitrators, and neither Borrower nor any guarantor has accepted liability
      for any such action or proceeding. There is no proceeding pending before
      any governmental agency (Federal, state or local) and, to the best of
      Borrower's knowledge, no investigation has been commenced before any such
      governmental agency the effect of which, if adversely decided, would or
      could, have a Material Adverse Effect.

                  xiv. Receivables Locations. Annexed hereto as Schedule 5.14 is
      a list showing all places at which Borrower maintains, or will maintain,
      records relating to Receivables. Borrower will provide Lender thirty (30)
      days prior written notice by means of an Authenticated Record of any new
      location where Borrower maintains records relating to Receivables or
      closes any location where it maintained records related to Receivables.

                  xv. Inventory Locations. Annexed hereto as Schedule 5.15 is a
      list showing all places where Borrower maintains, or will maintain,
      Inventory. Such list indicates whether the premises are owned or leased by
      Borrower or whether the premises are the premises of a warehouseman or
      other third party, and if owned by a third party, the name and address of
      such third party. Borrower shall provide Lender thirty (30) days prior
      written notice by means of an Authenticated Record of any new location of
      where Borrower maintains Inventory or closes any location where it
      maintains Inventory. This notice shall indicate whether the premises are
      owned or leased by Borrower or whether

                                       15
<PAGE>

      such premises are the premises of a warehouseman or other third party, and
      if owned by a third party, the name and address of such third party. Prior
      to moving any Inventory to a new location, Borrower shall obtain a
      landlord's waiver in form and content acceptable to Lender in its
      discretion.

                  xvi. Equipment List and Locations. Annexed hereto as Schedule
      5.16 is a list showing all of Borrower's equipment, and describing the
      places where the same is located. Such list indicates whether such
      premises are owned or leased by Borrower or whether the premises are the
      premises of another third party, and if leased, the name and address of
      such third party. Borrower shall provide Lender thirty (30) days prior
      written notice by means of an Authenticated Record of any new location of
      where Borrower maintains Equipment or closes any location where it
      maintains Equipment. This notice shall indicate whether the premises are
      owned or leased by Borrower or whether

      such premises are the premises of a warehouseman or other third party, and
      if owned by a third party, the name and address of such third party. Prior
      to moving any Equipment to a new location, Borrower shall obtain a
      landlord's waiver in form and content acceptable to Lender in its
      discretion.

                  xvii. Title/ Liens. Borrower has good and marketable title to
      the Collateral as sole owner thereof. There are no existing liens on any
      Property of Borrower, except for liens in favor of Lender and liens
      described in Schedule 5.17. Except as set forth on Schedule 5.17, none of
      the Collateral is subject to any prohibition against encumbering,
      pledging, hypothecating or assigning the same or requires notice or
      consent in connection therewith.

                  xviii. Existing Indebtedness. Borrower has no existing
      Indebtedness except the Indebtedness described in Schedule 5.18.

                  xix. ERISA Matters. The present value of all accrued vested
      benefits under any Plan (calculated on the basis of the actuarial
      evaluation for the Plan) did not exceed as of the date of the most recent
      actuarial evaluation for such Plan the fair market value of the assets of
      such Plan allocable to such benefits. Borrower is not aware of any
      information since the date of such evaluation that would affect the
      information contained therein. Such Plan has not incurred an accumulating
      funding deficiency, as that term is defined in Section 302 of ERISA or
      Section 412 of the Code (whether or not waived), no liability to the
      Pension Benefit Guaranty Corporation (other than required premiums which
      have become due and payable, all of which have been paid) has been
      incurred with respect to the Plan and there has not been any Reportable
      Event which presents a risk of termination of the Plan by the Pension
      Benefit Guaranty Corporation. Borrower has not engaged in any transaction
      which would subject Borrower to tax, penalty or liability for prohibited
      transactions imposed by ERISA or the Code.

                  xx. O.S.H.A. Borrower has duly complied with, and its
      facilities, business, leaseholds, equipment and other property are in
      compliance in all respects with, the provisions of the Federal
      Occupational Safety and Health Act and all rules and regulations
      thereunder and all similar state and local Governmental Rules. There are
      no outstanding citations, notices or orders of non-compliance issued to
      Borrower or relating

                                       16
<PAGE>

      to its facilities, business, leaseholds, equipment or other property under
      any such Governmental Rules.

                  xxi. Environmental Matters. Except as disclosed in Schedule
      5.21,

                        a. No Property owned or used by Borrower is or has been
                  used for the generation, manufacture, refining,
                  transportation, treatment, storage, handling or disposal of
                  any "hazardous substances" or "hazardous wastes". The
                  following are all of the Standard Industrial Classification
                  Codes applicable to the properties and operations of Borrower:
                  1711; (b) Borrower is in compliance with all applicable
                  Environmental Laws; (c) there has been no contamination or
                  release of hazardous substances at, upon, under or within any
                  Property owned or leased by Borrower, and there has been no
                  contamination (as defined in any applicable Environmental Law)
                  or release of hazardous substances (as defined in any
                  applicable Environmental Law) on any other Property that has
                  migrated or threatens to migrate to any Property owned or
                  leased by Borrower; (d) to the best of Borrower's knowledge,
                  there are not now and never have been above-ground or
                  underground storage tanks at any Property owned or leased by
                  Borrower; (e) there are no transformers, capacitors or other
                  items of Equipment containing polychlorinated biphenyls at
                  levels in excess of 49 parts per million, violative of any
                  applicable Environmental Law, at any Property owned or leased
                  by Borrower; (f) no hazardous substances are present at any
                  Property owned or leased by Borrower, nor will any hazardous
                  substances be present upon any such Property or in the
                  operation thereof by Borrower; (g) all permits and
                  authorizations required under Environmental Laws for all
                  operations of Borrower have been duly issued and are in full
                  force and effect including, but not limited to, those for air
                  emissions, water discharges and treatment, storage tanks and
                  the generation, treatment, storage and disposal of hazardous
                  substances; (h) there are no past, pending or threatened
                  environmental claims against Borrower or any Property owned or
                  leased by Borrower; and there is no condition or occurrence on
                  any Property owned or leased by Borrower that could be
                  anticipated (1) to form the basis of an environmental claim
                  against Borrower or its properties or (2) to cause any
                  Property owned or leased by Borrower to be subject to any
                  restrictions on its ownership, occupancy or transferability
                  under any Environmental Law; (i) no portion of any Property
                  owned or leased by Borrower contains asbestos-containing
                  material that is or threatens to become friable; (j) the
                  representations and warranties set forth in this Section 5.21
                  shall survive repayment of the Obligations and the termination
                  of this Agreement and the other Loan Documents.

                  xxii. Labor Disputes. There are no pending or, to Borrower's
      knowledge, threatened labor disputes which could have a Material Adverse
      Effect.

                                       17
<PAGE>

                  xxiii. Location of Bank and Securities Accounts. Annexed
      hereto as Schedule 5.23 is a complete and accurate list of all deposit,
      checking and other bank accounts, all securities and other accounts
      maintained with any broker dealer and all other similar accounts
      maintained by Borrower (collectively, "Bank Accounts"), together with a
      description thereof.

                  xxiv. Compliance With Laws. Borrower is in compliance with all
      Federal, state and local governmental rules, ordinances and regulations
      ("Governmental Rules") applicable to its ownership or use of properties or
      the conduct of its business.

                  xxv. No Other Violations. Borrower is not in violation of any
      term of its Certificate of Incorporation or By-laws and no event or
      condition has occurred or is continuing which constitutes or results in
      (or would constitute or result in, with the giving of notice, lapse of
      time or other condition) (a) a breach of, or a default under, any
      agreement, undertaking or instrument to which Borrower is a party or by
      which it or any of its Property may be affected, or (b) the imposition of
      any lien on any Property of Borrower.

                  xxvi. Survival of Representations and Warranties. Borrower
      covenants, warrants and represents to Lender that all representations and
      warranties of Borrower contained in this Agreement or in any other Loan
      Documents shall be true at the time of Borrower's execution of this
      Agreement and the other Loan Documents, and Lender's right to bring an
      action for breach of any such representation or warranty or to exercise
      any remedy under this Agreement based upon the breach of any such
      representation or warranty shall survive the execution, delivery and
      acceptance hereof by Lender and the closing of the transactions described
      herein or related hereto until the Obligations are finally and irrevocably
      paid in full.

            G. FINANCIAL STATEMENTS AND INFORMATION; CERTAIN NOTICES TO LENDER.
      So long as Borrower shall have any Obligations to Lender under this
      Agreement, Borrower shall deliver to Lender, or shall cause to be
      delivered to Lender:

                  i. Borrowing Base Certificate. Weekly (on or before Tuesday of
      each week as of the preceding week end), and monthly (within two (2) days
      after the end of each month) and contemporaneously with each request for
      an Advance, a satisfactorily completed and executed Borrowing Base
      Certificate.

                  ii. Monthly Reports. Within fifteen (15) days after the end of
      each month, an accounts receivable aging, accounts payable aging, an
      inventory listing, a collateral update certificate, and a Reconciliation
      Report of Borrower for such month, all in form satisfactory to Lender,
      prepared by Borrower and if Lender so requests, customer statements, sales
      journals, cash receipts journals and detailed sales credit reports.

                  iii. Annual Financial Statements. Within ninety (90) days
      after the close of each Fiscal Year of Borrower, a copy of audited annual
      financial statements of Borrower and its Affiliates prepared by an
      independent certified public accountant on a combined basis consisting of
      a balance sheet, statements of operations and retained

                                       18
<PAGE>

      earnings and accompanying footnotes, statements of cash flow, together
      with the unqualified opinion of such accounting firm, acceptable to Lender
      in its sole discretion.

                  iv. Monthly Financial Statements. Within thirty (30) days
      after the end of each month of Borrower, financial statements consisting
      of a balance sheet, statements of operations and retained earnings and
      statements of cash flow, prepared by management of Borrower, or Hudson
      Technologies Company in accordance with GAAP, together with a compliance
      certificate in the form attached as Exhibit E hereto.

                  v. Projections. Within thirty (30) days prior to the end of
      each Fiscal Year of Borrower, monthly financial projections for the next
      fiscal year and annual projections for each succeeding Fiscal Year of
      Borrower in form satisfactory to Lender.

                  vi. Customer Lists. Annually, a list of all of Borrower's
      customers and vendors, including the addresses, and telephone and
      facsimile numbers of such customers and vendors which lists shall be
      delivered within thirty (30) days of each Fiscal Year end.

                  vii. Insurance. Annually, within thirty (30) days of the
      renewal date of such insurance policy, evidence of insurance in form and
      content satisfactory to Lender and otherwise in compliance with Section
      8.6 of this Agreement, together with the original insurance policy.

                  viii. Notice of Event of Default and Adverse Business
      Developments. Immediately after becoming aware of the existence of a
      Default or an Event of Default or after becoming aware of any developments
      or other information which is likely to adversely affect Borrower's
      properties, business, prospects, profits or condition (financial or
      otherwise) or its ability to perform its obligation under this Agreement
      or any other Loan Documents including, without limitation, the following:

                        a. any dispute that may arise between Borrower and any
                  governmental regulatory body or law enforcement authority,
                  including any action relating to any tax liability of Borrower
                  or guarantor;

                        b. any labor controversy resulting in or threatening to
                  result in a strike or work stoppage against Borrower;

                        c. any proposal by any public authority to acquire the
                  assets or business of Borrower;

                        d. the location of any Collateral other than at
                  Borrower's place of business or as permitted under this
                  Agreement;

                        e. any proposed or actual change of Borrower's name,
                  identity, state of organization or corporate structure; or

                        f. any other matter which has resulted or may result in
                  a Material Adverse Effect.

                                       19
<PAGE>

      In each case, Borrower will provide Lender with telephonic notice followed
by notice in a Record specifying and describing the nature of such Default,
Event of Default or development or information, and such anticipated effect.

                  ix. Other Information. Such other information respecting the
      financial condition of Borrower or any guarantor, or any Property of
      Borrower in which Lender may have a lien as Lender may, from time to time,
      request. Borrower authorizes Lender to communicate directly with
      Borrower's independent certified public accountants and authorizes those
      accountants to disclose to Lender any and all financial statements and
      other information of any kind that they may have with respect to Borrower
      and its business and financial and other affairs. Lender shall treat
      information so obtained as confidential. On or before the date of this
      Agreement, Borrower shall deliver to Lender a letter addressed to such
      accountants instructing them to comply with the provisions of this Section
      6.9, which letter shall be acknowledged by such accountants.

            H. ACCOUNTING. Lender may account monthly to Borrower. Each and
      every account shall be deemed final, binding and conclusive upon Borrower
      in all respects, as to all matters reflected therein, unless Borrower,
      within fifteen (15) days after the date the account was rendered, delivers
      to Lender notice in a Record of any objections which Borrower may have to
      any such account and in that event only those items expressly objected to
      in such notice shall be deemed to be disputed by Borrower. If Borrower
      disputes the correctness of any statement, Borrower's notice shall specify
      in detail the particulars of its basis for contending that such statement
      is incorrect.

            I. AFFIRMATIVE COVENANTS. Borrower represents and warrants that, so
      long as it shall have any Obligations to Lender under this Agreement,
      Borrower will:

                  i. Business and Existence. Preserve and maintain Borrower's
      separate existence and rights, privileges and franchises.

                  ii. Trade Names. Transact business in Borrower's own name and
      invoice all of Borrower's Receivables in Borrower's own name.

                  iii. Intentionally Left Blank.

                  iv. Taxes. Pay and discharge all taxes, assessments,
      government charges and levies imposed upon Borrower, Borrower's income or
      Borrower's profits or upon any Property belonging to Borrower prior to the
      date on which penalties attach thereto, except where the same may be
      contested in good faith by appropriate proceedings being diligently
      conducted. Borrower will pay all taxes, assessments, governmental charges
      or private encumbrances levied, assessed, imposed or payable upon or with
      respect to the Inventory, the equipment or any other Collateral or any
      part thereof.

                  v. Compliance with Laws. Comply with all Governmental Rules
      applicable to Borrower including, without limitation, all laws and
      regulations regarding

                                       20
<PAGE>

      the collection, payment and deposit of employees' income, unemployment and
      Social Security taxes.

                  vi. Maintain Properties: Insurance. Safeguard and protect all
      Property used in the conduct of Borrower's business and keep all of
      Borrower's Property insured with insurance companies licensed to do
      business in the states where the Property is located against loss or
      damage by fire or other risk under extended coverage endorsement and
      against theft, burglary, and pilferage together with such other hazards as
      Lender may from time to time request, in amounts satisfactory to Lender.
      Borrower shall deliver the policy or policies of such insurance or
      certificates of insurance to Lender containing endorsements in form
      satisfactory to Lender naming Lender as lender, loss payee and additional
      insured and providing that the insurance shall not be canceled, amended or
      terminated except upon thirty (30) days' prior written notice to Lender.
      All insurance proceeds received by Lender shall be retained by Lender for
      application to the payment of such portion of the Obligations as Lender
      may determine in Lender's sole discretion. Borrower shall promptly notify
      Lender of any event or occurrence causing a loss or decline in the value
      of Property insured or the existence of an event justifying a claim under
      any insurance and the estimated amount thereof.

                  vii. Business Records. Keep adequate records and books of
      account with respect to Borrower's business activities in which proper
      entries are made in accordance with sound bookkeeping practices reflecting
      all financial transactions of Borrower; and Borrower shall maintain all of
      its Bank Accounts as set forth on Schedule 5.23 of this Agreement.

                  viii. Litigation. Give Lender prompt notice of any suit at law
      or in equity against Borrower involving money or property valued in excess
      of Fifty Thousand and 00/100 Dollars ($50,000.00) except where the same is
      fully covered by insurance and the insurer has accepted liability
      therefore in writing.

                  ix. Damage or Destruction of Collateral. Maintain or cause to
      be maintained the Collateral and all its Properties in good condition and
      repair at all times, preserve the Collateral and all its other Properties
      from loss, damage, or destruction of any nature whatsoever and provide
      Lender with prompt notice in a Record of any destruction or substantial
      damage to any Collateral subject to Lender's security interest and of the
      occurrence of any condition or event which has caused, or may cause, loss
      or depreciation in the value of any Collateral.

                  x. Name Change. Provide Lender with not fewer than thirty (30)
      days notice in an Authenticated Record prior to any proposed change of
      name or the creation of any subsidiary.

                  xi. Access to Books and Records. Provide Lender with such
      reports and with such access to Borrower's books and records and permit
      Lender to copy and inspect such reports and books and records all, as
      Lender deems necessary or desirable to enable Lender to monitor the credit
      facilities extended hereby. Lender may examine and inspect the Inventory,
      equipment or other Collateral and may examine, inspect and copy

                                       21
<PAGE>

      all books and records with respect thereto at any time during Borrower's
      normal business hours. Borrower shall maintain full, accurate and complete
      records respecting the Inventory, including a perpetual inventory, and all
      other Collateral at all times.

                  xii. Solvent. Continue to be Solvent.

                  xiii. Compliance With Environmental Laws. Comply with all
      applicable Environmental Laws.

                  xiv. Compliance with ERISA and other Employment Laws. Comply
      with all applicable provisions of ERISA and the Internal Revenue Code of
      1986, as amended, and any other applicable laws, rules or regulations
      relating to the compensation of employees and funding of employee pension
      plans.

                  xv. Proceeds of Collateral. Forthwith upon receipt, pay to
      Lender the proceeds of all Collateral, whereupon such proceeds shall be
      applied to the Obligations in such order and manner as shall be determined
      in the sole and absolute discretion of Lender.

                  xvi. Delivery of Documents. Notify Lender if any proceeds of
      Receivables shall include, or any of the Receivables shall be evidenced
      by, notes, trade acceptances or instruments or documents, or if any
      Inventory is covered by documents of title or chattel paper, whether or
      not negotiable, and if required by Lender, immediately deliver them to
      Lender appropriately endorsed. Borrower waives protest regardless of the
      form of the endorsement. If Borrower fails to endorse any instrument or
      document, Lender is authorized to endorse it on Borrower's behalf.

