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                                                                    Exhibit 10.4

                                                                       EXHIBIT B

                               SECURITY AGREEMENT


        THIS SECURITY AGREEMENT (this "Agreement") is made as of March 30, 2000,
by and between CRONOS GLOBAL INCOME FUND XVI, L.P., a California limited
partnership (the "Debtor"), and IBJ WHITEHALL BUSINESS CREDIT CORPORATION (the
"Secured Party").


                              W I T N E S S E T H:

        WHEREAS, the Debtor, Cronos Containers Limited and the Secured Party
have entered into a Note Purchase Agreement dated as of the date hereof (the
"Note Purchase Agreement"), relating to the offer and sale of Secured Notes due
2006 (the "Notes") and is obligated thereunder to enter into this Agreement to
secure the due and punctual payment of the obligations of the Debtor under the
Notes and the other Purchase Documents (as defined in the Note Purchase
Agreement); and

        WHEREAS, under the terms and conditions and subject to the exceptions
hereinbelow provided, the Debtor is granting the Secured Party and its
registered assigns, as holders of the Notes (collectively, the "Holders"), a
security interest in the Collateral (as defined herein).

        NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:

        1. SECURITY INTEREST IN THE COLLATERAL. For value received, and to
induce the Secured Party to purchase the Notes, Debtor hereby grants and assigns
to the Secured Party, as security for all present and future obligations and
liabilities of the Debtor under the Notes, this Agreement and the other Purchase
Documents (collectively, the "Obligations"), a security interest in, and lien
on, all of the Debtor's right, title and interest in and to:

               (a) all standard and specialized marine cargo containers and all
improvements, additions, parts, fittings, accessories, special tools, and
attachments and accessions now or hereafter affixed thereto or used in
connection therewith and all substitutions and replacements thereof (the
"Containers");

               (b) all leases, management agreements, sale and purchase
agreements, instruments, invoices, orders, documents of title and bills of sale
relating to the Containers (including, without limitation, the Leasing Agent
Agreement (as defined in the Note Purchase Agreement)) and all rights to
exercise any election or option or to make any decision or determination or to
give or receive any notice, consent, waiver or approval or to take any other
action under or in respect of any of the foregoing documents;


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               (c) all general intangibles, rights to payment, tolls, rents,
issues, profits, revenues, income, accounts receivable, contract rights and
proceeds of any kind (including, without limitation, insurance, disposition
proceeds and condemnation awards) with respect to or on account of the
Containers or the Leasing Agent Agreement;

               (d) all rights, claims and causes of action against the
manufacturer or any other party, by contract or otherwise, in respect of any
defect in any of the Containers;

               (e) (i) the Money Market Account, MMA Account No. 30865757,
maintained by the Debtor with IBJ Whitehall Bank & Trust Company (the
"Depository") representing money and funds currently on deposit by the Debtor
with the Depository in the amount of $750,000 (the "Account"), or any account
both now and hereafter opened in substitution or replacement for, or as a
renewal, extension, reissue or roll-over of such Account or as a reinvestment of
the money or funds on deposit thereto, (ii) all moneys and funds now and
hereafter deposited to such account or payable thereon, and (iii) all interest,
dividends, cash, income or other property now or hereafter payable or
distributable under, on, to or by reason of, such Account;

               (f) all instruments, books and records maintained by or for the
Debtor concerning any of the foregoing; and

               (g) any and all cash and non-cash proceeds of the foregoing;

in each case, wherever located and whether now owned or hereafter created or
acquired by the Debtor (collectively, the "Collateral").

        The Debtor agrees that the Secured Party shall have the sole power of
access and withdrawal from the Account. The Debtor shall deliver or promptly
cause to be delivered to the Secured Party an acknowledgment duly executed and
delivered by the Depository and in form and content satisfactory to the Secured
Party under which, among other things, the Depository will accept and confirm
notice of the Secured Party's security interest in the Account. Unless and until
an Event of Default shall have occurred and is continuing, the Debtor shall be
entitled to receive and retain any and all interest, income or dividends paid in
cash on the Account on a quarterly basis. Upon the occurrence and during the
continuance of an Event of Default, all such rights of the Debtor to receive
interest, income or dividends shall cease, and all such rights shall thereupon
become vested in the Secured Party as Collateral, and the Secured Party shall
have the sole and exclusive right and authority to receive and retain such
interest, income or dividends. All interest, income or dividends which are
received by the Debtor contrary to the provisions hereof shall be received in
trust for the benefit of the Secured Party, shall be segregated from other
property or funds of the Debtor and shall be forthwith delivered to the Secured
Party in the same form as so received with any necessary endorsement which the
Debtor agrees to make.

