AMENDMENT NO. 2
                                       TO
                                CREDIT AGREEMENT

         Amendment  No. 2,  dated  July 16,  1999 (the  "Amendment"),  to Credit
Agreement  dated June 30,  1998 (as  amended,  the  "Agreement")  by and between
AeroCentury  Corp.,  a  Delaware   corporation   ("AeroCentury"),   the  banking
institutions  signatories hereto and named in Exhibit A attached hereto and such
other  institutions  that  hereafter  become a "Bank"  pursuant to '10.4  hereof
(collectively  the "Banks" and  individually  a "Bank") and FIRST UNION NATIONAL
BANK, a national banking association, as agent for the Banks under the Agreement
("First  Union" which shall mean in its  capacity as agent  unless  specifically
stated  otherwise).  All capitalized terms used herein and not otherwise defined
shall have the respective meanings ascribed to them in the Agreement.


                              Preliminary Statement

         WHEREAS,  First Union and  AeroCentury,  together with the other Banks,
desire to amend the Agreement in the manner hereinafter set forth.

         NOW,   THEREFORE,   in  consideration  of  the  premises  and  promises
hereinafter  set forth and  intending to be legally  bound  hereby,  the parties
hereto agree as follows:

         1. Section 1.1 of the Agreement. The following definitions set forth in
Section 1.1 of the Agreement are hereby added,  or amended and restated in their
entireties, as applicable, to be as follows:

         "Collateral"  shall mean those assets  defined as  "Collateral"  in the
         Security Agreement  (including but not limited to the Equipment and the
         related leases therefor)."

         "Eligible  Collateral" shall mean the sum of (1) Equipment  included in
         the Collateral which is subject to an Eligible Lease, and (2) Equipment
         included in the  Collateral  which is not subject to a lease,  provided
         that (a) the aggregate of such  Equipment  shall not at any time exceed
         10% of the Aggregate  Revolving  Loan  Commitment,  and (b) the maximum
         period for which any item of such Equipment shall not have been subject
         to an  Eligible  Lease  does not  exceed  four  months.  In order to be
         Eligible  Collateral,  First  Union  as  Agent  shall  possess  a first
         priority  security  interest in said  Collateral to secure the payment,
         promptly  when  due,  and  the  punctual  performance  of  all  of  the
         "Liabilities" as defined in the Security Agreement."

         "Loan  Documents"  shall mean this Agreement,  the Notes,  the Security
         Agreement,  and all other documents  directly  related or incidental to
         said documents, the Loans or the Collateral,  but shall not include any
         Swap Agreement."



<PAGE>



         "Obligations"  shall mean all now existing or hereafter  arising debts,
         obligations,  covenants,  and duties of payment or performance of every
         kind, matured or unmatured, direct or contingent,  owing, arising, due,
         or  payable  to  the  Banks  or  First  Union,  as  Agent,  by or  from
         AeroCentury  arising out of this  Agreement or any other Loan Document,
         including,  without  limitation,  all obligations to repay principal of
         and interest on the Loans, and to pay interest,  fees, costs,  charges,
         expenses,  professional fees, and all sums chargeable to AeroCentury or
         for which AeroCentury is liable as indemnitor under the Loan Documents,
         whether or not  evidenced  by any note or other  instrument  as well as
         well as any and all  existing  and future  obligations  of  AeroCentury
         under or in connection with Swap Agreements with any one or more of the
         Banks,  including  but not limited to First  Union,  pertaining  to the
         Loans hereunder."

         "Security Agreement" shall mean all writings, agreements, and documents
         in any jurisdiction, whether within the United States or outside of the
         United  States,  the  intended  purpose of which is to grant a security
         interest in property,  whether then owned by  AeroCentury or thereafter
         acquired, and all replacements of said property, as collateral security
         for the payment and performance of the  Obligations,  including but not
         limited to (1) the Mortgage and  Security  Agreement,  dated August 11,
         1998 by  First  Security  Bank,  N.A.  trustee  under  Trust  Agreement
         (N272EP)  dated as of October 31, 1991 in favor of First Union National
         Bank, as Agent, (2) the Mortgage and Security  Agreement,  dated August
         11, 1998 by First Security  Bank,  N.A.  trustee under Trust  Agreement
         (N272EP) dated as of October 31, 1991 and trustee under Trust Agreement
         (N12303)  dated as of  November  15,  1989,  in  favor  of First  Union
         National Bank, as Agent, (3) the Mortgage and Security Agreement, dated
         March 31, 1999 by AeroCentury in favor of First Union National Bank, as
         Agent,  (4) the Security  Agreement,  dated December 21, 1998,  between
         AeroCentury  Corp., as debtor,  and First Union, as Agent,  and (5) all
         amendments,  modifications,  supplements,  amendments and restatements,
         replacements and substitutions of each of the foregoing."