            J. NEGATIVE COVENANTS. So long as Borrower shall have any Obligation
      to Lender under this Agreement and unless Lender has first consented
      thereto in an Authenticated Record, Borrower shall not:

                  i. Indebtedness. Create, incur, assume or suffer to exist,
      voluntarily or involuntarily, any Indebtedness, except (i) Obligations to
      Lender, (ii) trade debt incurred in the ordinary course of Borrower's
      business as currently conducted; (iii) purchase money financing and
      equipment leases not to exceed Fifty Thousand and 00/100 Dollars
      ($50,000.00) in any Fiscal Year; and (iv) existing Indebtedness described
      on Schedule 5.18.

                  ii. Mergers; Consolidations; Acquisitions. Enter into any
      merger, consolidation, reorganization or recapitalization with any other
      Person; take any steps in contemplation of dissolution or liquidation;
      conduct any part of its business through any corporate subsidiary,
      unincorporated association or other Person; acquire the stock or assets of
      any Person, whether by merger, consolidation, purchase of stock or
      otherwise; or acquire all or any substantial part of the properties of any
      Person.

                  iii. Sale or Disposition. Sell or dispose of all or any
      Properties or grant any Person an option to acquire any such Property,
      provided, however, that the

                                       22
<PAGE>

      foregoing shall not prohibit sales of Inventory in the ordinary course of
      Borrower's business.

                  iv. Defaults. Permit any landlord, mortgagee, trustee under
      deed of trust or lienholder to declare a default under any lease,
      mortgage, deed of trust or lien on real estate owned or leased by
      Borrower, which default remains uncured after any stated cure period or
      for a period in excess of thirty (30) days from its occurrence, whichever
      is less, unless such default is being contested by Borrower in good faith
      by appropriate proceedings being diligently conducted.

                  v. Limitations on Liens. Suffer any lien, encumbrance,
      mortgage or security interest on any of its Property, except such liens as
      appear on Schedule 5.17 attached hereto, if any.

                  vi. Dividends and Distributions. Pay any cash dividends, make
      any capital distribution in cash or other Property or return of capital,
      or purchase or redeem any of its stock or other securities, or retire any
      of its stock, or take any action which would have an effect equivalent to
      any of the foregoing. Notwithstanding the foregoing, Borrower may make (i)
      periodic payments to Hudson Holdings, Inc. and/or Hudson Technologies,
      Inc. solely to make periodic interest payments due on its promissory note
      to Joseph P. Mandracchia, Sr. in the original principal amount of
      $40,556.02 dated December 20, 2002, and its promissory note to Fredrick T.
      Zugibe, Sr. in the original principal amount of $101,390.17 dated December
      20, 2002 in accordance with the terms and conditions of the subordination
      and pledge agreement executed by each such individual, and (ii) periodic
      payments of principal and/or interest due on the promissory note payable
      to Fleming Discovery Offshore Fund III, L.P. in the original principal
      amount of $79,450.00 and the promissory note payable to Fleming Discovery
      Fund III, L.P. in the original principal amount of $495,550.00, in
      accordance with the terms and conditions of the subordination and pledge
      agreement executed by each respective entity.

                  vii. Borrower's Name and Offices. Transfer Borrower's chief
      executive office or change its organizational name or the office where it
      maintains its records (including computer printouts and programs) with
      respect to Receivables or any other Collateral.

                  viii. Fiscal Year. Change its Fiscal Year.

                  ix. Change of Control. Allow any current change in the
      ownership structure of Borrower such that Hudson Holdings, Inc. or Hudson
      Technologies, Inc. is not the sole shareholder of Borrower.

                  x. Guaranties; Contingent Liabilities. Assume, guarantee,
      endorse, contingently agree to purchase or otherwise become liable upon
      the obligation of any Person, except by the endorsement of negotiable
      instruments for deposit or collection or similar transactions in the
      ordinary course of its business as currently conducted.

                  xi. Removal of Collateral. Remove, or cause or permit to be
      removed, any of the Collateral or other Property from the premises where
      such Collateral

                                       23
<PAGE>

      or Property is currently located and as set forth on Schedule 5.14, 5.15
      or 5.16 of this Agreement, except for sales of Inventory in the ordinary
      course of business as currently conducted and except as provided in
      Sections 5.14, 5.15 or 5.16.

                  xii. Transfer of Notes or Accounts. Sell, assign, transfer,
      discount or otherwise dispose of any Receivables or any promissory note or
      other instrument payable to it with or without recourse.

                  xiii. Settlements. Compromise, settle or adjust any claim
      relating to any of the Collateral.

                  xiv. Change of Business. Cause or permit a change in the
      nature of its business as conducted on the date of this Agreement.

                  xv. Change of Accounting Practices. Change its present
      accounting principles or practices in any respect, except, upon notice to
      Lender in a Record, as may be required by changes in GAAP.

                  xvi. Inconsistent Agreement. Enter into any agreement
      containing any provision which would be violated by the performance of
      Borrower's Obligations or other obligations under this Agreement or any
      other Loan Document.

                  xvii. Loan or Advances. Make any loans or advances to any
      Person. For purposes of this Subsection 9.17, monetary obligation owed to
      any Affiliate, subsidiary or guarantor including, without limitation,
      those in connection with its performance of services or the sale of goods,
      shall constitute loans or advances subject to the provisions of this
      Subsection 9.17 but excluding salaries paid to employees.

                  xviii. Investments. Make any investment in any Person
      including, without limitation, any Affiliates or form any Affiliates or
      subsidiaries not existing on the date hereof.

                  xix. Tangible Net Worth. Permit Borrower's Tangible Net Worth
      to be less than the amounts set forth below, for the period ending:

                         Amount                     Time Period
                         ------                     -----------

                    $330,000.00                    June 30, 2003

                  $2,515,000.00                 September 30, 2003

                  $2,356,000.00                  December 31, 2003

                  $2,156,000.00                   March 31, 2004

                  $2,406,000.00                    June 30, 2004

                                       24
<PAGE>

                  $2,656,000.00                 September 30, 2004

                  $2,556,000.00                  December 31, 2004

                  $2,356,000.00                   March 31, 2005

                  $2,656,000.00                    June 30, 2005

                  $2,956,000.00                 September 30, 2005

                  $2,856,000.00                  December 31, 2005

                  $2,656,000.00                   March 31, 2006

                  $3,006,000.00                  June 30, 2006 and

                                            until the Termination Date
                 --------------        ---------------------------------------

                  xx. Fixed Charge Coverage Ratio. Permit Borrower's Fixed
Charge Coverage Ratio for the periods set forth below to be greater than the
levels set forth below, tested quarterly based on a rolling twelve-month period:

                       Ratio                         Time Period
                       -----                         -----------

                        N/A

                  xxi. Capital Expenditures. Make or agree to make Capital
      Expenditures in an amount which exceeds the levels set forth below during
      the periods set forth below:

                     Amount                           Time Period
                     ------                           -----------

                   $375,000.00                      Fiscal Year 2003

                   $425,000.00                      Fiscal Year 2004

                   $475,000.00                      Fiscal Year 2005

                   $525,000.00                  Fiscal Year 2006 prorated
                                              through the Termination Date
              ---------------------    ----------------------------------------

                  xxii. Transactions with Affiliates. Engage in any transaction
      with any of Borrower's Affiliates except the Indebtedness described on
      Schedule 5.18 hereof.

                                       25
<PAGE>

                  xxiii. EBITDA. Permit Borrower's EBITDA to be less than the
      following during the time periods set forth below tested quarterly based
      on a rolling twelve-month period:

                     Amount                       Time Period
                     ------                       -----------

                 ($1,308,700.00)    For the period ended June 30, 2003

                    $147,050.00     For the period ended September 30, 2003

                  $1,106,700.00     For the period ended December 31, 2003

                  $1,108,910.00     For the period ended March 31, 2004

                  $1,146,820.00     For the period ended June 30, 2004

                  $1,216,435.00     For the period ended September 30, 2004

                  $1,217,710.00     For the period ended December 31, 2004

                  $1,220,005.00     For the period ended March 31, 2005

                  $1,260,737.00     For the period ended June 30, 2005

                  $1,337,314.00     For the period ended September 30, 2005

                  $1,339,787.00     For the period ended December 31, 2005

                  $1,342,189.00     For the period ended March 31, 2006 and
                                    thereafter through the Termination Date

            K. CONDITIONS TO ADVANCES.

                  i. Lender's Right to Take Certain Actions. Lender's obligation
      to make any Advance is subject to the condition that, as of the date of
      the Advance, no Default or Event of Default shall have occurred and be
      continuing and that the matters set forth in Article 5 of this Agreement
      and the representations and covenants set forth in the other Loan
      Documents continue to be true and complete. Borrower's acceptance of each
      Advance under this Agreement shall constitute a confirmation, as of the
      date of the Advance, of the matters set forth in Article 5 of this
      Agreement, of the representations and covenants set forth in the other
      Loan Documents, and that no Default or Event of Default then exists. If
      requested by Lender, Borrower shall further confirm such matters by
      delivery of a Record dated the day of the Advance and signed by an
      authorized officer of Borrower.

                                       26
<PAGE>

            L. TERM. Unless sooner terminated by Lender pursuant to the terms of
      this Agreement, the period during which the Revolving Loan shall be
      available shall initially be a period commencing on the date hereof and
      concluding on the Termination Date.

            M. EVENTS OF DEFAULT.

                  i. Defaults. Upon the happening of any of the following events
      (individually, an "Event of Default," collectively, "Events of Default"):

                        a. if Borrower shall fail to make any payment when due
                  on any Obligation under this Agreement or any other Loan
                  Document; or

                        b. if Borrower shall fail to comply with any term,
                  condition, covenant, warranty or representation contained in
                  Articles 6 or 9 of this Agreement; or

                        c. if Borrower shall fail to comply with any term,
                  condition, covenant or warranty of or in this Agreement other
                  than in Articles 6 or 9 of this Agreement, and such failure
                  continues for a period in excess of ten (10) days after notice
                  thereof is given by Lender to Borrower; or

                        d. if Borrower shall fail to comply with any term,
                  condition, covenant, warranty or representation contained in
                  any of the other Loan Documents or any other agreement between
                  Lender and Borrower; or

                        e. if Borrower shall cease to be Solvent, make an
                  assignment for the benefit of its creditors, call a meeting of
                  its creditors to obtain any general financial accommodation,
                  suspend business or if a case under any provision of the
                  Bankruptcy Code including provisions for reorganizations,
                  shall be commenced by or against Borrower or if a receiver,
                  trustee or equivalent officer shall be appointed for all or
                  any of the Properties of Borrower; or

                        f. if any statement or representation contained in any
                  financial statement or certificate delivered by Borrower to
                  Lender shall be false, in any respect, when made; or

                        g. if any Federal or state tax lien is filed of record
                  against Borrower and is not bonded or discharged within ten
                  (10) days of filing; or

                        h. if Borrower's independent certified public
                  accountants shall refuse to deliver any financial statement
                  required by this Agreement; or

                        i. if a judgment for more than One Hundred Thousand and
                  00/100 Dollars ($100,000.00) shall be entered against Borrower
                  in any action or proceeding and shall not be stayed, vacated,
                  bonded, paid or discharged within ten (10) days of entry,
                  except a judgment where the

                                       27
<PAGE>

                  claim is fully covered by insurance and the insurance company
                  has accepted liability therefore in writing; or

                        j. if any obligation of Borrower in respect of any
                  Indebtedness (other than Indebtedness to Lender) shall be
                  declared to be or shall become due and payable prior to its
                  stated maturity or such obligation shall not be paid as and
                  when the same becomes due and payable; or there shall occur
                  any event or condition which constitutes an event of default
                  under any mortgage, indenture, instrument, agreement or
                  evidence of Indebtedness relating to any obligation of
                  Borrower in respect of any such Indebtedness the effect of
                  which is to permit the holder or the holders of such mortgage,
                  indenture, instrument, agreement or evidence of Indebtedness,
                  or a trustee, agent or other representative on behalf of such
                  holder or holders, to cause the Indebtedness evidenced thereby
                  to become due prior to its stated maturity; or

                        k. upon the happening of any Reportable Event which
                  Lender in its sole discretion determines might constitute
                  grounds for the termination of any Plan, or if a trustee shall
                  be appointed by an appropriate United States District Court or
                  other court or administrative tribunal to administer any Plan,
                  or if the Pension Benefit Guaranty Corporation shall institute
                  proceedings to terminate any Plan or to appoint a trustee to
                  administer any Plan; or

                        l. upon the occurrence and continuance of any Material
                  Adverse Effect, which in the sole and absolute opinion of
                  Lender, impairs Lender's security, increases Lender's risks or
                  impairs Borrower's ability to perform under this Agreement or
                  under the other Loan Documents; or

                        m. upon the happening of any of the events described in
                  Subsections 12.1 (d), (e), (f), (g), (h), (i) or (j) with
                  respect to any guarantor or if any such guarantor purports to
                  terminate its guaranty or upon the death of a guarantor that
                  is a natural person, if any; or

                        n. if either Brian F. Coleman or James R. Buscemi does
                  not occupy the same position with Borrower as at the time of
                  the closing of the Loans or is not actively engaged in the
                  day-to-day operations of Borrower's business unless within
                  sixty (60) days of such event, (i) an individual is hired by
                  Borrower to perform substantially the same duties as Brian F.
                  Coleman or James R. Buscemi, as the case may be; (ii) such
                  individual and their qualifications and experience are
                  acceptable to Lender which approval will not be unreasonably
                  withheld; and (iii) such individual executes a validity and
                  support agreement in substantially the same form as the
                  validity and support agreement executed by Brian F. Coleman or
                  James R. Buscemi, as the case may be.

                                       28
<PAGE>

            Then, and in any such event, Lender may terminate this Agreement
without prior notice or demand to Borrower or may demand payment in full of all
Obligations (whether otherwise then payable on demand or not) without
terminating this Agreement and shall, in any event, be under no further
responsibility to extend any credit or afford any financial accommodation to
Borrower, whether under this Agreement or otherwise.

                  ii. Obligations Immediately Due. Upon the Termination Date for
      any reason, all of Borrower's Obligations to Lender including, but not
      limited to, the Loans shall immediately become due and payable without
      further notice or demand.

                  iii. Continuation of Security Interests. Notwithstanding any
      termination, until all Obligations of Borrower shall have been fully paid
      and satisfied, Lender shall retain all security in and title to all
      existing and future Receivables, General Intangibles, Inventory,
      Equipment, Fixtures, Investment Property, and other Collateral held by
      Lender under the General Security Agreement or under any other Loan
      Document and Borrower shall continue to assign Receivables and consign
      Inventory to Lender and continue to turn over all proceeds of Collateral
      to Lender.

                  iv. Lockbox. Upon the occurrence of and during the
      continuation of an Event of Default, Lender shall have the right to
      require Borrower to establish a Lockbox over which Lender shall have the
      sole power of withdrawal. Upon the establishment of such Lockbox, all
      proceeds of Collateral, whether cash, checks, drafts, notes, acceptances
      or other forms of payment including, without limitation, electronic
      payment if received by Borrower, shall be received by Borrower in trust
      for Lender and Borrower shall deliver or cause to be delivered such
      payments forthwith, in the identical form in which received, to Lender or
      to the Lockbox, as Lender shall require from time to time.

            N. REMEDIES OF LENDER. Upon the occurrence of any Event of Default
      or upon any termination of this Agreement, then Lender shall have, in
      addition to all of its other rights under this Agreement all of the rights
      and remedies provided in the General Security Agreement.

            O. GENERAL PROVISIONS.

                  i. Rights Cumulative. Lender's rights and remedies under this
      Agreement shall be cumulative and non-exclusive of any other rights or
      remedies which Lender may have under any other agreement or instrument, by
      operation of law or otherwise.

                  ii. Successors and Assigns. This Agreement is entered into for
      the benefit of the parties hereto and their successors and assigns. It
      shall be binding upon and shall inure to the benefit of the parties, their
      successors and assigns. Lender shall have the right, without the necessity
      of any further consent or authorization by Borrower, to sell, assign,
      securitize or grant participation in all, or a portion of, Lender's
      interest in the Loans, to other financial institutions of the Lender's
      choice and on such terms as are acceptable to Lender in its sole
      discretion.

                                       29
<PAGE>

                  iii. Notice. Wherever this Agreement provides for notice to
      any party (except as expressly provided to the contrary), it shall be
      given by messenger, facsimile transmission, certified U.S. mail with
      return receipt requested, or nationally recognized overnight courier with
      receipt requested, effective when either received or receipt rejected by
      the party to whom addressed, and shall be addressed as follows, or to such
      other address as the party affected may hereafter designate:

                   If to Lender:        Keltic Financial Partners, LP
                                        Attn: John P. Reilly, Managing Partner
                                        555 Theodore Fremd Avenue, Suite C-207
                                        Rye, New York 10580
                                        Fax: (914) 921-1154

                                       30
<PAGE>

                   With a copy to:      Clinton A. Poff, Esq.
                                        Poff & Bowman LLC
                                        1600 Route 208 North
                                        PO Box 24
                                        Hawthorne, NJ 07507
                                        Tel: (973) 636-9770
                                        Fax: (973) 636-9777

                   If to Borrower:      Hudson Technologies Company
                                        275 North Middletown Road
                                        Pearl River, NY 10965
                                        Tel: (845) 735-6000
                                        Fax: (845) 512-6070

                   With a copy to:      Stephen P. Mandracchia, Esq.
                                        Hudson Technologies Company
                                        275 North Middletown Road
                                        Pearl River, New York 10965
                                        Tel: (845) 735-6000
                                        Fax: (845) 512-6070

                  iv. Strict Performance. The failure, at any time or times
      hereafter, to require strict performance by Borrower of any provision of
      this Agreement shall not waive, affect or diminish any right of Lender
      thereafter to demand strict compliance and performance therewith. Any
      suspension or waiver by Lender of any Default or Event of Default by
      Borrower under this Agreement or any other Loan Document shall not
      suspend, waive or affect any other Default or Event of Default by Borrower
      under this Agreement or any other Loan Document, whether the same is prior
      or subsequent thereto and whether of the same or a different type.

                  v. Waiver. Borrower waives presentment, protest, notice of
      dishonor and notice of protest upon any instrument on which it may be
      liable to Lender as maker, endorser, guarantor or otherwise.

                  vi. Construction of Agreement. The parties hereto agree that
      the terms and language of this Agreement were the result of negotiations
      between the parties, and, as a result, there shall be no presumption that
      any ambiguities in this Agreement shall be resolved against either party.
      Any controversy over the construction of this Agreement shall be decided
      mutually without regard to events of authorship or negotiation.

                  vii. Expenses. If, at any time or times prior or subsequent to
      the date hereof, regardless of whether or not a Default or an Event of
      Default then exists or any of the transactions contemplated under this
      Agreement are concluded, Lender employs counsel for advice or other
      representation, or incurs legal expenses, or consulting fees and expenses,
      or other costs or out-of-pocket expenses in connection with: (a) the

                                       31
<PAGE>

      negotiation and preparation of this Agreement or any other Loan Document,
      or any amendment of or modification of this Agreement or any other Loan
      Document; (b) the administration of this Agreement or any of the other
      Loan Documents and the transactions contemplated hereby and thereby; (c)
      periodic audits and appraisals performed by Lender; (d) any litigation,
      contest, dispute, suit, proceeding or action (whether instituted by
      Lender, Borrower or any other Person) in any way relating to the
      Collateral, this Agreement or any other Loan Document or Borrower's
      affairs; (e) the perfection of any lien on the Collateral; (f) any attempt
      to enforce any rights or remedies of Lender against Borrower or any other
      Person which may be obligated to Lender by virtue of this Agreement or any
      other Loan Document including, without limitation, the Account Debtors; or
      (g) any attempt to inspect, verify, protect, preserve, restore, collect,
      sell, liquidate or otherwise dispose of or realize upon the Collateral;
      then, in any such event, the actual reasonable attorneys' fees and
      expenses arising from such services and all reasonable expenses, costs,
      charges and other fees of such counsel of Lender or relating to any of the
      events or actions described in this Section 14.7 shall be payable by
      Borrower to Lender, and shall be additional Obligations under this
      Agreement secured by the Collateral. Additionally, if any taxes (excluding
      taxes imposed upon or measured by the net income of Lender, but including
      any intangibles tax, stamp tax or recording tax) shall be payable on
      account of the execution or delivery of this Agreement, or the execution,
      delivery, issuance or recording of any other Loan Document, or the
      creation of any of the Obligations under this Agreement, by reason of any
      existing or hereafter enacted Federal or state statute, Borrower will pay
      (or will promptly reimburse Lender for the payment of) all such taxes
      including, but not limited to, any interest and penalties thereon, and
      will indemnify, defend and hold Lender harmless from and against any
      liability in connection therewith. Borrower shall also reimburse Lender
      for all other expenses incurred by Lender in connection with the
      transactions contemplated under this Agreement or the other Loan
      Documents, including, without limitation, fees in connection with any bank
      account, the Lockbox, wire charges, automatic clearing house fees and
      other similar costs and expenses.

                  viii. Reimbursements Charged to Revolving Loan. With respect
      to any amount advanced by Lender and required to be reimbursed by Borrower
      pursuant to the foregoing provisions of Section 14.7, it is hereby agreed
      that Lender may charge any such amount to Borrower's Revolving Loan on the
      dates such reimbursement is made. Borrower's obligations under Section
      14.7 shall survive termination of the other provisions of this Agreement.

                  ix. Waiver of Right to Jury Trial.