        2. WARRANTIES, COVENANTS AND AGREEMENTS OF THE DEBTOR. The Debtor
warrants, covenants and agrees that:


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               (a) Except for the security interest granted hereby, the Debtor
is, and as to Collateral acquired after the date hereof the Debtor shall be at
the time of acquisition, the owner and holder of the Collateral free from any
Lien (as defined in the Note Purchase Agreement) and covenants that at all times
the Collateral will be and remain free of all Liens, except Permitted Liens (as
defined in the Note Purchase Agreement); the Debtor has full power and lawful
authority to enter into this Agreement and to grant to the Secured Party a
security interest in the Collateral as herein provided; and the Debtor will
defend the Collateral against all claims and demands of all persons at any time
claiming the same or any interest therein.

               (b) The Debtor has not heretofore signed any financing statement
or security agreement covering any of the Collateral, and no such financing
statement or security agreement is now on file in any public office.

               (c) The Debtor authorizes the Secured Party to file, in its
discretion, financing statements signed only by the Secured Party covering the
Collateral and hereby appoints the Secured Party as the Debtor's
attorney-in-fact to sign and file any such financing statements covering the
Collateral. At the request of the Secured Party, the Debtor will join the
Secured Party in executing such documents as the Secured Party may reasonably
determine from time to time to be necessary or desirable under provisions of the
laws of the States of California and New York and of any other jurisdiction from
time to time identified by the Secured Party and, without limiting the
generality of the foregoing, the Debtor will pay the costs of filing or
recording the same or of filing or recording this Agreement in such public
offices at any time and from time to time, whenever filing or recording of any
such financing statement or of this Agreement is deemed by the Secured Party to
be necessary or desirable. In connection with the foregoing, it is agreed and
understood between the parties hereto (and the Secured Party is hereby
authorized to carry out and implement this agreement and understanding and
Debtor hereby agrees to pay the costs thereof) that the Secured Party may at any
time or times file as a financing statement any counterpart, copy or
reproduction of this Agreement.

        3. FURTHER ASSURANCES. The Debtor agrees to take such actions and to
execute such writings as the Secured Party may reasonably request to further
confirm and assure the security interest granted hereby in the Collateral and to
assist the realization thereon.

        4. EVENTS OF DEFAULT. The occurrence of any "Event of Default" as
defined in the Note Purchase Agreement shall constitute an "Event of Default"
hereunder.

        5. RIGHTS AND REMEDIES OF THE SECURED PARTY AND DEBTOR RELATED TO THE
COLLATERAL. Until the occurrence of an Event of Default and subject to the
provisions of the Note Purchase Agreement, the Debtor shall be entitled to
exercise any and all rights pertaining to the Collateral or any part thereof for
any purpose not inconsistent with the terms of this Agreement or the Note
Purchase Agreement and shall receive all income from or interest on the
Collateral, and if the Secured Party receives any such income or interest prior
to the occurrence of an Event of Default, the Secured Party shall pay the same
promptly to the Debtor.

        Upon the occurrence and continuance of an Event of Default, the Secured
Party may exercise with reference to the Collateral any or all of the rights and
remedies of a secured party under


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applicable law, including, without limitation, the right and power to sell at
public or private sale or sales or otherwise dispose of or otherwise utilize the
Collateral and any part or parts thereof in any manner authorized or permitted
under applicable law after default by a debtor and to apply the proceeds thereof
toward payment of the Obligations. Specifically and without limiting the
foregoing, the Secured Party shall have the right to take possession of and to
exercise all rights of the Debtor pertaining to all or any part of the
Collateral or any security therefor and of all books, records, papers and
documents of Debtor or in Debtor's possession or control relating to the
Collateral which are not already in the Secured Party's possession and for such
purpose may enter upon any premises upon which any of the Collateral or any
security therefor or any of said books, records, papers and documents are
situated and remove the same therefrom without any liability for trespass or
damages thereby occasioned.

