EXHIBIT 4.1

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                           LOAN AND SECURITY AGREEMENT

                            DATED AS OF JULY 15, 2003


                                 BY AND BETWEEN


                         DRKW HOLDINGS, INC., AS LENDER,

                                       AND

                      BELROSE CAPITAL FUND LLC, AS BORROWER




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                                TABLE OF CONTENTS

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1.       DEFINITIONS...........................................................1

2.       THE LOAN..............................................................9

         2.1      Loan.........................................................9

         2.2      Note.........................................................9

         2.3      Borrowing Notice............................................10

         2.4      Interest....................................................10

         2.5      Alternate Rate of Interest..................................10

         2.6      Default Interest............................................10

         2.7      Repayment and Termination...................................11

         2.8      Optional Prepayments........................................11

         2.9      Manner of Payments..........................................11

         2.10     Change in Circumstances.....................................11

3.       ESTABLISHMENT OF SECURITIES ACCOUNT; PLEDGE OF COLLATERAL............13

         3.1      Establishment of the Securities Account.....................13

         3.2      Other Account Provisions....................................13

4.       PLEDGE AND SECURITY AGREEMENT........................................13

         4.1      Grant of Security Interest..................................13

5.       SPECIAL AGREEMENTS WITH RESPECT TO PLEDGED SECURITIES................14

         5.1      Liquidation of Pledged Securities...........................14

6.       REPRESENTATIONS AND WARRANTIES.......................................15

         6.1      Collateral..................................................15

         6.2      Due Organization............................................16

         6.3      Power and Authority; Binding Agreements.....................16

         6.4      No Violation................................................16

         6.5      No Consents.................................................16

         6.6      No Litigation...............................................17

         6.7      Compliance with Laws........................................17

         6.8      No Material Adverse Change..................................17

         6.9      Solvency....................................................17

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         6.10     Organization; Place of Business.............................17

         6.11     Full Disclosure.............................................17

         6.12     Sole Business...............................................17

         6.13     Investment Company Act......................................17

         6.14     Private Placement Memorandum................................18

         6.15     Pledged Securities..........................................18

         6.16     Subsidiaries................................................18

         6.17     Belrose Realty Corporation..................................18

         6.18     Preferred Equity Interests..................................18

7.       AFFIRMATIVE COVENANTS................................................18

         7.1      Maintenance of Existence....................................19

         7.2      Compliance with Laws........................................19

         7.3      Payment of Taxes............................................19

         7.4      Books and Records...........................................19

         7.5      Audit Rights................................................19

         7.6      Maintenance of Collateral...................................19

         7.7      Notices.....................................................19

         7.8      Bankruptcy..................................................19

         7.9      Financial and Credit Information............................20

         7.10     Financial Statements........................................20

         7.11     Report; Compliance Certificate..............................21

         7.12     Liens.......................................................21

         7.13     Government Approval.........................................21

         7.14     Use of Proceeds.............................................21

         7.15     Valuation Covenants.........................................21

         7.16     Formation of Additional Subsidiaries........................22

8.       NEGATIVE COVENANTS OF THE BORROWER...................................22

         8.1      No Indebtedness.............................................22

         8.2      No Liens....................................................22

         8.3      No Mergers, Etc.............................................23

         8.4      No New Business.............................................23

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         8.5      No Trading..................................................23

         8.6      No Distributions............................................23

         8.7      No Amendments...............................................23

         8.8      Manager, Investment Adviser and Custodian...................24

         8.9      Limitation on Restriction on Subsidiary Dividends
                  and Other Distributions, etc................................24

9.       CONDITIONS PRECEDENT TO CLOSING......................................24

         9.1      Conditions Precedent to Loan................................24

10.      DEFAULTS; REMEDIES...................................................26

         10.1     Events of Default...........................................26

         10.2     Remedies....................................................28

11.      The INVESTMENT MANAGER...............................................29

         11.1     Investment Manager..........................................29

12.      MISCELLANEOUS........................................................29

         12.1     Expenses....................................................29

         12.2     Cost of Collection..........................................29

         12.3     Indemnities.................................................29

         12.4     Delay in Enforcement; No Waiver.............................31

         12.5     Statements and Notices......................................31

         12.6     Waivers.....................................................31

         12.7     Non-Recourse................................................31

         12.8     Further Assurances..........................................32

         12.9     Successors and Assigns......................................32

         12.10    GOVERNING LAW AND JURISDICTION..............................32

         12.11    Effectiveness...............................................33

         12.12    WAIVER OF JURY TRIAL........................................33

         12.13    Amendments..................................................34

         12.14    Headings....................................................34

         12.15    Severability................................................34

         12.16    Entire Agreement............................................34

         12.17    Execution in Counterparts...................................34

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         12.18    Confidentiality.............................................34

         12.19    Acknowledgment and Acceptance of Investment Manager.........35


EXHIBITS

Exhibit A       Form of Note
Exhibit B       Form of Report
Exhibit C       Opinion of Counsel
Exhibit D       Form of Borrowing Notice
Exhibit E       Form of Compliance Certificate
Exhibit F       Form of Account Control Agreement
Exhibit G       Form of Intercreditor Agreement
Exhibit H       Form of Amendment to Swap Agreement

SCHEDULES

Schedule 2.8      Optional Prepayment Conditions

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                           LOAN AND SECURITY AGREEMENT

     LOAN AND SECURITY  AGREEMENT  dated as of July 15, 2003 (as the same may be
amended,  supplemented or otherwise  modified,  renewed or replaced from time to
time,  the  "Agreement"),  by and between  Belrose  Capital Fund LLC, a Delaware
limited liability  company (the "Borrower") and DrKW Holdings,  Inc., a Delaware
corporation,  as lender (the "Lender"). This Agreement establishes the terms and
conditions that will govern the Loan from the Lender to the Borrower.

                                    RECITALS

     All terms not otherwise defined above or in this Introductory Statement are
as defined in Article 1 hereof, or as defined elsewhere herein.

     The Borrower has requested  the Lender to make  available to the Borrower a
term loan in the aggregate principal amount of $168,000,000. The Borrower wishes
to pledge the Collateral to the Lender as security for the Loan.

     Pursuant to the  Investment  Servicing  and  Administration  Agreement  (as
hereinafter  defined),  the Lender has  appointed  Wells  Fargo Bank  Minnesota,
National  Association  as  investment  manager to, among other  things,  enforce
certain rights of the Lender under the terms of this Agreement.

     The  Borrower is  entering  into the  Overflow  Agreement  (as  hereinafter
defined) concurrently herewith.

     The  Obligations  are to be  secured  by a pledge  by the  Borrower  of the
Collateral (as hereinafter defined),  including securities owned by the Borrower
and held in the Securities  Account (as  hereinafter  defined)  established  and
maintained with Investors Bank & Trust Company.

     Subject to the terms and conditions set forth herein, the Lender is willing
to make the Loan to the Borrower.

     Accordingly, the parties hereto hereby agree as follows:

1.   DEFINITIONS

     For  the  purposes  hereof  unless  the  context  otherwise  requires,  the
following terms shall have the meanings indicated.  Unless the context otherwise
requires,  any of the following terms may be used in the singular or the plural,
depending on the reference:

     "1934 Act" shall have the meaning given to such term in Section 5.1(f).

     "Acceptable  Securities"  shall have the  meaning  set forth in the Private
Placement Memorandum.


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     "Account Control  Agreement" shall mean the Account Control Agreement among
the Borrower,  the Lender, the Swap Provider, the Overflow Agent, the Investment
Manager and the Custodian of even date  herewith,  substantially  in the form of
Exhibit F hereto.

     "Affiliate"  shall mean with respect to any Person,  any other Person which
directly or indirectly  controls,  is  controlled by or is under common  control
with such  Person.  A Person  shall be deemed to control a Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such other Person,  whether through  ownership of
voting securities, by contract or otherwise.

     "Alternate  Rate"  shall  mean a  floating  rate of  interest  equal to the
Federal Funds  Effective  Rate plus 0.75% per annum.  The  Alternate  Rate shall
change when and as the Federal Funds Effective Rate changes. A written statement
delivered  to the  Borrower  by  the  Lender  of the  Alternate  Rate  shall  be
conclusive evidence of such rate.

     "Amendment  to  Swap  Agreement"  shall  mean  the  Amendment  to the  Swap
Agreement, substantially in the form of Exhibit H hereto, among the Borrower and
the Swap Provider.

     "Applicable Law" shall mean all provisions of statutes,  rules, regulations
and orders of the United States, any state thereof or municipality  therein, the
Federal  Republic  of  Germany  or of any  foreign  governmental  body or of any
regulatory  agency  applicable  to the  Person in  question,  and all orders and
decrees of all courts and  arbitrators  in  proceedings  or actions in which the
Person in question is a party.

     "Belvedere Capital" shall mean Belvedere Capital Fund Company LLC.

     "Borrowing" shall mean the Loan made by the Lender.

     "Borrowing  Notice"  shall have the  meaning  given to such term in Section
2.3.

     "BRC" shall mean Belrose Realty Corporation, a Delaware corporation.

     "Business  Day"  means a day  (other  than a  Saturday  or Sunday) on which
deposits  in  Dollars  and any other  relevant  currency  may be dealt in on the
London Interbank Market and banks are open in London and New York City.

     "Cash Equivalents" shall mean (i) marketable securities issued, or directly
and fully  guaranteed or insured,  by the United States of America or any agency
or  instrumentality  thereof  (provided  that the full  faith and  credit of the
United States of America is pledged in support thereof) having maturities of not
more than twelve months from the date of acquisition, (ii) time deposits, demand
deposits,  certificates  of deposit,  acceptances or prime  commercial  paper or
repurchase  obligations  for  underlying  securities  of the types  described in
clause  (i)  entered  into  with,  any Lender or any  commercial  bank  having a

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short-term  deposit rating of at least A-2 or the equivalent thereof by Standard
& Poor's  Corporation  or at least  P-2 or the  equivalent  thereof  by  Moody's
Investors  Service,  Inc., (iii) commercial paper with a rating of A-1 or A-2 or
the  equivalent  thereof by Standard & Poor's  Corporation  or P-1 or P-2 or the
equivalent thereof by Moody's Investors Service,  Inc. and in each case maturing
within  twelve months after the date of  acquisition  or (iv) any mutual fund or
other pooled  investment  vehicle  which  invests  principally  in the foregoing
obligations.

     "Closing  Date" shall mean the  Business  Day on which (i) the Lender shall
have received  counterparts  of this Agreement  executed by the Borrower and the
Lender and (ii) all conditions  precedent to the making of the Loan as set forth
in Article 9 have been satisfied or waived.

     "Collateral" shall mean all personal property of the Borrower, tangible and
intangible,  wherever  located or situated  and  whether now owned or  hereafter
acquired  or  created,   including  without  limitation,  all  goods,  accounts,
documents,  instruments, chattel paper, cash, bank accounts, inventory, contract
rights, general intangibles,  equipment,  securities entitlements and securities
(including,  but not limited to the Pledged Securities) and financial assets and
any  proceeds  thereof  or income  therefrom,  specifically  including,  but not
limited to:

     (a) the Securities Account and all stocks, bonds, financial assets or other
securities (whether certificated or uncertificated) or property now or hereafter
in the Securities Account and all security entitlements in respect thereof;

     (b) all credit balances,  accounts,  contract rights,  general intangibles,
instruments, documents, money, certificates of deposit and all other property of
whatever kind or description now or hereafter in the Securities Account;

     (c) all  rights to any  securities  described  in  confirmations  and other
reports  delivered  by  Custodian  to the  Borrower  or  the  Secured  Party  in
connection with the Securities Account, which securities are deemed to be in the
Securities Account for purposes of this Agreement;

     (d) all dividends,  interest and proceeds of any of the property  described
in clauses (a), (b) or (c) above, including without limitation, proceeds of such
proceeds;

     (e) all its right, title and interest in and to all monies,  debts, claims,
securities and other property deposited with or owed or owing to the Borrower by
any member of the Merrill Lynch Group; and

     (f) all its rights,  title and interest in and to bullion,  precious metals
or other trades made on behalf of the Borrower (directly or indirectly);

provided,  however,  that assets encumbered by a lien to a person other than the
Secured  Party (or any secured  party under the Swap  Agreement and the Overflow
Agreement) not otherwise  prohibited by Section 8.2 of this  Agreement  shall be
excluded from this  definition of Collateral  for such period as the  underlying

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obligation which is secured by such lien exists; and provided further,  that the
term  Collateral  as used herein  shall not include any  preferred  stock of BRC
issued  from time to time which are  temporarily  held by the  Borrower  pending
donation to one or more charitable  organizations as contemplated by the Private
Placement Memorandum.

     "Compliance  Certificate"  shall  have the  meaning  given to such  term in
Section 2.3.

     "Custodian" shall mean Investors Bank & Trust Company.

     "Default" shall mean any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.

