AMENDED AND RESTATED

                                 LOAN AGREEMENT

                         Dated as of September 26, 1996

                                respecting a loan

                              of up to $38,000,000

                                      among

                           PLM EQUIPMENT GROWTH FUND V
                        TRADER VESSEL LIMITED PARTNERSHIP
                               TRADER VESSEL INC.
                      CALIFORNIA VESSEL LIMITED PARTNERSHIP
                             CALIFORNIA VESSEL INC.
                       COLUMBUS VESSEL LIMITED PARTNERSHIP
                              COLUMBUS VESSEL INC.
                           REDCAR INVESTMENTS LIMITED

                                  as Companies

                                       and

                         CHRISTIANIA BANK OG KREDITKASSE
            INTERNATIONALE NEDERLANDEN LEASE STRUCTURED FINANCE B.V.
                 AND SUCH OTHER BANKS AND FINANCIAL INSTITUTIONS
                        AS MAY HEREAFTER BE NAMED HEREIN
                                   as Lenders

                                       and

                        CHRISTIANIA BANK OG KREDITKASSE,
                                 NEW YORK BRANCH

                          as Agent and Security Trustee


                                                       Watson, Farley & Williams
                                                       380 Madison Avenue
                                                       New York, New York 10017


<PAGE>








                                      INDEX



CLAUSE                                                                  PAGE


    1             LOAN, PURPOSE                                           2

    2             DEFINITIONS AND INTERPRETATION                          2

    3             INTEREST AND INTEREST PERIODS                           10

    4             REPAYMENT AND PREPAYMENT                                11

    5             CONDITIONS PRECEDENT                                    12

    6             REPRESENTATIONS AND WARRANTIES                          16

    7             COVENANTS                                               19

    8             SECURITY TRUSTEE                                        27

    9             EVENTS OF DEFAULT                                       41

   10             FEES AND EXPENSES                                       46

   11             PAYMENTS AND CALCULATIONS                               46

   12             NO COUNTERCLAIM, TAXATION                               47

   13             CHANGES IN CIRCUMSTANCES                                47

   14             FUNDING LOSSES                                          49

   15             SECURITY                                                50

   16             COMMUNICATIONS                                          50

   17             ASSIGNMENTS                                             51

   18             MISCELLANEOUS                                           51

   19             LAW AND JURISDICTION                                    52

   20             RIGHTS OF CONTRIBUTION                                  53

   21             NONRECOURSE                                             53

   22             RELEASE OF CERTAIN COMPANIES                            54




<PAGE>









                                      (ii)

SCHEDULE 1           THE LENDERS
SCHEDULE 2           LIENS
SCHEDULE 3           APPROVED LIST OF APPRAISERS
APPENDIX A           FORM OF PROMISSORY NOTE
APPENDIX B           FORM OF LIBERIAN MORTGAGE
APPENDIX C           FORM OF DEED OF COVENANTS
APPENDIX D           [Intentionally omitted.]
APPENDIX E           FORM OF SECURITY AGREEMENT
APPENDIX F           FORM OF ASSIGNMENT OF CHARTER
APPENDIX G           FORM OF PLEDGE AGREEMENT
APPENDIX H           FORM OF AIRCRAFT MORTGAGE
APPENDIX I           FORM OF BENEFICIAL INTEREST SECURITY AGREEMENT
APPENDIX J           FORM OF COMPLIANCE CERTIFICATE
APPENDIX K           FORM OF ASSIGNMENT OF LIMITED PARTNERSHIP INTERESTS
APPENDIX L           FORM OF NOTICE AND ACKNOWLEDGMENT OF MORTGAGE


<PAGE>








                                                         -1-

THIS AMENDED AND RESTATED LOAN AGREEMENT (the "Agreement") dated as of September
26, 1996


BY AND AMONG

(1)        PLM  EQUIPMENT  GROWTH  FUND  V,  a  California  limited  partnership
           (hereinafter called "EGF V");

(2)        TRADER VESSEL LIMITED  PARTNERSHIP,  a California limited partnership
           (hereinafter called "Trader");

(3)        TRADER  VESSEL  INC., a California  corporation  (hereinafter  called
           "TVI");

(4)        CALIFORNIA   VESSEL  LIMITED   PARTNERSHIP,   a  California   limited
           partnership (hereinafter called "California");

(5)        CALIFORNIA  VESSEL INC., a Wyoming  corporation  (hereinafter  called
           "CVI");

(6)        COLUMBUS VESSEL LIMITED PARTNERSHIP, a California limited partnership
           (hereinafter called "Columbus");

(7)        COLUMBUS  VESSEL  INC.,  a Wyoming  corporation  (hereinafter  called
           "COVI");

(8)        REDCAR INVESTMENTS  LIMITED, a Hong Kong company  (hereinafter called
           "Redcar",  and together  with EGF V, Trader,  TVI,  California,  CVI,
           Columbus and COVI, as joint and several borrowers, hereinafter called
           the "Companies");

(9)        The  LENDERS  listed on  Schedule  1 hereto  (hereinafter  called the
           "Lenders"); and -------

(10)       CHRISTIANIA  BANK OG KREDITKASSE,  New York Branch ("CBK"),  as agent
           and  security  trustee   (hereinafter  called  "Agent"  or  "Security
           Trustee").


                                    RECITALS


(A)        The Lenders made  available to the Companies a loan facility of up to
           Thirty  Eight  Million  Dollars  ($38,000,000)  pursuant to, upon and
           subject to the terms and conditions of the Loan Agreement dated as of
           November 8, 1991,  as amended by an Addendum  No. 1 dated as of April
           27, 1992 (as so  amended,  the  "Original  Loan") as  evidenced  by a
           Secured  Joint and Several  Promissory  Note of the  Companies  dated
           November 14, 1991 as endorsed by  Endorsement  to Secured  Promissory
           Note  dated as of April  27,  1992  executed  by  Redcar  Investments
           Limited.

(B)        Pursuant  to an  Assignment  of Cash  Collateral  dated May 30,  1996
           executed by EGF V in favor of the Agent,  the Lenders  released their
           first  preferred  mortgage  on DUAL RIG 86,  and EGF V granted to the
           Agent a security interest in a $10,750,000 cash collateral deposit.

(C)        The  parties  hereto  desire  to amend  certain  covenants  and other
           provisions  contained in the Original Loan Agreement;  to add certain
           additional  obligors;  to pledge additional equipment (which is owned
           by the Owner  Trustee  for the benefit of EGF V pursuant to the Trust
           Agreement)  to the Agent and the Lenders to secure the  repayment  of
           the Loan and the  obligation of the Companies  under this  Agreement,
           the Note and the Security Documents; to release Balboa Marine Limited
           Partnership,  a California  limited  partnership  ("Balboa"),  Balboa
           Marine Inc., a California corporation ("BMI"),  Divisadero ------ ---
           Vessel  Limited   Partnership,   a  California  limited   partnership
           ("Divisadero"),  Divisadero  Vessel  Inc.,  a  ----------  California
           corporation ("DVI"), Ashbury Street Limited Partnership, a California
           limited  partnership  ---  ("Ashbury")  and Ashbury  Street  Inc.,  a
           California   corporation  ("ASI")  from  the  obligations  under  the
           ---------  --- Original Loan  Agreement;  and to restate the Original
           Loan Agreement as set forth herein.

           NOW THEREFORE the parties hereto agree that, upon satisfaction of the
conditions set forth in Section 5, the Original Loan Agreement  shall be amended
and restated to read in its entirety as follows:


1.         LOAN, PURPOSE

1.01       Subject  to the  terms  of  this  Agreement  and in  reliance  on the
           representations  and  warranties  of the  Companies set out in Clause
           6.01 of the Original Loan  Agreement,  the Lenders made  available to
           the Companies on a joint and several basis a loan facility  having an
           aggregate  principal  amount of up to $38,000,000 for the purposes of
           financing  the  acquisition  of  additional  equipment  for  EGF  V's
           equipment portfolio and to provide working capital for the Companies,
           the  entire  principal  amount  of which is  outstanding  on the date
           hereof.

2.         DEFINITIONS AND INTERPRETATION

2.01       In this  Agreement,  the  words,  expressions  and  other  provisions
           specified below shall,  except where the context otherwise  requires,
           have the meanings and effect prescribed below.