        Upon the occurrence and continuance of an Event of Default, the Debtor
shall hold in trust for Secured Party all rents and other payments thereafter
received by Debtor with respect to the Collateral, which funds shall be
delivered to the Secured Party immediately upon receipt thereof by the Debtor in
the same form as received except for any necessary endorsement of the Debtor. To
the extent permitted by law, Debtor expressly waives any notice of sale or other
disposition of the Collateral and all other rights or remedies of Debtor or
formalities prescribed by law relative to the sale or other disposition of the
Collateral or the exercise of any other right or remedy of the Secured Party
existing after default hereunder; and to the extent any such notice is required
and cannot be waived, Debtor agrees that if such notice is given in the manner
provided herein at least ten (10) days before the time of the sale or
disposition, such notice shall be deemed reasonable and shall fully satisfy any
requirement for giving of said notice. The Secured Party shall not be obligated
to make any sale of Collateral regardless of notice of sale having been given.
The Secured Party may adjourn any public or private sale.

        The Secured Party shall never be under any obligation to collect,
attempt to collect, protect or enforce the Collateral or any security therefor,
which the Debtor agrees and undertakes to do at the Debtor's expense, but the
Secured Party may do so in its discretion at any time after the occurrence of an
Event of Default and at such time the Secured Party shall have the right to take
any steps by judicial process or otherwise it may deem proper to effect the
collection of all or any portion of the Collateral or to protect or to enforce
the Collateral or any security therefor. All expenses (including, without
limitation, attorneys' fees and expenses) incurred or paid by the Secured Party
in connection with or incident to any collection or attempt to collect the
Collateral or actions to protect or enforce the Collateral, the Purchase
Documents or any security therefor shall be borne by the Debtor or reimbursed by
the Debtor to the Secured Party upon demand. The proceeds received by the
Secured Party as a result of any such actions in collecting or enforcing or
protecting the Collateral and the Purchase Documents shall be held by the
Secured Party without liability for interest thereon and shall be applied by the
Secured Party as provided herein.

        In the event the Secured Party shall pay any taxes, assessments,
interests, costs, penalties or expenses incident to or in connection with the
collection of the Collateral or protection or enforcement of the Collateral, the
Purchase Documents or any security therefor, the Debtor, upon demand of the
Secured Party, shall pay to the Secured Party the full amount thereof, and this
Agreement shall operate as security therefor as fully and to the same extent as
it operates as security


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for payment of the other Obligations secured hereunder, and for the enforcement
of such repayment the Secured Party shall have every right and remedy provided
for enforcement of payment of the Obligations.

        The Secured Party shall not have any responsibility for (i) ascertaining
or taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relative to any Collateral, whether or not the Secured
Party has or is deemed to have knowledge of such matters, or (ii) taking any
necessary steps to preserve rights against any parties with respect to any
Collateral.

        6. PAYMENTS UPON DEFAULT. Monies received by the Secured Party through
the enforcement of the security interests granted hereunder in favor of the
Secured Party for the benefit of the Holders will be applied: first, to pay any
amounts due to the Secured Party hereunder or under any of the other Purchase
Documents; second, to pay interest (including late charges, if any) due on the
Notes; and third, to pay the outstanding principal of the Notes. Any amounts and
any Collateral remaining after such application and after payment of all of the
Obligations in full shall be paid or delivered to Debtor, its successor or
assigns, or as a court of competent jurisdiction may direct.

        7. TERMINATION. This Agreement and the security interest created
hereunder shall terminate when all the Obligations have been indefeasibly paid
in full, at which time the Secured Party shall execute and deliver to the
Debtor, at Debtor's cost and expense, all documents which the Debtor shall
reasonably request to evidence termination of such security interest.

        8. ABSOLUTE INTEREST.

               (a) All rights of the Secured Party hereunder, and all
obligations of the Debtor hereunder, shall be absolute and unconditional
irrespective of (i) any lack of validity or enforceability of any provision of
this Agreement, any agreement with respect to the Obligations or any other
agreement or instrument relating to any of the foregoing, (ii) any change in the
time, manner or place of payment of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to any departure
from this Agreement or any other agreement or instrument relating to the
foregoing, (iii) any exchange, release or nonperfection of any Collateral, or
any release or amendment or waiver of or any consent to or departure from any
guarantee, for all or any of the Obligations, or (iv) any other circumstance
which might constitute a defense available to, or a discharge of, the Debtor in
respect of the Obligations or this Agreement.

               (b) This Agreement shall not be construed as relieving Debtor
from full liability on the Obligations and any and all future and other
indebtedness secured hereby and for any deficiency thereon.

               (c) The Secured Party is hereby subrogated to all of Debtor's
interests, rights and remedies in respect to the Collateral and all security now
or hereafter existing with respect thereto and all guaranties and endorsements
thereof and with respect thereto.