            A. Borrower and Lender recognize that in matters related to the
Loans and this Agreement, and as it may be subsequently modified and/or amended,
any such party may be entitled to a trial in which matters of fact are
determined by a jury (as opposed to a trial in which such matters are determined
by a Federal or state judge). By execution of this Agreement, Lender and
Borrower will give up their respective right to a trial by jury. Borrower and
Lender each hereby expressly acknowledge that this waiver is entered into to
avoid delays, minimize trial expenses, and streamline the legal proceedings in
order to accomplish a quick resolution of

                                       32
<PAGE>

claims arising under or in connection with the Revolving Note, the Term Note and
this Agreement.

            B. WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT NOT PROHIBITED BY
LAW, BORROWER AND LENDER EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES ANY RIGHT THAT BORROWER OR LENDER MAY HAVE TO A TRIAL BY JURY IN RESPECT
TO ANY LITIGATION, DIRECTLY OR INDIRECTLY, AT ANY TIME ARISING OUT OF, UNDER, OR
IN CONNECTION WITH THE LOANS, THIS AGREEMENT, OR ANY TRANSACTION CONTEMPLATED
THEREBY OR HEREBY, BEFORE OR AFTER MATURITY.

            C. CERTIFICATIONS. BORROWER HEREBY CERTIFIES THAT NEITHER ANY
REPRESENTATIVE NOR AGENT OF LENDER NOR LENDER'S COUNSEL HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, OR IMPLIED THAT LENDER WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER. BORROWER ACKNOWLEDGES THAT
LENDER HAS BEEN INDUCED TO ENTER INTO THE TRANSACTIONS BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATION HEREIN.

                  x. Indemnification by Borrower/Waiver of Claims. Borrower
      hereby covenants and agrees to indemnify, defend (with counsel selected by
      Lender) and hold harmless Lender and its officers, partners, employees,
      consultants and agents from and against any and all claims, damages,
      liabilities, costs and expenses (including, without limitation, the actual
      fees and expenses of counsel) which may be incurred by or asserted against
      Lender or any such other Person in connection with:

                        a. any investigation, action or proceeding arising out
                  of or in any way relating to this Agreement, any of the Loans,
                  any of the other Loan Documents, any other agreement relating
                  to any of the Obligations, any of the Collateral, or any act
                  or omission relating to any of the foregoing; or

                        b. any taxes, liabilities, claims or damages relating to
                  the Collateral or Lender's liens thereon; or

                        c. the correctness, validity or genuineness of any
                  instrument or document that may be released or endorsed to
                  Borrower by Lender (which shall automatically be deemed to be
                  without recourse to Lender in any event), or the existence,
                  character, quantity, quality, condition, value or delivery of
                  any goods purporting to be represented by any such documents;
                  or

                        d. any broker's commission, finder's fee or similar
                  charge or fee in connection with the Loans and the
                  transactions contemplated in this Agreement.

                  xi. Savings Clause for Indemnification. To the extent that the
      undertaking to indemnify, pay and hold harmless set forth in Section 14.10
      above may be

                                       33
<PAGE>

      unenforceable because it is violative of any law or public policy,
      Borrower shall contribute the maximum portion which it is permitted to pay
      and satisfy under applicable law to the payment and satisfaction of all
      matters referred to under Section 14.10.

                  xii. Waiver. To the extent permitted by applicable law, no
      claim may be made by Borrower or any other Person against Lender or any of
      its Affiliates, partners, officers, employees, agents, attorneys or
      consultants for any special, indirect, consequential or punitive damages
      in respect of any claim for breach of contract, tort or any other theory
      of liability arising out of or related to the transactions contemplated by
      this Agreement or the other Loan Documents or any act, omission or event
      occurring in connection therewith; and Borrower hereby waives, releases
      and agrees not to sue upon any claim for any such damages, whether or not
      accrued and whether or not known or suspected to exist in its favor.
      Neither Lender nor any of its Affiliates, partners, officers, employees,
      agents, attorneys or consultants shall be liable for any action taken or
      omitted to be taken by it or them under or in connection with this
      Agreement or the transactions contemplated hereby, except for its or their
      own gross negligence or willful misconduct.

                  xiii. Entire Agreement; Amendments; Lender's Consent. This
      Agreement (including the Exhibits and Schedules thereto) and the other
      Loan Documents supersede, with respect to their subject matter, all prior
      and contemporaneous agreements, understandings, inducements or conditions
      between the respective parties, whether express or implied, oral or
      written. No amendment or waiver of any provision of this Agreement or any
      other Loan Document, nor consent to any departure by Borrower therefrom,
      shall in any event be effective unless the same shall be in a Record
      Authenticated by Lender, and then such waiver or consent shall be
      effective only in the specific instance and for the specific purpose for
      which given.

                  xiv. Cross Default; Cross Collateral. Borrower hereby agrees
      that (a) all other agreements between Borrower and Lender are hereby
      amended so that a Default or an Event of Default under this Agreement is a
      default under all such other agreements and a default under any one of the
      other agreements is a Default or an Event of Default under this Agreement,
      and (b) the Collateral under this Agreement secures the Obligations now or
      hereafter outstanding under all other agreements between Borrower and
      Lender and the Collateral pledged under any other agreement with Lender
      secures the Obligations under this Agreement.

                  xv. Execution in Counterparts. This Agreement may be executed
      in any number of counterparts, each of which when so executed shall be
      deemed to be an original and all of which taken together shall constitute
      but one and the same agreement.

                  xvi. Severability of Provisions. Any provision of this
      Agreement or any of the other Loan Documents that is prohibited or
      unenforceable in any jurisdiction shall, as to such jurisdiction, be
      ineffective to the extent of such prohibition or unenforceability without
      invalidating the remaining provisions of this Agreement or the other Loan
      Documents or affecting the validity or enforceability of such provision in
      any other jurisdiction.

                                       34
<PAGE>

                  xvii. Table of Contents; Headings. The table of contents and
      headings preceding the text of this Agreement are inserted solely for
      convenience of reference and shall not constitute a part of this Agreement
      or affect its meaning, construction or effect.

                  xviii. Exhibits and Schedules. All of the Exhibits and
      Schedules to this Agreement are hereby incorporated by reference herein
      and made a part hereof.

            P. GOVERNING LAW; CONSENT TO JURISDICTION.

(A)   THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY LENDER
      AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE
      REVOLVING NOTE DELIVERED PURSUANT THERETO WERE DISBURSED FROM THE STATE OF
      NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO
      THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREIN, AND IN ALL
      RESPECTS, INCLUDING MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE,
      THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY,
      AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
      APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE AND ANY
      APPLICABLE LAW OF THE UNITED STATES OF AMERICA EXCEPT THAT AT ALL TIMES
      THE PROVISIONS FOR THE CREATION, PERFECTION, AND ENFORCEMENT OF THE LIENS
      AND SECURITY INTERESTS CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER
      LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF
      THE STATE IN WHICH THE APPLICABLE INDIVIDUAL PROPERTY IS LOCATED, IT BEING
      UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE,
      THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE VALIDITY AND THE
      ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE INDEBTEDNESS OR
      OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT
      PERMITTED BY LAW, LENDER AND BORROWER HEREBY UNCONDITIONALLY AND
      IRREVOCABLY WAIVE ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER
      JURISDICTION GOVERNS THIS AGREEMENT AND THE REVOLVING NOTE, AND THIS
      AGREEMENT AND THE REVOLVING NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
      ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

                  (B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR
BORROWER, ANY GUARANTOR OR OTHER PARTY TO THIS TRANSACTION ARISING OUT OF OR
RELATING TO THIS AGREEMENT SHALL BE INSTITUTED IN THE SOLE OPTION OF LENDER IN
ANY FEDERAL OR STATE COURT LOCATED IN WESTCHESTER COUNTY, NEW YORK, PURSUANT TO
ss. 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND LENDER AND BORROWER
WAIVE ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING, AND LENDER AND BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING.
BORROWER SHALL DESIGNATE FROM TIME TO TIME AN AUTHORIZED AGENT HAVING AN OFFICE
IN THE STATE OF NEW YORK TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING AND
AGREES THAT SERVICE OF PROCESS UPON SUCH AGENT AT SUCH ADDRESS AND WRITTEN
NOTICE OF SUCH SERVICE ON SUCH BORROWER MAILED OR DELIVERED TO SUCH BORROWER IN
THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF
PROCESS UPON SUCH BORROWER IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE
OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY CHANGE OF
ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO
TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW
YORK (WHICH OFFICE SHALL BE DESIGNATED AS THE ADDRESS FOR SERVICE OF PROCESS),
AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT
CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A
SUCCESSOR. BORROWER REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS CONSENT TO
JURISDICTION PROVISION

                                       35
<PAGE>

      WITH ITS LEGAL COUNSEL, AND HAS MADE THIS WAIVER KNOWINGLY AND
VOLUNTARILY.

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized on the day and year first
above written.

                                KELTIC FINANCIAL PARTNERS, LP
                                By: KELTIC FINANCIAL SERVICES LLC,
                                    its general partner

                                By: /s/ John P. Reilly
                                   ---------------------------------------------
                                    Name: John P. Reilly
                                    Title:  Managing Partner

                                HUDSON TECHNOLOGIES COMPANY

                                By: /s/ Brian F. Coleman
                                   ---------------------------------------------
                                    Name: Brian F. Coleman
                                    Title: President and Chief Operating
                                    Officer

                                       36
<PAGE>

      2. EXHIBIT A

                              a) REVOLVING NOTE

$4,600,000.00.............................................          May 30, 2003
                                                                   Rye, New York

            FOR VALUE RECEIVED, HUDSON TECHNOLOGIES COMPANY a corporation
organized and existing under the laws of the State of Tennessee, having an
address at 275 North Middletown Road, Pearl River, New York 10965 ("Borrower"),
promises to pay to the order of KELTIC FINANCIAL PARTNERS, LP ("Lender"), at 555
Theodore Fremd Avenue, Suite C-207, Rye, New York 10580 or at such other place
as Lender may from time to time in writing designate, the principal sum of each
Advance made by Lender to Borrower under that certain revolving loan agreement
dated even date herewith between Borrower and Lender as it may be subsequently
amended and/or modified (collectively, the "Loan Agreement") (the Loan Agreement
together with all of the other documents, instruments or agreements executed in
connection therewith, as the same may be modified, amended, restated or replaced
from time to time are hereinafter collectively referred to as, the "Loan
Documents"). The aggregate unpaid principal balance hereof shall not exceed at
any time the sum of FOUR MILLION SIX HUNDRED THOUSAND and 00/100 Dollar
($4,600,000.00). Capitalized terms used herein and not otherwise defined shall
have the meaning given such terms in the Loan Documents. The entire unpaid
principal balance hereof, together with the accrued interest thereon and accrued
late charges, if any, and all other sums due hereunder and under the Loan
Documents shall be due and payable on the Termination Date.

            Borrower also promises to pay interest to Lender monthly, in
arrears, on the first day of each month commencing on June 1, 2003 on the
average daily unpaid principal balance of this Note at the rate set forth in
Section 3.1 of the Loan Agreement.

            This is the "Revolving Note" referred to in the Loan Agreement and
is entitled to the benefit of all of the terms and conditions and the security
of all of the security interests and liens granted by Borrower or any other
person to Lender pursuant to the Loan Agreement or any other Loan Document
including, without limitation, provisions regarding mandatory and optional
prepayment rights. Upon the occurrence of any Event of Default, the entire
unpaid principal amount owed Lender hereunder shall become immediately due and
payable without further notice or demand.

            Whenever any payment to be made under this Note shall be stated to
be due on a day other than a Banking Day, such payment shall be made on the next
succeeding Banking Day and such extension of time shall be included in the
computation of any interest then due and payable hereunder.

            The undersigned and all other parties who, at any time, may be
liable hereon in any capacity waive presentment, demand for payment, protest and
notice of dishonor of this Note. This Note and any provision hereof may not be
waived, modified, amended or discharged orally, but only by an agreement in
writing which is signed by the holder and the party or parties against whom
enforcement of any waiver, change, modification, amendment or discharge is
sought.

                                       37
<PAGE>

            This Note shall be governed by and construed under the internal laws
of the State of New York, as the same may from time to time be in effect,
without regard to principles of conflicts of laws thereof.

            IN WITNESS WHEREOF, the undersigned has executed this Note the day
and year first above written.

WITNESS:.                            HUDSON TECHNOLOGIES COMPANY

___________________________          By:____________________________________
Stephen P. Mandracchia, Esq.            Name: Brian F. Coleman
                                        Title: President and Chief Operating
                                               Officer

                                       38
<PAGE>

      3. EXHIBIT B

                              a) TERM NOTE

$400,000.00                                                        May  30, 2003
                                                                   Rye, New York

            FOR VALUE RECEIVED, HUDSON TECHNOLOGIES COMPANY, a corporation
organized and existing pursuant to the laws of the State of Tennessee having an
address at 275 North Middletown Road, Pearl River, New York 10965 ("Borrower"),
promises to pay to the order of KELTIC FINANCIAL PARTNERS, LP ("Lender") a
Delaware limited partnership with a place of business at 555 Theodore Fremd
Avenue, Suite C-207, Rye, New York 10580, or at such other place as Lender may
from time to time in writing designate, the sum of FOUR HUNDRED THOUSAND DOLLARS
AND 00/100 ($400,000.00) as follows: equal monthly installments each in the
amount of $6,666.67 commencing on July 1, 2003 and payable on the first day of
each month thereafter through and including May 1, 2006, followed by one (1)
final payment on May 30, 2006 ("Maturity Date"), on which date all sums payable
hereunder are immediately due and payable.

            Borrower also promises to pay interest to Lender monthly, in
arrears, on the first day of each month, commencing on June 1, 2003 on the
average daily unpaid principal balance of this Note at a fluctuating rate which
is equal to the Loan Interest Rate.

            Notwithstanding the foregoing, after the occurrence of an Event of
Default, Borrower shall pay interest on the unpaid principal balance of this
Note at a rate which is three and one-half percent (3.5%) per annum above the
Loan Interest Rate, provided, however, in no event shall any interest to be paid
hereunder exceed the maximum rate permitted by law.

            Any partial prepayments made by the undersigned will be applied
against the remaining unpaid payments due hereunder in the inverse order of the
maturity of such payments.

            This is a term note referred to in the revolving loan agreement
between Borrower and Lender dated even date herewith (the "Loan Agreement")(the
Loan Agreement together with the other documents, instruments and agreements
executed in connection therewith, as they may from time to time be modified,
amended, restated or replaced are hereinafter collectively referred to as, the
"Loan Documents"). This Note is entitled to the benefits of all of the terms and
conditions and the security of all of the security interests and liens granted
by Borrower or any other person to Lender pursuant to the Loan Agreement or any
of the other Loan Documents including, without limitation, supplemental
provisions regarding mandatory and/or optional prepayment rights and premiums.
Capitalized terms used herein and not otherwise defined shall have the meaning
given such terms in the Loan Documents.

            Whenever any payment to be made under this Note shall otherwise be
due on a day that is not a Banking Day, such payment shall be made on the next
succeeding Banking Day, and such extension of time shall be included in
computing interest in connection with any such payment.

            This Note shall be binding upon and shall insure to the benefits of
the parties, their successors and assigns. Lender shall have the right, without
the necessity of any further consent or authorization by Borrower, to sell,
assign, securitize or grant participations in all, or a portion of, Lender's
interest in this Note, to other financial institutions of Lender's choice and on
such terms as are acceptable to Lender in its sole discretion.

            This Note shall be governed by and construed under the internal laws
of the State of New York, as the same may from time to time be in effect,
without regard to principles of conflicts of laws thereof.

            Borrower and all other parties who, at any time, may be liable
hereon in any capacity waive presentment, demand for payment, protest and notice
of dishonor of this Note. This Note may not be changed orally, but only by an
agreement in writing which is signed by the holder and the party or parties
against whom enforcement of any waiver, change, modification or discharge is
sought.

            IN WITNESS WHEREOF, the undersigned has executed this Note on the
day and year first above written.

                                       39
<PAGE>

WITNESS:                            HUDSON TECHNOLOGIES COMPANY

__________________________          By:______________________________
Stephen Mandracchia, Esq.              Name: Brian F. Coleman
                                       Title:  President and Chief
                                               Operating Officer

                                       40
<PAGE>

      4. EXHIBIT C

                           FORM OF NOTICE OF BORROWING

Keltic Financial Partners, LP
555 Theodore Fremd Avenue, Site C-207
New York, New York 10580

(1)   Re: Request for loan/advance

            The undersigned requests a $____________ loan advance pursuant to
Section 2.1 of the Loan Agreement dated May 30, 2003 between Keltic Financial
Partners, LP and the undersigned ("Loan Agreement"). Capitalized terms used
herein and not otherwise defined herein shall have the meanings given to them in
the Loan Agreement.

            Please wire the requested loan advance [to our operating account
number _________ at __________ or [in accordance with the following wire
instructions [insert instructions]. Please call the undersigned to confirm
receipt of this fax at ____________.

            Thank you.