         "Swap Agreement" shall have the meaning set forth in 11 U.S.C. '101 and
         shall  include  but not be limited to  interest  rate swap  agreements,
         interest rate cap agreements, interest collar agreements, interest rate
         hedging  agreements,  interest  rate floor  agreements or other similar
         agreements or arrangements.

         2. Section 2.7(b) of the  Agreement.  The reference to "'2.1(f)" as set
forth in the last line of Section 2.7(b) of the Agreement shall be and hereby is
amended to be "2.1(i)".

      3. Section 8.1(e) of the Agreement. Section 8.1 (e) of the Agreement shall
be and hereby is amended and restated to be as follows:



<PAGE>



         "(e) Certain Other Defaults. (1) AeroCentury shall fail to pay when due
         any Indebtedness for Borrowed Money which singularly  exceeds $250,000,
         or in the aggregate exceeds  $250,000,  and such failure shall continue
         beyond any applicable cure period,  or (2) AeroCentury  shall suffer to
         exist any default or event of default in the performance or observance,
         subject  to  any  applicable  grace  period,  of any  agreement,  term,
         condition  or  covenant  with  respect  to any  agreement  or  document
         relating  to  Indebtedness  for  Borrowed  Money if the  effect of such
         default is to  permit,  with the giving of notice or passage of time or
         both, the holders thereof, or any trustee or agent for said holders, to
         terminate or suspend any commitment  (which is equal to or in excess of
         $250,000 in any  individual  case or $250,000 in the aggregate) to lend
         money or to cause or declare any portion of any  borrowings  thereunder
         to become due and payable prior to the date on which it would otherwise
         be due and  payable,  or (3) any  default  shall  exist  under any Swap
         Agreement;  provided that during any applicable  cure period the Banks'
         obligations hereunder to make further Loans shall be suspended."

         4. Section 8.1(i) of the Agreement.  The reference to "6.2, 6.3" as set
forth in the last line of Section 8.1(i) of the Agreement shall be and hereby is
amended to be "6.3".

         5. Section 8.1 of the  Agreement.  The  paragraph at the end of Section
8.1 of the Agreement which begins with the phrase "THEN and in every such event"
shall be and hereby is amended to be as follows:

         "THEN and in every such  event  other  than that  specified  in 8.1(d),
         First  Union as Agent may, or at the  written  request of the  Required
         Banks shall,  immediately  terminate the Revolving Loan Commitments and
         declare  the  Notes  and  all  other  Obligations,   including  without
         limitation accrued interest but excluding any obligation under any Swap
         Agreement then in existence,  to be, and they shall thereupon forthwith
         become due and payable without  presentment,  demand,  or notice of any
         kind, all of which are hereby expressly waived by AeroCentury. Upon the
         occurrence  of any  event  specified  in  8.1(d),  the  Revolving  Loan
         Commitments shall  automatically  terminate and the Notes and all other
         Obligations,   including  without   limitation   accrued  interest  but
         excluding any  obligation  under any Swap  Agreement then in existence,
         shall  immediately  be due and  payable  without  presentment,  demand,
         protest or other notice of any kind, all of which are hereby  expressly
         waived by  AeroCentury.  Any date on which  the  Notes  and such  other
         obligations are declared due and payable  pursuant to this 8.1 shall be
         Revolver  Termination  Date for  purposes of this  Agreement.  From and
         after the date an Event of Default  shall have occurred and for so long
         as an Event of  Default  shall be  continuing,  the  Loans  shall  bear
         interest at the Default Rate whether or not a Revolver Termination Date
         shall have occurred."

         6. Section 9.7 of the Agreement.  Section 9.7 of the Agreement shall be
and hereby is deleted in its entirety.

         7. Section 10.2 of the Agreement.  The phrase "modify the definition of
"Required  Banks"" as set forth in Section  10.2 of the  Agreement  shall be and
hereby is amended to be "modify the definitions of "Borrowing  Base",  "Eligible
Collateral", "Eligible Lease" or "Required Banks"."