           "Act" has the meaning specified in Clause 8.04 hereof;

           "Agent"  means  Christiania  Bank og  Kreditkasse,  New York  branch,
           acting in its capacity as agent for the Lenders under this  Agreement
           and includes (a) any other branch or office  through  which the Agent
           may be acting  from time to time and (b) where the context so admits,
           the Agent's successors and assigns;

           "Aircraft"  means (i) Aircraft 1, Aircraft 2, Aircraft 3, Aircraft 4,
           Aircraft 5, Aircraft 6 and (ii) such other  aircraft as the Companies
           may  hereafter  mortgage  as  security  for  the  obligations  of the
           Companies under this Agreement,  the Note and the Security Documents,
           or any of them as the  context  requires,  as the  same  are  further
           described in the respective Aircraft Mortgages;

           "Aircraft  1" means the  Canadian  registered  Boeing  737-200  (msn.
           22257),  as the same is further  described in the  relevant  Aircraft
           Mortgage;

           "Aircraft  2" means the  Canadian  registered  Boeing  737-200  (msn.
           22264),  as the same is further  described in the  relevant  Aircraft
           Mortgage;

           "Aircraft 3" means the Canadian  registered  DHC-8-102 (msn. 190), as
           the same is further described in the relevant Aircraft Mortgage;

           "Aircraft 4" means the U.S. registered McDonnel-Douglas DC-9-32 (msn.
           48112),  as the same is further  described in the  relevant  Aircraft
           Mortgage;

           "Aircraft 5" means the U.S.  registered De Havilland  DHC-8-102 (msn.
           016),  as the same is  further  described  in the  relevant  Aircraft
           Mortgage;

           "Aircraft 6" means the U.S.  registered De Havilland  DHC-8-102 (msn.
           019),  as the same is  further  described  in the  relevant  Aircraft
           Mortgage;

           "Aircraft  Mortgages" means (i) each first priority Aircraft Mortgage
           and Security  Agreement executed by the Owner Trustee in favor of the
           Security Trustee in respect of Aircraft 4, Aircraft 5 and Aircraft 6,
           (ii) each first  priority  Aircraft  Mortgage and Security  Agreement
           executed  by the Owner  Trustee in favor of the  Security  Trustee in
           respect of Aircraft 1,  Aircraft 2 and Aircraft 3 and (iii) any other
           aircraft  mortgage  in respect of  Aircraft  executed in favor of the
           Security  Trustee by the owner of such Aircraft or any of them as the
           context  requires,  each in form and  substance  satisfactory  to the
           Agent, as the same may be amended, supplemented or modified from time
           to time;

           "Approved List" means the approved list of sale and purchase  brokers
           attached hereto as Schedule 3;

           "Approved  Manager"  means IMI or any other  company  which the Agent
           may, in its reasonable  discretion,  approve from time to time as the
           manager of the Vessels or any other Equipment;

           "Approved Management Agreement" means the agreement between EGF V and
           the  Approved  Manager   providing  for  the  complete   maintenance,
           operation,  repair,  certification  and upkeep of the  Vessels or any
           other Equipment;

           "Assignment  of  Limited   Partnership   Interests"   means  (i)  the
           assignments  executed  or to be  executed  in favor  of the  Security
           Trustee by EGF V for the limited partnership interests in Clement and
           Montgomery,  respectively,  and (ii) such other assignment of limited
           partnership  interests  executed in favor of the Security  Trustee as
           security for the  obligations of the Companies  under this Agreement,
           the  Notes and the  Security  Documents,  each in form and  substance
           satisfactory to the Agent,  as the same may be amended,  supplemented
           or modified from time to time;

           "Beneficial Interest Security Agreement" means the security agreement
           executed or to be executed by the Security Trustee, the Owner Trustee
           and EGF V in  respect  of its  beneficial  interest  in the  Aircraft
           pursuant to the Trust Agreement,  in form and substance  satisfactory
           to the Agent,  as the same may be amended,  supplemented  or modified
           from time to time;

           "Business  Day"  means  a  day  on  which  banks  are  open  for  the
           transaction  of business of the nature  required by this Agreement in
           the place or places from time to time specified;

           "California"   means  California   Vessel  Limited   Partnership,   a
           California  limited  partnership  having its principal offices at One
           Market, Steuart Tower, Suite 800, San Francisco, CA 94105;

           "Cash  Collateral  Account"  means the cash  collateral  account  no.
           406-246-5001 in the name of the Companies  maintained by the Security
           Trustee and under the dominion  and control of the Security  Trustee,
           as further described in Clause 7.04;

           "Cash Equivalents" means any of the following, to the extent owned by
           the Companies  free and clear of all Security  Interests and having a
           maturity  not  greater  than 360 days (or  such  other  period  as is
           specified) from the date of issuance thereof:  (a) direct obligations
           of  the   Government   of  the   United   States  or  any  agency  or
           instrumentality thereof or obligations  unconditionally guaranteed by
           the full faith and credit of the Government of the United States; (b)
           certificates of deposit or time deposits with (i) Christiania Bank og
           Kreditkasse or (ii) any commercial  bank that (x) is organized  under
           the laws of the  United  States or any State  thereof  or any  member
           country of the Organization for Economic  Cooperation and Development
           and (y) has combined capital and surplus of at least $300,000,000 and
           whose  debt  is  rated  A  by  Standard  and  Poors,   provided  such
           certificates of deposit or time deposits described in this clause (b)
           will  not  in  the  aggregate  exceed  $20,000,000  and do not in any
           individual case have a maturity in excess of 180 days, (c) commercial
           paper having a maturity not to exceed 180 days in an aggregate amount
           of not more than  $20,000,000  per  issuer  outstanding  at any time,
           issued  by  Christiania   Bank  og  Kreditkasse  or  any  corporation
           organized  under the laws of any State of the United States and rated
           at  least "  Prime-1  " (or the then  equivalent  grade)  by  Moody's
           Investors  Services,  Inc. or " A- I " (or the then equivalent grade)
           by Standard & Poor's Ratings Group or an equivalent  rating or higher
           from at least one nationally recognized rating agency; (d) repurchase
           obligations  with a term of not more than 30 days for  securities  of
           the types listed in clause (a) with a bank meeting the  qualification
           described  in clause  (b);  or (e) shares of money  market  mutual or
           similar  funds  having  assets in excess  of  $100,000,000  and which
           invest  exclusively in assets  satisfying the requirements of clauses
           (a) through (d) of this definition;

           "CBK" means Christiania Bank og Kreditkasse, New York Branch;

           "Classification  Society"  shall mean Det norske Veritas with respect
           to M/T STOLT TRADER,  American Bureau of Shipping with respect to M/V
           CALIFORNIA,  and Lloyd's  Register of  Shipping  with  respect to M/T
           COLUMBUS or such other  classification  society as is selected by the
           Companies with the consent of the Agent;

           "CLVI" means Clement Vessel,  Inc., a Wyoming  corporation having its
           principal  offices at One  Market,  Steuart  Tower,  Suite  800,  San
           Francisco, CA 94105;

           "Clement"  means Clement  Vessel  Limited  Partnership,  a California
           limited  partnership  having its  principal  offices  at One  Market,
           Steuart Tower, Suite 800, San Francisco, CA 94105;

           "Columbus"  means Columbus Vessel Limited  Partnership,  a California
           limited  partnership  having its  principal  offices  at One  Market,
           Steuart Tower, Suite 800, San Francisco, CA 94105;

           "Companies"  means  each  of EGF V,  Trader,  TVI,  California,  CVI,
           Columbus,  COVI and  Redcar,  as such  list may be from  time to time
           amended;

           "Containers"  means  those  refrigerated  and dry  marine  containers
           listed in Schedule 1 to Appendix E;

           "COVI" means Columbus Vessel Inc., a Wyoming  corporation  having its
           principal  offices at One  Market,  Steuart  Tower,  Suite  800,  San
           Francisco, CA 94105;

           "CVI" means California Vessel Inc., a Wyoming  corporation having its
           principal  offices at One  Market,  Steuart  Tower,  Suite  800,  San
           Francisco, CA 94105;

           "Deeds of Covenants" means the Deeds of Covenants supplemental to the
           Mortgages  executed in favor of the Security Trustee by (i) Redcar on
           M/V  CALIFORNIA  and (ii)  Columbus on M/T  COLUMBUS,  and such other
           deeds of covenants  supplemental  to a Mortgage  executed in favor of
           the Security  Trustee by the  mortgagor in respect of such  Mortgage,
           each in form and substance satisfactory to the Agent, as the same may
           be amended, supplemented or modified from time to time;

           "Default" means an event or occurrence that with the giving of notice
           or lapse of time or both would constitute an Event of Default;

           "Dollars" and "$" means the lawful currency for the time being of the
           United States of America;

           "Drawdown Date" means the date upon which the Companies requested the
           drawdown  of the  Loan  pursuant  to  Clause 2 of the  Original  Loan
           Agreement,  or (as the context  requires)  the date on which the Loan
           was actually drawn down thereunder;

           "EGF V" means  PLM  Equipment  Growth  Fund V, a  California  limited
           partnership  having  its  principal  offices at One  Market,  Steuart
           Tower, Suite 800, San Francisco, CA, 94105;

           "Equipment"  means all aircraft,  aircraft  engines,  drilling  rigs,
           vessels,  railcars,  truck  trailers,  truck  tractors,  chassis  and
           containers owned directly or beneficially by EGF V or a subsidiary or
           affiliate of EGF V, including any Company other than EGF V;

           "Estate"  has the meaning specified in Clause 8.02 hereof;

           "Event of Default" means any one of the events listed in Clause 9.01;

           "FSI" means PLM  Financial  Services,  Inc.,  a Delaware  corporation
           having its principal offices at One Market, Steuart Tower, Suite 800,
           San Francisco, CA 94105;

           "IMI" means PLM Investment Management, Inc., a California corporation
           with its principal  place of business at One Market,  Steuart  Tower,
           Suite 800, San Francisco, CA 94105;

           "Indebtedness"  has the meaning  specified in Clause  8.02,  together
           with such other  amounts as may be owing to the  Security  Trustee by
           any of the Companies under the Security Documents;

           "Indenture"  means the trust  indenture  created  by Clause 8 of this
           Agreement and the Security Documents;

           "Insurance  Assignments"  means  the  assignments  executed  or to be
           executed  in favor of the  Security  Trustee  by (i)  Trader  for the
           insurances  of M/T  TRADER;  (ii)  Redcar for the  insurances  of M/V
           CALIFORNIA,  (iii)  Columbus for the  insurances  of M/T COLUMBUS and
           (iv) EGF V for the  insurances  on the  Containers,  and  such  other
           assignment of insurances in respect of any other Vessel,  Aircraft or
           other  Equipment  executed  in favor of the  Security  Trustee by the
           owner  of  such  Vessel  or  Aircraft,  each in  form  and  substance
           satisfactory to the Agent,  as the same may be amended,  supplemented
           or modified from time to time;

           "Interest  Period" means a period of either one (1), three (3) or six
           (6) months as determined pursuant to Clause 3;