                                   HUDSON TECHNOLOGIES COMPANY

                                   By:___________________________
                                      Name: Brian F. Coleman
                                      Title:  President and Chief
                                              Operating Officer

                                       41
<PAGE>

      5. EXHIBIT D

                              a) BORROWING BASE

                                       42
<PAGE>

                                    EXHIBIT E

                             COMPLIANCE CERTIFICATE

            HUDSON TECHNOLOGIES COMPANY ("Borrower") hereby certifies to KELTIC
FINANCIAL PARTNERS, LP ("Lender") in accordance with the provisions of a Loan
Agreement between Borrower and Lender dated the 30th day of May, 2003, as the
same from time to time may be amended, supplemented or otherwise modified
("Agreement") that:

      A. General

            (i) Borrower has complied in all respects with all the terms,
covenants and conditions of the Agreement which are binding upon them;

            (ii) there exists no Event of Default or Default as defined in the
Agreement;

            (iii) the representations and warranties contained in the Agreement
are true in all respects with the same effect as though such representations and
warranties had been made on the date hereof; and

      B. Financial Covenants

            As of the date hereof or, from such period as may be designated
below, the computations and ratios as set forth below, are true and correct:

            (a) Tangible Net Worth

            (b) Capital Expenditures

            (c) EBITDA

            WITNESS the signature of the undersigned duly authorized officer of
Borrower on _____________, 200___.

                                           HUDSON TECHNOLOGIES COMPANY

                                           By_________________________________
                                             Name: Brian F. Coleman
                                             Title: President and Chief
                                                    Operating Officer

                                       43
<PAGE>

                                  Schedule 5.2

                                   Other Names

Hudson Technologies Company

         dba Hudson Technologies of Tennessee

         dba Hudson Technologies Company of Tennessee

                                       44
<PAGE>

                                  Schedule 5.3

                                    b) Subsidiaries and Affiliates

Parent Company is Hudson Technologies, Inc. ("Parent"), a New York corporation

Parent is the sole stockholder of Hudson Holding's, Inc. ("Holding"), a Nevada
Corporation

Holding is the sole stockholder of Borrower, Hudson Technologies Company, a
Tennessee Corporation

The following Persons may be deemed "Affiliates" as that term is defined in
Section 1.3:

         Hudson Technologies, Inc.
         Hudson Holdings, Inc.
         Fleming US Discovery Fund III, LP
         Fleming US Discovery Offshore Fund III, L.P.
         DuPont Chemical and Energy Operations, Inc.
         Kevin J. Zugibe
         Thomas P. Zugibe
         Frederick T. Zugibe, Sr.
         Stephen P. Mandracchia

                                       45
<PAGE>

                                  Schedule 5.8
                                   Real Estate

                               Leased by Borrower

<TABLE>
<CAPTION>
Facility           Address                           Landlord                                     Term
--------          --------                           --------                                     ----
<S>               <C>                                <C>                                          <C>
Champaign, Il     3402 North Mattis Avenue           Busey Bank                                   12/1/02 - 11/30/04
                  Champaign, Illinois                201 West Main Street
                                                     Urbana, Illinois 61803-7430

Houston, Tx.      12820 Hempstead Hwy., Suite D      Two Ninety, Ltd.                             7/15/00-6/30/03
                  Houston, Texas                     1527 West Alabama
                                                     Houston, Texas 77006

Seattle, Wa.      1320 26th St. NW, Ste 11           Park 26, LLC                                 4/1/02 -3/31/04
                  Auburn, Washington                 c/o The Andover Company, Inc.
                                                     415 Baker Boulevard, Suite 200
                                                     Tukwila, WA  98188

Charlotte, NC     2720 Westport Road                 Thomas & Nancy Cox                           4/24/98 -4/23/00
                  Charlotte, North Carolina          c/o Colliers Pinkard                         now month to month
                                                     330 S. Tryon Street, Suite 301
                                                     Charlotte, NC 28202-1916

Punta Gorda, Fl.  5474 Williamsburg Drive            Rick Treworgy                                12/15/01 - 12/14/03
                  Punta Gorda, Florida               5445 Williamsburg Drive
                                                     Punta Gorda, Florida 33982

Pearl River, NY   275 N. Middletown Road             275 N. Middletown Road, LLC                  1/1/03 - 12/31/06
                  Pearl River, New York              275 North Middletown Road
                                                     Pearl River, New York 10965

Baton Rouge, La.  11245 Airline Highway              Reulet Family Holdings, LLC                  8/1/02 - 7/31/05
                  Baton Rouge, Louisiana             c/o John A. Reulet, Sr., President
                                                     3037 Jones Creek Road
                                                     Baton Rouge, Louisiana 70817

Villa Park, Il.   739 North Harvard Ave.             HVP Partners                                 6/1/99 - 8/31/05
                  Villa Park, Illinois               17 W 335 Belmont
                                                     Bensenville, Illinois 60106

Baltimore, Md.    2605 Lord Baltimore Dr.            MIE Properties, Inc.                         9/1/01 - 8/31/05
                  Baltimore, Maryland                5720 Executive Drive
                                                     Baltimore, Maryland 21288-1757

Rantoul, IL       896 West Champaign St.             Roeco Enterprises, Inc.                      10/1/97 - 9/30/02
                  Rantoul, Illinois                  PO Box 583                                   now month to month
                                                     Rantoul, Illinois 61866

Freemont, NH      1 Coopers Common                   Phoenix Fremont LLC                          7/1/02 - 6/30/04
                  Freemont, New Hampshire            189 Mill Road
                                                     North Hampton, New Hampshire  03862
</TABLE>

                                       46
<PAGE>

                            Schedule 5.8 (continued)

                   Leased by Parent, Hudson Technologies, Inc.

<TABLE>
<S>               <C>                                <C>                                <C>
Hillburn, NY      60 Torne Valley Road               Ramapo Land Co., Inc.              6/1/99 - 5/31/04
                  Hillburn, New York                 145 Route 17
                                                     Sloatsburg, New York 10974
</TABLE>

                                      Owned

                                      None

                                       47
<PAGE>

                                  Schedule 5.9

                                      c) Intellectual Property

                                      i) U.S. Patents

<TABLE>
<CAPTION>
TITLE-NAME                 INVENTOR         OWNER             DATE ISSUED               NUMBER
----------                 --------         -----             -----------               ------
<S>                        <C>              <C>               <C>                    <C>
Method & Apparatus
for Refrigerant
Reclamation                K. Zugibe        Parent            1/3/95                    5,377,499

Hydraulic System
for Recovering
Refrigerants               K. Zugibe        Parent            4/2/96                    5,502,974

Method & Apparatus
for Reclaiming a
Refrigerant                J. Todack        Borrower          6/11/91                   5,022,230

Apparatus & Method
For Recovering Volatile
Refrigerants               K. Zugibe        Parent            9/8/98                    5,802,859

Apparatus & Method         K. Zugibe        Parent            11/7/00                   6,141,977
For Recovering Volatile
Refrigerants

Method & Apparatus
For Sonic Cleaning of
Heat Exchangers            K. Zugibe        Parent            9/18/01                   6,290,778

Apparatus & Method
For Flushing a             K. Zugibe &
Chiller System             A. Mika          Parent            3/19/02                   6,357,240

Apparatus & Method
For Flushing a             C. Harkins &
Refrigeration System       A. Mika          Parent            2/26/00                   6,164,080

Method & Apparatus
For Measuring and
Improving Efficiency       K. Zugibe &
In Refrigeration Systems   D. Schmidt       Borrower          1/14/03                   6,505,475

Patent Pending - Method
& Apparatus
For Measuring and          K. Zugibe &
Improving Efficiency       D. Schmidt       Parent            filed 1/7/03           App. # 10/338,941
</TABLE>

                                       48
<PAGE>

                            Schedule 5.9 (continued)

<TABLE>
<S>                        <C>              <C>                <C>                   <C>
Patent Pending - Method
& Apparatus
For Measuring and
Improving Efficiency       K. Zugibe &
In Refrigeration Systems   D. Schmidt       Parent             filed 1/7/00          App. # 09/577,703

Provisional - Method
& Apparatus
For Measuring and
Improving Efficiency in
Refrigeration Systems      K..Zugibe        Parent             filed 12/9/02             60/431,901
                                                               Foreign license granted 3/13/2003

Provisional - Method
& Apparatus
For Optimizing
Refrigeration Systems      K..Zugibe        Parent             filed 12/19/02            60/434,847
                                                               Foreign license granted 2/25/2003
</TABLE>

                                      ii) Foreign Patents

1. U.S. Patent # 5,377,499, issued to Hudson Technologies, Inc., has been filed
in the following jurisdictions;

BRAZIL - Patent Issued 8/8/00 - Expires 12/6/2014, Patent #PI9404879-7 8/8/00

CANADA - Patent Issued 8/20/02 - Expires 12/8/2014, Patent #2137771

CHINA - Patent issued 11/9/2001- Expires 12/9/2014, Registration #82500

COSTA RICA - Patent Pending, application filed 12/7/94

ISRAEL - Patent issued 10/14/97 -Expires 12/6/14, Patent#111899

JAPAN - Patent Pending, application filed 12/8/94

MEXICO- Patent Issued 6/25/99 - Expires 12/9/14, Patent # 192486

POLAND - Patent Issued 12/1/98 - Expires 12/5/14. Patent#176 518

RUSSIA- Patent Issued 8/20/99 - Expires 8/20/14. Patent # 2134851

UNITED STATES - Patent Issued 1/3/95- Expires 1/3/12. Patent # 5,377,499

EUROPEAN COMMUNITY - Patent Issued 3/31/99. Expires 12/8/14. Patent # 0682218
(Belgium, Denmark, France, Germany, Italy, Netherlands, Spain, Sweden,
Switzerland/Liechtenstein, United Kingdom)

2. U.S. Patent #5,022,230, issued to Hudson Technologies Company, has been filed
in the following jurisdictions;

                                       49
<PAGE>

CANADA - Patent Issued 7/31/01 - Expires 5/23/2011, Patent #2,084,088

AUSTRALIA - Patent #660280

                                      iii)

                                      iv) Patent Licenses

Reciprocal licenses between Parent and Borrower (not formalized)

License of Borrower's Patent #5,022,230 granted to James Todack for a total of
10 machines that were leased to Borrower in 1994, of which six were purchased by
Borrower in 2001 and four were returned to James Todack in 2001.

                                      v) Trademark Registrations

<TABLE>
<CAPTION>
TITLE-NAME                                  OWNER         DATE ISSUED           NUMBER
----------             ----------           -----         -----------           ------
<S>                     <C>                 <C>           <C>                   <C>
GLACIER                                     Parent        3/2/99                2,227,148

ZUGIBEAST                                   Parent        7/9/96                1,985,422

HTI                                         Parent        4/23/96               1,970,063

R-SIDE                                      Borrower      7/30/02               2,601434

REFRIGERANTSIDE                             Borrower      4/9/02                2,559,214

Hudson Technologies,                        Parent        4/23/96               1,969,986
Inc.
</TABLE>

                                      vi) Trademark Applications

                                       None

                                      vii) Trademark Licenses

              All trademarks licensed to Borrower (not formalized)

                                      viii) Copyrights

                                       None

                                      ix) Copyright Licenses

                                       None

                                       50
<PAGE>

                                  Schedule 5.13

                                      d) Litigation

A. In June 1998, United Water of New York Inc. ("United") commenced an action
against the Hudson Technologies, Inc. (the "Company") in the Supreme Court of
the State of New York, Rockland County, seeking damages in the amount of $1.2
million allegedly sustained as a result of alleged contamination of certain of
United's wells which are in close proximity to the Company's Hillburn, New York
facility.

On April 1, 1999, the Company reported a release at the Company's Hillburn, New
York facility of approximately 7,800 lbs. of R-11, as a result of a failed hose
connection to one of the Company's outdoor storage tanks allowing liquid R-11 to
discharge from the tank into the concrete secondary containment area in which
the subject tank was located.

In July 1999, United amended its complaint in the Rockland County action to
allege facts relating to, and to seek damages allegedly resulting from the April
1, 1999 R-11 release.

In June 2000, the Rockland County Supreme Court approved a settlement of the
Rockland County action commenced by United. Under the settlement, the Company
paid to United the sum of $1,000,000 and has been making additional monthly
payments in the amount of $5,000, which payments are expected to continue
through December 2003. .

In June 2000, the Company signed an Order on Consent with the DEC regarding all
past contamination of the United well field, whereby, the Company agreed to
continue operating a remediation system it installed at its Hillburn facility in
May 1999, until remaining groundwater contamination has been effectively abated.
In May 2001, the Company signed an amendment to the Order on Consent with the
DEC, pursuant to which the Company installed one additional monitoring well and
modified the Company's existing remediation system to incorporate a second
recovery well. The Company is continuing to operate the remediation system
pursuant to that Order on Consent.

In May 2000, the Company's Hillburn facility was nominated by the United States
Environmental Protection Agency ("EPA") for listing on the National Priorities
List ("NPL"), pursuant to the Comprehensive Environmental Response, Compensation
and Liability Act of 1980. The Company submitted opposition to the listing
within the sixty-day comment period. To date, no final decision has been made by
the EPA regarding the proposed listing. The Company has requested that the EPA
remove the Hillburn facility from nomination for the NPL due to the continued
reduction of contamination.

In October 2001, the Company learned that trace levels of R-11 were detected in
one of United's wells that are closest to the Village of Suffern's ("Village")
well system. During February 2002, the Village expressed concern over the
possibility of R-11 reaching its well system and has advised the Company that it
was investigating available options to protect its well system. No contamination
of R-11 has ever been detected in any of the Village's wells. In October 2002,
the Village advised the Company that it intends to proceed with plans to protect
its wells and could look to the Company to reimburse the Village for any costs
it may incur. To date, no detailed cost estimate, formal demand or claim has
been presented by the Village.

In February 2003, the Company agreed to extend the statute of limitations
applicable to any claims that may be available to Ramapo Land Company, the
lessor of the Hillburn facility, arising out of the April 1, 1999 incident for
an additional two years. To date, no claims against the Company have been
asserted or threatened by Ramapo Land Company.

B. In February 2000, an action was commenced in the Supreme Court of the State
of New York, Rockland by CS Dowling Inc. d/b/a Dow-Tech Associates against the
Company seeking recovery of the sum of $20,000 allegedly due in connection with
the hiring of two employees by the Company. The Company maintains that the
allegations

                                       51
<PAGE>

in the complaint are without merit, that no amounts are due the plaintiff and
that the plaintiff owes $4,000 to the Company for unearned deposits.

                                       52
<PAGE>

                            Schedule 5.13 (continued)

B. In April 2003, NASDAQ advised the Guarantor that, based upon Guarantor's
Stock holders equity as reported in Form 10KSB for the 12 months ended December
31, 2002, the Guarantor failed to comply with Nasdaq SmallCap Market listing
requirements and was subject to delisting unless the Guarantor could demonstrate
a plan to achieve and sustain compliance with Nasdaq SmallCap Market listing
requirements. The Guarantor has submitted a plan, based upon the proposed rights
offering, to Nasdaq which the Guarantor believes will achieve and sustain
compliance.

                                       53
<PAGE>

                                  Schedule 5.14

                                      e) Receivables Locations

<TABLE>
<CAPTION>
Facility          Address                             Landlord                          Term
---------         -------                            --------                           ----
<S>               <C>                                <C>                                <C>
Pearl River, NY   275 N. Middletown Road             275 N. Middletown Road, LLC        1/1/03 - 12/31/06
                  Pearl River, New York              275 North Middletown Road
                                                     Pearl River, New York 10965
</TABLE>

                                       54
<PAGE>

                                  Schedule 5.15

                                      f) Current Inventory Locations - as of
                         5/22/03

<TABLE>
<CAPTION>
Facility          Address                            Landlord                           Term
--------          --------                           --------                           ----
<S>               <C>                                <C>                                <C>
Champaign, Il     3402 North Mattis Avenue           Busey Bank                         12/1/02 - 11/30/04
                  Champaign, Illinois                201 West Main Street
                                                     Urbana, Illinois 61803-7430

Houston, Tx.      12820 Hempstead Hwy., Suite D      Two Ninety, Ltd.                   7/15/00-6/30/03
                  Houston, Texas                     1527 West Alabama
                                                     Houston, Texas 77006

                  The Houston facility has been closed, and all inventory and equipment will be removed by 6/30/03

Seattle, Wa.      1320 26th St. NW, Ste 11           Park 26, LLC                       4/1/02 -3/31/04
                  Auburn, Washington                 c/o The Andover Company, Inc.
                                                     415 Baker Boulevard, Suite 200
                                                     Tukwila, WA  98188

                  Borrower anticipates that the Seattle facility will be closed and all inventory and equipment
                  removed witching sixty (60) days.

Charlotte, NC     2720 Westport Road                 Thomas & Nancy Cox                 4/24/98 -4/23/00
                  Charlotte, North Carolina          c/o Colliers Pinkard               now month to month
                                                     330 S. Tryon Street, Suite 301
                                                     Charlotte, NC 28202-1916

Punta Gorda, Fl.  5474 Williamsburg Drive            Rick Treworgy                      12/15/01 - 12/14/03
                  Punta Gorda, Florida               5445 Williamsburg Drive
                                                     Punta Gorda, Florida 33982

Pearl River, NY   275 N. Middletown Road             275 N. Middletown Road, LLC        1/1/03 - 12/31/06
                  Pearl River, New York              275 North Middletown Road
                                                     Pearl River, New York 10965

Baton Rouge, La.  11245 Airline Highway              Reulet Family Holdings, LLC        8/1/02 - 7/31/05
                  Baton Rouge, Louisiana             c/o John A. Reulet, Sr., President
                                                     3037 Jones Creek Road
                                                     Baton Rouge, Louisiana 70817

                  Borrower anticipates that the Baton Rouge facility will be closed and all inventory and equipment
                  removed witching sixty (60) days.

Villa Park, Il.   739 North Harvard Ave.             HVP Partners                       6/1/99 - 8/31/05
                  Villa Park, Illinois               17 W 335 Belmont
                                                     Bensenville, Illinois 60106

                  The Villa Park facility has been closed and all inventory and equipment will be removed by 6/30/03

Baltimore, Md.    2605 Lord Baltimore Dr.            MIE Properties, Inc.               9/1/01 - 8/31/05
                  Baltimore, Maryland                5720 Executive Drive
                                                     Baltimore, Maryland 21288-1757

Rantoul, IL       896 West Champaign St.             Roeco Enterprises, Inc.            10/1/97 - 9/30/02
                  Rantoul, Illinois                  PO Box 583                         now month to month
                                                     Rantoul, Illinois 61866
</TABLE>

                                       55
<PAGE>

                  The Rantoul facility will be closed and all inventory and
                  equipment transferred to Champaign facility within sixty (60)
                  days

                                       56
<PAGE>

                                  Schedule 5.16

                                      g) Current Equipment List and Locations

                                      h) 1. Equipment List - See attached
                                Equipment List

                                      i)

                                      j) 2. List of Locations - as of 5/22/03

When equipment is not in use at a customer's facility, the equipment is
maintained at the following locations:

<TABLE>
<CAPTION>
Facility          Address                            Landlord                           Term
--------          --------                           --------                           ----
<S>               <C>                                <C>                                <C>
Champaign, Il     3402 North Mattis Avenue           Busey Bank                         12/1/02 - 11/30/04
                  Champaign, Illinois                201 West Main Street
                                                     Urbana, Illinois 61803-7430

Houston, Tx.      12820 Hempstead Hwy., Suite D      Two Ninety, Ltd.                   7/15/00-6/30/03
                  Houston, Texas                     1527 West Alabama
                                                     Houston, Texas 77006

                  The Houston facility has been closed, and all inventory and equipment will be removed by 6/30/03

Seattle, Wa.      1320 26th St. NW, Ste 11           Park 26, LLC                       4/1/02 -3/31/04
                  Auburn, Washington                 c/o The Andover Company, Inc.
                                                     415 Baker Boulevard, Suite 200
                                                     Tukwila, WA  98188

                  Borrower anticipates that the Seattle facility will be closed and all inventory and equipment
                  removed within sixty (60) days.