     "Designated  Funds" shall include Belair Capital Fund LLC, Belcrest Capital
Fund LLC, Belshire Capital Fund LLC,  Belvedere Equity Fund LLC, Belport Capital
Fund LLC and Belmar Capital Fund LLC.

     "Dollars"  or "$" shall mean the lawful  currency  of the United  States of
America.

     "Event of  Default"  shall have the  meaning  given to such term in Section
10.1.

     "Excluded  Real  Estate  Investment"  shall  mean any  direct  or  indirect
investment  in real  property  of any type made by the  Borrower,  BRC or any of
their subsidiaries, other than Preferred Equity Interests.

     "Existing  Credit  Agreement"  shall mean the Loan and Security  Agreement,
dated as of March 19, 2002 among  Merrill  Lynch  Mortgage  Capital,  Inc.,  the
Borrower and the Swap Provider.

     "Federal Funds  Effective  Rate" shall mean for any day, the rate per annum
(expressed as a decimal) equal to the weighted average of the rates on overnight
federal funds  transactions  with members of the Federal Reserve System arranged
by federal funds  brokers on such day, as published by the Federal  Reserve Bank
of New York on the Business Day next succeeding such day; provided,  (i) if such
day is not a Business Day, the Federal Funds  Effective  Rate for such day shall
be such  rate on such  transactions  on the next  preceding  Business  Day as so
published on the next  succeeding  Business  Day, and (ii) if no such rate is so
published,  the Federal Funds  Effective Rate for such day shall be such rate of
interest as the Lender, using any reasonable method, shall determine.

     "Fundamental  Documents"  shall mean this Agreement,  the Note, the Account
Control  Agreement,  the Swap  Agreement and any other  ancillary  documentation
which is required to be or is otherwise  executed by the Borrower and  delivered
to the Lender or the Swap  Provider in  connection  with this  Agreement  or any
other Fundamental Document.

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     "GAAP" shall mean United States generally  accepted  accounting  principles
consistently applied (except for accounting changes in response to FASB releases
or other authoritative pronouncements).

     "Governmental  Authority" shall mean any federal, state, municipal or other
governmental department,  commission,  board, bureau, agency or instrumentality,
or any  court,  in  each  case  whether  of the  United  States  or any  foreign
jurisdiction.

     "Indebtedness" of any Person means (a) any liability of such Person (i) for
borrowed money,  or under any  reimbursement  obligation  related to a letter of
credit or bond or performance bond facility,  or (ii) evidenced by a bond, note,
debenture  or  other  evidence  of  indebtedness  (including  a  purchase  money
obligation)  representing  extensions of credit or issued in connection with the
acquisition of any business,  property, service or asset of any kind (other than
trade accounts  payable and securities  transaction  settlements in the ordinary
course of  business)  (iii) under swap,  cap or other  interest  rate or foreign
currency hedging agreements and options,  financial future contracts and options
on financial futures contracts or (iv) under margin accounts or other securities
transactions  conducted  by the  Borrower  on  margin or (v) with  respect  to a
capital  lease;  (b) any liability of others  either for any lease,  dividend or
letter of credit or for any  obligation  described in the  preceding  clause (a)
that (i) the Person has  guaranteed  or that is  otherwise  its legal  liability
(whether   contingent  or  otherwise  or  direct  or  indirect,   but  excluding
endorsements of negotiable instruments for deposit or collection in the ordinary
course of business) or (ii) is secured by any Lien, charge, easement,  mortgage,
pledge,  security interest or other encumbrance or any restriction or limitation
of any kind on any property or asset owned or held by that Person, regardless of
whether  the  obligation  secured  thereby  shall  have been  assumed by or is a
personal   liability  of  that  Person  and  (c)  any   amendment,   supplement,
modification,  deferral, renewal, extension or refunding of any liability of the
types referred to in clauses (a) and (b) above.

     "Intercreditor  Agreement" shall mean an Intercreditor  Agreement among the
Borrower,  the Lender, the Investment  Manager,  the Overflow Agent and the Swap
Provider,  substantially  in the form of  Exhibit G hereto or such other form as
may be acceptable to the Lender.

     "Interest  Payment  Date"  shall mean the 25th day of each month or if such
25th day is not a Business Day, the first  Business Day  immediately  following,
commencing July 25, 2003.

     "Interest  Period"  shall mean a period of  approximately  one month  which
begins on an  Interest  Payment  Date and ends on the next  succeeding  Interest
Payment Date,  except that the first Interest  Period shall begin on the Closing
Date and end on the first Interest  Payment Date.

     "Interest  Rate"  shall  mean a rate per  annum of  LIBOR,  reset  for each
Interest Period, plus 0.30%.

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     "Investment   Advisor"  shall  mean  Boston  Management  and  Research,   a
subsidiary of Eaton Vance Management.

     "Investment  Advisory Agreement" shall mean the agreement dated as of March
12, 2002 between the Borrower and the Investment Advisor.

     "Investment  Manager"  shall mean  Wells  Fargo  Bank  Minnesota,  National
Association,  in its  capacity  as  investment  manager  for the  Lender or such
successor Investment Manager as may be appointed by the Lender.

     "Investment   Servicing  and  Administration   Agreement"  shall  mean  the
Investment  Servicing and Administration  Agreement dated as of June 30, 2003 by
and between Wells Fargo Bank Minnesota,  National Association and DrKW Holdings,
Inc.

     "Lender"  shall mean the  financial  institution  whose name appears on the
signature  page of this  Agreement  and any  assignee of the Lender  pursuant to
Section 12.9.

     "LIBOR"  shall mean,  for each  Interest  Period,  the rate of interest per
annum  that is the U.S.  Dollar  London  Interbank  Offered  Rate for one  month
periods as  published on page BBAM by  Bloomberg  L.P. as of 11:00 a.m.,  London
time two Business  Days before the first day of such  Interest  Period.  If such
interest  rate is not  offered or  published  for any  period,  then during that
period LIBOR means the London  Interbank  Offered Rate for one month  periods as
published  in The Wall Street  Journal in its  regular  column  entitled  "Money
Rates" two Business Days before the first day of such Interest Period.

     "Lien" shall mean any mortgage, pledge, hypothecation,  assignment, deposit
arrangement,  encumbrance (excluding  restrictions on the transfer of securities
arising under Federal or state  securities laws or by reason of contract),  lien
(statutory or other),  preference,  priority or other security  agreement of any
kind or nature whatsoever (including,  without limitation,  any conditional sale
or other title retention agreement, any financing or similar statement or notice
filed under the Uniform Commercial Code or any other similar recording or notice
statute,  and any  lease  having  substantially  the same  effect  as any of the
foregoing).

     "Liquidation" shall have the meaning given to such term in Section 5.1(c).

     "Loan" shall mean collectively, the loan made by the Lender to the Borrower
under this Agreement pursuant to Section 2.1(i) and any loans made by the Lender
to the Borrower under this Agreement pursuant to Section 2.1(ii).

     "Manager" shall mean Eaton Vance Management.

     "Maturity Date" shall mean June 25, 2010, or such earlier date on which the
Loan shall become due in accordance with Section 10.2.

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     "Merrill  Lynch  Group"  shall  mean  Merrill  Lynch & Co.,  Inc.  ("MLC"),
together  with any company  (whether now existing or hereafter  formed) of which
MLC is or becomes a  Subsidiary  and all  companies  (whether  now  existing  or
hereinafter  formed or acquired)  including,  but not limited to, Merrill Lynch,
Pierce, Fenner & Smith Incorporated,  and any partnership,  association, firm or
other organization (whether now existing or hereafter formed or acquired) during
the period it is directly or  indirectly  owned or  controlled by MLC and/or any
such company and/or one or more of their Subsidiaries.

     "Note" shall have the meaning given to such term in Section 2.2.

     "Obligations"  shall mean the  obligations  of the Borrower to make due and
punctual  payment of principal  and interest on the Loan and all other  monetary
obligations  of the Borrower owed to the Lender or the Swap Provider  under this
Agreement, the Note, the Swap Agreement or any other Fundamental Document.

     "Operating Agreement" shall mean the Limited Liability Company Agreement of
the Borrower dated as of December 5, 2001.

     "Overflow  Agent" shall mean Merrill Lynch Mortgage  Capital,  Inc., in its
capacity as agent for the Lenders under the Overflow Agreement.

     "Overflow Agreement" shall mean the Loan and Security Agreement dated as of
July 15, 2003 by and among the Overflow Agent,  the Lenders referred to therein,
the Swap Provider and the Borrower.

     "Overflow  Exposure" shall have the meaning given such term in the Overflow
Agreement.

     "Person"  shall  include  any  individual,   company,  corporation,   firm,
partnership, joint venture, association, organization, trust, state or agency of
a state (in each case, whether or not having separate legal personality).

     "Pledged  Securities"  shall mean all securities and security  entitlements
held in the  Securities  Account,  including  but not limited to all  Qualifying
Assets and Acceptable  Securities,  and all shares of Belvedere  Capital and BRC
owned by the Borrower.

     "Portfolio"  shall  mean the  Tax-Managed  Growth  Portfolio,  an  open-end
management investment company.

     "Preferred Equity Interests" shall mean income-producing,  preferred equity
interests  issued by real estate  operating  partnerships  or limited  liability
companies  that are  affiliated  with  publicly  traded real  estate  investment
trusts.

     "Private  Placement   Memorandum"  shall  mean  the  Confidential   Private
Placement  Memorandum of the Borrower dated December 5, 2001 and any supplements
thereto.

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     "Qualifying  Assets"  shall mean any assets,  including  but not limited to
Preferred Equity Interests and Excluded Real Estate Investments  acquired by the
Borrower or BRC or other  subsidiaries  in order for the exchange of  Acceptable
Securities for shares of the Borrower to be non-taxable.

     "Regulation  D" shall mean  Regulation  D of the Board of  Governors of the
Federal Reserve System of the United States of America,  as from time to time in
effect, and all official rulings and interpretations thereunder or thereof.

     "Report" shall have the meaning given to such term in Section 7.11.

     "Required  Amount" shall mean an amount equal to the "Net Market Quotation"
(as hereinafter defined), if such amount is positive; provided, however, that if
and for so long as the principal  amount of the Loan  outstanding  shall be less
than the greater of (i)  $25,000,000  and (ii) 15% of the notional amount of all
Transactions  under the Swap  Agreement,  then the Required Amount shall mean an
amount equal to the sum of (x) 3.7% of the notional  amount of the  Transactions
under the Swap  Agreement  and (y) if  positive,  the  amount of the Net  Market
Quotation.  The "Net Market Quotation" is the sum of all Market Quotations (both
positive and negative) for all Transactions under the Swap Agreement;  provided,
that the Swap Provider need not obtain quotations from Reference  Market-Makers,
but shall determine the Market Quotation on the basis of their customary methods
of valuation  using  mid-market swap rates and a zero coupon yield curve for the
purpose of discounting to the present value. A positive  Market  Quotation shall
mean that the Swap  Provider  is exposed  to the  Borrower,  a  negative  Market
Quotation shall mean the Borrower is exposed to the Swap Provider. Terms used in
this  definition  and not  otherwise  defined in this  Agreement  shall have the
meaning ascribed to them in the Swap Agreement.

     "Secured Party" shall mean the Lender.

     "Securities  Account"  shall  mean the  securities  account,  number  4918,
established  with the Custodian which shall be known as the Belrose Capital Fund
LLC -  Collateral  Account  for DrKW  Holdings,  Inc.,  Merrill  Lynch  Mortgage
Capital,  Inc. and Merrill  Lynch  Capital  Services,  Inc." or such other title
acceptable to the Lender to reflect its interest  therein.  The Borrower agrees,
as a condition to the Lender's  obligation to make the Loan to place the Pledged
Securities in the Securities Account, subject to the terms and provisions of the
Account Control Agreement.

     "Security  Interest"  shall have the meaning  given to such term in Section
4.1.

     "Shareholder"  shall  have the  meaning  given to such term in the  Private
Placement Memorandum.

     "Shares" shall have the meaning given to such term in the Private Placement
Memorandum.

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     "Swap Agreement" shall mean the ISDA Master Agreement dated as of March 19,
2002,  including the schedule and all exhibits thereto,  and any  "Transactions"
and  "confirmations"  thereunder which shall  supplement,  form a part of and be
subject to the ISDA Master Agreement,  all as they may be amended,  supplemented
or otherwise  modified from time to time,  by and between  Merrill Lynch Capital
Services, Inc. and the Borrower.

     "Swap Provider" shall mean Merrill Lynch Capital Services, Inc.

     "Value"  shall mean,  at any time and with respect to any  Collateral,  the
value of such Collateral  (expressed in Dollars)  determined by the Borrower for
use in its  financial  reports  using the  methodology  described in the Private
Placement Memorandum.