         8. Section  10.7(b) of the Agreement.  Section 10.7(b) of the Agreement
shall be and hereby is amended and restated to be as follows:

              " (b) If an Event of  Default  or  Potential  Default  shall  have
         occurred  and be  continuing  the Agent  and each Bank and  AeroCentury
         agree that all payments on account of the Loans shall be applied by the
         Agent and the Banks as follows:

              First,  to the Agent for any Agent fees then due and payable under
              this Agreement until such fees are paid in full;



<PAGE>



              Second,  to the Agent for any fees,  costs or expenses  (including
              expenses  described  in '10.8)  incurred by the Agent under any of
              the Loan Documents or this Agreement, then due and payable and not
              reimbursed by AeroCentury or the Banks until such fees,  costs and
              expenses are paid in full;

              Third, to the Banks for their percentage  shares of the Commitment
              Fee then due and payable  under this  Agreement  until such fee is
              paid in full;

              Fourth,  to the Banks for their  respective  shares of all  costs,
              expenses and fees then due and payable from AeroCentury until such
              costs, expenses and fees are paid in full;

              Fifth,  to the Banks for their  percentage  shares of all interest
              then due and payable from AeroCentury  until such interest is paid
              in  full,   which   percentage   shares  shall  be  calculated  by
              determining each Bank's  percentage share of the amounts allocated
              in (a) above determined as set forth in said clause (a);

              Sixth, to the Banks for their  percentage  shares of the principal
              amount of the Loans then due and payable  from  AeroCentury  until
              such principal is paid in full, which  percentage  shares shall be
              calculated  by  determining  each Bank's  percentage  share of the
              amounts  allocated  in (a) above  determined  as set forth in said
              clause (a); and

              Seventh,  tothe Banks in respect of any Obligations of AeroCentury
              under or in connection with any Swap Agreements pro rata, it being
              understood and agreed that any benefits or income  received by the
              Banks  or any  of  them  under  or in  connection  with  any  Swap
              Agreement  shall belong  strictly to the applicable Bank and shall
              not be considered as benefits or income to be shared by all of the
              Banks pursuant to this Agreement."

         9. Section 10.8 of the Agreement.  The reference to "Bank" as set forth
in the first  sentence of Section 10.8 of the  Agreement  shall be and hereby is
amended to be "Banks".

         10. Section 10.9 of the Agreement. The reference to "2.10" as set forth
in Section 10.9 of the Agreement shall be and hereby is amended to be "2.9".

         11. Section 10.19 of the Agreement. A new section "'10.19" shall be and
hereby is added to the Agreement which shall be as follows:

         "10.19. Swap Agreements.  Notwithstanding any to the contrary contained
         in this  Agreement,  AeroCentury  and any  Bank may  enter  into a swap
         agreement or swap agreements at any time and from time to time or amend
         or  otherwise  modify any such  agreement  and such  entry,  amendment,
         modification  and/or  the  existence  of any such  agreement  shall not
         constitute  a breach of any  provision  of this  Agreement or any other
         Loan Document,  or be in any manner restricted by this Agreement or any
         other Loan Document."



<PAGE>



         12.  Amended  and  Restated  Exhibit A to  Agreement.  Exhibit A to the
Agreement  shall be and is  hereby  amended  and  restated  in its  entirety  as
attached hereto.

         13. Exhibit D to Agreement.  Exhibit D to the Agreement shall be and is
hereby deleted.

         14.  Amended and Restated  Schedule 1 to  Agreement.  Schedule 1 to the
Agreement  shall be and is  hereby  amended  and  restated  in its  entirety  as
attached hereto.

         15. Conditions Precedent.  Simultaneous with the execution and delivery
of this Amendment,  AeroCentury shall provide to each Bank all items referred to
Section  4.1(b) of the  Agreement to the extent no  heretofore  provided to each
Bank,  including  but not limited to the execution and delivery to Sanwa Bank of
California of its Revolving  Credit Note in the principal  amount of $7,500,000.
Further,  AeroCentury  shall provide to each Bank (a) a Secretary's  Certificate
dated the date of this Amendment certifying and attaching copies of its Articles
of  Incorporation  and Bylaws as  currently  in effect,  evidence  of  corporate
authorization of this Amendment and the Agreement as amended, and the signatures
of the officer or officers  authorized to execute and deliver this Amendment and
the  Note to  Sanwa  Bank of  California,  (b) good  standing  certificates  for
AeroCentury  Corp.  in  California  and  Delaware,  (c)  the  legal  opinion  of
Christopher  B.  Tigno,  Esq.,  General  Counsel  to  AeroCentury,  in form  and
substance satisfactory to each Bank, and (d) such other documents and agreements
as any Bank shall reasonably request.

         16.  Representations  and Warranties.  AeroCentury  hereby restates the
representations and warranties made in the Agreement,  including but not limited
to Article 3 thereof,  on and as of the date  hereof as if  originally  given on
this date.

         17. Covenants. AeroCentury hereby represents and warrants that it is in
compliance  and has  complied  with  each and  every  covenant  set forth in the
Agreement  (including this  amendment),  including but not limited to Articles 5
and 6 thereof, on and as of the date hereof.