           "Interest Rate  Agreements"  means any  agreements  entered into from
           time to time  between  any  Lender and the  Companies  or any of them
           providing  for the hedging of  interest  rate  risks;  provided,  the
           Companies  shall first offer to the Agent the  opportunity to provide
           such hedging of interest rate risks;

           "Lenders" mean the Lenders  listed on Schedule 1 hereto,  as the same
           may be amended from time to time, and their successors and assigns;

           "LIBOR"  means (i) the rate per annum equal to the rate quoted by the
           Agent as appearing  on the Telerate  Page 3750 at or about 11:00 A.M.
           (London  time)  for the  applicable  Interest  Period  on the  second
           Business Day prior to the  commencement  of such  Interest  Period or
           (ii) if such rate does not appear on the Telerate Page 3750, the rate
           at which deposits in Dollars in an amount  approximately equal to the
           Loan (or any relevant  part  thereof) are offered to the Agent in the
           London  Interbank  Dollar Market at or about 11:00 a.m. (London time)
           for the applicable  Interest  Period on the second Business Day prior
           to the  commencement  of such  Interest  Period for a period equal to
           such Interest Period;

           "Loan" means the aggregate  principal amount of all borrowings by the
           Companies  under this  Agreement  or (as the  context  requires)  the
           aggregate  principal  amount  thereof for the time being advanced and
           outstanding under this Agreement;

           "Majority  Lenders"  means  the  Lenders  owning  at least 51% of the
           Indebtedness;

           "Margin" means one and two-tenths percent (1.20%) per annum, plus any
           applicable margin imposed on the Companies or the Lenders as a result
           of the operation of Regulation D (Code of Federal Regulations,  Title
           12, Chapter II, Part 204) or any successor or replacement  regulation
           as in effect from time to time;

           "Montgomery"   means  Montgomery   Vessel  Limited   Partnership,   a
           California  limited  partnership  having its principal offices at One
           Market, Steuart Tower, Suite 800, San Francisco, CA 94105;

           "Mortgages"  means (a) the First  Preferred  Liberian ship  mortgages
           executed  in favor of the  Security  Trustee by Trader on M/T TRADER,
           (b) the Statutory First Priority Bahamian mortgages executed in favor
           of the Security  Trustee by Columbus on M/T  COLUMBUS,  (c) the First
           Priority  Hong Kong Ship  Mortgage  executed in favor of the Security
           Trustee by Redcar on M/V CALIFORNIA,  (d) the Aircraft Mortgages, and
           such other mortgage in respect of a Vessel or an Aircraft executed in
           favor  of the  Security  Trustee  by the  owner  of  such  Vessel  or
           Aircraft, as the case may be, each in form and substance satisfactory
           to the Agent,  as the same may be amended,  supplemented  or modified
           from time to time;

           "M/T COLUMBUS" means the Bahamian flag product tanker named COLUMBUS,
           as the same is further described in the relevant Mortgage;

           "M/T TRADER"  means the Liberian  flag  chemical  tanker named TRADER
           (formerly known as STOLT TRADER), as the same is further described in
           the relevant Mortgage;

           "M/V  CALIFORNIA"  means  the  Hong  Kong  flag  bulk  carrier  named
           CALIFORNIA,  as  the  same  is  further  described  in  the  relevant
           Mortgage;

           "M/V CLEMENT" means the Bahamian flag oil tanker named CLEMENT,  duly
           documented  under the laws and flag of the Bahamas,  official  number
           713619;

           "M/V PACIFIC  SPLENDOR"  means the Bahamian  flag bulk carrier  named
           PACIFIC  SPLENDOR,  duly  documented  under  the laws and flag of the
           Bahamas, official number 706810;

           "MVI" means Montgomery Vessel, Inc., a Wyoming corporation having its
           principal  offices at One  Market,  Steuart  Tower,  Suite  800,  San
           Francisco, CA 94105;

           "New Security Documents" means (i) the Aircraft  Mortgages,  (ii) the
           amendments to the Mortgage  delivered or to be delivered  pursuant to
           Clause 5.01 (c), (iii) the Pledge  Agreement,  (iv) the Assignment of
           Limited  Partnership  Interests,  and  (v)  the  Beneficial  Interest
           Security Agreements;

           "Note" means the Secured  Promissory  Note  evidencing  the Loan,  in
           substantially  the form of Appendix A and any  amended  and  restated
           Secured Promissory Note evidencing the Loan;

           "Owner   Trustee"  means  First  Security  Bank  of  Utah,   National
           Association, as owner trustee pursuant to the Trust Agreement (or any
           successor owner trustee);

           "Permitted Liens" means (i) liens in favor of the Lenders,  the Agent
           or the  Security  Trustee,  (ii) with  respect to the Vessels and the
           Aircraft,  the  meaning  for such  term set  forth in the  respective
           Mortgages  and (iii) with  respect to all other  Equipment  (a) liens
           incident to expenses of current  operations  incurred in the ordinary
           course  of  business  of EGF V; (b) liens  set  forth on  Schedule  2
           hereto,  (c) purchase money liens in favor of the  Warehousing  Agent
           securing  amounts  borrowed  by  EGF  V  and  outstanding  under  the
           Warehousing  Agreement  provided that such liens are released  within
           180 days of the day they  were  created,  (d)  liens  imposed  by any
           governmental authority for taxes,  assessments or charges not yet due
           (after  giving  effect to any  applicable  grace period) or which are
           being  contested  in good  faith and by  appropriate  proceedings  if
           adequate reserves with respect thereto are maintained on the books of
           the  Companies  in  accordance  with  generally  accepted  accounting
           principals, (e) liens securing claims which are completely covered by
           insurance and the deductible applicable thereto, so long as there has
           not been any action by the  lienholder  to enforce  such lien and (f)
           judgment  or other  similar  liens  provided  that there  shall be no
           period of more than 20 consecutive days (or such longer appeal period
           as may be provided by local court  procedural  rules)  during which a
           stay of enforcement of the related judgment shall not be in effect;

           "Person"  means any  individual,  corporation  (including  a business
           trust), company, voluntary association, partnership, joint venture or
           other entity, trust,  incorporated organization or government (or any
           agency, instrumentality or political subdivision thereof);

           "Pledge  Agreement"  means the pledge  agreements  executed  or to be
           executed in favor of the Security  Trustee by EGF V in respect of the
           shares of each of the CLVI and MVI;

           "Pledged  Equipment"  means  Equipment  that  is  subject  to a first
           priority  lien in favor of the  Security  Trustee,  the  Agent or the
           Lenders and which secures the obligations of the Companies under this
           Agreement, the Note and the Security Documents;

           "Pledged  Shares"  means the  shares  of CLVI and MVI,  respectively,
           pledged  by EGF V to the  Security  Trustee  for the  benefit  of the
           Lenders pursuant to the Pledge Agreement;

           "Qualified  Assets" means the three (3) Boeing model 737-200 aircraft
           msns.  21003,  21008  and  21009  and  registration  marks  "PP-VMH",
           "PP-VMM" and "PP-VMN", respectively;

           "Redcar" means Redcar Investments Limited, a Hong Kong company having
           its principal  offices at 702 Tower One Admiralty Centre, 18 Harcourt
           Road, Hong Kong;

           "Repayment  Date"  means  each of the dates  determined  pursuant  to
           Clause 4.01;

           "Repurchase Units" means each unit representing a limited partnership
           interest in EGF V which has been repurchased by EGF V from the holder
           thereof;

           "Request" means a request set forth in a written instrument signed by
           an officer or attorney-in-fact of EGF V on behalf of the Companies;

           "Security  Agreement" means the security  agreement executed in favor
           of the Security  Trustee by EGF V with respect to the  Containers and
           related collateral,  in form and substance satisfactory to the Agent,
           as the same may be amended,  supplemented  or  modified  from time to
           time;

           "Security Documents" means (a) the Mortgages,  the Deed of Covenants,
           the  Insurance  Assignments,   the  Security  Agreement,  the  Pledge
           Agreement,  the  Assignment  of Limited  Partnership  Interests,  the
           Beneficial   Interest   Security   Agreements,   any  Interest   Rate
           Agreements,  any assignments of charters,  leases or accounts entered
           into  pursuant  hereto  and  (where  the  context  so  permits)  this
           Agreement  and  (b) any  other  agreement  or  document  that  may be
           executed at any time by the Companies or any other person as security
           for all or any part of the Loan, interest thereon or any other moneys
           payable to the Lenders  under or in connection  with this  Agreement,
           the Note  and/or  any of the  documents  to which  these  definitions
           refer;

           "Security Interest" means a mortgage,  pledge,  lien,  hypothecation,
           encumbrance,  assignment, trust arrangement, title retention or other
           security  interest or other arrangement of any kind having the effect
           of conferring security;

           "Security  Period"  means the period  commencing on the Drawdown Date
           and  terminating  on the date upon  which all  moneys  payable  or to
           become  payable  at any time and from  time to time  pursuant  to the
           terms  of  this  Agreement,  the  Note  and/or  any of  the  Security
           Documents shall have been paid and discharged in full;

           "Security  Trustee"  means CBK in its  capacity as trustee  hereunder
           until a successor  Security  Trustee shall have become such under the
           applicable  provisions  of  Clause  8  hereof,  and  thereafter  such
           successor Security Trustee;

           "Taxes"  includes  all  present  and future  income,  corporation  or
           value-added taxes and all stamp and other taxes and levies,  imposts,
           deductions, duties, charges and withholdings whatsoever together with
           interest  thereon and  penalties  with respect  thereto,  if any, and
           charges,  fees or other  amounts made on or in respect  thereof other
           than (and references to "Taxation" shall be construed accordingly);