2.   THE LOAN

     2.1 Loan. The Lender agrees,  on the terms and conditions set forth herein,
(i) to make a Loan to the Borrower on the Closing Date in an aggregate principal
amount of  $168,000,000  and (ii)  concurrently  with any  prepayment  made by a
Designated Fund under a loan facility  provided by the Lender to such Designated
Fund in connection  with a transfer of assets from such  Designated  Fund to the
Borrower,  to make an additional Loan to the Borrower in an aggregate  principal
amount equal to the amount of such prepayment.

     2.2 Note.

     (a) The Loan made by the Lender shall be  evidenced by a single  promissory
note substantially in the form of Exhibit A hereto (the "Note"),  payable to the
order of the Lender, duly executed by the Borrower and dated the date hereof.

     (b) On or before  each date the Lender  makes any  additional  Loans to the
Borrower  pursuant  to Section  2.1(ii)  hereof,  the  Borrower  shall issue and
deliver to the Lender a new Note, in an aggregate  principal amount equal to the
sum of (x) $168,000,000  minus the aggregate amount of any payments of principal
of the Loan made by the  Borrower  prior to such date  pursuant  to the terms of
this  Agreement,  (y) the  aggregate  principal  amount of any prior  Loans made
pursuant to Section 2.1(ii) hereof and (z) the amount of such additional Loan to
be made pursuant to Section 2.1(ii) hereof,  payable to the order of the Lender,
duly executed by the Borrower and dated the date of such  additional  Loan.  Any
Note issued and delivered pursuant to this Section 2.2(b) shall be exchanged for
and shall  replace the prior Note  delivered by the Borrower and such prior Note
shall be canceled.

     (c) The Note shall  bear  interest  on the  outstanding  principal  balance
thereof as set forth in Section 2.4 hereof.  The Lender is hereby  authorized by
the Borrower, but not obligated,  to enter the amount of the Loan and the amount
of  each  payment  or  prepayment  of  principal  or  interest  thereon  in  the
appropriate spaces on the reverse of or on an attachment to the Note.

                                       9
<PAGE>
     2.3 Borrowing Notice.

     (a)  The  Borrower   shall  give  the  Lender   notice  of  the   Borrowing
(substantially  in the form of  Exhibit D hereto or in such other form as may be
mutually agreed upon by the Borrower and the Lender (a "Borrowing  Notice")) not
later than 11:00 a.m.  (New York City time) at least one  Business  Day prior to
the Closing Date specifying (i) such Closing Date and (ii) the principal  amount
of such Borrowing,  and certifying the matters contained in Section 9.1(c), (d),
(e) and (f) hereof.  Such  notice  shall be  irrevocable  to the extent that the
Lender has  relied on the  notice to its own  detriment  or  incurred  costs and
expenses in  connection  therewith;  provided  that the Borrower may revoke such
notice,  in any case,  if the  Borrower  fully  reimburses  the  Lender  for any
reasonable  costs and expenses  associated with its reliance on such notice.  In
addition to such notice,  the Borrower  shall  deliver a Compliance  Certificate
substantially  in the form of  Exhibit E hereto or in such  other form as may be
mutually agreed upon by the Borrower and the Lender (a "Compliance Certificate")
to the Lender.

     (b) Upon  satisfaction  or waiver  of the  conditions  precedent  specified
herein, the Lender shall make the proceeds of the Loan available to the Borrower
on the Closing  Date by causing an amount of same day funds in Dollars  equal to
the proceeds of the Loan to be disbursed  via Federal Funds wire transfer to the
Borrower's account at the Custodian, ABA No. 011-001-438,  Account No. 5821-5013
Control Wire, Re:  Belrose  Capital Fund LLC - 4918, or to such other account as
to which the Borrower shall instruct the Lender in writing.

     2.4 Interest.  Interest shall accrue on the unpaid  principal amount of the
Loan at the Interest  Rate from and  including the Closing Date to but excluding
the date of any  principal  payment  whether  upon  acceleration  or  otherwise.
Interest  accrued  on the Loan  shall be  payable  on each  applicable  Interest
Payment  Date  and on any  day on  which  the  Loan  is  repaid  whether  due to
acceleration  or otherwise.  Notwithstanding  anything in this  Agreement to the
contrary,  the  interest  rate on the Loan shall in no event be in excess of the
maximum  interest rate  permitted by Applicable  Law. All interest  shall accrue
daily and shall be  calculated  on the  basis of a 360-day  year and the  actual
number of days elapsed.

     2.5 Alternate Rate of Interest.  If the Lender  reasonably  determines that
for any  reason  deposits  in Dollars  are not  offered to the Lender by leading
banks in the London  Interbank  Market in an amount  comparable  to the proposed
Loan for which  renewal  of the  Interest  Period has been  requested  and for a
period equal to the requested  Interest Period for the Loan, the Lender shall so
notify the Borrower and, until the  circumstances  giving rise to such notice no
longer exist,  interest shall accrue and be payable on the Loan at the Alternate
Rate, subject to the terms and conditions of this Agreement.

     2.6 Default  Interest.  So long as an Event of Default  shall have occurred
and be continuing  (after as well as before  judgment),  the Borrower  shall pay
interest on the unpaid  principal  amount of the Loan and on any interest,  fees
and other  amounts  payable  hereunder,  at the times  specified  in Section 2.4

                                       10
<PAGE>
hereof and on demand at a rate per annum equal (i) in the case of the  principal
amount of the Loan,  the Interest  Rate then  applicable to the Loan plus 2% per
annum  and  (ii) in the  case of such  other  amounts,  an  amount  equal to the
Alternate Rate plus 2% per annum.

     2.7 Repayment and  Termination.  The Borrower  shall repay the  outstanding
principal amount of the Loan on the Maturity Date.

     2.8 Optional Prepayments.  Subject to Section 12.3, the Borrower may at any
time and from time to time (i) from the Closing  Date until the date that is the
first anniversary  thereof,  provided that after giving effect to any prepayment
made pursuant to this Section 2.8(i) all of the conditions set forth on Schedule
2.8  hereto  would be  satisfied,  and (ii) at any time  thereafter,  upon  five
Business Days' prior written notice to the Lender, pay the outstanding principal
amount of the Loan, in whole or in part,  without prepayment  penalty,  together
with accrued  interest to the date of such  prepayment on the  principal  amount
prepaid,  provided that each partial  principal  repayment shall be in a minimum
aggregate  amount of $1,000,000  or any integral  multiple of $100,000 in excess
thereof.  Each notice of prepayment  shall specify the  prepayment  date and the
principal  amount  of the Loan to be  prepaid,  shall be  irrevocable  and shall
commit the  Borrower  to prepay  the Loan in the  amount and in the date  stated
therein.

     2.9 Manner of Payments.  All payments by the Borrower  hereunder  and under
the Note shall be made by the  Borrower on the date when due  without  offset or
counterclaim in Dollars in federal or other immediately  available funds by wire
transfer to the account of DrKW  Holdings,  Inc., at Wells Fargo Bank,  National
Association,  ABA No. 121000248,  Account No. 0001038377,  Name: Corporate Trust
Clearing  Account,  OBI: FFC 14825700,  reference;  DrKW  Holdings,  Inc., or in
accordance with any other wire transfer  instructions  provided by the Lender to
the Borrower from time to time.  Any such payment  received after 11:00 a.m. New
York City time on any  Business  Day shall be deemed  received on the  following
Business Day.

     2.10 Change in Circumstances.

     (a) In the event that after the date hereof any change in Applicable Law or
in the official  interpretation or administration  thereof  (including,  without
limitation, any request, guideline or policy not having the force of law) by any
authority charged with the  administration  or  interpretation  thereof or, with
respect to clause  (ii),  (iii) or (iv) below any  change in  conditions,  shall
occur which shall:

          (i)  subject  the Lender to, or  increase  the net amount of, any tax,
     levy, impost,  duty, charge,  fee, deduction or withholding with respect to
     the Loan for  which the  Interest  Rate is based  upon  LIBOR  (other  than
     withholding  tax imposed by the United  States of America or any  political
     subdivision or taxing  authority  thereof or any other tax,  levy,  impost,
     duty,  charge,  fee,  deduction or  withholding  (x) that is measured  with
     respect to the overall net income of the Lender, and that is imposed by the
     United  States of America,  or by the  jurisdiction  in which the Lender is
     incorporated,  or in which the  Lender  has its  principal  office  (or any

                                       11
<PAGE>
     political  subdivision or taxing authority thereof or therein), or (y) that
     is imposed solely by reason of the Lender failing to make a declaration of,
     or otherwise to  establish,  non-residence,  or to make any other claim for
     exemption,  or otherwise to comply with any certification,  identification,
     information,  documentation or reporting requirements  prescribed under the
     laws of the  relevant  jurisdiction,  in those  cases  where the Lender may
     properly make such  declaration or claim or so establish  non-residence  or
     otherwise comply); or

          (ii)  change  the basis of  taxation  of any  payment to the Lender of
     principal or any interest on the Loan for which the Interest  Rate is based
     upon LIBOR (except as limited in clause (i) above); or

          (iii)  impose,  modify or deem  applicable  any  reserve,  deposit  or
     similar  requirement  against any assets held by,  deposits with or for the
     account of or loans or  commitments by an office of the Lender with respect
     to the Loan for which the interest rate is based upon LIBOR; or

          (iv) impose upon the Lender or the London  Interbank  Market any other
     condition  with  respect to the Loan for which the  interest  rate is based
     upon LIBOR or this Agreement;

and the result of any of the  foregoing  shall be to increase the actual cost to
the Lender of making or  maintaining  the Loan hereunder or to reduce the amount
of any  payment  (whether  of  principal,  interest  or  otherwise)  received or
receivable by the Lender in connection  with the Loan  hereunder,  or to require
the Lender to make any payment in connection  with the Loan  hereunder,  in each
case by or in an amount  which the  Lender in its sole and  reasonable  judgment
shall deem material, then and in each case the Borrower shall pay to the Lender,
as  provided  in  paragraph  (b)  below,  such  amounts  as shall be  reasonably
necessary to compensate the Lender for such cost, reduction or payment.

     (b) The Lender shall deliver to the Borrower from time to time, one or more
certificates  setting  forth the amounts due to the Lender under  paragraph  (a)
above,  the  changes as a result of which such  amounts  are due,  the manner of
computing such amounts and the manner of computing the amounts  allocable to the
Loan hereunder  pursuant to paragraph (a) above.  Each such certificate shall be
conclusive in the absence of demonstrable  error.  The Borrower shall pay to the
Lender the amounts shown as due on any such certificate  within 10 Business Days
after its  receipt  of the same.  No failure on the part of the Lender to demand
compensation  under  paragraph (a) above on any one occasion shall  constitute a
waiver  of its  rights  to  demand  compensation  on  any  other  occasion.  The
protection  of this Section  shall be available to the Lender  regardless of any
possible  contention of the invalidity or inapplicability of any law, regulation
or other  condition  which  shall  give  rise to any  demand by the  Lender  for
compensation thereunder.

                                       12
<PAGE>
3.   ESTABLISHMENT OF SECURITIES ACCOUNT; PLEDGE OF COLLATERAL

     3.1 Establishment of the Securities  Account.  The Borrower shall establish
with the Custodian the Securities  Account.  The Borrower agrees at all times to
maintain the Pledged  Securities in the Securities  Account,  until the Borrower
has satisfied all of the Obligations in full.

     3.2 Other Account Provisions. The Borrower acknowledges that the Securities
Account  shall be subject to the terms and  conditions  of the  Account  Control
Agreement.

4.   PLEDGE AND SECURITY AGREEMENT

     4.1 Grant of Security Interest.

     (a) As security for the Obligations,  the Borrower hereby assigns, pledges,
grants and conveys to the Secured  Party a continuing  first  priority  lien and
security  interest (the "Security  Interest") in the  Collateral,  except to the
extent provided for herein and in the Intercreditor Agreement.

     (b) The Borrower will take all action which the Secured Party  requests and
which is reasonably  necessary to assure that the Secured Party has a continuing
perfected  first  priority  Security  Interest  in  the  Collateral  while  this
Agreement  is in  effect,  except to the extent  provided  for herein and in the
Intercreditor  Agreement.  Upon the request of the Secured  Party,  the Borrower
will  promptly  execute and deliver to the Secured  Party  financing  statements
conforming  to the  Uniform  Commercial  Code in effect in the  Commonwealth  of
Massachusetts,  the State of Delaware and any other state or jurisdiction deemed
appropriate by the Secured Party and such other  documents as may be required in
order to perfect the Security Interest, all in a form the Secured Party deems to
be acceptable.  Upon the request of the Secured Party,  the Borrower also agrees
to promptly  execute  and  deliver  continuation  statements  conforming  to the
Uniform  Commercial  Code in effect in the  Commonwealth of  Massachusetts,  the
State of Delaware and any other state or jurisdiction  deemed appropriate by the
Secured  Party and in a form the Secured  Party deems to be  acceptable.  If the
Borrower fails to promptly deliver to the Secured Party financing  statements or
continuation statements required by the Secured Party, the Secured Party may, to
the extent  permitted  by law and without  limiting  its other rights under this
Agreement  and the  Note,  execute  and  file  in the  Borrower's  name,  as the
Borrower's attorney-in-fact, such documents.