Charlotte, NC     2720 Westport Road                 Thomas & Nancy Cox                 4/24/98 -4/23/00
                  Charlotte, North Carolina          c/o Colliers Pinkard               now month to month
                                                     330 S. Tryon Street, Suite 301
                                                     Charlotte, NC 28202-1916

Punta Gorda, Fl.  5474 Williamsburg Drive            Rick Treworgy                      12/15/01 - 12/14/03
                  Punta Gorda, Florida               5445 Williamsburg Drive
                                                     Punta Gorda, Florida 33982

Pearl River, NY   275 N. Middletown Road             275 N. Middletown Road, LLC        1/1/03 - 12/31/06
                  Pearl River, New York              275 North Middletown Road
                                                     Pearl River, New York 10965

Baton Rouge, La.  11245 Airline Highway              Reulet Family Holdings, LLC        8/1/02 - 7/31/05
                  Baton Rouge, Louisiana             c/o John A. Reulet, Sr., President
                                                     3037 Jones Creek Road
                                                     Baton Rouge, Louisiana 70817

                  Borrower anticipates that the Baton Rouge facility will be closed and all inventory and equipment
                  removed within sixty (60) days.

Villa Park, Il.   739 North Harvard Ave.             HVP Partners                       6/1/99 - 8/31/05
                  Villa Park, Illinois               17 W 335 Belmont
</TABLE>

                                       57
<PAGE>

                                                     Bensenville, Illinois 60106

                  The Villa Park facility has been closed and all inventory and
                  equipment will be removed by 6/30/03

                            Schedule 5.16 (continued)

<TABLE>
<S>               <C>                                <C>                                <C>
Baltimore, Md.    2605 Lord Baltimore Dr.            MIE Properties, Inc.               9/1/01 - 8/31/05
                  Baltimore, Maryland                5720 Executive Drive
                                                     Baltimore, Maryland 21288-1757

Rantoul, IL       896 West Champaign St.             Roeco Enterprises, Inc.            10/1/97 - 9/30/02
                  Rantoul, Illinois                  PO Box 583                         now month to month
                                                     Rantoul, Illinois 61866
                  The Rantoul facility will be closed and all inventory and equipment transferred to Champaign
                  facility within sixty (60) days

Hillburn, NY      60 Torne Valley Road               Ramapo Land Co., Inc.              6/1/99 - 5/31/04
                  Hillburn, New York                 145 Route 17
                                                     Sloatsburg, New York 10974
</TABLE>

                                       58
<PAGE>

                                  Schedule 5.17

                                      k) Liens

1. Hudson Technologies Company

A. Financed - Equipment Loans

<TABLE>
<CAPTION>
     Acct #               Item                  Expiration     12/31/2002    12/31/2003    12/31/2004    12/31/2005      Total
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>            <C>           <C>           <C>           <C>           <C>
  Loans - Recovery Vans                           Sub-Total    $289,688.00   $192,926.00   $    96,762                 $289,688.00
                                                                                                                       -----------
 CIT TERM LOAN                                                 $302,812.00   $186,053.00   $    93,693   $    23,066   $302,812.00
                                                               -------------------------------------------------------------------
                        Total
                        Indebtedness                           $592,500.00   $378,979.00   $   190,455   $    23,066   $592,500.00
                                                               -------------------------------------------------------------------

                                                Expiration      12/31/2002    12/31/2003    12/31/2004                     Total
  25020 Loans-Recovery Vans
  -----------------------------------
  1999 Econoline - Ford Credit
  Houston 6709                                    Mar-04       $  7,214.00   $  6,633.00   $    581.06                 $  7,214.06
  1999 Chev Cube Van - GMAC
  Hillburn 0280                                   Feb-04       $  9,071.00   $  7,712.00   $  1,359.65                 $  9,071.65
  1999 Frht Med Con - GMAC
  Houston 0813                                    Feb-04       $ 14,310.00   $ 12,165.40   $  2,144.32                 $ 14,309.72
  1999 Chev Cube Van - GMAC
  Chicago 9744                                    Mar-04       $  8,411.00   $  6,527.00   $  1,884.00                 $  8,411.00
  1999 Chev Cube Van - GMAC
  Charlotte 0665                                  Mar-04       $  8,411.00   $  6,527.00   $  1,884.00                 $  8,411.00
  1999 Frht Med Con - GMAC
  Hillburn 3176                                   Mar-04       $ 15,271.00   $ 12,067.35   $  3,203.83                 $ 15,271.18
  1999 Frht FL  70 - GMAC
  Seattle 3177                                    Apr-04       $ 16,225.00   $ 11,970.09   $  4,254.80                 $ 16,224.89
  1999 Frht FL  70 - GMAC
  Chicago 3178                                    Apr-04       $ 16,225.00   $ 11,970.09   $  4,254.80                 $ 16,224.89
  1999 Ford Econoline - Ford Credit
  Seattle 5434                                    May-04       $  9,148.00   $  6,757.45   $  2,390.83                 $  9,148.28
  1999 Frht FL 70 - Intek Assoc
  Baltimore 3175                                  Apr-04       $ 17,706.00   $ 13,067.01   $  4,639.34                 $ 17,706.35
  Ford Econoline
  Baltimore 2761                                  Jun-04       $ 10,039.00   $  6,541.19   $  3,497.71                 $ 10,038.90
  Ford Econoline
  Baton Rouge 9771                                Jun-04       $ 10,039.00   $  6,541.19   $  3,497.71                 $ 10,038.90
  Ford Econoline
  Detroit 5427                                    Jun-04       $ 11,192.00   $  7,292.70   $  3,899.17                 $ 11,191.87
  Ford Econoline
  Long Island 9772                                Jun-04       $ 11,192.00   $  7,292.70   $  3,899.17                 $ 11,191.87
  Ford Econoline
  Boston 5423                                     Jun-04       $ 11,192.00   $  7,292.70   $  3,899.17                 $ 11,191.87
  Frht Fl 70 - Intek Assoc
  Detroit 6207                                    Jul-04       $ 20,783.00   $ 12,759.90   $  8,023.55                 $ 20,783.45
  Frht Fl 70 - Intek Assoc
  Boston 6206                                     Jul-04       $ 20,783.00   $ 12,759.90   $  8,023.55                 $ 20,783.45
  Frht Fl 70 - Intek Assoc. 6208                  Sep-04       $ 23,492.00   $ 12,456.00   $ 11,037.12                 $ 23,493.12
  Frht Fl 70 - Intek Assoc. 6209                  Oct-04       $ 24,492.00   $ 12,297.00   $ 12,194.00                 $ 24,491.00
  Frht Fl 70 - Intek Assoc. 6210                  Oct-04       $ 24,492.00   $ 12,297.00   $ 12,194.00                 $ 24,491.00
                                                               ---------------------------------------                 -----------
                        Total - Loans - Recovery  Vans         $289,688.00   $192,926.67   $ 96,761.78                 $289,688.45
                                                               ---------------------------------------                 -----------
</TABLE>

                                       59
<PAGE>

                            Schedule 5.17 (continued)

B.    Operating Leases

             Item                              Expiration
             ----                              ----------

Trade Winds chassis (3)                            Mo-Mo
Matlack Leasing                                    Mo-Mo
Mail Machine (PR) Pitney Bowes                     May-03
Dell Computer (MD) (PR) (008)                      May-03
Dell Computer (PR) (010)                           Jun-03
Ascom Hasler (NC)                                  Mo-Mo
Neopost (LA)                                       Nov-04
Copelco-2 Hysler Fork Lift (IL)                    Mar-05
Mellon Leasing Fax Machine (PR)                    Sep-03
Mellon Leasing Fax Machine (NY)                    Qtr/Qtr
Mellon Leasing Fax Machine (IL)                    Dec-03
Sharp-Copier (IL)                                  Dec-03
PBCC(Mailing System) (IL)                          Sep-05

C.    Capital Leases

                  Item                                    Expiration
                  ----                                    ----------
Computers                                                   Jul-03
Gas Chromograph- NY                                         Mar-03
Greentree Vendor Service NY                                 Sept=03
Gas Chromograph- FL                                         Mar-03
CIT/Norstar Phone Equip-NC                                  Feb-05
Yale Forklift-GE Capital-TX                                 Nov-04
Panas DBS Phone Sys-Wells Fargo-Ch                          Dec-07
2001 Chevy Silverado-Charlotte NC                           Nov-04
1998 Chevy Truck-Ft. Meyers Fl                              Nov-03
  Load Cells for Champaign Bulk Storage                     June - 08

2.    Hudson Technologies, Inc.

A.    Operating Leases

              Item                              Expiration
              ----                              ----------
Postage Meter (NY) Pitney Bowes                   Qtr/Qtr
Minolta Copier (PR)                               Sep-04
Dell Computer (018)                               Jun-04
GE Capital-Xerox fax (PR)                         Apr-05

B.       Capital Leases

               Item                            Expiration
               ----                            ----------
Computers                                         Sep-03
Poweredge 2400 Server                             Aug-03
Toyota 5FBE-18 Elec Forklift-NC                   Oct-04

                                       60
<PAGE>

                                  Schedule 5.18

                                        l) Indebtedness

1.    Obligations of Parent, Hudson Technologies, Inc.

A.    Convertible Debt:

<TABLE>
<CAPTION>
Convertible Note holder                                     Note Amount        Date of Note            Interest
-----------------------                                     -----------        ------------            --------
<S>                                                          <C>                 <C>               <C>
Fleming U S Discovery Fund III, L. P.                        $302,000            12/20/02          10% Accrued and
1221 Avenue of the Americas, 40th Floor,                                                           Added to principal
New York, New York  10020

Fleming US Discovery Offshore Fund III, L.P.
1221 Avenue of the Americas, 40th Floor,                     $ 48,000             12/20/02         10% Accrued and
New York, New York  10020                                                                          Added to principal

Matthew M. Zugibe                                            $ 50,000             12/20/02         10% Accrued and
20 Colonel Conklin Drive,                                                                          Added to principal
Stony Point, New York  10980

Frederick T. Zugibe, Jr.                                     $ 50,000             12/20/02         10% Accrued and
509 East Avenue,                                                                                   Added to principal
Newark, New York  14513

Phyllis J. LeFrois                                           $ 35,000             12/20/02         10% Accrued and
990 Lake Road,                                                                                     Added to principal
Webster, New York 20 14580

Joseph Longo                                                 $ 10,000             12/20/02         10% Accrued and
66 Bergen Avenue,                                                                                  Added to principal
Waldwick, New Jersey  07463

Fleming US Discovery Fund III, L.P.                          $431,000             4/15/03          10% Accrued and
1221 Avenue of the Americas, 40th Floor,                                                           Added to principal
New York, New York  10020

Fleming US Discovery Offshore Fund III, L.P.                 $ 69,000             4/15/03          10% Accrued and
1221 Avenue of the Americas, 40th Floor,                                                           Added to principal
New York, New York  10020
</TABLE>

                                       61
<PAGE>

                            Schedule 5.18 (continued)

<TABLE>
<CAPTION>
Exchange Note holder                                          Note Amt.         Date of Note           Interest
--------------------                                          ---------         ------------           --------
<S>                                                          <C>                 <C>               <C>
Brian F. Coleman
at 41 Mountainview Avenue,                                   $15,214.75          12/20/02          10% Accrued and
Pearl River, New York  10965                                                                       Added to principal

Stephen P. Mandracchia                                       $50,715.84          12/20/02          10% Accrued and
2 Heritage Court                                                                                   Added to principal
Warwick, New York  10990

Joseph P. Mandracchia, Sr.                                   $40,556.07          12/20/02          10% - interest  paid
512 Fourth Avenue                                                                                  in cash on interest
Pelham, New York  10803                                                                            payment dates

Fleming US Discovery Fund III, L.P.                          $349,939.27         12/20/02          10% Accrued and
1221 Avenue of the Americas, 40th Floor,                                                           Added to principal
New York, New York  10020

Fleming US Discovery Offshore Fund III, L.P.                 $55,787.42          12/20/02          10% Accrued and
1221 Avenue of the Americas, 40th Floor,                                                           Added to principal
New York, New York  10020

Frederick T. Zugibe, Sr.                                     $101,390.17         12/20/02          10% - interest  paid
One Angelus Drive                                                                                  in cash on interest
Garnerville, New York  10923                                                                       payment dates

Thomas P. Zugibe                                             $50,715.84          12/20/02          10% Accrued and
30 Tavarone Street                                                                                 Added to principal
Garnerville, New York  10923
</TABLE>

Copies of the form Convertible Note and Exchange Note are attached hereto.

B.    Other Debt:

      i.    Premium Finance Agreement with A.I. Credit Corp. in the amount of
            $308,664.30 representing financed Insurance premiums on liability,
            workers compensation, business auto, property and umbrella policies,
            covering period 4/27/03 through 4/27/04, requiring 8 equal payments
            through 12/17/03.

      ii.   Premium Finance Agreement with First Insurance Funding in the amount
            of $68,592 representing financed Insurance premiums on Pollution and
            Environmental impairment policies, covering period 1/20/03 through
            1/20/03, requiring 9 equal payments through 10/20/03.

      iii   Premium Finance Agreement with A.I. Credit Corp. in the amount of
            $77,000representing financed Insurance premiums on Directors and
            Officers liability policy, covering period 11/1/02 through 11/1/03,
            requiring 9 equal payments through 8/1/03.

      iv.   Premium Finance Agreement with Premium Financing Specialists in the
            amount of $26,000, expected to be renewed on or about June 1, 2003
            for financing of premiums on A/R Credit Indemnity Policy. 2002-2003
            policy paid in full, coming up for renewal and will be refinanced.

2.    Obligations of Borrower, Hudson Technologies Company

A.    Unsecured Obligations

                                       62
<PAGE>

      i.    $62,500.00 unsecured note to Busey Bank made pursuant to lease
            agreement for Champaign, Illinois facility (see Schedule 5.8), dated
            May 15, 2003, based upon 5 year amortization.

      ii.   A total of $575,000 unsecured notes to Fleming U.S. Discovery Fund
            III, L.P. and Fleming U.S. Discovery Offshore Fund III, L.P., 1221
            Avenue of the Americas, 40th Floor, New York, New York 10020
            ("Fleming Funds"), dated the date of this Revolving Loan Agreement.

B.    Additional Secured Debt/Equipment financing:

<TABLE>
<CAPTION>
        Acct #             Item                 Expiration      12/31/2002   12/31/2003    12/31/2004    12/31/2005      Total
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>            <C>           <C>           <C>           <C>           <C>
  Loans - Recovery Vans                           Sub-Total    $289,688.00   $192,926.00   $    96,762                 $289,688.00
                                                                                                                       -----------
 CIT TERM LOAN                                                 $302,812.00   $186,053.00   $    93,693   $    23,066   $302,812.00
                                                               -------------------------------------------------------------------
                        Total
                        Indebtedness                           $592,500.00   $378,979.00   $   190,455   $    23,066   $592,500.00
                                                               -------------------------------------------------------------------

                                                Expiration      12/31/2002    12/31/2003    12/31/2004                       Total
  25020 Loans-Recovery Vans
--------------------------------
  1999 Econoline - Ford Credit
  Houston 6709                                    Mar-04       $  7,214.00   $  6,633.00   $    581.06                 $  7,214.06
  1999 Chev Cube Van - GMAC
  Hillburn 0280                                   Feb-04       $  9,071.00   $  7,712.00   $  1,359.65                 $  9,071.65
  1999 Frht Med Con - GMAC
  Houston 0813                                    Feb-04       $ 14,310.00   $ 12,165.40   $  2,144.32                 $ 14,309.72
  1999 Chev Cube Van - GMAC
  Chicago 9744                                    Mar-04       $  8,411.00   $  6,527.00   $  1,884.00                 $  8,411.00
  1999 Chev Cube Van - GMAC
  Charlotte 0665                                  Mar-04       $  8,411.00   $  6,527.00   $  1,884.00                 $  8,411.00
  1999 Frht Med Con - GMAC
  Hillburn 3176                                   Mar-04       $ 15,271.00   $ 12,067.35   $  3,203.83                 $ 15,271.18
  1999 Frht FL  70 - GMAC
  Seattle 3177                                    Apr-04       $ 16,225.00   $ 11,970.09   $  4,254.80                 $ 16,224.89
  1999 Frht FL  70 - GMAC
  Chicago 3178                                    Apr-04       $ 16,225.00   $ 11,970.09   $  4,254.80                 $ 16,224.89
  1999 Ford Econoline - Ford Credit
  Seattle 5434                                    May-04       $  9,148.00   $  6,757.45   $  2,390.83                 $  9,148.28
  1999 Frht FL 70 - Intek Assoc
  Baltimore 3175                                  Apr-04       $ 17,706.00   $ 13,067.01   $  4,639.34                 $ 17,706.35
  Ford Econoline
  Baltimore 2761                                  Jun-04       $ 10,039.00   $  6,541.19   $  3,497.71                 $ 10,038.90
  Ford Econoline
  Baton Rouge 9771                                Jun-04       $ 10,039.00   $  6,541.19   $  3,497.71                 $ 10,038.90
  Ford Econoline
  Detroit 5427                                    Jun-04       $ 11,192.00   $  7,292.70   $  3,899.17                 $ 11,191.87
  Ford Econoline
  Long Island 9772                                Jun-04       $ 11,192.00   $  7,292.70   $  3,899.17                 $ 11,191.87
  Ford Econoline
  Boston 5423                                     Jun-04       $ 11,192.00   $  7,292.70   $  3,899.17                 $ 11,191.87
  Frht Fl 70 - Intek Assoc
  Detroit 6207                                    Jul-04       $ 20,783.00   $ 12,759.90   $  8,023.55                 $ 20,783.45
  Frht Fl 70 - Intek Assoc
  Boston 6206                                     Jul-04       $ 20,783.00   $ 12,759.90   $  8,023.55                 $ 20,783.45
  Frht Fl 70 - Intek Assoc. 6208                  Sep-04       $ 23,492.00   $ 12,456.00   $ 11,037.12                 $ 23,493.12
  Frht Fl 70 - Intek Assoc. 6209                  Oct-04       $ 24,492.00   $ 12,297.00   $ 12,194.00                 $ 24,491.00
  Frht Fl 70 - Intek Assoc. 6210                  Oct-04       $ 24,492.00   $ 12,297.00   $ 12,194.00                 $ 24,491.00
                                                               ---------------------------------------                 -----------
                        Total - Loans - Recovery Vans          $289,688.00   $192,926.67   $ 96,761.78                 $289,688.45
                                                               ---------------------------------------                 -----------
</TABLE>

                                       63
<PAGE>

                                  Schedule 5.21

                              Environmental Matters

      (a) The Borrower is a refrigerant services company providing innovative
solutions to recurring problems within the refrigeration industry. The
Borrower's products and services are primarily used in commercial air
conditioning, industrial processing and refrigeration systems, including (i)
refrigerant sales, (ii) RefrigerantSide(R) Services performed at a customer's
site, consisting of system decontamination to remove moisture, oils and other
contaminants and (iii) reclamation of refrigerants. The Company's products and
services are centered around refrigerants of all types, including
Chlorofluorocarbons (CFC's), Hydrochlorofluorocarbons (HCFC's),
Hyrofluorocarbons (HFC's), and Anhydrous Ammonia. Most refrigerants handled,
processed or sold by the Borrower are classified as hazardous materials and some
are classified as hazardous substances.