           (i)       taxes on,  based on or  measured  by the net  income of the
                     Lenders  imposed  by the  United  States of  America or the
                     State of New York or any  political  subdivision  of either
                     thereof;

           (ii)      any  withholding  of United States federal income tax which
                     would not have been imposed had the payee been  entitled to
                     provide and had it timely  provided to the Companies a duly
                     completed  and  signed  Form  4224  of  the  United  States
                     Internal  Revenue  Service  (the "IRS") ---  entitling  the
                     payee to a complete  exemption  from such  withholding or a
                     certification   that  the   payee  is  a   corporation   or
                     partnership established under the laws of the United States
                     or a State thereof and having its principal  office located
                     in the United States (or such successor form(s) as shall be
                     adopted  from time to time by the  relevant  United  States
                     taxing authorities);

           (iii)     any  withholding of any tax to the extent such  withholding
                     would not have been imposed had the payee been  entitled to
                     provide and had it timely  provided to the Companies a duly
                     completed  and  signed  Form  1001  of  the  IRS  (or  such
                     successor  form(s) as shall be adopted from time to time by
                     the relevant  United States taxing  authorities)  entitling
                     the payee to an exemption  from or reduction of the rate of
                     such withholding; and

           (iv)      any tax which  would not have been so  imposed  but for the
                     failure  of the  Agent or any  Lender,  as  applicable,  to
                     comply  with  any  certification,  identification  or other
                     similar  requirement under United States income tax laws or
                     regulations  (including  backup  withholding)  to establish
                     entitlement to exemption from such tax;

           "Trader"  means  Trader  Vessel  Limited  Partnership,  a  California
           limited  partnership  having its  principal  offices  at One  Market,
           Steuart Tower, Suite 800, San Francisco, CA 94105;

           "Trust  Agreement"  means the Trust Agreement dated as of October 16,
           1989, as amended by a First  Amendment to Trust Agreement dated as of
           May 11, 1990, a Trust  Agreement  Amendment  dated as of May 8, 1995,
           and a Trust  Agreement  Amendment  dated as of  September  26,  1996,
           between  the  Owner  Trustee  and EGF V, as the same may be  amended,
           supplemented or modified from time to time);

           "TVI" means Trader Vessel Inc., a California  corporation  having its
           principal  offices at One  Market,  Steuart  Tower,  Suite  800,  San
           Francisco, CA 94105;

           "Total  Loss",  in  relation  to  any of  the  Vessels  or any of the
           Aircraft,  shall  have  the  meaning  ascribed  to  such  term in the
           respective Mortgages;

           "Valuation"  means  the  market  value  of each of the  Vessels,  the
           Aircraft and Containers determined at the relevant time by means of a
           valuation made pursuant to Clause 7.03.  Valuation shall be made with
           or without  physical  inspection  of the  Vessels,  the  Aircraft and
           Containers  (as the  Agent may  require),  on the basis of a sale for
           prompt delivery for cash at arm's length on normal  commercial  terms
           as between a willing  seller and a willing  buyer,  and shall be with
           charter  lease or  existing  contract  of  employment  for Vessels or
           Aircraft,  as the  case  may be,  as to which  sale is  subject  to a
           charter or lease,  otherwise free of any existing  charter,  lease or
           other  contract of employment.  The Companies  agree to supply to the
           Agent,  and to any such  brokers,  such  information  concerning  the
           Vessels,  the  Aircraft  or the  Containers,  as the case may be, and
           their condition as such brokers may require for the purpose of making
           such valuation;

           "Vessels"  means (a)(i) the Liberian flag chemical tanker M/T TRADER,
           (ii) the Hong Kong flag bulk  carrier  M/V  CALIFORNIA  and (iii) the
           Bahamian flag product  tanker M/T COLUMBUS and (b) such other vessels
           as  the  Companies  may  hereafter   mortgage  as  security  for  the
           obligations of the Companies under this  Agreement,  the Note and the
           Security  Documents,  or any of them as the context requires,  as the
           same are further described in the Mortgages;

           "Warehousing   Agent"  means  First  Union  National  Bank  of  North
           Carolina,  as agent under the Warehousing Agreement (or any successor
           agent);

           "Warehousing   Agreement"  means  the  Second  Amended  and  Restated
           Warehousing  Credit  Agreement dated May 31, 1996 among PLM Equipment
           Growth Fund III, PLM  Equipment  Growth Fund IV, EGF V, PLM Equipment
           Growth Fund VI, PLM Equipment Growth & Income Fund VII,  Professional
           Lease  Management  Income Fund I, L.L.C.,  FSI,  First Union National
           Bank of North  Carolina and the other  lenders  party thereto and the
           Warehousing  Agent  (as the  same  may be  amended,  supplemented  or
           modified from time to time).



<PAGE>



           Words importing the singular number only shall include the plural and
           vice versa. Words importing persons shall include  companies,  firms,
           corporations and their respective successors and assigns.


           All  accounting  terms  not  specifically  defined  herein  shall  be
           construed in  accordance  with  generally  accepted  U.S.  accounting
           principles  consistently  applied and all  financial  data  submitted
           pursuant to this Agreement  shall be prepared in accordance with such
           principles.

3.         INTEREST AND INTEREST PERIODS

3.01       Subject to the terms of this  Agreement,  the Companies shall specify
           which Interest Period they choose to apply to the Loan.

3.02       The Companies shall jointly and severally pay accrued interest on the
           outstanding  amount  of the Loan at a rate per  annum  equal to LIBOR
           plus the Margin in arrears on the last day of such  Interest  Period,
           provided  that in the case of  Interest  Periods  of six (6)  months,
           accrued  interest shall be paid at the end of three (3) months and at
           the last day of such Interest Period.

3.03       The duration of each  Interest  Period shall be one (1) month,  three
           (3)  months or six (6) months as  notified  by the  Companies  to the
           Agent in  writing  by 11:00  A.M.  New York  time at least  three (3)
           Business  Days prior to the  commencement  of such  Interest  Period,
           provided that:

           (a)       if the  Companies  fail to  select  an  Interest  Period as
                     provided in this Clause 3.03, the Borrowers shall be deemed
                     to have selected an Interest Period of three months;

           (b)       the  selection of Interest  Periods  under this Clause 3.03
                     shall be made in such  manner as to ensure that an Interest
                     Period  expires  on each  Repayment  Date in  respect of an
                     amount  of  the  Loan  at  least  equal  to  the  repayment
                     installment  which is then due to be repaid  under  Clauses
                     4.01 or 4.02 on such Repayment Date; and

           (c)       the  Agent,  in  its  sole  and  absolute  discretion,   is
                     satisfied  that  deposits in Dollars for a period  equal to
                     such Interest  Period will be available to the Agent in the
                     London  Interbank Dollar Market at the commencement of such
                     Interest Period and, if the Agent is not so satisfied, such
                     Interest  Period shall be of such duration as the Agent and
                     the  Companies  shall  agree  (or,  in the  absence of such
                     agreement, as the Agent shall specify).

3.04       In the event that the Agent does not  receive on the due date any sum
           due under this Agreement,  the Note or any of the Security  Documents
           to which any of the  Companies is a party (or any  agreement  entered
           into by the  Companies  in  connection  herewith or  therewith),  the
           Companies  shall  jointly  and  severally  pay to the Agent on demand
           interest on such sum from and  including the due date therefor to the
           date of actual payment (as well after as before judgment) at the rate
           per annum determined by the Agent to be: (a) if such sum is principal
           of the  Loan or  interest  thereon  calculated  on the  basis  of two
           percent  (2%)  above the  higher of the rates set out at (i) and (ii)
           below and (b) if such sum is other than such  principal,  two percent
           (2%) above the rate set out in (ii) below:

           (i)       the  rate  (inclusive  of the  Margin)  applicable  to such
                     overdue principal immediately prior to the due date (and in
                     any  event  only  for the  unexpired  part of any  Interest
                     Period relative to such overdue principal); and

           (ii)      the  Margin  plus the rate per annum at which  deposits  in
                     Dollars  in an  amount  equal to such  overdue  amount  are
                     offered  to the  Agent  by  leading  banks  in  the  London
                     Interbank  Dollar Market on call or for successive  periods
                     of any  duration  up to  three  months,  as the  Agent  may
                     determine  from time to time.  Such  interest rate shall be
                     determined on the commencement of each such period.  If the
                     Agent  determines  that Dollar  deposits are not being made
                     available  to it by leading  banks in the London  Interbank
                     Dollar  Market in the  ordinary  course of  business,  such
                     interest  rate shall be determined by reference to the cost
                     of funds to the Agent from such other  sources as the Agent
                     may from time to time determine.

           Any such  interest  which is not paid when due shall be compounded at
           the end of each such Interest  Period or other period as the case may
           be (both  before  and after any  notice of demand by the Agent  under
           Clause 9.02).

4.         REPAYMENT AND PREPAYMENT

4.01       The Companies  shall  jointly and severally  repay the Loan in twenty
           consecutive  quarterly  installments  commencing on February 12, 1997
           whereof  the  first  four  installments  shall  be in the  amount  of
           $1,500,000  and the remaining  sixteen  installments  shall be in the
           amount of $2,000,000. In no event shall the Loan be repaid later than
           December 12, 2001.