     (c) If the  jurisdiction of the Borrower's  organization or the location of
the Borrower's  principal  executive office changes,  the Borrower will promptly
notify the Secured  Party in writing to that effect and will execute and deliver
to  the  Secured   Party  any   additional   financing   statements  or  similar
documentation  the Secured Party may reasonably  request to assure the continued
effectiveness of the Security  Interest.  Once the Secured Party agrees that the
Borrower has fully and  indefeasibly  performed  the  Obligations,  the Security

                                       13
<PAGE>
Interest in any  Collateral  will be  terminated,  any such  Collateral  will be
returned to the Borrower and the Secured Party will, at the Borrower's  expense,
execute  and  deliver  to  the  Borrower  such  documents  as the  Borrower  may
reasonably request to evidence such termination.

5.   SPECIAL AGREEMENTS WITH RESPECT TO PLEDGED SECURITIES

     On a continuing basis, the Borrower covenants with the Secured Party that:

     5.1 Liquidation of Pledged Securities.

     (a) Subject to the Account Control  Agreement,  the Borrower may direct the
Custodian to release from the  Securities  Account and pay to the Secured  Party
proceeds of the Pledged Securities sufficient to provide for payment then due on
the Loan (whether principal or interest) or any other amounts hereunder. Nothing
in  this  section  shall  affect  the  Secured  Party's  rights  to  direct  the
application  of the  Collateral  to the  payment of amounts due on the Loan upon
acceleration  thereof.  Upon the release of any  Collateral  from the Securities
Account to the Secured Party in accordance  with the terms of this section,  the
security interest  evidenced by this Agreement in such released  Collateral will
automatically terminate and be of no further force and effect.

     (b) If an Event of Default  has  occurred  and is  continuing,  the Secured
Party shall be entitled to take market action against any securities held in the
Securities Account in accordance with this Agreement, and where appropriate, the
Secured Party may execute and file the requisite  number of S.E.C.  Forms 144 on
behalf of the Borrower.

     (c) In the event that upon the occurrence and  continuation  of an Event of
Default,  the Secured Party sells,  assigns and delivers or otherwise  transfers
any of the  Pledged  Securities  under this  Agreement  (a  "Liquidation"),  the
Borrower will cooperate with the Secured Party in taking any and all action that
the Secured Party deems  necessary or appropriate  to effect or facilitate  such
Liquidation. The Borrower agrees that upon the occurrence and continuation of an
Event of Default,  the Secured  Party may, in its sole and absolute  discretion,
sell,  or  instruct  the  Custodian  to  sell,  all or any  part of the  Pledged
Securities  at private sale in such manner and under such  circumstances  as the
Secured  Party may deem  necessary  or  advisable  in order that the sale may be
lawfully conducted, provided, however, that, without prejudice to the foregoing,
to the extent  notice of any such sale shall be  required by law,  the  Borrower
agrees that at least ten days'  notice to the  Borrower of the time and place of
any public  sale or the time after  which any  private  sale is to be made shall
constitute  reasonable  notification.  The purchaser of any or all Collateral so
sold shall thereafter hold the same absolutely free from any claim,  encumbrance
or right of any kind whatsoever created by or through the Borrower.  Any sale of
the Collateral  conducted in conformity with reasonable  commercial practices of
banks,  insurance  companies,  commercial finance companies,  or other financial
institutions  disposing of property similar to the Collateral shall be deemed to

                                       14
<PAGE>
be  commercially  reasonable.  The Secured  Party may, in its own name or in the
name of a designee or nominee, buy any of the Collateral at any public sale and,
if permitted by  applicable  law, at any private sale.  All expenses  (including
court costs and reasonable  attorneys' fees,  expenses and disbursements) of, or
incident  to,  the  enforcement  of  any  of  the  provisions  hereof  shall  be
recoverable  from  the  proceeds  of  the  sale  or  other  disposition  of  the
Collateral.

     (d) Without limiting the foregoing,  the Secured Party may (i) approach and
negotiate with a limited number of potential  purchasers,  and (ii) restrict the
prospective  bidders or purchasers to persons who will  represent and agree that
they are purchasing the Pledged  Securities for their own account for investment
and not with a view to distribution or resale thereof.  In the event that any of
the Pledged Securities are sold at private sale, the Borrower agrees that if the
Pledged  Securities  are sold for a price which the Secured  Party in good faith
believed to be reasonable,  then (a) the sale will be deemed to be  commercially
reasonable  in all  respects  and (b) the  Secured  Party  will  not  incur  any
liability  or   responsibility   to  the  Borrower  in   connection   therewith,
notwithstanding  the possibility  that a  substantially  higher price might have
been realized at a public sale.

     (e) Any surplus of such cash or cash proceeds held by the Secured Party and
remaining after payment in full of the Loan (and any accrued  interest  thereon)
shall be paid over to the Borrower or to whomsoever may be lawfully  entitled to
receive such surplus.

     (f) The Borrower  understands and acknowledges  that it or its Shareholders
may incur monetary  liability to the issuer of certain of the Pledged Securities
under  Section  16(b) of the  Securities  Exchange Act of 1934,  as amended (the
"1934  Act"),  in  connection  with a sale of such Pledged  Securities,  whether
initiated by it or by the Lender under this Agreement. The Borrower acknowledges
that any such liability is strictly personal to it and/or its Shareholders,  and
the  Borrower  agrees to  indemnify  and hold the Lender and any agent acting on
behalf of the  Lender  harmless  from and  against  any and all  losses,  costs,
liabilities or expenses  arising out of or relating to a purchase or sale of any
of the  Pledged  Securities  under  Section  16(b)  of the  1934 Act at any time
whatsoever.

6.   REPRESENTATIONS AND WARRANTIES

     On the date hereof and on each Borrowing Date, the Borrower  represents and
warrants to the Lender that:

     6.1 Collateral.

     (a)  Except  for (i) the  Secured  Party's  rights  established  under this
Agreement and the Account Control  Agreement,  (ii) the Swap  Provider's  rights
established under the Swap Agreement and the Account Control Agreement and (iii)
the Overflow Agent's rights under the Overflow Agreement and the Account Control
Agreement,  the Borrower owns the Collateral  (including  without limitation the
shares of common stock of BRC and the  interests in Belvedere  Capital  owned by

                                       15
<PAGE>
the  Borrower)  free of any  interest or Lien in favor of any third party or any
restriction on transfer, other than pursuant to the Operating Agreement.

     (b) The Security  Interest is and shall remain a perfected  and valid first
priority Lien and security interest upon the Collateral.

     6.2 Due  Organization.  The Borrower is a limited liability company and BRC
is a corporation,  and each of them is duly organized and validly existing under
the  jurisdiction of its organization and has the power and authority to own its
assets and to conduct the business  which it conducts.  Each of the Borrower and
BRC is in good standing under the laws of the  jurisdiction of its  organization
or formation and is duly qualified to do business in all  jurisdictions in which
the nature of its activities requires such qualification.

     6.3 Power and  Authority;  Binding  Agreements.  The  Borrower has the full
right, power and authority to make, execute, deliver and perform its obligations
under  this  Agreement  and  the  execution,  delivery  and  performance  of the
documents  contemplated by this Agreement and  consummation of the  transactions
contemplated by this Agreement have been duly authorized by all necessary action
on the part of the Borrower.  The Agreement and the Note  constitute  the legal,
valid and binding  obligation of the Borrower,  enforceable  in accordance  with
their respective terms,  except as  enforceability  may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general  equitable  principles
(whether enforcement is sought by proceedings in equity or at law).

     6.4 No Violation.  Neither the  execution,  delivery or  performance by the
Borrower of this Agreement and the related  documents,  the  consummation of the
transactions  contemplated by this Agreement, nor compliance with the provisions
of this  Agreement  will (i) violate  any law,  regulation,  order,  judgment or
decree  binding on the Borrower,  (ii) violate or conflict  with, as applicable,
the  Borrower's  certificate  of  organization,  Operating  Agreement  or  other
organizational or governing  documents,  (iii) conflict with, cause a breach of,
constitute a default under, be cause for the acceleration of the maturity of, or
create  or  result  in the  creation  or  imposition  of  any  Lien,  charge  or
encumbrance  (other  than  in  favor  of the  Lender)  on any of the  Borrower's
property  under,  any  agreement,   notice,   indenture,   instrument  or  other
undertaking to which the Borrower is a party.

     6.5 No Consents. No order, consent,  license,  authorization,  recording or
registration  is required to  authorize  or is required in  connection  with the
execution,  delivery and performance by the Borrower or the legality,  validity,
binding effect or enforceability of this Agreement upon or against the Borrower,
any documents  executed by the Borrower in connection with this Agreement or any
transactions  contemplated  by this Agreement other than (i) the filing of UCC-1
financing  statements,  (ii) the registration of the shares of Belvedere Capital
and BRC in the name of the  Custodian or the  Custodian's  nominee and (iii) the
written consent of the manager of Belvedere  Capital to the Borrower's pledge of
its shares of Belvedere Capital.

                                       16
<PAGE>
     6.6  No   Litigation.   There  are  no  actions,   suits,   litigation   or
investigations, pending or, threatened, against the Borrower that could (i) have
a material adverse effect on the business,  condition  (financial or otherwise),
or  operations,  properties  or  prospects  of the  Borrower  or (ii) affect the
Borrower's  ability  to enter  into  and  perform  its  obligations  under  this
Agreement or any of the transactions contemplated by this Agreement.

     6.7 Compliance  with Laws. The operations of the Borrower are and have been
in  compliance  in all  material  respects  with all federal,  state,  local and
foreign laws and regulations  applicable to it, including,  without  limitation,
tax, environmental and health and safety laws and regulations.

     6.8 No Material  Adverse  Change.  Since March 31, 2003,  there has been no
material  adverse  change in the business,  condition  (financial or otherwise),
obligations, operations, performance or properties of the Borrower.

     6.9 Solvency.  After giving effect to the Loan,  the Swap Agreement and the
Borrower's  Obligations,  (i) the present  fair value of the  Borrower's  assets
exceeds  the total  amount of the  Borrower's  liabilities  (including,  without
limitation,  contingent  liabilities),  (ii) the Borrower has capital and assets
sufficient to carry on its businesses,  (iii) the Borrower is not engaged and is
not about to engage  in a  business  or a  transaction  for which its  remaining
assets are  unreasonably  small in relation to such business or transaction  and
(iv) the  Borrower  does not intend to incur or believe that it will incur debts
beyond its ability to pay as they become due. The Borrower  will not be rendered
insolvent by the execution,  delivery and  performance of documents  relating to
this Agreement or by the  consummation of the  transactions  contemplated  under
this Agreement.

     6.10 Organization;  Place of Business. The Borrower was organized under the
laws of the State of Delaware, and the address of the principal executive office
of the Borrower as indicated on the signature page hereto is correct.

     6.11 Full  Disclosure.  Neither this  Agreement  nor the Private  Placement
Memorandum nor any, agreement,  document,  certificate or statement furnished to
the  Lender  or the  Swap  Provider  by the  Borrower  in  connection  with  the
transactions  contemplated  hereby,  at the time it was  furnished or delivered,
contained any untrue statement of a material fact or omitted to state a material
fact,  under the  circumstances  under which it was made,  necessary in order to
make the statements contained herein or therein not misleading.

     6.12 Sole  Business.  Neither  of the  Borrower  and BRC is  engaged in any
business other than as described in the Private Placement Memorandum.

     6.13  Investment  Company Act. The  Borrower is not an  investment  company
required to be registered under the Investment Company Act of 1940, as amended.

                                       17
<PAGE>
     6.14 Private Placement  Memorandum.  All transactions  contemplated by this
Agreement are consistent in all material respects with the descriptions thereof,
if any,  contained  in the  Private  Placement  Memorandum  and  neither  of the
Borrower and BRC has entered into any agreements which would otherwise prohibit,
restrict or limit the transactions contemplated by this Agreement or the Private
Placement Memorandum other than agreements as a holder of interests of Belvedere
Capital to be bound by the operating agreement of Belvedere Capital,  agreements
as a holder of shares of common stock of BRC to be bound by the  Certificates of
Incorporation of BRC, and agreements entered into or made in connection with the
acquisition of Qualifying  Assets which restrict the transfer of such Qualifying
Assets.

     6.15 Pledged  Securities.  Any outstanding  certificates  representing  the
Pledged Securities will be physically held in the United States by the Custodian
or an authorized sub-custodian or agent of the Custodian.

     6.16  Subsidiaries.  As of the Closing Date,  other than BRC,  there are no
subsidiaries of the Borrower.

     6.17 Belrose  Realty  Corporation.  As of the Closing Date,  the authorized
capitalization  of BRC consists of (i) 7,000 shares of common  stock,  par value
$0.01 per share of which  1,463.881231  shares are  outstanding and owned by the
Borrower on the date hereof and (ii) 3,000 shares of preferred  stock, par value
$0.01 per share, of which 2,100 shares have been designated as Class A preferred
stock with a liquidation  preference of $100 per share,  all of which  preferred
stock has been issued to the Borrower and donated by the Borrower to  charitable
organizations as contemplated by the Private Placement Memorandum.