         18.   Affirmation.   AeroCentury   hereby   affirms  its  absolute  and
unconditional  promise to pay to the Banks the Loans and all other  amounts  due
under the Agreement and any other Loan Document on the maturity date(s) provided
in the Agreement or any other Loan  Document,  as such  documents may be amended
hereby.

         19. Effect of Amendment.  This  Amendment  amends the Agreement only to
the extent and in the manner  herein set forth,  and in all other  respects  the
Agreement is ratified and confirmed.

         20.  Amendment of Rio Sul Lease.  AeroCentury  has amended the Aircraft
Operating  Lease  Agreement  No.  AOLA  1364.007  with Rio Sul  Servicos  Aereos
Regionais  S.A.,  copies of which have been furnished to each of the Banks.  The
Lease  Agreement as amended shall be deemed to be an Eligible Lease for purposes
of the Agreement notwithstanding the amendment if the Lease as amended otherwise
qualifies as an Eligible Lease.



<PAGE>



         21. Re-Funding of Loans.  Promptly  following the effectiveness of this
Amendment  including but not limited to the delivery to Sanwa Bank of California
of its Note as contemplated  above,  the Agent shall coordinate with each of the
Banks  (a) to  provide  for  funding  by Sanwa  Bank of  California  of Loans to
AeroCentury under the Credit Agreement,  as amended,  equal to its proportionate
share of the aggregate principal amount of Loans then outstanding to AeroCentury
based on its Revolving Loan  Commitment  Percentage  and (b)  application of the
proceeds of such Loans to repayment to  California  Bank & Trust and First Union
National  Bank,  in its  individual  capacity,  of Loans by each of them then in
effect  such  that the  aggregate  Loans  of each  Bank  shall  not  exceed  the
proportionate  share  of  each  Bank  based  on its  Revolving  Loan  Commitment
Percentage applied to the aggregate principal amount of outstanding Loans by the
Banks to AeroCentury on such date.

         22.  Counterparts.  This  Amendment  may be  signed  in any  number  of
counterparts, each of which shall be an original, with the same effect as if the
signatures hereto were upon the same instrument.

         IN WITNESS WHEREOF,  the parties hereto have each caused this Amendment
to be duly  executed  by their duly  authorized  representatives  as of the date
first above written.


                             AEROCENTURY CORP.




                        By ______________________________



                            FIRST UNION NATIONAL BANK



                                               By ______________________________
                                                          Hugh W. Connelly
                                                          Vice President



                             CALIFORNIA BANK & TRUST



                                               By ______________________________
                                                     Thomas C. Paton, Jr.
                                                     Vice President &
                                                     Senior Relationship Manager


<PAGE>



                                               SANWA BANK CALIFORNIA



                                               By ______________________________
                                                        Michael Sullivan
                                                        Vice President


<PAGE>




                                                     EXHIBIT A

                       BANKS' COMMITMENTS AND PERCENTAGES



<TABLE>
<S>                                        <C>                                  <C>
        Bank                                Commitment                         Percentage


First Union National Bank                   $15,000,000                          50.00%
Transportation and Leasing Division
FC 1-8-11-24
1339 Chestnut Street
Philadelphia, PA  19107
FAX No. (215) 786-7704

California Bank & Trust                     $7,500,000                           25.00%
320 California Street
Suite 600
San Francisco, CA 94104
FAX No. (415) 296-9617

Sanwa Bank of California                    $ 7,500,000                          25.00%
444 Market Street, 23rd Floor
San Francisco, CA 94111
FAX No. (415)
</TABLE>


<PAGE>




                                   SCHEDULE I

                               DISCLOSURE SCHEDULE

Section 3.2  Stock Ownership

  AeroCentury Corp.: Principal Stockholders

         Class             Total Authorized          Total Issued

Common                     3,000,000                           1,606,557

Preferred Stock             2,000,000                               -0-
         Series A             100,000                               -0-
         undesignated       1,900,000                               -0-

In  connection  with the adoption of a  shareholders  rights  plan,  AeroCentury
issued  rights to its  shareholders  as of April 23, 1998,  entitling  each such
shareholder the right to purchase 1/100th of a share of Series A Preferred Stock
for each share of Common Stock held by the shareholder.

Principal Shareholders

To AeroCentury=s best knowledge,  the only shareholder of AeroCentury that holds
5% or more of the Common Stock of AeroCentury is JetFleet  Holding Corp.,  which
holds 147, 667 shares of Common Stock or approximately 9.2% of that class.

Section 3.3 Litigation

None

Section 3.5 Material Adverse Changes

None

Section 3.7 Taxes

None

Section 3.12 Subsidiaries

None

Section 3.13 Liens

None