4.02       The Companies may prepay without penalty the whole or any part of the
           Loan  on the  last  day  of any  Interest  Period  relating  thereto,
           provided that:

           (a)       the Agent shall have  received  from the Companies not less
                     than five (5) days' prior irrevocable written notice of its
                     intention  to make  such  prepayment  which  specifies  the
                     amount and date on which such prepayment is to be made;

           (b)       the amount of any such partial prepayment shall be not less
                     than  $1,000,000.  Should  the  Companies  wish  to  make a
                     prepayment  in an  amount in  excess  of  $1,000,000,  such
                     additional  prepayment  shall  be  made  in  increments  of
                     $1,000,000;

           (c)       no amount prepaid under this Clause 4.02 may be reborrowed;

           (d)       each  prepayment  under  this  Clause  4.02  shall  be made
                     together  with accrued  interest on the amount  prepaid and
                     all  other  sums  payable  thereon  under the terms of this
                     Agreement; and

           (e)       each  partial  prepayment  of the Loan shall be applied pro
                     rata against the remaining installments of the Loan.

4.03       After  December  31,  1997,  the  Companies  shall prepay the Loan as
           follows:

           (a)       In respect of each fiscal  quarter of EGF V, the  Companies
                     shall  prepay the Loan in an amount equal to the sum of (i)
                     the excess of the aggregate  cash balances of the Companies
                     (not  including  amounts on deposit in the Cash  Collateral
                     Account) over  $20,000,000  (as measured at the end of each
                     such fiscal quarter and disclosed on the reports  delivered
                     to  the  Agent  pursuant  to  Clause  7.01(a)(ii)  of  this
                     Agreement)  plus  (ii)  an  amount  equal  to  60%  of  the
                     aggregate  proceeds from the sale of any  Equipment  during
                     such fiscal quarter;

           (b)       After  December 31, 1997, any and all amounts on deposit in
                     the Cash  Collateral  Account  shall be applied on the next
                     succeeding Repayment Date as a prepayment of the Loan;

           (c)       no amount prepaid under this Clause 4.03 may be reborrowed;

           (d)       each prepayment under this Clause 4.03 shall be made on the
                     Repayment  Date  next  succeeding  the  end of  the  fiscal
                     quarter for which the prepayment  was  calculated  together
                     with accrued  interest on the amount  prepaid and all other
                     sums payable thereon under the terms of this Agreement;

           (e)       each  partial  prepayment  of the Loan shall be applied pro
                     rata against the remaining installments of the Loan.

5.         CONDITIONS

5.01       Conditions   Precedent.   The  effectiveness  of  this  Agreement  is
           expressly  conditioned  upon  receipt  by the Agent of the  following
           documents  and  evidence,  in all  respects  in  form  and  substance
           satisfactory to the Agent and its legal advisers:

           (a)       the Notes, substantially in the form of Appendix A;

           (b)       the  first  priority  Aircraft  Mortgages  on  each  of the
                     Aircraft,  in form and substance  satisfactory to the Agent
                     (and notice in the form of APPENDIX L shall have been given
                     to each of the lessees thereunder);

           (c)       an amendment to the First  Preferred  Liberian  Mortgage on
                     M/T  TRADER,  in form  and  substance  satisfactory  to the
                     Agent;

           (d)       an Assignment of Charter relating to the Time Charter Party
                     between Trader and Chembulk  Trading Inc. in respect of M/T
                     TRADER,  with notice to Chembulk  Trading Inc., in form and
                     substance satisfactory to the Agent;

           (e)       [Intentionally omitted];

           (f)       [Intentionally omitted];

           (g)       Letter  from  relevant  Companies   reaffirming  the  first
                     priority Insurance Assignment for the insurances on each of
                     the Vessels and on the  Containers,  in form and  substance
                     satisfactory to the Agent;

           (h)       the Pledge  Agreement  in respect of (i) the shares of CLVI
                     and   MVI,   respectively,   together   with   certificates
                     representing   the  Pledged  Shares   referred  to  therein
                     accompanied  by undated stock powers  executed in blank and
                     an irrevocable  proxy to vote the Pledged  Shares,  in form
                     and substance satisfactory to the Agent;



<PAGE>



           (i)       the Assignment of Limited Partnership  Interests in respect
                     of EGF V's  limited  partnership  interest  in Clement  and
                     Montgomery,    respectively,    in   form   and   substance
                     satisfactory to the Agent;


           (j)       copies  of  the   Agreement   and   Articles   of   Limited
                     Partnership,  as amended, and forms LP-1 and as applicable,
                     LP-2 issued by the  appropriate  authority  of the State of
                     California, for each of Clement and Montgomery;

           (k)       certificates  of each of FSI, TVI, CVI,  COVI,  each in its
                     capacity as general  partner of EGF V,  Trader,  California
                     and Columbus, respectively, certifying that there have been
                     no  amendments  or   modifications  to  the  Agreement  and
                     Articles of Limited Partnership, Form LP-1 or Form LP-2, as
                     applicable, of each such limited partnership since the last
                     date that certified copies of such documents were delivered
                     to the Agent;

           (l)       copies  of  the   Certificates  of  Status  issued  by  the
                     appropriate  authority of the State of California  for each
                     of  EGF  V,  Trader,  California,   Columbus,  Clement  and
                     Montgomery;

           (m)       Certificate of the Secretary or Assistant Secretary of CLVI
                     and MVI as to (i)  Articles  of  Incorporation  and By-Laws
                     (and all amendments thereto) and (ii) authorized and issued
                     share capital;

           (n)       certificates  of the  Secretary or  Assistant  Secretary of
                     each of FSI,  TVI,  CVI,  COVI and Redcar  certifying  that
                     there  have  been no  amendments  or  modifications  to the
                     Articles  of   Incorporation   and  By-Laws  of  each  such
                     corporation  since the last date that  certified  copies of
                     such documents were delivered to the Agent;

           (o)       certificates  of good  standing  issued by the  appropriate
                     authority of the  jurisdiction of  incorporation of each of
                     FSI, TVI, CVI, COVI, Redcar, CLVI and MVI;

           (p)       copies  of  resolutions   duly  adopted  by  the  board  of
                     directors  and  shareholders  of each of TVI, CVI, COVI and
                     Redcar evidencing approval of the making and performance of
                     this Agreement and the New Security Documents to which each
                     is  a  party  and  authorizing   appropriate   officers  or
                     attorneys  to  execute  the same  and to sign  all  notices
                     required  to be  given  hereunder  or  thereunder  on their
                     behalf,   or  other   evidence   of  such   approvals   and
                     authorizations as shall be acceptable to the Agent;

           (q)       copies  of  resolutions   duly  adopted  by  the  board  of
                     directors of each of FSI,  TVI,  CVI and COVI,  each in its
                     capacity as general  partner of EGF V,  Trader,  California
                     and  Columbus,  respectively,  evidencing  approval  of the
                     making  and  performance  of  this  Agreement  and  the New
                     Security  Documents to which each such limited  partnership
                     is  a  party  and  authorizing   appropriate   officers  or
                     attorneys  to  execute  the same  and to sign  all  notices
                     required to be given hereunder or thereunder on its behalf,
                     or other evidence of such approvals and  authorizations  as
                     shall be acceptable to the Agent;

           (r)       the  original of any power of  attorney  issued in favor of
                     any person  executing this  Agreement,  the Notes or any of
                     the New Security Documents on behalf of the Companies;



<PAGE>



           (s)       a list specifying the directors and officers of each of the
                     Companies  (together  with their specimen  signatures)  and
                     specifying  the authorized and issued share capital of each
                     of FSI, TVI, CVI, COVI, Redcar, CLVI and MVI;


           (t)       copies of all  governmental  and other consents,  licenses,
                     approvals  and   authorizations  as  may  be  necessary  to
                     authorize  the   performance  by  the  Companies  of  their
                     respective  obligations  under the terms of this Agreement,
                     the Notes and the New Security Documents to which each is a
                     party;

           (u)       the Beneficial  Interest  Security  Agreement,  in form and
                     substance satisfactory to the Agent;

           (v)       a  favorable   opinion   from  an   independent   insurance
                     consultant  acceptable  to the Lenders as to  compliance of
                     insurances with the terms of the Aircraft Mortgages on each
                     of the Aircraft;

           (w)       such  further  evidence  as the  Agent  may  require  as to
                     placement  of   insurances  on  each  of  the  Aircraft  in
                     compliance with the terms of the Aircraft Mortgages on each
                     of the Aircraft and of this Agreement;

           (x)       all items and documents  required to be delivered  pursuant
                     to the  New  Security  Documents,  including  (but  without
                     limitation)  all notices and  acknowledgements  pursuant to
                     the Insurance Assignments, and UCC financing statements;

           (y)       evidence satisfactory to the Agent that:

                     (i)       each  of  the   Aircraft   is  duly   permanently
                               registered  in the name of the Owner  Trustee and
                               prior  to  the   registration   of  the  Aircraft
                               Mortgages  is free and clear of  recorded  liens,
                               mortgages and charges;

                     (ii)      each  Aircraft has been issued a  Certificate  of
                               Airworthiness  and a Certificate of Registration,
                               issued  by the  appropriate  office  of the  U.S.
                               Federal Aviation  Administration  or the Canadian
                               Aviation Authority;

                     (iii)     each of the  Aircraft  Mortgages  has  been  duly
                               recorded  against  the  respective  Aircraft as a
                               valid  first   priority   aircraft   mortgage  in
                               accordance with the laws of the United States and
                               Canada, as the case may be.