     6.18 Preferred  Equity  Interests.  To the Borrower's  knowledge:  (i) each
issuer of Preferred  Equity  Interests which are included in the Collateral is a
limited  partnership  or limited  liability  company duly  organized and validly
existing under the laws of the state of its  organization  and has all requisite
power  and  authority  to  conduct  its  business  as now  conducted;  (ii) each
Preferred  Equity  Interest  which is included in the Collateral has been issued
pursuant  to a  written  partnership  agreement  or  limited  liability  company
agreement,  a true and  correct  copy of which  has been made  available  to the
Secured Party, has been duly  authorized,  executed and delivered by all parties
thereto,  has not been amended or otherwise modified (except as disclosed to the
Secured Party),  is in full force and effect and is binding upon and enforceable
against  all  parties  thereto in  accordance  with its terms.  There  exists no
default  under any such  partnership  agreement  or  limited  liability  company
agreement by the  Borrower or, to  Borrower's  knowledge,  by any other  Person,
which default is material in the context of this Agreement.

7.   AFFIRMATIVE COVENANTS

     Until  this  Agreement  has  terminated  and  all  Obligations   have  been
indefeasibly paid in full, the Borrower will and will cause its subsidiaries to:

                                       18
<PAGE>
     7.1  Maintenance  of  Existence.  Preserve and maintain its  existence  and
material rights and franchises.

     7.2  Compliance  with  Laws.  Comply  in all  material  respects  with  all
Applicable  Laws,  statutes,  codes,  ordinances,  regulations,  rules,  orders,
awards, judgments, decrees, injunctions, approvals and permits applicable to it.

     7.3 Payment of Taxes. Pay all taxes,  assessments and governmental  charges
imposed  upon  it or  upon  its  property  and all  claims  (including,  without
limitation,  claims for labor, materials,  supplies or services) which might, if
unpaid,  become a lien upon its property,  unless, in each case, the validity or
amount thereof is being  contested in good faith by appropriate  proceedings and
it has maintained adequate reserves with respect thereto.

     7.4 Books and Records. Maintain or cause to be maintained at all times true
and  complete  books and records of its  financial  and business  operations  in
accordance with GAAP, except that the valuation of the Pledged  Securities shall
be in  accordance  with  the  valuation  procedures  described  in  the  Private
Placement Memorandum.

     7.5 Audit Rights.  Permit any  representative  of the Lender to examine the
Borrower's,  and its  consolidated  subsidiaries'  books and records and to make
copies and take  extracts  therefrom,  and to discuss  the  Borrower's  affairs,
finances  and  accounts  with the  Manager and with the  Borrower's  independent
accountants,  all at such reasonable  times upon reasonable  prior notice and as
often as the Lender may reasonably request.

     7.6  Maintenance of Collateral.  Maintain the Pledged  Securities and other
Collateral in the  Securities  Account;  provided,  however,  that  withdrawals,
releases, distributions and transfers of Pledged Securities and other Collateral
may be made in accordance with the terms of the Account Control Agreement.

     7.7  Notices.  Furnish to the  Secured  Party:  (i) within ten (10) days of
becoming aware of the  occurrence of any Default or Event of Default,  notice of
the  occurrence and nature of such Default and of the steps that are being taken
to cure  such  Default  or Event of  Default;  and (ii)  promptly  after (a) the
occurrence  thereof,  notice  of  the  institution  of or any  material  adverse
development in any action, suit or proceeding or any governmental  investigation
or any arbitration, before any court or arbitrator or any Governmental Authority
(involving in excess of $500,000, or otherwise material) against the Borrower or
any material property of the Borrower,  or (b) actual knowledge thereof,  notice
of  the  threat  of  any  such  action,  suit,   proceeding,   investigation  or
arbitration.

     7.8  Bankruptcy.  Notify the  Secured  Party in writing  before  filing any
petition  seeking the  protection of any  bankruptcy,  insolvency or any similar
statutes,  and neither the  Borrower nor any of its  subsidiaries  will take any
action (or fail to take any  necessary  action)  which may cause a  petition  in
bankruptcy,  insolvency  or any similar law or procedure to be filed against the
Borrower or Belvedere Capital.

                                       19
<PAGE>
     7.9 Financial and Credit Information.

     (a) Notify the  Secured  Party  immediately,  in writing,  of any  material
change in the Borrower's or any of its subsidiaries'  financial  condition which
would adversely affect the Borrower's  ability to repay any obligation(s) to the
Lender or the Swap Provider  according to the terms of this Agreement,  the Note
or the Swap Agreement.

     (b) Supply to the Secured Party such current financial information or other
information as the Secured Party may reasonably request from time to time.

     (c) Permit the Secured  Party to share with any of its  Affiliates,  or any
Person  authorized  by the  Borrower,  for  legitimate  business  purposes,  any
information  about the Borrower which it may currently  possess or obtain in the
future.

     (d)  Permit the  Secured  Party to answer  any  questions  about its credit
experience with the Borrower.

     (e)  Comply  with any  reasonable  requests  from  the  Secured  Party  for
additional  documentation  required to be filed or executed by the Borrower from
time to time by  Applicable  Law or the policies and  procedures  of the Secured
Party.

     7.10 Financial Statements. Furnish the Secured Party:

     (a) within 90 days after the end of the first  six-month  fiscal  period of
the  Borrower,   semi-annual,   unaudited,   consolidated  financial  statements
consisting of a consolidated  balance sheet of the Borrower and its subsidiaries
and consolidated statements of operations and cash flows of the Borrower and its
subsidiaries,  for such period,  all in  reasonable  detail and certified by the
Manager of the Borrower, that such statements are correct and fairly present the
consolidated financial condition of the Borrower and its subsidiaries, as at the
end of such fiscal period (subject to normal year-end audit adjustments);

     (b)  within 90 days  after  the end of each  fiscal  year of the  Borrower,
annual,  audited,  consolidated  financial  statements  of the  Borrower and its
subsidiaries, consisting of a consolidated balance sheet as of the close of such
fiscal year and related consolidated statements of operations and cash flows for
such year,  attached to which shall be a report of Deloitte & Touche LLP or such
other independent certified public accountants of recognized standing acceptable
to the Secured Party and which  statement shall have been prepared in accordance
with GAAP,  except  that the  valuation  of the Pledged  Securities  shall be in
accordance  with the  valuation  procedures  described in the Private  Placement
Memorandum;

     (c)  upon  receipt  by  the  Borrower,  copies  of  all  financial  reports
distributed by or on behalf of Belvedere Capital;

     (d) concurrently with such  distributions,  copies of all financial reports
distributed by or on behalf of the Borrower to all Shareholders; and

                                       20
<PAGE>
     (e) promptly upon their becoming available,  copies of (i) all registration
statements, proxy statements, and all reports which the Borrower shall file with
any securities  exchange or with the  Securities and Exchange  Commission or any
successor agency and (ii) all reports, financial statements,  press releases and
other  information  which the Borrower shall release,  send or make available to
its Shareholders generally.

     7.11 Report; Compliance Certificate.  Provide the Secured Party, within ten
Business Days after the end of each calendar  month,  a Statement in the form of
Exhibit B hereto (the "Report") and a Compliance Certificate.  The Secured Party
reserves the right to request such additional information in connection with the
Report and any Pledged Security as it deems appropriate.

     7.12  Liens.  Defend the  Collateral  (including  the  Pledged  Securities)
against any and all Liens, claims and other impediments howsoever arising, other
than (i) the Lien in favor of the Secured Party created hereunder and (ii) Liens
not otherwise prohibited under Section 8.2.

     7.13  Government  Approval.  If  any  further  authorizations,   approvals,
registrations  or filings with any  governmental  or public  regulatory  body or
authority  of the United  States,  any state  thereof or any other  jurisdiction
required for the performance by the Borrower of this Agreement  should hereafter
become  necessary,  obtain or make,  or cause to be obtained  or made,  all such
authorizations, approvals, registrations or filings.

     7.14 Use of Proceeds.  The  Borrower  shall use the proceeds of the Loan to
refinance  certain existing  indebtedness,  to pay loan facility expenses of the
Borrower, for liquidity needs, and for other general purposes, including payment
of interest and fees hereunder.

     7.15 Valuation Covenants. Maintain:

     (a) the Value of the  total  assets of the  Borrower  and its  consolidated
subsidiaries  (less the Value of its assets pledged to any Person other than the
Secured  Party and less  (without  duplication)  the Value of all Excluded  Real
Estate  Investments),  at an amount  equal to or in excess of 250% of the sum of
the Required  Amount plus the  outstanding  principal  balance of the Loan, plus
accrued and unpaid  interest on the Loan, plus any liability of the Borrower for
which the  termination  value on any swap exceeds the  collateral  held for such
swap, plus the Overflow Exposure;

     (b) the Value of the  Qualifying  Assets,  other than  Excluded Real Estate
Investments,  at an  amount  not in  excess  of 40% of the  market  value of the
Collateral;

     (c) the Value of all  securities  of any single issuer held by the Borrower
by reason of its indirect  interest in the securities which are directly held by
the  Portfolio  at an amount not in excess of 5% of the Value of all  Collateral
held in the Securities  Account;  provided that such restriction shall not apply
to the Borrower's  direct  investments in (w) Qualifying  Assets,  (x) shares in
Belvedere  Capital or BRC, (y) the Borrower's  indirect  investment in shares of

                                       21
<PAGE>
the Portfolio  (as  distinguished  from the  underlying  securities  held by the
Portfolio) held through its direct  investment in shares of Belvedere Capital or
(z) BRC's investments in Qualifying Assets; and

     (d) the Value of all securities  held by the Borrower of issuers  primarily
engaged in any one industry by reason of its indirect interest in the securities
which are directly  held by the  Portfolio at an amount not to exceed 25% of the
Value of all  Collateral  held in the  Securities  Account;  provided  that such
restriction  shall  not  apply  to  the  Borrower's  direct  investments  in (w)
Qualifying  Assets,  (x) shares in Belvedere  Capital or BRC, (y) the Borrower's
indirect  investment  in  shares of the  Portfolio  (as  distinguished  from the
underlying  securities held by the Portfolio) held through its direct investment
in shares of Belvedere Capital or (z) BRC's investments in Qualifying Assets.

     In the event that any of the  foregoing  restrictions  contained in clauses
(b),  (c) and (d) above are  exceeded,  the Value for that portion of the excess
shall not be included for purposes of determining  the Value of the total assets
of the Borrower  and its  consolidated  subsidiaries  for purposes of clause (a)
above.

     7.16 Formation of Additional Subsidiaries.  Promptly following the creation
thereof,  notify the Secured Party of any additional  subsidiary and the purpose
for which it is being created.

8.   NEGATIVE COVENANTS OF THE BORROWER

     Until  this  Agreement  has  terminated  and  all  Obligations   have  been
indefeasibly  paid in full,  the  Borrower  will not and it will not  allow  its
subsidiaries to:

     8.1  No  Indebtedness.  Create,  incur,  assume  or  suffer  to  exist  any
Indebtedness,  except for (i)  Indebtedness of the Borrower under this Agreement
and the Note, the Overflow  Agreement and the Swap Agreement,  (ii) Indebtedness
in respect of (x) swap, cap or other interest rate or foreign  currency  hedging
arrangements  (in each case,  where used for hedging  purposes) and (y) options,
financial  futures contracts and options on financial futures contracts (in each
case,  where  used for  hedging  purposes),  (iii)  Indebtedness  in  respect of
purchases  of  securities  on  short-term  credit  as may be  necessary  for the
clearance of purchases  and sales of  portfolio  securities  as described in the
Private Placement  Memorandum,  (iv) overdrafts  extended by the Custodian under
the Account Control Agreement,  (v) Indebtedness of a subsidiary of the Borrower
incurred in connection  with the  acquisition by such  subsidiary of an Excluded
Real Estate  Investment,  provided that such Indebtedness is without recourse to
the Borrower and BRC except to the extent of a so-called  "bad boy"  guaranty by
the Borrower or BRC on terms and conditions consistent with the past practice of
the  Borrower  and  similar  entities  advised by the  Investment  Advisor or an
Affiliate  thereof.  Nothing  contained in this  Section 8.1 shall  prohibit the
incurrence of the Required Amount.