            Additionally, the Borrower's facilities located at Champaign,
Illinois and Rantoul, Illinois, and Punta Gorda, Florida, are classified as
small waste generators and generate and store small amounts of hazardous waste
representing spent laboratory chemicals used in the Borrower's refrigerant
testing laboratories.

      (c) (i) On April 1, 1999, the Borrower reported a release at its Hillburn,
New York facility of approximately 7,800 lbs. of R-11, as a result of a failed
hose connection to one of the Borrower's outdoor storage tanks allowing liquid
R-11 to discharge from the tank into the concrete secondary containment area in
which the subject tank was located. The R-11 migrated to ground water and
impacted four wells operated by United Water New York used for supply of
drinking water to Rockland County.

            (ii) In January 1999, the Borrower had a vapor release at its Baton
      Rouge, Louisiana facility of a quantity of ammonia.

            (iii) Normal operation of the Borrower's equipment results in de
minimis releases of refrigerants. EPA regulations permit a loss of up to 1.5% of
refrigerant processed during reclamation procedures.

      (d) The Borrower has above ground bulk storage tanks used for the storage
of refrigerant at the following facilities: Rantoul, Illinois; Champaign,
Illinois, Charlotte, North Carolina; Punta Gorda, Florida. Additionally, the
Company stores refrigerants at each of its facilities in cylinders and tanks
ranging in size from 30 lbs to 10,000 lbs.

      (f) All of the Borrower's facilities, except for the Pearl River, New York
and Fremont, New Hampshire facilities, have various refrigerants at the
facilities, including Chlorofluorocarbons (CFC's), Hydrochlorofluorocarbons
(HCFC's), Hyrofluorocarbons (HFC's), and Anhydrous Ammonia. Most refrigerants
handled, processed or sold by the Borrower are classified as hazardous materials
and some are classified as hazardous substances.

      (h) See schedule 5.13 above.

                                       64Exhibit 10.18

                           GENERAL SECURITY AGREEMENT

      This GENERAL SECURITY AGREEMENT is made this 30 day of May 2003, between
HUDSON TECHNOLOGIES COMPANY ("Debtor"), a corporation organized and existing
pursuant to the laws of the State of Tennessee having an address at 275 North
Middletown Road, Pearl River, New York 10965 and KELTIC FINANCIAL PARTNERS, LP
("Lender"), a Delaware limited partnership, with a place of business at 555
Theodore Fremd Avenue, Suite C-207, Rye, New York 10580.

  DEFINITIONS. All words and terms used in this Agreement shall have the
     meanings as set forth herein and where not otherwise defined herein shall
     be deemed to have the meanings as accorded to them in the Uniform
     Commercial Code as in effect from time to time ("UCC"). As used herein, the
     following terms shall have the following meanings (terms defined in the
     singular to have the same meaning when used in the plural and vice versa):

            B. "Account" shall have the meaning given to such term in the UCC.

            C. "Account Debtor" shall mean any Person who is or may become
obligated under or on account of any Account, Chattel Paper or General
Intangible.

            D. "Agreement" shall mean this General Security Agreement.

            E. "Authenticate" shall mean to sign or to execute or otherwise
adopt a symbol, or encrypt or similarly process a record in whole or in part,
with the present interest of the authenticating person to identify the person
and adopt or accept a Record.

            F. "Chattel Paper" shall have the meaning given to such term in the
UCC.

            G. "Collateral" shall have the meaning given to such term in Section
2.1 hereof.

            H. "Commercial Tort Claim" shall have the meaning given to such term
in Section 2.1 hereof.

            I. "Deposit Account" shall have the meaning given to such term in
the UCC.

            J. "Document" shall have the meaning given to such term in the UCC.

            K. "Equipment" shall mean all machinery, equipment, office
machinery, furniture, fixtures, conveyors, tools, materials storage and handling
equipment, molds, dies, stamps and other equipment of every kind and nature and
wherever situated now or hereafter owned by Debtor or in which Debtor may have
any interest (to the extent of such interest), together with all additions and
accessions thereto, all replacements and all accessories and parts therefor, all
manuals, blueprints, know-how, warranties and records in connection therewith,
all rights against suppliers, warrantors, manufacturers, sellers or others in
connection therewith, and together with all substitutes for any of the
foregoing.

            L. "General Intangibles" shall mean all personal property and
general intangibles, including, without limitation, all choses in action, causes
of action, payment intangibles, corporate or other business records, inventions,
blueprints, designs, patents,

                                       66
<PAGE>

patent applications, copyrights, copyright applications, trademarks, trademark
applications, trade names, trade secrets, goodwill, brand names, registrations,
licenses, franchises, customer lists, tax refund claims, computer programs and
software, operational manuals, capitalized finance costs, origination fees, all
equipment formulations, manufacturing procedures, quality control procedures and
product specifications relating to products sold under patents, trademarks or
copyrights owned by Debtor or in which Debtor has an interest, the right to sue
for all past, present and future infringements of such patents, trademarks and
copyrights, all claims under guaranties, security interests or other security
held by or granted to Debtor to secure payment of any of the Accounts by an
Account Debtor, all rights to indemnification and all other intangible and
personal property of every kind and nature (other than Receivables).

            M. "Goods" shall have the meaning given to such term in the UCC.

            N. "Instruments" shall have the meaning given to such term in the
UCC.

            O. "Inventory" shall have the meaning given to such term in the UCC.

            P. "Investment Property" shall have the meaning given to such term
in the UCC.

            Q. "Loan Agreement" shall mean the Revolving Loan Agreement dated
the date hereof between the Debtor and Lender, as the same may be modified,
amended, restated or replaced from time to time.

            R. "Loan Documents" shall mean the Revolving Note, the Term Note,
the Loan Agreement executed and delivered by the Debtor to Lender, together with
this Agreement and any and all other documents, instruments or agreements
executed in connection therewith as the same may be modified, amended, restated
or replaced from time to time.

            S. "Letter-of-Credit Rights" shall have the meaning given to such
term in the UCC.

            T. "Obligations" shall mean and include all loans, advances, debts,
liabilities, obligations, covenants and duties owing by Debtor to Lender or any
affiliate of Lender of any kind or nature, present or future, whether or not
evidenced by any note, guaranty or other instrument, whether arising under this
Agreement, the other Loan Documents or under any other agreement or by operation
of law, whether or not for the payment of money, whether arising by reason of an
extension of credit, opening, guaranteeing or confirming of a letter of credit,
loan, guaranty, indemnification or in any other manner, whether direct or
indirect (including those acquired by assignment), absolute or contingent, due
or to become due, now due or hereafter arising and however acquired, including,
without limitation, all interest, charges, expenses, commitment, facility,
collateral management or other fees, attorneys' fees and expenses, and any other
sum chargeable to Debtor under this Agreement, the other Loan Documents or any
other agreement with Lender.

            U. "Person" shall mean an individual, partnership, limited liability
company, limited liability partnership, corporation, joint venture, joint stock
company, land trust, business trust or unincorporated organization, or a
government agency or political subdivision thereof.

                                       67
<PAGE>

            V. "Property" shall mean any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.

            W. "Receivables" shall mean and include all present and future
Accounts including, without limitation, healthcare receivables, credit card
receivables, software and license fees, contract rights, promissory notes,
chattel paper, electronic chattel paper, Instruments and documents, all tax
refunds and rights to receive tax refunds, bonds, certificates, rights to
payment for the sale, lease or license of equipment and policies of insurance
and insurance proceeds, investment securities, notes and instruments, deposit
accounts book accounts, credits and reserves and all forms of obligations
whatsoever owing, together with all instruments, all documents of title
representing any of the foregoing, and all rights in any merchandise or goods
which any of the same may represent, all files and records with respect to any
collateral or security given by Debtor to Lender, together with all right,
title, security and guaranties with respect to each Receivable, including any
right of stoppage in transit, whether now owned or hereafter created or acquired
by Debtor or in which Debtor now has or hereafter acquires any interest.

            X. "Record" shall mean information that is inscribed on a tangible
medium or which is stored in an electronic or other medium and is retrievable in
perceivable form. If Lender so specifies with respect to a particular type of
Record, that type of Record shall be signed or otherwise authenticated by
Debtor.

            SECURITY INTEREST.

            Y. Security Interest. To secure the prompt payment and performance
of all of the Obligations to Lender, Debtor hereby grants to Lender a first
priority lien and security interest in all of Debtor's right, title and interest
in all Properties and rights in Properties, whether now owned or existing or
hereafter created, acquired or arising and wheresoever located including,
without limitation, the following (collectively, "Collateral"):

All Accounts;

All Chattel Paper;

All Commercial Tort Claims;

All Deposit Accounts;

All Documents;

All Equipment;

All General Intangibles;

All Goods;

All Instruments;

All Inventory;

All Investment Property;

Letter-of-Credit Rights;

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<PAGE>

All monies or other Property of any kind, now or at any time or times
    hereafter, in the possession or under the control of Lender or any
    affiliate of Lender or any representative, agent or correspondent of
    Lender;

All accessions to, substitutions for and all replacements, products and cash
    and non-cash proceeds of (a), (b), (c), (d), (e), (f), (g), (h), (i), (j),
    (k), (l) and (m) above, including, without limitation, proceeds of and
    unearned premiums with respect to insurance policies insuring any of the
    Collateral and claims against any Person for loss of, damage to, or
    destruction of any or all of the Collateral; and

All books and records (including, without limitation, customer lists, credit
    files, computer programs, printouts and other computer materials and
    records) of Debtor pertaining to any of (a), (b), (c), (d), (e), (f), (g),
    (h), (i), (j), (k), (l), (m) and (n) above.

            Z. Perfection. Debtor will execute and deliver to Lender such
security agreements, assignments (including, without limitation, assignments of
specific Receivables, Inventory and General Intangibles), and other papers as
Lender may at any time or from time to time reasonably request that are required
to perfect or protect the security interest granted hereby. Debtor shall also
cooperate with Lender in obtaining appropriate waivers or subordinations of
interests from any Person having an interest in any Collateral and Debtor shall
cooperate with Lender in obtaining control of Collateral consisting of Deposit
Accounts, Investment Property, Letter-of-Credit Rights or Electronic Chattel
Paper. In the event that Lender requests, Debtor shall instruct its Account
Debtors to remit payments directly to Lender or to Lender's designee, which may
be a Lockbox. Debtor authorizes Lender to execute alone any financing statements
or other documents or instruments that Lender may require to perfect, protect or
establish any lien or security interest granted to Lender by Debtor and further
authorizes Lender to sign Debtor's name on the same and\or to file or record the
same without Debtor's signature thereon. Debtor will perform any and all steps
that Lender may request to perfect Lender's security interest in Inventory,
including, but without limitation, placing and maintaining signs, appointing
custodians, executing and filing financing or continuation statements in form
and substance satisfactory to Lender, maintaining stock records and transferring
of Inventory to warehouses. If any Inventory is in the possession or control of
any third party other than a purchaser in the ordinary course of business or a
public warehouseman where the warehouse receipt is in the name of or held by the
Debtor, Debtor shall notify such person of Lender's security interest therein
and, instruct such person or persons to hold all such Inventory for the account
and benefit of Lender and subject to Lender's instructions. Debtor will deliver
to Lender warehouse receipts covering any Inventory located in warehouses
showing Lender as the beneficiary thereof and will also deliver to the
warehouseman such agreements relating to the release of warehouse Inventory as
Lender may request. If the Collateral is a motor vehicle required to be titled
under applicable law, Debtor warrants that Lender's security interest will be
recorded on the title certificates covering the Collateral and will deliver such
certificates or other evidence of ownership to Lender as Lender requests. Debtor
hereby appoints Lender as its attorney in fact to execute and deliver notices of
lien, financing statements, assignments, and any other documents, notices, and
agreements necessary for the perfection of Lender's security interests in the
Collateral. Debtor appoints such person or persons as Lender may designate as
Debtor's attorney-in-fact to endorse the name of Debtor on any checks, notes,
drafts or other forms of payment or security that may come into the possession
of Lender or any Affiliate of Lender, to sign Debtor's name on invoices or bills
of lading, drafts against customers, notice of assignment, verifications and
schedules and, generally, to do all things necessary to carry out this
Agreement. Such attorney-in-fact may notify the Post Office authorities to
change the

                                       69
<PAGE>

address of delivery of mail to an address designated by Lender, and open and
dispose of mail addressed to Debtor. The powers granted herein, being coupled
with an interest, are irrevocable, and Debtor approves and ratifies all acts of
the attorney-in-fact. Neither Lender nor the attorney-in-fact shall be liable
for any act or omission, error in judgment or mistake of law so long as the same
is not willful or grossly negligent. Debtor agrees to pay the costs of the
continuation of Lender's security interests and releases or assignments of
Lender's interests.

            REPRESENTATIONS, WARRANTIES AND COVENANTS. Debtor represents,
      warrants and covenants to Lender, and shall be deemed to continually do
      so, as long as this Agreement shall remain in force, that:

         AA. Inventory.

            Warranties With Respect to Inventory. (i) all representations made
      by Debtor to Lender and all documents and schedules given by Debtor to
      Lender, relating to the description, quantity, quality, condition and
      valuation of Inventory are true and correct, and (ii) Debtor has not
      received any Inventory on consignment or approval unless Debtor has
      notified Lender thereof in a Record, has marked such Inventory on
      consignment or approval or has segregated it from all other Inventory, and
      has appropriately marked its records to reflect that such Inventory is
      held on consignment or approval.

            Lender's Rights in Inventory. Lender's security interests in the
      Inventory shall continue through all steps of manufacture and sale and
      attach without further act to raw materials, work in process, finished
      goods, returned goods, documents of title, warehouse receipts, and to
      proceeds resulting from sale or disposition of Inventory. Until all
      Obligations of Debtor to Lender have been satisfied, Lender's security
      interest in Inventory and in all proceeds thereof shall continue in full
      force and effect. Upon the occurrence of a Default or an Event of Default
      (as defined below), Lender shall have, in its discretion and at any time,
      the right to take physical possession of the Inventory and to maintain it
      on Debtor's premises, in a public warehouse, or at such place as Lender
      may remove the Inventory or any part thereof. If Lender exercises its
      right to take possession of Inventory, Debtor will, upon demand, and at
      Debtor's own cost and expense assemble the Inventory and make it available
      to Lender at a place or places reasonably convenient to Lender.

            Debtor's Obligation with Respect to Inventory. All Inventory is and
      shall be maintained at the locations shown on Schedule 3.1(c) hereof. No
      Inventory shall be removed therefrom, except for the purpose of sale or in
      the ordinary course of Debtor's business, and except for such sales,
      Debtor will not sell, encumber, grant a security interest in, dispose of
      or permit the sale, encumbrance, return or disposal of any Inventory
      without Lender's prior consent contained in an Authenticated Record. If
      sales are made for cash, Debtor shall immediately deliver to Lender the
      identical checks or other forms of payment, which it receives. In the
      event that Inventory is stored with the manufacturer thereof, Debtor shall
      cause such manufacturer to enter into a no offset agreement with Lender
      which agreement is in form and substance satisfactory to Lender. Debtor
      shall provide Lender thirty (30) days prior written notice by means of an
      Authenticated Record of any new location of where Debtor maintains
      Inventory or closes any location where it maintains Inventory. This notice
      shall indicate whether the premises are owned or leased by Debtor or
      whether such premises are the premises of a warehouseman or other third
      party, and if owned by a third party, the name and address of such third
      party. Prior to

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<PAGE>

      moving any Inventory to a new location, Debtor shall obtain a landlord's
      waiver in form and content acceptable to Lender in its discretion.

            Further Obligations of Debtor with Respect to Inventory. From time
      to time, and at least once every month in any event, Debtor shall execute
      and deliver to Lender, a confirmatory Record, in form and substance
      satisfactory to Lender, listing Debtor's Inventory, but any failure to
      execute or deliver the same shall not affect or limit Lender's security
      interest in and to the Inventory.

            Maintenance of Inventory Records. Debtor shall maintain full,
      accurate and complete records respecting Inventory, including a perpetual
      inventory, and all other Collateral at all times. Debtor will pay all
      costs to be paid on taxes, assessments, governmental charges or private
      encumbrances levied, assessed, imposed or payable upon or with respect to
      the Inventory, Equipment or other Collateral or any part thereof.

            Inventory Report. A physical verification of all Inventory wherever
      located will be taken by Debtor monthly at the end of each month and as
      often as reasonably required by Lender, and a copy of such physical
      verification shall be submitted to Lender. If Lender so requests, Debtor
      shall also submit to Lender a copy of any physical inventory. Debtor shall
      maintain full, accurate and complete records respecting Inventory,
      including a perpetual inventory, and all other Collateral at all times,
      and shall diligently endeavor to prepare an inventory reporting system
      that converts the perpetual inventory on hand into Inventory that is
      merchantable which Lender, in Lender's sole and absolute discretion, shall
      deem eligible to serve as the Collateral for Advances. Debtor covenants
      and agrees that beginning on that date that Debtor creates said inventory
      report and continuing through the Termination Date, Debtor shall deliver
      to Lender on a bi-monthly basis, said converted inventory report together
      with any additional reports that Lender in its sole discretion deems
      necessary to make an Advance.

          BB. Receivables.

            Warranties With Respect to Receivables. (i) will cover a bona fide
      sale and delivery of merchandise usually dealt in by Debtor in the
      ordinary course of its business or will cover the rendition of services by
      Debtor to customers of a kind ordinarily rendered in the ordinary course
      of Debtor's business, (ii) will be for a liquidated amount from a customer
      competent to contract therefor, (iii) is not subject to renegotiation,
      (iv) is not subject to any prepayment or credit and will not be subject to
      any deduction, offset, counterclaim, lien or other condition, and (v) is
      generally enforceable in accordance with its terms. Debtor further
      represents and warrants that all services to be performed by Debtor in
      connection with each Receivable have been performed.