           (z)       evidence  that  CBK  has  received  an  amendment  fee,  as
                     separately agreed between the Companies and CBK;

           (aa)      appraisals  of each  of the  Aircraft  satisfactory  to the
                     Agent;

           (bb)      a  Certificate  from an  officer  of each of the  Companies
                     representing that no Default or Event of Default shall have
                     occurred and be continuing;

           (cc)      IRS Form  1001 or 4224,  as  appropriate,  from each of the
                     Lenders;

           (dd)      the  opinion  of  Stephen  Peary,  General  Counsel  to the
                     Companies in form and substance satisfactory to the Agent;

           (ee)      the  opinion of Messrs.  Graham,  Thompson & Co.,  Bahamian
                     Counsel to the Lenders, in form and substance  satisfactory
                     to the Agent;

           (ff)      the opinion of MacCleod,  Dicksen, special Canadian counsel
                     to the Lenders on matters of  Canadian  law  regarding  the
                     Aircraft  Mortgages in form and substance  satisfactory  to
                     the Agent;

           (gg)      the  opinion of (i)  Messrs.  Ray  Quinney,  counsel to the
                     Owner  Trustee  and (ii)  Messrs.  Deacons  Graham & James,
                     special Hong Kong  counsel to the Lenders,  in each case in
                     form and substance satisfactory to the Agent;

           (hh)      the opinion of Messrs.  Watson,  Farley & Williams, in such
                     form as the Agent shall specify;

           (ii)      a certificate  by an officer  acting on behalf of the Owner
                     Trustee  respecting  any  amounts  due and owing under each
                     current  lease with  respect to each  respective  Aircraft,
                     together with a copy of each such lease and any  guarantees
                     for  performance  thereof,  in a form  satisfactory  to the
                     Agent;

           (jj)      a consent of the  charterer in respect of the M/T TRADER to
                     the amendment of the Mortgage  covering  such Vessel,  in a
                     form satisfactory to the Agent;

           (kk)      a copy of (i) the  Trust  Agreement  (with  all  amendments
                     thereto) and (ii) the Warehousing Agreement;

           (ll)      a  Certificate  of an officer of FSI as general  partner of
                     EGF V  certifying  that (i) the equity of EGF V consists of
                     9,169,019  units as of September 15, 1996 and (ii) EGF V is
                     the  legal  and  beneficial  owner of (A) the sole  limited
                     partnership  interest  in each of  Trader,  California  and
                     Columbus and (B) 50% of the limited partnership interest in
                     each of Clement and Montgomery;

           (mm)      a  Certificate  of the Owner  Trustee  with  respect to (i)
                     execution  of  the  Aircraft   Mortgages,   the  Beneficial
                     Interest  Security  Agreement  and the Trust  Agreement and
                     (ii)  incumbency  and specimen  signatures  of  appropriate
                     officers, in form and substance satisfactory to the Agent;

           Each of the documents  specified in  sub-clauses  (j), (l), (m), (p),
           (q),  (r), (s) with respect to the leases (ii) above,  and (kk) shall
           be  certified  as a true and  up-to-date  copy by an  officer  of the
           relevant Company or Companies, as the case may be.

5.02       Conditions  Subsequent.   The  effectiveness  of  this  Agreement  is
           expressly  subject to the condition  subsequent  that the Agent shall
           have received  within 30 days of the date of this  Agreement a Notice
           and Acknowledgment of Mortgage (substantially in the form of Appendix
           L) duly  acknowledged  by each lessee of an Aircraft  with respect to
           the  respective  Aircraft  Mortgages,  in all  respects  in form  and
           substance satisfactory to the Agent and its legal advisers.



<PAGE>



6.         REPRESENTATIONS AND WARRANTIES


6.01       The Companies hereby represent and warrant to the Lenders and to each
           of them severally that:

           (a)       each of FSI,  TVI,  CVI,  COVI,  Redcar,  CLVI and MVI is a
                     company  duly  organized  and validly  existing and in good
                     standing under the laws of its respective  jurisdiction  of
                     incorporation  and  is  qualified  to do  business  in  all
                     jurisdictions   where  the  conduct  of  its   business  so
                     necessitates;

           (b)       each of EGF V, Trader,  California,  Columbus,  Clement and
                     Montgomery  is a limited  partnership  duly  organized  and
                     existing and in good standing  under the laws of California
                     and is qualified to do business in all jurisdictions  where
                     the conduct of its business so necessitates;

           (c)       each of the  Companies  has full power and authority to (i)
                     own and operate its  Equipment and to carry on its business
                     as presently  conducted or proposed to be  conducted,  (ii)
                     execute, deliver and perform under this Agreement, the Note
                     and the Security  Documents  to which it is a party,  (iii)
                     borrow under this Agreement, (iv) execute and perform under
                     any  Approved  Management  Agreement to which it is a party
                     and (v) comply with the  provisions of, and perform all its
                     obligations  under,  this  Agreement,   the  Note  and  the
                     Security Documents to which it is a party;

           (d)       each of the  Companies  has  complied  with all  statutory,
                     regulatory and other requirements relative to the ownership
                     and (in all material respects) the operation of each of the
                     Vessels,  Containers,  the Aircraft and other Equipment and
                     the making and performance of this Agreement;

           (e)       (i) the  Companies  have  taken all  necessary  actions  to
                     authorize the execution,  delivery and  performance of this
                     Agreement  and the  Security  Documents  to which each such
                     Company is a party and the borrowing and giving of security
                     contemplated hereby, and (ii) this Agreement,  the Note and
                     the  Security  Documents  to which  each such  Company is a
                     party,  constitute  or,  as the  case  may be,  will,  upon
                     execution  and delivery  thereof  (and,  where  applicable,
                     registration  thereof as provided for in this Agreement and
                     the  Security  Documents),   constitute  legal,  valid  and
                     binding  obligations of such Companies  enforceable against
                     such Companies in accordance  with their  respective  terms
                     except to the  extent  limited  by  applicable  bankruptcy,
                     insolvency and  reorganization  laws and other similar laws
                     affecting  the rights of  creditors  generally;  and to the
                     extent that enforcement is subject to general principles of
                     equity  (including but not limited to all matters of public
                     policy)  regardless  of  whether  such   enforceability  is
                     considered in a proceeding in equity or at law;

           (f)       the making and performance by each of the Companies of this
                     Agreement, the Note and the Security Documents to which the
                     Companies  are a party,  do not,  and will not  during  the
                     Security   Period,   violate   in  any   respect   (i)  the
                     constitutional  documents  of  such  Companies,  or in  any
                     material   respect  (ii)  any  law  or  regulation  of  any
                     governmental  or official  authority or body,  or (iii) any
                     agreement,  contract or other  undertaking  to which any of
                     such  Companies  is a party or which is  binding  on any of
                     such Companies or any of its assets;

           (g)       all  consents,   licenses,   approvals  and  authorizations
                     (including,   without  limitation,  any  approvals  of  the
                     Bahamian,  Liberian and Canadian governmental  authorities)
                     required in  connection  with the entry into,  performance,
                     validity  and  enforceability  of  this  Agreement  and the
                     Security Documents have been obtained and are in full force
                     and effect;

           (h)       save for such  registrations  and filings  contemplated  by
                     this Agreement and the Security Documents and the filing of
                     required  extensions under the Uniform  Commercial Code, it
                     is not necessary for the legality, validity, enforceability
                     or admissibility in evidence of this Agreement, the Note or
                     the  Security  Documents  that any of them or any  document
                     relating thereto be registered, filed, recorded or enrolled
                     with any court or authority in any relevant jurisdiction or
                     that any stamp, registration or similar Taxes be paid on or
                     in  relation  to  this  Agreement  or any  of the  Security
                     Documents;

           (i)       except as set forth in the most  recent  Form 10-K and Form
                     10-Q  reports  referred  to in Clause  6.01(k),  no action,
                     suit, proceeding,  litigation or dispute against any of the
                     Companies is currently  pending or, to the knowledge of the
                     Companies,   threatened,   nor  is  there  outstanding  any
                     judgment or award given or basis for any  judgment or award
                     against any of the  Companies  before any court,  tribunal,
                     board of arbitration  or other body which,  in either case,
                     could or might result in any material adverse change in the
                     business or  condition  (financial  or  otherwise)  of such
                     Companies;

           (j)       none  of  the  Companies  or  FSI  is  in  default  in  the
                     performance,  observance  or  fulfillment  of  any  of  the
                     obligations,  covenants or conditions  contained in (i) any
                     agreement to which it is a party,  which default might have
                     a  material  adverse  effect on the  business,  properties,
                     assets, operations or condition (financial or otherwise) of
                     EGF V and  the  Companies  taken  as a whole  or  (ii)  any
                     agreement   or    instrument    evidencing   or   governing
                     indebtedness  for borrowed  money,  and no Event of Default
                     (or event which,  with the giving of notice and/or lapse of
                     time or other  applicable  condition  might  constitute  an
                     Event of Default)  has occurred  and is  continuing  and no
                     such Event of Default  (or such event) will result from the
                     making and  performance by the Companies of this Agreement,
                     the Note and the  Security  Documents  to which  any of the
                     Companies is or will be a party;

           (k)       the  Companies  have made  available to the Agent copies of
                     the EGF V  consolidated  annual report on Form 10-K for the
                     fiscal year ended  December 31, 1995 and quarterly  reports
                     on Form 10-Q for the first and second quarters of 1996. The
                     financial statements contained in the annual report on Form
                     10-K,  including the schedules and notes  thereto,  and the
                     condensed financial  statements  contained in the quarterly
                     reports,  fairly present (in the case of quarterly  reports
                     on  an  unaudited  basis),  in  accordance  with  generally
                     accepted  accounting  principles  (in the case of quarterly
                     reports,   to  the  extent   such   principles   have  been
                     established  with  respect  to  quarterly  reporting),  the
                     financial  condition and results of operations of EGF V and
                     its  consolidated  subsidiaries as of the respective  dates
                     thereof  and  for the  periods  covered  by such  financial
                     statements.   All  such  financial   statements  have  been
                     prepared in accordance with generally  accepted  accounting
                     principles  consistently  applied  throughout  the  periods
                     involved,  except  as  otherwise  stated  in the  preceding
                     sentence or in the notes thereto. Since June 30, 1996 there
                     has  been  no  material  adverse  change  in the  financial
                     condition of EGF V and its consolidated  subsidiaries  and,
                     except as  otherwise  disclosed  to the  Agent in  writing,
                     neither EGF V nor any of its consolidated  subsidiaries has
                     incurred  any  liabilities  which are material to EGF V and
                     its consolidated  subsidiaries as a whole otherwise than in
                     the ordinary course of business.