     8.2 No Liens.  Create,  incur, assume or suffer to exist any Lien on any of
its  properties  or assets  except (i) Liens on assets of the Borrower  (but not
BRC) in respect of Indebtedness permitted under Sections 8.1(i)-(iv), (ii) liens
on  assets  of  subsidiaries  of BRC to  secure  Indebtedness  incurred  by such

                                       22
<PAGE>
subsidiaries in connection with the acquisition by such subsidiaries of Excluded
Real Estate Investments,  (iii) Liens for taxes,  assessments or similar charges
incurred in the ordinary  course of business  which are not  delinquent or which
are being  contested  in good faith and by  appropriate  proceedings  diligently
conducted,  and for which  adequate  reserves  have been set aside in accordance
with  GAAP,  provided  that  proceedings  to  enforce  such  Liens have not been
commenced or have been stayed pending such contest, (iv) statutory Liens arising
by operation of law such as mechanics,  materials,  carriers',  warehouse liens,
(A) which occur in the ordinary course of business, (B) secure normal trade debt
which is not yet due and payable,  (C) do not secure  Indebtedness  for borrowed
money,  (D)  which  are  being  contested  in  good  faith  and  by  appropriate
proceedings diligently conducted,  and (E) for which adequate reserves have been
set aside in accordance  with GAAP,  provided that  enforcement of such Liens is
stayed pending such contest, (v) Liens arising out of judgments or decrees which
are being  contested  in good faith and by  appropriate  proceedings  diligently
conducted,  and for which  adequate  reserves  have been set aside in accordance
with GAAP,  provided that  enforcement  thereof is stayed  pending such contest,
(vi) Liens of the Custodian under the Account Control  Agreement and (vii) Liens
created  pursuant to this  Agreement,  the  Overflow  Agreement  and the Account
Control Agreement.

     8.3 No Mergers,  Etc. Enter into any transaction of merger or consolidation
or  liquidate,  wind  up or  dissolve  itself  (or  suffer  any  liquidation  or
dissolution).

     8.4 No New Business.  Engage in any business other than as described in the
Private Placement Memorandum.

     8.5 No Trading.  Conduct any sale of any Qualifying  Assets (other than (i)
in connection with a distribution or redemption not otherwise  prohibited  under
this  Agreement,  (ii) if the proceeds of such sale will be utilized to purchase
(x) other Qualifying Assets which are comparable Qualifying Assets being sold or
(y) cash  equivalents,  but only if such investment in cash equivalents will not
result in the Borrower being treated as an investment company within the meaning
of Section 351 of the  Internal  Revenue  Code or (iii) if the  proceeds of such
sale will be utilized to repay the Loan) without  providing  three Business Days
prior notice to the Lender.

     8.6 No  Distributions.  Make any  distributions  or honor any  requests for
redemptions if such  distributions or withdrawals,  if made, would result in the
occurrence of a Default or an Event of Default of the type specified in Sections
10.1(a)(i), 10.1(b), 10.1(h) or 10.1(i).

     8.7 No Amendments. Amend or modify, or permit to be amended or modified the
Private  Placement  Memorandum  or  Operating  Agreement  of the Borrower or the
organizational  documents of any of its subsidiaries,  without the prior written
consent of the Secured Party, which consent shall not be unreasonably  withheld.
Notwithstanding  the  foregoing,  the  Borrower  and its  subsidiaries  may make
ministerial  or other  non-material  changes,  changes  required  to comply with
statutory or regulatory requirements or revisions or changes reflecting matters,

                                       23
<PAGE>
events or  circumstances  which  should be  described  in the Private  Placement
Memorandum,  provided,  however,  that the Borrower  shall  promptly  notify the
Secured Party of such changes.

     8.8 Manager,  Investment  Adviser and Custodian.  Terminate the services or
accept the resignation of the Manager or Investment Adviser or Custodian without
the prior written consent of the Secured Party.

     8.9   Limitation  on   Restriction   on  Subsidiary   Dividends  and  Other
Distributions,  etc.  Create  or  otherwise  cause or  suffer to exist or become
effective any consensual encumbrance or restriction on the ability of BRC to (a)
pay dividends or make any other interest or  participation  in its profits owned
by the  Borrower  other  than  such  restrictions  as are  set  forth  in  BRC's
certificates  of  incorporation  or BRC's  Certificate of Designation of Class A
preferred stock, or pay any indebtedness owed to the Borrower, (b) make loans or
advances to the Borrower, or (c) transfer any of its properties or assets to the
Borrower.

9.   CONDITIONS PRECEDENT TO CLOSING

     9.1 Conditions  Precedent to Loan. It shall be a condition precedent to the
making of the Loan hereunder that:

     (a) the Lender shall have received,  the  following,  in form and substance
satisfactory to the Lender in its sole discretion:

          (i) evidence  that the Borrower is duly  authorized to enter into this
     Agreement  and all  transactions  contemplated  hereby and to  execute  and
     deliver  this  Agreement,  the Note and all  documents  to be  executed  in
     connection therewith;

          (ii) a  certificate  of the Manager of the Borrower  attesting,  among
     other things,  (w) that true, correct and complete copies of the Borrower's
     certificate  of  formation  and  Operating  Agreement,  together  with  all
     amendments thereto,  have been delivered to the Lender, (x) that provisions
     of  the  Operating   Agreement  authorize  the  Manager  to  authorize  the
     execution,  delivery and  performance in accordance with their terms of the
     Agreement,  the Note and the other documents and transactions  contemplated
     thereby and the borrowings  hereunder and the Manager has so authorized and
     such   authorization   is  in  full   force  and   effect,   (y)  that  all
     representations  and warranties  made in connection with this Agreement are
     true,  accurate  and  correct  in  all  material  respects  and  (z) to the
     incumbency of the Manager,  or any other Person  executing this  Agreement,
     the Note and any related documents on behalf of the Borrower;

          (iii)  (w) a copy  of the  certificate  of  formation  of  each of the
     Borrower and BRC filed in each entity's jurisdiction of organization, (x) a
     copy of the by-laws of BRC, (y) a copy of BRC's  Certificate of Designation
     of Class A preferred  shares and (z) a  certificate  of good  standing from

                                       24
<PAGE>
     each of the  Borrower's  and BRC's  jurisdiction  of  organization  and the
     jurisdiction  in which  its  principal  executive  office  is  located,  if
     different;

          (iv) the  Account  Control  Agreement  duly  executed on behalf of the
     Lender, the Swap Provider, the Borrower, the Overflow Agent, the Investment
     Manager and the Custodian;

          (v) evidence that the Securities Account has been established and that
     the Pledged Securities have been deposited into the Securities Account;

          (vi) the appropriate UCC-1 Financing Statements;

          (vii) the Private Placement Memorandum;

          (viii)  evidence that the Existing  Credit  Agreement and all liens in
     connection therewith have been terminated;

          (ix) the Investment Advisory Agreement;

          (x) instructions from the Borrower in connection with the payment from
     the proceeds of the Loan of certain existing indebtedness;

          (xi) the favorable opinion of Testa, Hurwitz & Thibeault, LLP, counsel
     to the Borrower in the form of Exhibit C hereto;

          (xii) the Note,  dated as of the date hereof,  duly executed on behalf
     of the Borrower;

          (xiii)  (x) the  Swap  Agreement  and  all  Exhibits  thereto  and the
     Amendment to Swap  Agreement,  duly  executed on behalf of the Borrower and
     (y) evidence that the Borrower has executed the "Confirmation"  relating to
     the Swap Agreement;

          (xiv) the Intercreditor Agreement; and

          (xv) a Form G-3 executed by the Borrower and the Lender.

     (b) the Lender shall have received  such other  documents as the Lender may
reasonably request.

     (c) the representations and warranties  contained in Article 6 are true and
correct in all material  respects on and as of the Closing  Date,  except to the
extent such  representations  and warranties  specifically  relate to an earlier
date.

     (d) no event has occurred or is  continuing or would result from the making
of the Loan, which would constitute a Default or an Event of Default.

     (e) the  Borrower  has  delivered  to the Lender the  Borrowing  Notice and
Compliance Certificate required pursuant to Section 2.3 hereof.

                                       25
<PAGE>
     (f) after giving  effect to the Loan,  (a) the Value of the total assets of
the Borrower  (less the Value of its assets pledged to any Person other than the
Secured  Party and less  (without  duplication)  the Value of all Excluded  Real
Estate  Investments),  shall be equal to or in  excess of 250% of the sum of the
Required Amount plus the outstanding principal balance of the Loan, plus accrued
and unpaid  interest on the Loan,  plus any  liability of the Borrower for which
the  termination  value on any swap exceeds the  collateral  held for such swap,
plus the Overflow Exposure.

10.  DEFAULTS; REMEDIES

     10.1 Events of Default. An event of default ("Event of Default") will occur
under this Agreement and the Note if:

     (a) the  Borrower  fails (i) to make any payment when it is due as required
by this Agreement and such default continues unremedied, in the case of payments
of any amounts other than principal, for five days after such amount becomes due
or (ii) to observe or perform any covenant or  agreement  contained in Article 8
of this  Agreement  or Section 4 of the Account  Control  Agreement  or (iii) to
observe or perform any other  covenant or agreement  contained in this Agreement
and such default continues unremedied for 30 days;

     (b) the Value of the Collateral  falls below the  requirement  contained in
Section 7.15, and the Borrower has not, within two Business Days after demand by
the Lender,  reduced the outstanding  principal balance of the Loan or deposited
in the Securities  Account additional funds and/or securities as Collateral with
a Value  sufficient  to increase  the Value of the  Collateral  to at least that
required pursuant to Section 7.15;

     (c) the Borrower makes, or the Lender discovers that the Borrower has made,
a  material  misrepresentation  under  this  Agreement  or in  any  certificate,
financial  statement  or  other  document  delivered  in  connection  with  this
Agreement, the Note or the Loan;

     (d)  default  shall be made  (and not cured  within  any  applicable  grace
period) with respect to the payment of any  Indebtedness or other  obligation of
the Borrower,  the outstanding  amount of which exceeds  $1,000,000 or a default
shall have occurred under the Swap Agreement;

     (e)  (i)  an  attachment  is  levied  against  all or  any  portion  of the
Securities  Account or (ii) the  Custodian  shall have breached any provision of
the Account Control Agreement in any material respect;

     (f) the Secured Party reasonably  determines that the Security Interest (in
whole or in part)  hereby  created  is not in full  force and effect or does not
have the priority stated herein;

     (g) final  judgment for the payment of money in excess of $1,000,000  shall
be  rendered  against the  Borrower or BRC and within  thirty (30) days from the

                                       26
<PAGE>
entry of judgment  shall not have been  discharged or stayed  pending  appeal or
shall not have been discharged within thirty (30) days from the entry of a final
order of affirmance or appeal;

     (h) the  Borrower or BRC shall admit in writing  its  inability  to pay its
debts  generally as they become due, or shall make a general  assignment for the
benefit of creditors; or the Borrower or BRC shall commence any case, proceeding
or other action  seeking to have an order for relief  entered on its behalf as a
debtor or to  adjudicate  it a bankrupt or insolvent or seeking  reorganization,
arrangement,  adjustment,  liquidation,  dissolution or composition of it or its
debts under any law relating to bankruptcy, insolvency, reorganization or relief
of debtors or seeking  appointment  of a receiver,  trustee,  custodian or other
similar  official for it or for all or any  substantial  part of its property or
shall file an answer or other  pleading  in any such case,  proceeding  or other
action admitting the material allegations of any petition,  complaint or similar
pleading  filed against it or consenting  to the relief sought  therein;  or the
Borrower shall take any action to authorize any of the foregoing;

     (i) any involuntary case, proceeding,  or other action against the Borrower
or BRC shall be commenced seeking to have an order for relief entered against it
as  debtor  or  to  adjudicate   it  as  bankrupt  or   insolvent,   or  seeking
reorganization, arrangement, adjustment, liquidation, dissolution or composition
of  it  or  its  debts  under  any  law  relating  to  bankruptcy,   insolvency,
reorganization  or relief of  debtors,  or seeking  appointment  of a  receiver,
trustee,  custodian  or  other  similar  official  for  it or  for  all  or  any
substantial part of its property,  and such case, proceeding or other action (i)
results  in the entry of any order for relief  against  it or (ii) shall  remain
undismissed for a period of thirty (30) days;

     (j) the Borrower is subject to  dissolution or termination as the result of
(i) a vote to  dissolve  by the  Shareholders,  (ii) the  election by Manager to
terminate the operations of the Borrower or (iii) the  expulsion,  bankruptcy or
dissolution of a Shareholder, unless within 90 days thereafter, the Shareholders
holding at least a majority of the  interests in the  Borrower  vote to continue
the operations of the Borrower;

     (k) any event occurs  which would  entitle the  beneficiary  of any limited
recourse  guaranty  permitted by clause (v) of Section 8.1 to demand  payment in
excess of  $500,000  from BRC  pursuant  to the terms of such  limited  recourse
guaranty;

     (l) the ratio of  Belvedere  Capital's  total  assets to total  liabilities
(excluding  the  amount  of any  Shares  submitted  for  redemption  but not yet
redeemed  in the  ordinary  course of  business)  shall at any time be less than
10:1;

     (m) a material  adverse  change in the  business,  condition  (financial or
otherwise),  obligations,  operations, performance or properties of the Borrower
shall have occurred; or

     (n) the  occurrence  of an Event of Default  (as  defined  in the  Overflow
Agreement) under the Overflow Agreement.