        9. NOTICES. Any communication, notice or demand to be given hereunder
shall be duly given if delivered or mailed by certified mail, or if delivered by
facsimile transmission (with


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telephonic confirmation of receipt) within one day of such delivery, to the
Debtor or the Secured Party at the respective address set forth below, or such
other address as shall be designated by any party hereto to each other party
hereto in a written notice delivered in accordance with the terms hereof:

Debtor:               Cronos Global Income Fund XVI, L.P.
                      c/o Cronos Capital Corp.
                      444 Market Street
                      San Francisco, CA 94111
                      Telephone No.: 415-677-8990
                      Facsimile No.: 415-677-9196
                      Attention: President

Secured Party:        IBJ Whitehall Business Credit Corporation
                      One State Street
                      New York, New York 10004
                      Telephone No.: 212-858-2000
                      Facsimile No.: 212-952-1629
                      Attention: Vice President / Operations

        10. NO WAIVER; CUMULATIVE RIGHTS. No failure on the part of the Secured
Party to exercise, and no delay in exercising, any right, remedy or power
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise by the Secured Party of any right, remedy or power hereunder preclude
any other or future exercise of any other right, remedy or power. Each and every
right, remedy and power hereby granted to the Secured Party or allowed it by law
or other agreement shall be cumulative and not exclusive the one of any other,
and may be exercised by the Secured Party from time to time.

        11. APPLICABLE LAW; CONSENT TO JURISDICTION. THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO ITS CONFLICT OF LAWS RULES (EXCEPT TITLE 14, SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW), EXCEPT TO THE EXTENT THAT THE LAWS OF ANOTHER
JURISDICTION MANDATORILY GOVERN THE PERFECTION AND THE EFFECT OF PERFECTION OR
NON-PERFECTION OF THE SECURITY INTEREST CREATED BY THIS AGREEMENT.

        Debtor hereby irrevocably submits to the non-exclusive jurisdiction of
any New York state or federal court sitting in the Borough of Manhattan in the
City of New York, New York, in any action or proceeding arising out of or
relating to this Agreement, and the Debtor hereby irrevocably agrees that all
claims in respect of such action or proceeding may be heard and determined in
such New York state or federal court. The Debtor hereby irrevocably waives, to
the fullest extent that it may legally do so, the defense of an inconvenient
forum to the maintenance of such action or proceeding and agrees that a final
judgment in any such action or proceeding shall be conclusive to the fullest
extent permitted by law and may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by law. The Debtor irrevocably
designates and appoints Dennis J.


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Tietz, President of the general partner of the Company (and the successors in
such office) as its agent to receive on its behalf service of all process
brought against it with respect to any such proceeding in any such court in the
State of New York, such service being hereby acknowledged to be effecting and
binding upon it in every respect. If for any reason such agent shall cease to be
available to act as such, then the Debtor shall promptly designate a new agent
for such purpose in New York, New York.

        12. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.

        13. AMENDMENT. The Secured Party and the Debtor may agree in writing to
amend this Agreement, or waive any of the provisions of this Agreement.

        14. ENTIRE AGREEMENT. This Agreement and the other Purchase Documents
constitute the entire understanding between the Secured Party and the Debtor
with respect to the subject matter hereof and supersede any prior agreements,
written or oral, with respect thereto.

        15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Debtor and its successors and permitted assigns and shall inure to the benefit
of the Secured Party and its successors and assigns. This Agreement may not be
assigned by the Debtor.

        16. SEVERABILITY. Any provision of this Agreement 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, which shall remain in full force and
effect, or affecting the validity or enforceability of such provision in any
other jurisdiction.

        17. WAIVERS OF JURY TRIAL. EACH OF THE DEBTOR AND THE SECURED PARTY
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE EXTENT PERMITTED
BY APPLICABLE LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE
ARISING UNDER OR RELATED TO THIS AGREEMENT OR THE OTHER PURCHASE DOCUMENTS AND
AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A
JURY.


                            [SIGNATURES ON NEXT PAGE]


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

                                    CRONOS GLOBAL INCOME FUND XVI, L.P.

                                    By: CRONOS CAPITAL CORP., as General Partner


                                        By: /s/ DENNIS J. TIETZ
                                           -------------------------------------
                                           Dennis J. Tietz
                                           President


                                    IBJ WHITEHALL BUSINESS CREDIT CORPORATION


                                    By: /s/ Robert F. Brown
                                       -----------------------------------------
                                    Name: Robert F. Brown
                                    Title: Sr. Vice President




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