           (l)       all  financial  and other  information  furnished  by or on
                     behalf  of each of the  Companies  in  connection  with the
                     negotiation of this  Agreement,  or in the most recent Form
                     10K and Form 10-Q  reports  filed with the  Securities  and
                     Exchange  Commission  and referred to in Clause  6.01(k) is
                     true and accurate in all material respects and there are no
                     other material facts or matters the omission of which would
                     have made any statement or  information  contained  therein
                     misleading;

           (m)       all payments made or to be made by the  Companies  under or
                     pursuant to this  Agreement  and the Security  Documents to
                     which any of the  Companies is a party may be made free and
                     clear of, and without  deduction or  withholding  for or in
                     account of, any Taxes;

           (n)       the chief place of business of the  Companies is located at
                     One Market, Steuart Tower, Suite 800, San Francisco, CA USA
                     and the  corporate  documents  and records  concerning  the
                     transactions  contemplated  hereby,  are kept  only at such
                     offices;

           (o)       the provisions of the Employee  Retirement  Income Security
                     Act of 1974, as amended,  are not  applicable to any of the
                     Companies;

           (p)       none of the  proceeds  of the Loan will be used to purchase
                     or carry margin stock within the meanings of Regulations G,
                     T, U and X of the Board of Governors of the Federal Reserve
                     System. None of the Companies is engaged in the business of
                     extending  credit for the purpose of purchasing or carrying
                     margin stock within the meaning of Regulations G, T, U or X
                     of the Board of Governors of the Federal Reserve System;

           (q)       none  of the  Companies  is an  "investment  company"  or a
                     company "controlled" by an "investment company" (as each of
                     such terms is defined or used in the Investment Company Act
                     of 1940, as amended); and

           (r)       prior  to  the  date  hereof,  none  of the  Companies  has
                     incurred any material indebtedness except as explicitly set
                     forth in the most  recent  Form 10-K and Form 10-Q  reports
                     referred to in clause 6.01(k) or as disclosed in writing to
                     the Agent.

           (s)       The  authorized  capital  stock  of CLVI  consists  of 1000
                     shares of common stock,  no par value,  and of MVI consists
                     of 1000 shares of common  stock,  no par value.  All of the
                     capital stock of each of CLVI and MVI is  outstanding,  has
                     been validly issued, is fully paid and  non-assessable  and
                     fifty  percent  (50%) of the  capital  stock  of each  such
                     company is owned  beneficially  and of record by EGF V free
                     and clear of all Liens.

           (t)       EGF V owns,  directly  or  indirectly,  50% of the  limited
                     partnership interests in each of Clement and Montgomery.

           (u)       The M/V  CLEMENT is duly  documented  in the  absolute  and
                     unencumbered  ownership of Clement  under the laws and flag
                     of the Bahamas. The M/V PACIFIC SPLENDOR is duly documented
                     in the absolute and  unencumbered  ownership of  Montgomery
                     under the laws and flag of the Bahamas.

6.02       The Companies hereby further represent and warrant to the Lenders and
           to each of them severally that:

           (a)       The  Aircraft  are  duly  documented  in the  absolute  and
                     unencumbered  ownership of the Owner Trustee under the laws
                     and flag of the United  States and Canada,  as the case may
                     be,  free and clear of all  Security  Interests  other than
                     Permitted Liens;

           (b)       The  Aircraft  are  operationally  airworthy  and have been
                     issued Certificates of Airworthiness by the jurisdiction in
                     which the Aircraft are respectively registered;

           (c)       The Aircraft comply with all relevant laws, regulations and
                     requirements  (including  environmental laws,  statutory or
                     otherwise)  as are  applicable  to (i) aircraft  documented
                     under  the  laws of such  flag,  as  applicable,  and  (ii)
                     aircraft  engaged in a trade  similar to that  performed by
                     the Aircraft, respectively;

           (d)       The Aircraft are insured in accordance  with the provisions
                     of this Agreement and the respective Aircraft Mortgages and
                     the  requirements  herein and therein for  insurances  have
                     been complied with.


7.         COVENANTS

7.01       The Companies hereby covenant and agree that, as and from the date of
           this Agreement and throughout the Security  Period,  they will comply
           in full with the following covenants and undertakings:

           (a)       each of the  Companies  will send (or procure that there is
                     sent) to the Agent:

                     (i)       as soon as  possible,  but in no event later than
                               one  hundred  twenty  (120) days after the end of
                               each fiscal year of EGF V, the EGF V consolidated
                               audited annual or other published accounts of all
                               financial  statements  as required  by law,  such
                               financial statements to be prepared in accordance
                               with  generally  accepted  accounting  principles
                               consistently  applied and  certified  as to their
                               correctness   by  KPMG  Peat   Marwick  or  other
                               independent    accounting    firm   of   national
                               reputation;

                     (ii)      as soon as  possible,  but in no event later than
                               sixty  (60)  days  after  the end of each  fiscal
                               quarter of each  financial year of EGF V, the EGF
                               V quarterly  consolidated financial statements as
                               at the end of such period and for the period then
                               ending,   such   statements  to  be  prepared  in
                               accordance  with  generally  accepted  accounting
                               principles  consistently applied and certified as
                               to  their  correctness  by  the  chief  financial
                               officer or  controller  of FSI,  together  with a
                               certificate   by  an   officer  of  each  of  the
                               Companies  (substantially in the form of Appendix
                               J hereto) confirming (i) that the representations
                               and warranties stated in Clause 6.01 and 6.02 are
                               true  and  correct  on and as of the date of such
                               certificate as if made on such date, (ii) that no
                               Default or Event of Default has  occurred  and is
                               continuing  and  (iii)  that EGF V and the  other
                               Companies have complied with all of the covenants
                               contained   in   Clause  7   (setting   forth  in
                               reasonable  detail the  calculations  required to
                               establish  that such covenants were complied with
                               on the  date of such  financial  statements)  and
                               furnished to the Agent copies of any new charters
                               and/or leases entered into with respect of any of
                               the Vessels or the Aircraft, respectively with an
                               indicated duration in excess of six months;

                     (iii)     as soon as  possible  but in no event  later than
                               sixty  (60)  days  after  the end of each  fiscal
                               quarter  in each  fiscal  year of EGF V,  EGF V's
                               valuation  (as  set  forth  in  the   certificate
                               referred  to in  sub-clause  (ii) of this  Clause
                               7.01) of the fair  market  value of the  Vessels,
                               Containers,   Aircraft   and   other   Equipment,
                               together with a list of the Equipment  indicating
                               all  sales  of   Equipment,   the   purchase   of
                               additional  Equipment and any Equipment  that has
                               become a Total Loss and identifying  each charter
                               or lease in effect  with  respect to each  Vessel
                               and Aircraft, respectively;

                     (iv)      copies of all reports  filed with the  Securities
                               and  Exchange  Commission  and all  other  public
                               reports  furnished to the limited partners of EGF
                               V or any of its subsidiaries;

                     (v)       promptly after the same is instituted (or, to the
                               knowledge of the Companies,  threatened), details
                               of any litigation,  arbitration or administrative
                               proceedings  against  or  involving  any  of  the
                               Companies,  the Approved  Manager,  or any of the
                               Vessels,  Aircraft  or  Containers  or  Equipment
                               which is likely to have a material adverse effect
                               on the financial condition of the Companies taken
                               as a whole,  the  operation  of any  Vessel,  the
                               operation of any Aircraft or the operation of the
                               Equipment taken as a whole;

                     (vi)      copies of all reports  relating  to the  Aircraft
                               that are required to be filed by any governmental
                               agency  of the  jurisdiction  in which  each such
                               Aircraft is registered and/or operated.

                     (vii)     from time to time, and promptly upon demand, such
                               additional   financial   or   other   information
                               relating to the Companies,  the Equipment  and/or
                               any  relevant  subsidiary  or  affiliate  of  the
                               Companies as may be  reasonably  requested by the
                               Agent.