                                       27
<PAGE>
     10.2 Remedies.

     (a) Upon the occurrence and during the continuation of an Event of Default,
the Lender may, without prejudice to any other right or remedy of the Lender, at
law, by  contract  or  otherwise,  by notice to the  Borrower  declare the Loan,
accrued  interest  thereon  and any  other  sum  then  payable  hereunder  to be
immediately due and payable by the Borrower  whereupon such amounts shall become
so due and payable.  If an Event of Default specified in clause (h) or (i) above
shall have occurred,  the Note shall automatically become due and payable,  both
as to interest and  principal,  without  presentment,  demand,  protest or other
notice of any kind. Upon the occurrence and continuation of an Event of Default,
the Lender may, to the extent permitted by Applicable Law, set-off,  against any
amount owing to it under this  Agreement and the Note, any  securities,  cash or
other  property  of the  Borrower in the  Lender's or any agent of the  Lender's
possession.

     (b) Upon the  occurrence  and  continuation  of an  Event of  Default,  the
Secured  Party may, at its option,  instruct  the  Custodian  to cancel any open
orders and close any and all  outstanding  financial  contracts  referred  to in
subparagraph (a)(iii) of the definition of Indebtedness,  transfer any or all of
the Pledged Securities to the Secured Party or its designee,  transfer the whole
or any part of the  Collateral  into its name or the name of its  nominee  or to
notify the obligors on any  Collateral  to make payment to the Secured  Party or
its nominee of any amounts due thereon and to take  control or grant its nominee
the right to take  control of any  proceeds  of the  Collateral,  liquidate  the
Pledged  Securities or other  Collateral,  withdraw and/or sell any such Pledged
Securities  or other  Collateral  and apply any such  Collateral  as well as the
proceeds  of any such  Pledged  Securities  or other  Collateral  to all  unpaid
Obligations  in such order as the Lender  defines  in its sole  discretion.  The
Borrower  will be  responsible  for any decrease in the value of the  Collateral
occurring prior to liquidation. Upon the occurrence and continuation of an Event
of Default,  the Secured Party may, to the extent  permitted by Applicable  Law,
also set-off,  against any amount owing to it under this Agreement,  the Note or
the Swap Agreement,  any  securities,  cash or other property of the Borrower in
the possession of any such Person.

     (c) The Secured  Party may exercise  any or all of the rights  contained in
this Section without further demand for additional Collateral, or notice of sale
or purchase,  or other  notice or  advertisement.  Any sales or  purchases  made
pursuant to this Section may be made at the Secured  Party's  discretion  on any
exchange or other market where such business is usually transacted, or at public
auction or private sale,  and the Secured Party or its agent or any Affiliate of
the Secured Party or its agent may be the purchaser for the Secured Party or its
agent or such Affiliate's or its agent's own account.  It is understood that the
giving of any prior demand or call or prior notice of the time and place of such
sale or  purchase  by the Secured  Party or its agent will not be  considered  a
waiver of the  Lender's  right to sell or buy without any such  demand,  call or
notice except as provided in this Agreement.

     (d) In addition to the Secured  Party's  rights and  remedies  described in
this  Agreement,  the Secured Party has the right to exercise any one or more of
the rights and remedies of a secured creditor under the Uniform  Commercial Code

                                       28
<PAGE>
in effect  in the  State of New York.  All the  rights  and  remedies  which are
available to the Lender under this  Agreement are cumulative and are in addition
to any and all other rights and remedies  which are  otherwise  available to the
Lender either at law,  equity or  otherwise.  The Secured Party may exercise any
one or more of such rights and remedies simultaneously or successively.

11.  THE INVESTMENT MANAGER

     11.1 Investment Manager.

     (a) The  Borrower  acknowledges,  agrees and  consents  that the Lender has
assigned its rights under Sections 5.1(b), 5.1(c), 7.5, 7.9(b)-7.9(e),  10.2 and
12.8 of this  Agreement  to the  Investment  Manager,  and that  the  Investment
Manager may, but is not obligated to, exercise such rights.

     (b) The  Borrower  shall  provide  directly to the  Investment  Manager all
notices that the Borrower is required to provide to the Secured  Party  pursuant
to Sections  7.7,  7.8,  7.9(a),  7.10,  7.11 and 7.16 of this  Agreement.  Such
notices shall be delivered to the Investment  Manager in the time and manner set
forth in each such section.

12.  MISCELLANEOUS

     12.1 Expenses. Whether or not the transactions hereby contemplated shall be
consummated,  Merrill Lynch Group agrees to pay all reasonable expenses incurred
by the  Borrower  and the Lender in  connection  with,  or  growing  out of, the
negotiation,  preparation,  execution and delivery of this Agreement  (including
any amendment hereto) and any other documentation  contemplated hereby, the Note
and the  Collateral  (including  the  Pledged  Securities),  including,  but not
limited to, the reasonable fees and disbursements of any counsel for the Lender.
The Borrower  agrees to pay all  reasonable  expenses  incurred by the Lender in
connection with, or growing out of, any waiver,  modification or enforcement and
administration of this Agreement  (including any amendment hereto) and any other
documentation  contemplated  hereby, the Note and the Collateral  (including the
Pledged  Securities),  including,  but not limited to, the  reasonable  fees and
disbursements of any counsel for the Borrower and the Lender.

     12.2 Cost of  Collection.  If the Borrower  fails to make any payment under
this  Agreement  as and when  required,  the  Borrower  must pay,  to the extent
permitted by Applicable  Law, the Secured  Party's court and  collection  costs,
including  legal fees, any costs incurred in the  disposition of the Collateral,
and, if the Loan is referred for  collection to any attorney not employed by the
Lender or one of its Affiliates, the Lender's reasonable attorney fees.

     12.3 Indemnities. The Borrower shall on demand indemnify the Lender and the
Investment  Manager  to the  extent the  Lender or the  Investment  Manager  has
sustained or suffered:

                                       29
<PAGE>
          (i) Any increased cost in  maintaining  all or any part of the Loan or
     any other amount  outstanding  under this Agreement or any reduction in the
     effective  return to the  Lender  under  this  Agreement  or in the rate of
     overall  return on its capital  below that which it would have been able to
     achieve but for its entering  into or giving  effect to the  Agreement,  in
     each case,  which is  sustained  or incurred  directly or  indirectly  as a
     consequence of, or of compliance  with, any change after the date hereof in
     any law, regulation, guideline, order or any directive or the like (whether
     or not having  the force of law) of any  governmental  or other  regulatory
     body or  authority  affecting  the  manner  in which the  Lender  allocates
     capital   resources  to  its  obligations   under  this  Agreement  or  any
     interpretation by any such governmental or regulatory body or authority;

          (ii) Any funding and any other cost,  expense or liability  (including
     loss of profit,  legal fees and taxes)  sustained or incurred by the Lender
     or the  Investment  Manager (1) to render  this  Agreement  (including  the
     Security Interest created by this Agreement) enforceable, (2) in connection
     with  protecting  or  enforcing  the Lender's or the  Investment  Manager's
     rights under this Agreement and/or any amendment  thereto,  (3) as a result
     of the occurrence or continuance of any Default,  or (4) as a result of the
     receipt or  recovery  by the  Lender of all or any part of the Loan  (other
     than a Loan  interest on which is  calculated by reference to the Alternate
     Rate) or an  overdue  sum  otherwise  than on the  last day of an  Interest
     Period applicable to the Loan;

          (iii) Any stamp,  documentary,  registration or similar tax payable in
     connection with the entry into, registration,  performance,  enforcement or
     admissibility  in  evidence  of the  Agreement  and/or any such  amendment,
     supplement  or waiver,  promptly  and in any event  before any  interest or
     penalty  becomes  payable,  together with any liability  with respect to or
     resulting from any delay in paying or omission to pay any such tax;

          (iv) Any claims, demands, losses,  judgments,  damages and liabilities
     (including  liabilities  for  penalties)  incurred  by  the  Lender  or the
     Investment Manager and/or their directors,  officers,  employees and agents
     (each an "Indemnified  Party") as a result of, or arising out of, or in any
     way related  to, or by reason of, any  investigation,  litigation  or other
     proceeding (whether or not either the Lender or the Investment Manager is a
     party thereto)  related to the entering into and/or the performance of this
     Agreement,  or the  use of  the  proceeds  of  the  Loan  hereunder  or the
     consummation  of any  other  transaction  contemplated  by this  Agreement,
     including,  without  limitation,  the reasonable fees and  disbursements of
     counsel incurred in connection with any such  investigation,  litigation or
     other  proceeding  (but  excluding  any such losses,  liabilities,  claims,
     damages or expenses of an Indemnified  Party to the extent  incurred (i) by
     reason of the gross  negligence or willful  misconduct of such  Indemnified
     Party or (ii) as a result of any dispute between Indemnified Parties or any
     conflicting instructions given to the Borrower by Indemnified Parties); and

                                       30
<PAGE>
          (v) Any claims, demands,  losses,  judgments,  damages and liabilities
     (including  liabilities  for  penalties)  incurred  by  the  Lender  or the
     Investment Manager as a result of, or arising out of, or in any way related
     to, or by reason  of, any loss  incurred  by any  Shareholder  whether as a
     result of an adverse tax situation or otherwise, arising from or in any way
     related  to any act or failure to act by the  Secured  Party in  connection
     with the Collateral or this Agreement.

     12.4 Delay in Enforcement; No Waiver. The Secured Party can choose to delay
or not to enforce any of its rights  under this  Agreement  without  losing such
rights. If the Secured Party chooses not to exercise or enforce (or is prevented
from  exercising or enforcing) any of such rights,  the Borrower agrees that the
Secured Party is not waiving the right to enforce such rights at a later time or
any of its other  rights.  Any waiver of the Secured  Party's  rights under this
Agreement must be in writing.

     12.5  Statements  and Notices.  Statements  and notices will be sent to the
address for the Borrower  indicated  on the  signature  page hereto,  unless the
Borrower  notifies  the Lender in writing of a change in address.  The  Borrower
agrees to provide the Lender with 30 Business  Days' prior written notice of any
change of address or name.  The Borrower  agrees to send  correspondence  to the
Lender and the Investment Manager at the respective addresses for the Lender and
the Investment  Manager indicated on the signature page or as otherwise provided
by the Lender or the Investment Manager, as applicable.

     12.6  Waivers.  To the extent  permitted  by  Applicable  Law, the Borrower
waives the Borrower's  rights to require the Lender,  (a) to demand  payments of
amounts due (known as  "presentment");  (b) to give notice that amounts due have
not been paid  (known as "notice of  dishonor");  and (c) to obtain an  official
certification of non-payment (known as "protest").

     12.7 Non-Recourse.  The Secured Party hereby agrees for the benefit of each
and every  Shareholder  of the  Borrower,  the  Manager  of the  Borrower,  each
employee, officer and trustee of the Manager and of the Borrower, the Investment
Advisor, and any successor,  assignee,  heir, estate,  administrator or personal
representative  of any  such  person  (a  "Non-Recourse  Person")  that:  (a) no
Non-Recourse  Person shall have any personal liability for any obligation of the
Borrower  under this Agreement or the Note or the Account  Control  Agreement or
the Swap Agreement or any other instrument or document delivered pursuant hereto
or thereto;  (b) no claim  against any  Non-Recourse  Person may be made for any
obligation of the Borrower under this  Agreement,  the Note, the Account Control
Agreement  or any other  instrument  or document  delivered  pursuant  hereto or
thereto,  whether for payment of  principal  of, or interest on, the Loan or for
any fees, costs,  expenses or other amounts payable by the Borrower hereunder or
thereunder,  or otherwise;  and (c) the  obligations  of the Borrower under this
Agreement,  the Note,  the Account  Control  Agreement or the Swap  Agreement or
other  document  or  instrument   delivered   pursuant  hereto  or  thereto  are

                                       31
<PAGE>
enforceable  against the  Borrower  and the  Borrower's  properties  and assets.
Nothing  contained  in this  Section  shall be construed as limiting the Secured
Party's  rights  against the  Custodian in its capacity as custodian and account
carrier under the Account Control Agreement.

     12.8 Further  Assurances.  The Borrower agrees that upon the request of the
Secured  Party,  it shall  execute  and/or  deliver any  additional  agreements,
documents and  instruments  as may be reasonably  requested by the Secured Party
from time to time,  including,  without  limitation,  opinions  of counsel  with
respect to the continuing  authority of the Borrower to perform its  obligations
under this Agreement  (which counsel shall be  satisfactory to the Secured Party
in its sole  discretion),  which  agreements,  documents or instruments shall be
satisfactory to the Secured Party in its sole discretion.