            Confirmatory Written Assignments. Promptly after the creation of any
      Receivable, if Lender shall so request, Debtor shall execute and deliver
      confirmatory written assignments to Lender of Receivables, but the failure
      to execute or deliver any schedule or assignment shall not affect or limit
      any lien or other right of Lender in and to any Receivable. Debtor shall
      cause all of its invoices to be printed and to bear consecutive numbers,
      and to issue its invoices in such consecutive numerical order. On Lender's
      request therefor, Debtor shall also furnish to Lender copies of invoices
      to customers and shipping and delivery receipts or warehouse receipts
      thereof. Debtor will also furnish Lender with such other documents and
      instruments as Lender may request in connection with any Receivables,
      including detailed monthly agings. Debtor shall deliver to Lender

                                       71
<PAGE>

      the originals of all letters of credit, notes, and Instruments in its
      favor and such endorsements or assignments as Lender may request.

            Notice of Certain Events. Debtor will notify Lender of all returns
      and recoveries of merchandise and of all claims asserted with respect to
      merchandise which such returns, recoveries or claims exceed $2,500.00 per
      occurrence. Debtor shall promptly report each such return, repossession or
      recovery of merchandise to Lender, advising it of the location thereof and
      providing it with a description of such goods and its location. Debtor
      shall not settle or adjust any dispute or claim, or grant any discount
      (except ordinary trade discounts), credit or allowance or accept any
      return of merchandise (except in the ordinary course of Debtor's business,
      provided that, such credit, allowance or return does not exceed
      $2,500.00), without Lender's consent. Upon the occurrence of a Default or
      an Event of Default, Lender may settle or adjust disputes or claims
      directly with customers or Account Debtors of Debtor for amounts and upon
      terms which it considers advisable. Where a Debtor receives Collateral of
      any kind or nature by reason of transactions between itself and its
      customers or Account Debtors, it will hold the same on Lender's behalf,
      subject to Lender's instructions, and as property forming part of the
      Receivables.

            Communication with Account Debtors. Debtor authorizes Lender, before
      or after the occurrence of an Event of Default, without notice to or the
      consent of Debtor, to communicate directly with customers or Account
      Debtors by whatever means Lender shall elect for the purpose of verifying
      the information supplied by Debtor to Lender with respect to Receivables.
      Upon Lender's request, before or after the occurrence of an Event of
      Default, Debtor shall provide Lender with a list of the addresses of its
      Account Debtors.

          CC. Equipment.

            Warranties With Respect to Equipment. Annexed hereto as Schedule
      3.3(a) is a list showing all of Debtor's Equipment and describing the
      location where the same is kept. All Equipment, now owned or hereafter
      acquired, will be kept at the location or locations shown on the Schedule
      unless Debtor shall provide Lender thirty (30) days prior written notice
      by means of an Authenticated Record of any new location of where Debtor
      maintains Equipment or closes any location where it maintains Equipment.
      This notice shall indicate whether the premises are owned or leased by
      Debtor or whether such premises are the premises of a warehouseman or
      other third party, and if owned by a third party, the name and address of
      such third party. Prior to moving any Equipment to a new location, Debtor
      shall obtain a landlord's waiver in form and content acceptable to Lender
      in its discretion.

            Debtor's Obligations With Respect to Equipment. Debtor shall keep
      all of its Equipment in a good state of repair, and will make all repairs
      and replacements when and where necessary, will not waste or destroy
      Equipment or any part thereof, and will not be negligent in the care, or
      use, thereof. Debtor shall keep accurate lists and records reflecting its
      Equipment and shall retain copies of all warranties, manuals and
      manufacturers or vendors' requirements with respect thereto. All Equipment
      shall be used in accordance with law and prudent business practice and the
      manufacturer's instructions and shall be kept separate from and shall not
      be annexed or affixed to or become part of the realty except where Lender
      first consents in an Authenticated Record.

          DD. Ownership and Maintenance of Collateral. Debtor is the owner of
the Collateral with good, marketable and indefeasible title thereto, free
and clear of all liabilities,

                                       72
<PAGE>

mortgages, security interests, leases, liens, pledges, encumbrances,
restrictions, charges, claims or imperfections of title whatsoever, except for
the lien granted to the Lender pursuant to this Agreement and the other liens
permitted to exist on the Collateral pursuant to the Loan Agreement.

          EE. Maintenance of Collateral. Debtor shall continually take such
steps as are necessary and prudent to protect the interest of Lender in the
Collateral including, but not limited to, the following:

            Maintain books and records relating to the Collateral satisfactory
      to Lender and shall allow Lender or its representatives access to such
      records and the Collateral at all reasonable times for the purpose of
      examination, inspection, verification, copying, extracting and other
      reasonable purposes as Lender may require;

            Maintain the Collateral and the books and records relating to the
      Collateral at Debtor's address indicated above, at any address listed on
      Schedule A or at such other address as Lender shall permit, in its sole
      discretion, upon the request to Lender contained in an Authenticated
      Record from Debtor;

            Execute and deliver to Lender such other and further documentation
      necessary to evidence, effectuate or perfect its security interest in the
      Collateral including, without limitation, any documentation to give Lender
      control of all Deposit Accounts, Investment Properties, Letter of Credit
      Rights, and Electronic Chattel Paper;

            Defend the Collateral against all claims and demands of third
      parties at any time claiming the same or any interest therein, except
      buyers of Inventory in the ordinary course of Debtor's business;

            Except for the security interest of Lender, and except as permitted
      pursuant to the Loan Agreement, Debtor will not, without prior consent of
      Lender contained in an Authenticated Record, sell, transfer or otherwise
      dispose of the Collateral or any interest therein, in bulk or otherwise,
      except for the sale of Inventory in the ordinary course of business;

            Notify Lender in the event of material loss or damage to the
      Collateral or of any material adverse change in Debtor's business,
      financial condition or the Collateral, or of any other occurrences which
      could materially and adversely affect the security of Lender;

            Pay all expenses incurred in the manufacture, delivery, storage or
      other handling of the Collateral and all taxes which are or may become a
      lien on the Collateral, promptly when due, and in any event reimburse
      Lender, on demand, for any expenses which Lender might incur following the
      occurrence of a Default or an Event of Default, in satisfying such
      expenses or taxes, which Lender, in its sole discretion, deems necessary
      in order to protect the Collateral;

            Maintain insurance on the Collateral from carriers acceptable to
      Lender of such types, coverage, form and amount as is usually carried on
      similar goods by similar enterprises. In the event Debtor fails to
      maintain such insurance, the same may be maintained by Lender, at its
      option, and Debtor shall reimburse Lender for the cost thereof, on demand;
      and

                                       73
<PAGE>

            If requested by Lender: (i) mark its records evidencing the
      Collateral in a manner satisfactory to Lender so as to indicate the
      security interest of Lender hereunder; (ii) furnish to Lender any chattel
      paper, invoices, documents, schedules, purchase orders, delivery receipts,
      contracts or other documents representing or relating to any of the
      Collateral; (iii) promptly reflect in its books, records, and reports to
      Lender the rejection of goods, delay in delivery or performance, or claims
      made, in regard to any Collateral and after a Default or an Event of
      Default inform Lender immediately of any of the same; (iv) prior to a
      Default or an Event of Default, with respect to material debtors and
      obligors, and thereafter with respect to all debtors and obligors, furnish
      to Lender all information received by Debtor indicating a material adverse
      change in the financial standing of any Account Debtor, debtor under any
      General Intangible, or obligor under any Receivables; (v) immediately
      notify Lender if any of the Collateral arises out of contracts for the
      improvement of real property, deals with a public improvement or is with
      the United States, any state, or any department, agency or instrumentality
      thereof, and execute any instruments and take any steps required by Lender
      in order that all moneys due or to become due under any such contract
      shall be assigned to Lender and notice thereof be given as required by
      law; (vi) furnish to Lender such financial statements, reports,
      certificates, lists of Account Debtors (showing names, addresses,
      telephone and facsimile numbers, and amounts owing) and other data
      concerning the Collateral and other matters as Lender may, from time to
      time, request; and (vii) fully cooperate with Lender in the exercising of
      its rights and methods for verification of the Collateral.

          FF. Authority. Debtor is authorized to enter into and implement this
Agreement and has taken all necessary actions, corporate or otherwise, in
relation to such authorization.

          GG. Fixtures/Landlords. The Collateral will remain personalty and
will not be permanently affixed to real estate without the prior consent of
Lender contained in an Authenticated Record. If any of the Collateral is or will
be a fixture, Debtor will provide legal descriptions and the names of record
owners of the premises to which the Collateral will be affixed sufficient for
perfection of the security interests of Lender. Debtor will provide disclaimers
of interest and removal agreements, in form satisfactory to Lender.

          HH. Commercial Tort Claims. If Debtor at any time holds or acquires
a Commercial Tort Claim (as such term is defined in the New York Uniform
Commercial Code), it shall promptly notify Lender in a writing signed by it of
the particulars thereof and grant to Lender in such writing a security interest
in such Commercial Tort Claim and in the proceeds thereof, all upon the terms of
this Guaranty, with that writing to be in form and substance approved by Lender.

          EVENTS OF DEFAULT. Any of the following events or occurrences shall
constitute an "Event of Default" under this Agreement:

            the occurrence of any Event of Default under any of the Loan
      Documents;

            the failure of Debtor to perform or comply with any provision of
      this Agreement and the continuance of such failure beyond any applicable
      grace and/or notice period; or

                                       74
<PAGE>

            the occurrence of a material adverse change in the condition,
      marketability or value of the Collateral, unless such change is caused by
      an event for which insurance coverage is in effect and the proceeds of
      such insurance are paid to Lender.

          RIGHTS OF LENDER.

          II. General Rights. The rights of Lender shall at all times be those
of a secured party under the UCC. Without limiting the generality of the
foregoing, Lender shall have the additional rights set forth in this Agreement.

          JJ. Lender's Right to Perform Debtor's Obligations. In the event
that Debtor shall fail to purchase or maintain insurance, or to pay any tax,
assessment, government charge or levy, except as the same may be otherwise
permitted hereunder, or under the other Loan Documents, or in the event that any
lien, encumbrance or security interest prohibited hereby shall not be paid in
full or discharged, or in the event that Debtor shall fail to perform or comply
with any other covenant, promise or Obligation to Lender hereunder or under any
other Loan Document, Lender may, but shall not be required to, perform, pay,
satisfy, discharge or bond the same for the account of Debtor, and all monies so
paid by Lender, including actual attorneys' fees and expenses, shall be treated
as part of the Obligations.

          KK. Collections; Modifications of Terms. Without limiting any rights
Lender may have pursuant to this Agreement or otherwise, upon the occurrence and
during the continuance of a Default or an Event of Default, Lender may demand,
sue for, collect and give receipts for any money, Instruments or property
payable or receivable on account of or in exchange for any of the Collateral, or
make any compromises it deems necessary or proper, including without limitation,
extending the time of payment, permitting payment in installments, or otherwise
modifying the terms or rights relating to any of the Collateral, all of which
may be effected without notice to or consent by Debtor and without otherwise
discharging or affecting the Obligations, the Collateral or the security
interest granted under this Agreement or any of the Loan Documents.

          LL. Notification of Account Debtors. Without limiting any rights of
Secured Party pursuant to this Agreement or under applicable law, after a
Default or an Event of Default has occurred, (i) Debtor, at the request of
Lender, shall notify the Account Debtors of Lender's security interest in
Debtor's Receivables; and (ii) Lender may notify the Account Debtors of Lender's
security interest in the Receivables and to make payment directly to Lender, and
Lender may endorse all items of payment received by it that are payable to
Debtor. Debtor authorizes such parties to make such payments directly to Lender
and to rely on notice from Lender without further inquiry. Lender may demand and
take all necessary or desirable steps to collect such Collateral in either its
or Debtor's, name, with the right to enforce, compromise, settle, or discharge
any of the foregoing.

          MM. Insurance. Without limiting any rights of Lender pursuant to
this Agreement or under applicable law, after a Default or Event of Default has
occurred, Lender may file proofs of loss and claim with respect to any of the
Collateral with the appropriate insurer, and may endorse in its own and Debtor's
name any checks or drafts constituting insurance proceeds. Any insurance
proceeds received by Lender may be applied by it against Debtor's Obligations
under the Loan Documents.

          NN. Waiver of Rights by Debtor. Except as may be otherwise
specifically provided herein, Debtor waives, to the extent permitted by law, any
bonds, security or sureties

                                       75
<PAGE>

required by any statute, rule or otherwise by law as an incident to any taking
of possession by Lender of any Collateral. Debtor authorizes Lender, upon the
occurrence of an a Default or Event of Default, to enter upon any premises owned
by or leased to Debtor where the Collateral is kept, without obligation to pay
rent or for use and occupancy, through self help, without judicial process and
without having first given notice to Debtor or obtained an order of any court,
and peacefully retake possession thereof by securing at or removing same from
such premises.

          OO. Lender's Rights. Debtor agrees that Lender shall not have any
obligation to preserve rights to any Collateral against prior parties or to
marshall any Collateral of any kind for the benefit of any other creditor of
Debtor or any other Person. After the occurrence of a Default or an Event of
Default, Lender is hereby granted a license or other right to use, without
charge, Debtor's labels, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks and advertising matter, or any property of a
similar nature, as it pertains to the Collateral, in completing production of,
advertising for sale, and selling any Collateral and Debtor's rights under all
licenses and any franchise, sales or distribution agreements shall inure to
Lender's benefit for such purpose.

          PP. Rights on Default.

            Upon the occurrence of any Default or an Event of Default, and after
      giving effect to any applicable grace period, in addition to and without
      limiting any rights Lender may have under any agreement, document or
      instrument evidencing or representing any obligation of Debtor to Lender
      or executed in connection with any such obligation, Lender is hereby
      authorized to declare any or all of the Obligations to be immediately due
      and payable, and the rights and remedies of Lender with respect to the
      Collateral shall be as set forth herein, in the UCC and as otherwise
      available under applicable law.

            Lender may, without demand, advertising or notice, all of which
      Debtor hereby waives (except as the same may be required by law), sell,
      lease, license, dispose of, deliver and grant options to a third party to
      purchase, lease or otherwise dispose of any and all Collateral held by it
      or for its account at any time or times in one or more public or private
      sales or other dispositions, for cash, on credit or otherwise, as such
      prices and upon such terms as Lender, in its sole discretion, deems
      advisable. Lender, in its sole discretion, is authorized to disclaim any
      and all warranties under ss.9-610(d) of the UCC. Without requiring notice
      to Debtor, all requirements of reasonable notice under this section shall
      be met if such notice is mailed, postage prepaid, to Debtor at its address
      set forth herein or such other address as Debtor may have provided to
      Lender, in a Record, at least ten (10) days before the time of such sale
      or disposition. Lender may, if it deems it reasonable, postpone or adjourn
      any sale of any Collateral from time to time by an announcement at the
      time and place of the sale to be so postponed or adjourned without being
      required to give a new notice of sale, provided, however, that Lender
      shall provide Debtor with written notice of the time and place of such
      postponed or adjourned sale. Lender may be the purchaser at any such sale,
      and payment may be made, in whole or in part, in respect of such purchase
      price by the application of Obligations due from Debtor to Lender. Debtor
      shall be obligated for, and the proceeds of sale shall be applied first
      to, the costs of retaking, refurbishing, storing, guarding, insuring,
      preparing for sale, and selling the Collateral, including the fees and
      disbursements of attorneys, auctioneers, appraisers, consultants and
      accountants employed by Lender. Proceeds from the Sale or other
      disposition or Collateral shall be applied to the payment, in whatever
      order Lender may elect, of all Obligations of Debtor. Lender shall return
      any excess to Debtor and

                                       76
<PAGE>

      Debtor shall remain liable for any deficiency. Collateral securing
      purchase money security interests also secures non-purchase money security
      interests. To the extent Debtor uses an advance under the Loan Documents
      to purchase Collateral, Debtor's repayment of such advance shall apply on
      a "first-in-first-out" basis so that the portion of the advance used to
      purchase a particular item of Collateral shall be paid in the
      chronological order the Debtor purchased the Collateral. Upon request of
      Lender, Debtor will assemble and make the Collateral available to Lender,
      at a reasonable place and time designated by Lender. Debtor's failure to
      take possession of any Collateral at any time and place reasonably
      specified by Lender in a Record to the Debtor shall constitute an
      abandonment of such Property.

            Lender shall not be responsible to Debtor for loss or damage
      resulting from Lender's failure to enforce or collect any Collateral or
      any monies due or to become due under any liability of Debtor to Lender.

            After a Default or an Event of Default, Debtor (i) will make no
      change in any Receivable or General Intangible, and (ii) shall receive as
      the sole property of Lender and hold in trust for Lender all monies,
      checks, notes, drafts, and other property (collectively called "Items of
      Payment") representing the proceeds of any Collateral.

            After a Default or an Event of Default, Lender may but shall be
      under no obligation to: (i) notify all appropriate parties that the
      Collateral, or any part thereof, has been assigned to Lender; (ii) collect
      any Receivables or General Intangibles in its or Debtor's name, and apply
      any such collections against such obligations of Debtor to Lender as
      Lender may select; (iii) take control of any cash or non?cash proceeds of
      any item of the Collateral; (iv) compromise, extend or renew any
      Receivables, General Intangible, or document, or deal with the same as it
      may deem advisable; and (v) make exchanges, substitutions or surrender of
      items comprising the Collateral.

          QQ. Lender's Right of Set-Off. Lender may, at any time upon the
occurrence of a Default or an Event of Default hereunder and without any further
notice to Debtor (such notice being expressly waived), set-off or apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held by, or any other Indebtedness at any time owing by Lender or any
affiliate of Lender or any participant in Lender's loans, to Debtor to or for
the credit or the account of Debtor against any Obligation irrespective of
whether any demand has been made hereunder or whether such Obligation is mature.

          RR. Expense of Collection and Sale. Debtor agrees to pay all costs
and expenses incurred by Lender in connection with the negotiation and
preparation of this Agreement or any other document, or any other Loan Documents
executed in connection herewith, in determining Lender's rights under, and in
enforcing and collecting the indebtedness represented by the guaranty and in
determining its rights under and enforcing the security interests created by
this Agreement, including, without limitation, costs and expenses relating to
taking, holding, insuring, preparing for sale, appraising, selling or otherwise
realizing on the Collateral, and reasonable attorneys' fees and expenses in
connection with any of the foregoing. All such reasonable costs and expenses
shall be payable on demand, and shall bear interest at the highest rate charged
on any Obligation, payable on demand, from the date of Lender's payment of such
costs and expenses until payment in full is made by Debtor, at the highest rate
of interest permitted by law.

                                       77
<PAGE>

          SS. Compliance with Other Laws. Lender may comply with any
applicable law requirements in connection with a disposition of the Collateral,
and compliance will not be considered adversely to effect the commercial
reasonableness of any sale of the Collateral.