     12.9 Successors and Assigns.

     (a) This  Agreement  shall be binding  upon and inure to the benefit of the
successors  and  permitted  assigns of all the  parties to this  Agreement.  The
Lender may assign at its sole option all or part of its rights,  obligations and
remedies under this  Agreement to any member of the Merrill Lynch Group.  In the
event that the Lender wishes to assign all or part of its rights, obligation and
remedies under this Agreement to anyone other than a member of the Merrill Lynch
Group,  such assignment is subject to the written consent of the Borrower (which
consent shall not unreasonably be withheld);  provided however,  that no consent
by the  Borrower  shall be required  for any  assignment  which is made while an
Event of Default has occurred or is continuing. Any such assignee of such rights
and  obligations  shall be entitled to the full benefit of this Agreement to the
same  extent  as if it were an  original  party  in  respect  of the  rights  or
obligations  assigned  or  transferred  to it.  The  Lender  may  disclose  to a
potential  assignee  (or any other  Person who has  entered or proposes to enter
into contractual  arrangements with the Lender in relation to or concerning this
Agreement),  such information  about the Borrower,  and this Agreement as it may
deem  appropriate  provided  that such  assignee  (or any other  Person  who has
entered or proposes to enter into  contractual  arrangements  with the Lender in
relation to or concerning this Agreement) is subject to the provisions set forth
in Section 12.18.  The Borrower may not assign its rights or  obligations  under
this Agreement.

     12.10 GOVERNING LAW AND JURISDICTION.

     (a) THIS  AGREEMENT AND THE NOTE HAVE BEEN DELIVERED BY THE BORROWER IN THE
STATE OF NEW YORK AND IN ALL RESPECTS SHALL BE GOVERNED BY AND INTERPRETED UNDER
THE  LAWS OF THE  STATE  OF NEW  YORK  APPLICABLE  TO  CONTRACTS  MADE AND TO BE
PERFORMED WHOLLY WITHIN SUCH STATE.

     (b) THE BORROWER HEREBY  IRREVOCABLY  SUBMITS ITSELF TO THE JURISDICTION OF
ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY AND TO THE JURISDICTION OF THE
UNITED  STATES  DISTRICT  COURT FOR THE  SOUTHERN  DISTRICT  OF NEW YORK FOR THE
PURPOSES OF ANY SUIT,  ACTION OR OTHER  PROCEEDING  ARISING OUT OF OR BASED UPON
THIS  AGREEMENT  OR THE  SUBJECT  MATTER  HEREOF  BROUGHT  BY THE  LENDER OR ITS
SUCCESSORS OR ASSIGNS. THE BORROWER,  TO THE EXTENT PERMITTED BY APPLICABLE LAW,

                                       32
<PAGE>
(A) HEREBY  WAIVES AND AGREES NOT TO ASSERT,  BY WAY OF MOTION,  AS A DEFENSE OR
OTHERWISE,  IN ANY SUCH  SUIT,  ACTION OR  PROCEEDING,  ANY CLAIM THAT IT IS NOT
SUBJECT  PERSONALLY TO THE  JURISDICTION  OF THE  ABOVE-NAMED  COURTS,  THAT ITS
PROPERTY IS EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE SUIT, ACTION
OR PROCEEDING IS BROUGHT IN AN INCONVENIENT  FORUM,  THAT THE VENUE OF THE SUIT,
ACTION OR  PROCEEDING IS IMPROPER OR THAT THIS  AGREEMENT OR THE SUBJECT  MATTER
HEREOF MAY NOT BE ENFORCED IN OR BY SUCH COURT,  AND (B) HEREBY WAIVES THE RIGHT
TO ASSERT IN ANY SUCH SUIT,  ACTION OR  PROCEEDING  ANY OFFSET OR  COUNTERCLAIM,
EXCEPT  COUNTERCLAIMS  THAT ARE COMPULSORY.  THE BORROWER HEREBY CONSENTS TO THE
SERVICE OF PROCESS BY MAIL AT ITS NOTICE  ADDRESS SET FORTH IN SECTION 12.5. THE
BORROWER  AGREES THAT ITS SUBMISSION TO  JURISDICTION  AND CONSENT TO SERVICE OF
PROCESS BY MAIL IS MADE FOR THE  EXPRESS  BENEFIT OF THE  SECURED  PARTY.  FINAL
JUDGMENT  AGAINST THE BORROWER IN ANY SUCH SUIT,  ACTION OR PROCEEDING  SHALL BE
CONCLUSIVE, AND MAY BE ENFORCED IN ANY OTHER JURISDICTION (X) BY SUIT, ACTION OR
PROCEEDING  ON THE  JUDGMENT,  A  CERTIFIED  OR TRUE  COPY  OF  WHICH  SHALL  BE
CONCLUSIVE  EVIDENCE  OF THE  FACT  AND OF THE  AMOUNT  OF THE  INDEBTEDNESS  OR
LIABILITY OF THE BORROWER OR (Y) IN ANY OTHER MANNER  PROVIDED BY OR PURSUANT TO
THE LAWS OF SUCH OTHER JURISDICTION;  PROVIDED,  HOWEVER, THAT THE SECURED PARTY
MAY AT ITS OPTION BRING SUIT OR INSTITUTE OTHER JUDICIAL PROCEEDINGS AGAINST THE
BORROWER OR ANY OF ITS ASSETS IN ANY STATE OR FEDERAL COURT OF THE UNITED STATES
OR OF ANY COUNTRY OR PLACE WHERE THE BORROWER OR SUCH ASSETS MAY BE FOUND.

     12.11  Effectiveness.  The  Borrower  hereby  acknowledges  that  (i)  this
Agreement shall become effective with respect to the Lender only at such time as
the  Lender  has  accepted  this  Agreement  and the  Lender  shall not have any
liability or obligation  hereunder  until such time, (ii) the Lender may execute
this Agreement by telecopy and provide executed originals to the Borrower.

     12.12 WAIVER OF JURY TRIAL. TO THE EXTENT  PERMITTED BY APPLICABLE LAW, THE
BORROWER  HEREBY  WAIVES  AND  COVENANTS  THAT IT WILL NOT  ASSERT  (WHETHER  AS
PLAINTIFF,  DEFENDANT OR OTHERWISE),  ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN
RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING OUT OF OR
BASED UPON THIS AGREEMENT,  THE NOTE OR THE SUBJECT MATTER HEREOF OR THEREOF, IN
EACH CASE WHETHER NOW  EXISTING OR  HEREAFTER  ARISING OR WHETHER IN CONTRACT OR
TORT OR OTHERWISE.  THE BORROWER  ACKNOWLEDGES  THAT IT HAS BEEN INFORMED BY THE
SECURED  PARTY  THAT  THE  PROVISIONS  OF THIS  SECTION  CONSTITUTE  A  MATERIAL

                                       33
<PAGE>
INDUCEMENT UPON WHICH THE SECURED PARTY HAS RELIED,  IS RELYING AND WILL RELY IN
ENTERING INTO THIS AGREEMENT,  THE NOTE AND ANY OTHER DOCUMENT  RELATED THERETO.
THE SECURED  PARTY MAY FILE AN ORIGINAL  COUNTERPART  OF THIS  SECTION  WITH ANY
COURT AS WRITTEN  EVIDENCE OF THE  CONSENT OF THE  BORROWER TO THE WAIVER OF ITS
RIGHTS TO TRIAL BY JURY.

     12.13 Amendments. No amendment,  modification or waiver of any provision of
this Agreement and no consent to any departure by the Borrower  herefrom,  shall
be  effective  unless the same shall be in writing  and signed by the Lender and
then such waiver or consent shall be effective only in the specific instance and
for the purpose for which given.  In addition,  no  amendment,  modification  or
waiver of any provision of this Agreement  which effects the Investment  Manager
shall be  effective  unless  the same  shall be in  writing  and  signed  by the
Investment Manager.

     12.14  Headings.  The heading of each  provision  of this  Agreement is for
descriptive  purposes  only and shall not be deemed to modify or qualify  any of
the rights or obligations described in each such provision.

     12.15  Severability.  If any  provision  of  this  Agreement  is held to be
invalid,   illegal,  void  or  unenforceable,   by  reason  of  any  law,  rule,
administrative  order or judicial or arbitral decision,  such decision shall not
affect the validity of the remaining provisions of this Agreement.

     12.16 Entire  Agreement.  This Agreement and the Account Control  Agreement
constitute  the entire  agreement  between the parties and supersede any and all
prior agreements (whether written or oral).

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

     12.18  Confidentiality.  The Lender agrees to keep confidential any written
or oral information (a) provided to it by or on behalf of the Borrower  pursuant
to or in connection with this Agreement or (b) obtained by the Lender based on a
review of the books and records of the Borrower;  provided  that nothing  herein
shall  prevent  the  Lender  from  disclosing  any such  information  (i) to any
assignee,  transferee,  prospective  assignee or  prospective  transferee  which
agrees to comply with the  provisions of this Section,  (ii) to its  affiliates,
employees,  directors,  agents,  attorneys,  accountants and other  professional
advisors,  (iii)  upon  the  request  or  demand  of any  governmental  or other
regulatory  body or  authority,  (iv) in  response  to any order of any court or
other  governmental or other regulatory body or authority or as may otherwise be

                                       34
<PAGE>
required pursuant to any present or future law or regulation or any directive or
the like (whether or not having the force of law) of any  governmental  or other
regulatory body or authority,  (v) which has been publicly  disclosed other than
in breach of this Section or (vi) in connection  with the exercise of any remedy
hereunder.

     12.19   Acknowledgment   and   Acceptance   of  Investment   Manager.   The
acknowledgment  and Acceptance of the Investment Manager shall only apply to its
respective rights and obligations set forth in Section 11 of this Agreement.

                           [Signature page to follow]

                                       35
<PAGE>
     IN WITNESS  WHEREOF,  the parties hereto have caused this Loan and Security
Agreement to be duly executed by its  authorized  officer as of the day and year
first written above. Borrower:

                                BELROSE CAPITAL FUND LLC, as Borrower

                                By:     EATON VANCE MANAGEMENT, as Manager


                                By:     /s/ Thomas E. Faust Jr.
                                        ------------------------------------
                                Name:     Thomas E. Faust Jr.
                                Title:    Executive Vice President
                                Address:  The Eaton Vance Building
                                          255 State Street
                                          Boston, Massachusetts 02109
                                Telephone No.:  (617) 482-8260
                                Telecopier No.:  (617) 482 3836

                                       36
<PAGE>
                                Lender:

                                DRKW HOLDINGS, INC., as Lender


                                By:     /s/ Neil Winward
                                        ------------------------------------
                                Name:     Neil Winward
                                Title:    President
                                Address:  1301 Avenue of the Americas
                                          New York, New York 10019
                                Telephone No.:  (212) 969-7909
                                Telecopier No.:  (212) 969-7850

                                       37
<PAGE>
                                ACKNOWLEDGED AND ACCEPTED


                                Investment Manager:

                                WELLS FARGO BANK MINNESOTA, NATIONAL
                                ASSOCIATION, as Investment Manager


                                By:     /s/ Joe Nardl
                                        ------------------------------------
                                Name:     Joe Nardl
                                Title:    Assistant Vice President
                                Address:  Sixth Street and Marquette Avenue
                                          MAC N9311-161
                                          Minneapolis, MN 55479
                                          Attention: Corporate Trust
                                          Services/Asset- Backed Administration
                                Telephone No.:  (612) 667-8058
                                Telecopier No.:  (617) 667-3539

                                       38
<PAGE>
                                                                    SCHEDULE 2.8

                         OPTIONAL PREPAYMENT CONDITIONS

The Borrower may make prepayments of principal pursuant to Section 2.8(i) of the
Agreement only if any such  prepayment is made in accordance  with the following
conditions:

     1.   Prepayments  of  principal  may be made in an  amount  up to,  but not
          exceeding,  an amount  received  by the  Borrower  in  respect  of any
          principal  redemptions or  prepayments  with respect to the Borrower's
          Qualifying  Assets  received  in  accordance  with  the  terms of such
          Qualifying Asset.

     2.   Prepayments of principal may be made in such principal amount as shall
          be determined by the Borrower to ensure continued  compliance with the
          collateral  coverage  requirement,  but only if and to the extent that
          the excess of the  collateral  value over the amount of the collateral
          coverage  requirement  does not exceed 15% of the collateral  coverage
          requirement.

     3.   Prepayments  of  principal  may be made in an  amount  up to,  but not
          exceeding,  the proceeds of a disposition of Qualifying  Assets,  that
          the Borrower  determines it is no longer required to hold by reason of
          the   redemption   of  Shares  of  the  Borrower  at  the  request  of
          Shareholders.

     4.   Prepayments  of  principal  may be made in an  amount  up to,  but not
          exceeding,  the  amount  drawn  down  by a  Transferee  Fund*  on  its
          respective  loan from the Lender in connection  with the transfer of a
          Qualifying Asset from the Borrower to such Transferee Fund.

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* Transferee Funds: Belair Capital Fund LLC, Belcrest Capital Fund LLC, Belshire
Capital Fund LLC and Belvedere Equity Fund LLC