          TT. Warranties. Lender may sell the Collateral without giving any
warranties. Lender may specifically disclaim any warranties of title or the
like. This procedure will not be considered adversely to affect the commercial
reasonableness of any sale of the Collateral.

          UU. Sales on Credit. If Lender sells any of the Collateral on
credit, Debtor will be credited only with payments actually made by the
purchaser, received by Lender and applied to the Indebtedness. If the purchaser
fails to pay for the Collateral, Lender may resell the Collateral, and Debtor
shall be credited with the proceeds of the sale.

          GENERAL PROVISIONS.

          VV. Waivers. Debtor expressly waives notice of nonpayment, demand,
presentment, protest or notice of protest in relation to the Loan Documents or
the Collateral. No delay or omission of Lender in exercising or enforcing any of
its rights, powers, privileges, options or remedies under this Agreement shall
constitute a waiver thereof, and no waiver by Lender of any default by Debtor
shall operate as a waiver of any other default.

          WW. Remedies Not Exclusive. All rights and remedies of Lender under
this Agreement shall be cumulative and not alternative or exclusive,
irrespective of any other collateral guaranty, right or remedy and may be
exercised by Lender at such time or times and in such order as Lender, in its
sole discretion, may determine, and are for the sole benefit of Lender. The
exercise or failure to exercise such rights and remedies shall not result in
liability to Debtor or others except in the event of willful misconduct or bad
faith by Lender, and in no event shall Lender be liable for more than it
actually receives as a result of the exercise or failure to exercise such rights
and remedies.

          XX. Successors and Assigns. This Agreement is entered into for the
benefit of the parties hereto and their successors and assigns. It shall be
binding upon and shall inure to the benefit of such parties, their successors
and assigns. Lender shall have the right, without the necessity of any further
consent or authorization by the Debtor, to sell, assign, securitize or grant
participation in all, or a portion of, Lender's interest in the Collateral, to
other financial institutions of the Lender's choice and on such terms as are
acceptable to Lender in its sole discretion.

          YY. Notices. Wherever this Agreement provides for notice to any
party (except as expressly provided to the contrary), it shall be given by
messenger, facsimile, certified U.S. mail with return receipt requested, or
nationally recognized overnight courier with receipt requested, effective when
received by the party to whom addressed, and shall be addressed as follows, or
to such other address as the party affected may hereafter designate:

<TABLE>
<S>                        <C>                              <C>
          If to Lender:    Keltic Financial Partners, LP    Attn: John P. Reilly, Managing Partner
                                                            555 Theodore Fremd Avenue, Suite C-207
                                                            Rye, New York 10580
                                                            Tel: (914) 921-3555
                                                            Fax: (914) 921-1154
</TABLE>

                                       78
<PAGE>

                With a copy to:     Clinton A. Poff, Esq.
                                    Poff & Bowman LLC
                                    1600 Route 208 North
                                    PO Box 24
                                    Hawthorne, New Jersey 07507
                                    Tel:  (973) 636-9770
                                    Fax: (973) 636-9777

                                       79
<PAGE>

                If to Debtor:       Hudson Technologies Company
                                    Attn:  Brian F. Coleman, President and
                                             Chief Operating Officer
                                    275 North Middletown Road
                                    Pearl River, New York 10965
                                    Tel:  (845) 735-6000
                                    Fax: (845) 512-6070

                With a copy to:     Stephen P. Mandracchia, Esq.
                                    Hudson Technologies Company
                                    275 North Middletown Road
                                    Pearl River, New York 10965
                                    Tel:  (845) 735-6000
                                    Fax: (845) 512-6070

          ZZ. Strict Performance. The failure, at any time or times hereafter,
to require strict performance by the Debtor of any provision of this Agreement
shall not waive, affect or diminish any right of Lender thereafter to demand
strict compliance and performance therewith. Any suspension or waiver by Lender
of any Default or Event of Default by the Debtor under this Agreement or any
other Loan Document shall not suspend, waive or affect any other Default or
Event of Default by the Debtor under this Agreement or any other Loan Document,
whether the same is prior or subsequent thereto and whether of the same or a
different type.

          AAA. Construction of Agreement. The parties hereto agree that the
terms and language of this Agreement were the result of negotiations between the
parties, and, as a result, there shall be no prescription that any ambiguities
in this Agreement shall be resolved against either party. Any controversy over
the construction of this Agreement shall be decided mutually without regard to
events of authorship or negotiation.

          BBB. WAIVER OF RIGHT TO JURY TRIAL.

            Debtor and Lender recognize that in matters related to this
      Agreement, and as it may be subsequently modified and/or amended, any such
      party may be entitled to a trial in which matters of fact are determined
      by a jury (as opposed to a trial in which such matters are determined by a
      federal or state judge). By execution of this Agreement, Debtor and Lender
      will give up their respective right to a trial by jury. Debtor and Lender
      each hereby expressly acknowledged that this waiver is entered into to
      avoid delays, minimize trial expenses, and streamline the legal
      proceedings in order to accomplish a quick resolution of claims arising
      under or in connection with this Agreement.

            WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW,
      DEBTOR AND LENDER EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
      WAIVES ANY RIGHT THAT DEBTOR OR LENDER MAY HAVE TO A TRIAL BY JURY IN
      RESPECT TO ANY LITIGATION, DIRECTLY OR INDIRECTLY, AT ANY TIME ARISING OUT
      OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT, OR ANY TRANSACTION
      CONTEMPLATED THEREBY OR HEREBY, BEFORE OR AFTER MATURITY.

            CERTIFICATIONS. DEBTOR HEREBY CERTIFIES THAT NEITHER ANY
      REPRESENTATIVE NOR AGENT OF LENDER NOR LENDER'S COUNSEL HAS REPRESENTED,
      EXPRESSLY OR OTHERWISE, OR IMPLIED THAT LENDER WOULD NOT, IN THE EVENT OF
      LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER. DEBTOR ACKNOWLEDGES THAT
      LENDER HAS BEEN

                                       80
<PAGE>

      INDUCED TO ENTER INTO THE TRANSACTION BY, AMONG OTHER THINGS, THE MUTUAL
      WAIVERS AND CERTIFICATION HEREIN.

          CCC. Entire Agreement; Amendments; Lender's Consent. This Agreement
(including the Exhibits and Schedules thereto) and the other Loan Documents
supersede, with respect to their subject matter, all prior and contemporaneous
agreements, understandings, inducements or conditions between the respective
parties, whether express or implied, oral or written. No amendment or waiver of
any provision of this Agreement or any of the Loan Documents, nor consent to any
departure by Debtor therefrom, shall in any event be effective unless the same
shall be in a Record Authenticated by Lender, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.

          DDD. Cross Default; Cross Collateral. Debtor hereby agrees that (a)
all other agreements between Debtor and Lender are hereby amended so that a
Default or an Event of Default under this Agreement is a default under all such
other agreements and a default under any of such other agreements is a Default
or an Event of Default under this Agreement, and (b) the Collateral under this
Agreement secures the Obligations now or hereafter outstanding under all other
agreements between Debtor and Lender and the Collateral pledged under any other
agreement with Lender secures the Obligations under this Agreement.

          EEE. Execution in Counterparts. This Agreement may be executed in
any number of counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute but one and the
same agreement.

          FFF. Severability of Provisions. Any provision of this Agreement or
any of the other Loan Documents that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or the other Loan Documents or affecting the
validity or enforceability of such provision in any other jurisdiction.

          GGG. Table of Contents; Headings. The table of contents and headings
preceding the text of this Agreement are inserted solely for convenience of
reference and shall not constitute a part of this Agreement or affect its
meaning, construction or effect.

          HHH. Exhibits and Schedules. All of the Exhibits and Schedules to
this Agreement are hereby incorporated by reference herein and made a part
hereof.

          III. Governing Law; Consent To Jurisdiction.

            THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY
      LENDER AND ACCEPTED BY DEBTOR IN THE STATE OF NEW YORK, AND THE PROCEEDS
      OF OBLIGATIONS DELIVERED PURSUANT THERETO WERE DISBURSED FROM THE STATE OF
      NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO
      THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREIN, AND IN ALL
      RESPECTS, INCLUDING MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE,
      THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY,
      AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
      APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE AND ANY
      APPLICABLE LAW OF THE

                                       81
<PAGE>

      UNITED STATES OF AMERICA EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE
      CREATION, PERFECTION, AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS
      CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS SHALL BE
      GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE
      APPLICABLE INDIVIDUAL PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO
      THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE
      STATE OF NEW YORK SHALL GOVERN THE VALIDITY AND THE ENFORCEABILITY OF ALL
      LOAN DOCUMENTS AND ALL OF THE INDEBTEDNESS OR OBLIGATIONS ARISING
      HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED BY LAW, LENDER
      AND DEBTOR HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVE ANY CLAIM TO
      ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND
      THE OBLIGATIONS, AND THIS AGREEMENT AND THE OBLIGATIONS SHALL BE GOVERNED
      BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

            ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR DEBTOR, ANY
      GUARANTOR OR OTHER PARTY TO THIS TRANSACTION ARISING OUT OF OR RELATING TO
      THIS AGREEMENT SHALL BE INSTITUTED IN THE SOLE OPTION OF LENDER IN ANY
      FEDERAL OR STATE COURT LOCATED IN WESTCHESTER COUNTY, NEW YORK, PURSUANT
      TO ss. 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND LENDER AND
      DEBTOR WAIVE ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
      LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND LENDER AND
      DEBTOR HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY SUCH COURT IN
      ANY SUIT, ACTION OR PROCEEDING. DEBTOR SHALL DESIGNATE FROM TIME TO TIME
      AN AUTHORIZED AGENT HAVING AN OFFICE IN THE STATE OF NEW YORK TO ACCEPT
      AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE
      SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING, AND AGREES THAT SERVICE OF
      PROCESS UPON SUCH AGENT AT SUCH ADDRESS AND WRITTEN NOTICE OF SUCH SERVICE
      ON DEBTOR MAILED OR DELIVERED TO DEBTOR IN THE MANNER PROVIDED HEREIN
      SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON SUCH
      DEBTOR IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK.
      DEBTOR (I) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY CHANGE OF ADDRESS OF
      ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME
      DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW
      YORK (WHICH OFFICE SHALL BE DESIGNATED AS THE ADDRESS FOR SERVICE OF
      PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS
      AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS
      DISSOLVED WITHOUT LEAVING A SUCCESSOR. DEBTOR REPRESENTS AND WARRANTS THAT
      IT HAS REVIEWED THIS CONSENT TO JURISDICTION PROVISION WITH ITS LEGAL
      COUNSEL, AND HAS MADE THIS WAIVER KNOWINGLY AND VOLUNTARILY.

            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their officers thereunto duly authorized on the day and year
first above written.

                                       82
<PAGE>

                                            KELTIC FINANCIAL PARTNERS, LP

                                            By:   KELTIC FINANCIAL SERVICES LLC,
                                                     its general partner

                                            By: /s/ John P. Reilly
                                               ---------------------------------
                                               John P. Reilly, Managing
                                               Partner

                                            HUDSON TECHNOLOGIES COMPANY

                                            By: /s/ Brian F. Coleman
                                               ---------------------------------
                                               Brian F. Coleman
                                               President and Chief Operating
                                               Officer

                                       83
<PAGE>

                                   Schedule A
                              Collateral Locations

<TABLE>
<CAPTION>
Facility          Address                            Landlord                           Term
--------          -------                            --------                           ----
<S>               <C>                                <C>                                <C>
Champaign, Il     3402 North Mattis Avenue           Busey Bank                         12/1/02 - 11/30/04
                  Champaign, Illinois                201 West Main Street
                                                     Urbana, Illinois 61803-7430

Houston, Tx.      12820 Hempstead Hwy., Suite D      Two Ninety, Ltd.                   7/15/00-6/30/03
                  Houston, Texas                     1527 West Alabama
                                                     Houston, Texas 77006

Seattle, Wa.      1320 26th St. NW, Ste 11           Park 26, LLC                       4/1/02 -3/31/04
                  Auburn, Washington                 c/o The Andover Company, Inc.
                                                     415 Baker Boulevard, Suite 200
                                                     Tukwila, WA  98188

Charlotte, NC     2720 Westport Road                 Thomas & Nancy Cox                 4/24/98 -4/23/00
                  Charlotte, North Carolina          c/o Colliers Pinkard               now month to month
                                                     330 S. Tryon Street, Suite 301
                                                     Charlotte, NC 28202-1916

Punta Gorda, Fl.  5474 Williamsburg Drive            Rick Treworgy                      12/15/01 - 12/14/03
                  Punta Gorda, Florida               5445 Williamsburg Drive
                                                     Punta Gorda, Florida 33982

Pearl River, NY   275 N. Middletown Road             275 N. Middletown Road, LLC        1/1/03 - 12/31/06
                  Pearl River, New York              275 North Middletown Road
                                                     Pearl River, New York 10965

Baton Rouge, La.  11245 Airline Highway              Reulet Family Holdings, LLC        8/1/02 - 7/31/05
                  Baton Rouge, Louisiana             c/o John A. Reulet, Sr., President
                                                     3037 Jones Creek Road
                                                     Baton Rouge, Louisiana 70817

Villa Park, Il.   739 North Harvard Ave.             HVP Partners                       6/1/99 - 8/31/05
                  Villa Park, Illinois               17 W 335 Belmont
                                                     Bensenville, Illinois 60106

Baltimore, Md.    2605 Lord Baltimore Dr.            MIE Properties, Inc.               9/1/01 - 8/31/05
                  Baltimore, Maryland                5720 Executive Drive
                                                     Baltimore, Maryland 21288-1757

Rantoul, IL       896 West Champaign St.             Roeco Enterprises, Inc.            10/1/97 - 9/30/02
                  Rantoul, Illinois                  PO Box 583                         now month to month
                                                     Rantoul, Illinois 61866
</TABLE>

                                Schedule 3.1 (c)
                               Inventory Locations

<TABLE>
<CAPTION>
Facility          Address                            Landlord                           Term
--------          -------                            --------                           ----
<S>               <C>                                <C>                                <C>
Champaign, Il     3402 North Mattis Avenue           Busey Bank                         12/1/02 - 11/30/04
                  Champaign, Illinois                201 West Main Street
                                                     Urbana, Illinois 61803-7430

Houston, Tx.      12820 Hempstead Hwy., Suite D      Two Ninety, Ltd.                   7/15/00-6/30/03
                  Houston, Texas                     1527 West Alabama
                                                     Houston, Texas 77006

Seattle, Wa.      1320 26th St. NW, Ste 11           Park 26, LLC                       4/1/02 -3/31/04
</TABLE>

                                       84
<PAGE>

<TABLE>
<S>               <C>                                <C>                                   <C>
                  Auburn, Washington                 c/o The Andover Company, Inc.
                                                     415 Baker Boulevard, Suite 200
                                                     Tukwila, WA  98188

Charlotte, NC     2720 Westport Road                 Thomas & Nancy Cox                    4/24/98 -4/23/00
                  Charlotte, North Carolina          c/o Colliers Pinkard                  now month to month
                                                     330 S. Tryon Street, Suite 301
                                                     Charlotte, NC 28202-1916

Punta Gorda, Fl.  5474 Williamsburg Drive            Rick Treworgy                         12/15/01 - 12/14/03
                  Punta Gorda, Florida               5445 Williamsburg Drive
                                                     Punta Gorda, Florida 33982

Baton Rouge, La.  11245 Airline Highway              Reulet Family Holdings, LLC           8/1/02 - 7/31/05
                  Baton Rouge, Louisiana             c/o John A. Reulet, Sr., President
                                                     3037 Jones Creek Road
                                                     Baton Rouge, Louisiana 70817

Villa Park, Il.   739 North Harvard Ave.             HVP Partners                          6/1/99 - 8/31/05
                  Villa Park, Illinois               17 W 335 Belmont
                                                     Bensenville, Illinois 60106

Baltimore, Md.    2605 Lord Baltimore Dr.            MIE Properties, Inc.                  9/1/01 - 8/31/05
                  Baltimore, Maryland                5720 Executive Drive
                                                     Baltimore, Maryland 21288-1757

Rantoul, IL       896 West Champaign St.             Roeco Enterprises, Inc.               10/1/97 - 9/30/02
                  Rantoul, Illinois                  PO Box 583                            now month to month
                                                     Rantoul, Illinois 61866
</TABLE>

                                       85
<PAGE>

                                 Schedule 3.3(a)
                        Equipment and Equipment Location

<TABLE>
<CAPTION>
Facility          Address                            Landlord                           Term
--------          -------                            --------                           ----
<S>               <C>                                <C>                                <C>
Champaign, Il     3402 North Mattis Avenue           Busey Bank                         12/1/02 - 11/30/04
                  Champaign, Illinois                201 West Main Street
                                                     Urbana, Illinois 61803-7430

Houston, Tx.      12820 Hempstead Hwy., Suite D      Two Ninety, Ltd.                   7/15/00-6/30/03
                  Houston, Texas                     1527 West Alabama
                                                     Houston, Texas 77006

Seattle, Wa.      1320 26th St. NW, Ste 11           Park 26, LLC                       4/1/02 -3/31/04
                  Auburn, Washington                 c/o The Andover Company, Inc.
                                                     415 Baker Boulevard, Suite 200
                                                     Tukwila, WA  98188

Charlotte, NC     2720 Westport Road                 Thomas & Nancy Cox                 4/24/98 -4/23/00
                  Charlotte, North Carolina          c/o Colliers Pinkard               now month to month
                                                     330 S. Tryon Street, Suite 301
                                                     Charlotte, NC 28202-1916

Punta Gorda, Fl.  5474 Williamsburg Drive            Rick Treworgy                      12/15/01 - 12/14/03
                  Punta Gorda, Florida               5445 Williamsburg Drive
                                                     Punta Gorda, Florida 33982

Pearl River, NY   275 N. Middletown Road             275 N. Middletown Road, LLC        1/1/03 - 12/31/06
                  Pearl River, New York              275 North Middletown Road
                                                     Pearl River, New York 10965

Baton Rouge, La.  11245 Airline Highway              Reulet Family Holdings, LLC        8/1/02 - 7/31/05
                  Baton Rouge, Louisiana             c/o John A. Reulet, Sr., President
                                                     3037 Jones Creek Road
                                                     Baton Rouge, Louisiana 70817

Villa Park, Il.   739 North Harvard Ave.             HVP Partners                       6/1/99 - 8/31/05
                  Villa Park, Illinois               17 W 335 Belmont
                                                     Bensenville, Illinois 60106

Baltimore, Md.    2605 Lord Baltimore Dr.            MIE Properties, Inc.               9/1/01 - 8/31/05
                  Baltimore, Maryland                5720 Executive Drive
                                                     Baltimore, Maryland 21288-1757

Rantoul, IL       896 West Champaign St.             Roeco Enterprises, Inc.            10/1/97 - 9/30/02
                  Rantoul, Illinois                  PO Box 583                         now month to month
                                                     Rantoul, Illinois 61866
</TABLE>

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