           (b)       each of the Companies will notify the Agent of any Event of
                     Default (or event which,  with the giving of notice  and/or
                     lapse  of  time  or  other  applicable   condition,   would
                     constitute  an  Event  of  Default)   forthwith   upon  the
                     occurrence thereof;

           (c)       each of the  Companies  and FSI will maintain its corporate
                     existence  or existence  as a limited  partnership,  as the
                     case may be, and, in the case of Trader,  its qualification
                     as a foreign  maritime entity under Liberian law, and shall
                     remain  duly  organized  and validly  existing  and in good
                     standing  under  the  laws  of  the   jurisdiction  of  its
                     incorporation or organization, as the case may be, and will
                     obtain  and  promptly  renew  from  time to time,  and will
                     promptly furnish certified copies to the Agent of, all such
                     authorizations,  approvals, consents and licenses as may be
                     required  under any  applicable law or regulation to enable
                     the Companies to perform their respective obligations under
                     this  Agreement,  the Note and the  Security  Documents  to
                     which  any  such  Company  is a party or  required  for the
                     validity or enforceability of this Agreement,  the Note and
                     the  Security  Documents or required to enable the relevant
                     Companies  to continue  to own and  operate the  respective
                     Vessels,  Aircraft and Containers  and the Companies  shall
                     comply with the terms of the same;

           (d)       each of the Companies will promptly and in any event within
                     five days  notify  the Agent in  writing  of any  change or
                     development  which would  materially  adversely  affect the
                     assets,  properties,   liabilities,   business  results  or
                     operations or financial or other condition of the Companies
                     taken as a whole or threaten the  validity,  enforceability
                     or performance of this Agreement,  the Note or the Security
                     Documents,  and the Companies  will permit the Agent or its
                     authorized  representatives  at reasonable times to inspect
                     and copy the books,  records,  accounts,  logs and  discuss
                     with the  Companies  their  affairs,  finances and business
                     plan;

           (e)       each of the Companies will comply in all material  respects
                     with all applicable statutes, regulations and orders of and
                     applicable restrictions (including, without limitation, all
                     applicable   environmental   laws)   of  any   governmental
                     authority of any jurisdiction applicable to the Companies;

           (f)       each of the Companies  will obtain and promptly  renew from
                     time to time, all authorizations,  approvals,  consents and
                     licenses  required  under any  applicable  law or  licenses
                     required  under  any  applicable  law  or  regulation  with
                     respect  to this  Agreement,  the  Note  and  the  Security
                     Documents;

           (g)       the Companies will procure that EGF V and its  consolidated
                     subsidiaries shall maintain the following financial ratios:

                     1.        The  ratio  of net  cash  provided  by  operating
                               activities   (defined   as  net   income   before
                               extraordinary  items plus  interest  expense plus
                               depreciation  and  amortization  plus  cash  from
                               unconsolidated special purpose entities plus loss
                               on sale  of  assets  or  minus  gains  on sale of
                               assets) to interest  expenses  shall at all times
                               be at least 3:1.

                     2.        The ratio of total liabilities (minus the balance
                               in  the  Cash   Collateral   Account)   to  total
                               value-adjusted  assets  (defined as  unrestricted
                               cash and Cash  Equivalents  plus the fair  market
                               value of all Equipment)  shall be no greater than
                               0.4:1.

                     3.        The   combined   market   value  of  the  Pledged
                               Equipment  (as  determined   pursuant  to  Clause
                               7.03(c))  shall  at  all  times  be  equal  to or
                               greater  than  135%  of the  excess  of  (x)  the
                               outstanding principal amount of the Loan over (y)
                               the  aggregate  amount of cash on  deposit in the
                               Cash Collateral Account.

           (h)       each of the  Companies  shall insure or cause to be insured
                     and keep  insured,  with  financially  sound and  reputable
                     insurers,  so much of the  properties  of each such Company
                     and its subsidiaries in such amounts and against such risks
                     as are usually and customarily insured against by companies
                     in a similar  business  with  respect  to  properties  of a
                     similar character;

           (i)       each of the  Companies  will send (or procure that there is
                     sent) to the Agent a survey or drydock or inspection report
                     on each Vessel by the Approved Manager or its agent no less
                     often than once every 2 years;

           (j)       each of the  Companies  will send (or procure that there is
                     sent) to the  Agent  copies  of all  survey  or  inspection
                     reports  delivered or required to be delivered  pursuant to
                     the leases in respect of each Aircraft;  provided,  that if
                     any such lease does not  require the  periodic  delivery of
                     reports  relating to the use,  operation and maintenance of
                     the Aircraft, then the Companies will send (or procure that
                     there is sent) to the Agent (no less  often than once every
                     2 years  commencing on the Closing  Date) such  information
                     relating  to the  use,  operation  and  maintenance  of the
                     Aircraft as the Agent may request;

           (k)       the  Companies   will  procure  that  the  sum  of  regular
                     dividends paid and other regular distributions of assets or
                     profits  declared  for a calendar  year and  payable to any
                     partner or  shareholder  of the Companies  plus  Repurchase
                     Units for each such  calendar  year  shall not  exceed  the
                     lower of (x)  $20,000,000  and (y) the net cash provided by
                     operating   activities   (defined  as  net  income   before
                     extraordinary items plus interest expense plus depreciation
                     and  amortization  plus  cash from  unconsolidated  special
                     purpose entities plus loss on sale of assets or minus gains
                     on  sale  of  assets)  during  such  year;  provided,  that
                     notwithstanding  the foregoing (and subject to Clauses 4.03
                     and 7.03),  so long as (i) no Default  shall have  occurred
                     and be  continuing  and (ii) the  Companies  have  made the
                     deposit  required  to be  made  into  the  Cash  Collateral
                     Account pursuant to Clause  7.03(a)(iii)(A)  and (B), after
                     December 31, 1997 the Companies  may pay special  dividends
                     and make other special  distributions  of assets or profits
                     so long as the sum of all such  special  distributions  for
                     each  calendar  year does not exceed  40% of the  aggregate
                     proceeds from the sale of any Equipment  during such fiscal
                     year;

           (l)       for so long as any amount  remains  outstanding  under this
                     Agreement, the Note or any of the Security Documents, EGF V
                     shall maintain a diversified portfolio of Equipment;

           (m)       EGF V shall at all times own,  beneficially  and of record,
                     at least (i) 50% of the  issued  and  outstanding  stock of
                     each  of  CLVI  and  MVI  and  (ii)  49.5%  of the  limited
                     partnership interests in each of Clement and Montgomery.

           (n)       If (i) any  Company  intends  to  acquire  an  asset  for a
                     purchase price greater than  $2,000,000 or (ii) any Company
                     intends to acquire an asset for a purchase  price less than
                     $2,000,000  while a  Default  shall  have  occurred  and be
                     continuing,  the Companies  shall give the Agent 5 Business
                     Days  notice  of such  intended  acquisition  and  upon the
                     request of the Agent (which  request shall be made within 5
                     Business Days of the receipt of such notice), the Companies
                     shall  procure  that such  acquiring  Company  deliver such
                     documents,  certificates and instruments, and take all such
                     actions,  as the Agent  deems  necessary  so as to create a
                     fully  perfected first priority lien in such acquired asset
                     in  favor  of the  Security  Trustee;  provided  that  with
                     respect to the acquisition of any Qualified  Assets (x) the
                     Companies shall not be required to notify the Agent of such
                     acquisition  pursuant to  sub-clause  (i) hereof unless and
                     until an Event of Default  shall have  occurred and (y) the
                     Companies  shall  not be  required  to grant  the  Security
                     Trustee a first  priority  mortgage  lien on any  Qualified
                     Assets  (but  nothing  herein  shall be deemed to limit the
                     obligation of the Companies to grant the Security Trustee a
                     first  priority lien in any other  interest,  beneficial or
                     otherwise,  in the  Qualified  Assets or in the earnings or
                     insurances relating thereto);

           (o)       Upon the  occurrence  of a  Default,  the  Companies  shall
                     deliver all such documents,  certificates  and instruments,
                     and shall take all such  actions,  as the Agent may request
                     in order to create a fully perfected first priority lien in
                     favor  of  the  Security  Trustee  in  any  assets  of  the
                     Companies  that  are at such  time  free  and  clear of all
                     Security Interests and that are not Pledged Equipment;

           (p)       The  Aircraft  shall not be used for any  purpose or in any
                     manner  not  fully  covered  by  the  insurances   relating
                     thereto,  or outside any geographical limit imposed by such
                     insurances,  or for any  illegal  purpose or in any illegal
                     manner.

           (q)       The  Aircraft  shall  be  maintained  in the  absolute  and
                     unencumbered ownership of the Owner Trustee, free and clear
                     of all Security Interests other than Permitted Liens;

           (r)       Each of the Companies shall comply in all respects with all
                     applicable   statues,   regulations   and   orders  of  any
                     governmental  authority of any  jurisdiction  applicable to
                     the  Aircraft  or the  operation  thereof  and shall at all
                     times  maintain  in full  force and  effect  all  necessary
                     certificates, licenses, permits and authorizations required
                     for the use and operation of the Aircraft;

           (s)       The  Aircraft  shall be  maintained  in good and  efficient
                     repair,  condition  and  appearance  consistent  with first
                     class  aircraft  ownership  and  management  practices  and
                     operationally airworthy in all respects,  ordinary wear and
                     tear excepted;

           (t)       The Companies shall cause the  Warehousing  Agreement to be
                     amended (no later than the Commitment  Termination Date (as
                     defined  in the  Warehousing  Agreement))  to  reflect  the
                     amendment and  restatement  of the Original Loan  Agreement
                     pursuant to this  Agreement  and to reflect the granting of
                     Security  Interests  by the  Companies  in  the  Collateral
                     pursuant to the Security Documents.

7.02       Each of the  Companies  further  undertakes  that it will not, as and
           from the date of this Agreement and  throughout the Security  Period,
           without the prior written consent of the Agent:

           (a)       conduct any business or activity  other than the ownership,
                     chartering, leasing and operation of the Equipment; or

           (b)       if  an  Event  of  Default   shall  have  occurred  and  be
                     continuing,  or if an Event  of  Default  would  occur as a
                     consequence of the  declaration or payment of a dividend or
                     distribution, declare or pay any dividend or make any other
                     distribution  of its assets or  profits  to any  partner or
                     shareholder; or

           (c)       repay any loans  (other than  intercompany  advances in the
                     ordinary course of business) made by any general partner or
                     limited  partner to any  limited  partnership  or any other
                     loans  advanced to any  Company by any person,  or make any
                     loans  or  advances  to any  person,  except  that (i) each
                     Company  may  lend  to and  borrow  from  another  Company,
                     provided that such loans shall be  subordinated to the Loan
                     and any lending  Company  shall enter into a  subordination
                     undertaking in form and substance satisfactory to the Agent
                     with  respect  to any such  loan  and (ii) EGF V may  repay
                     amounts outstanding under the Warehousing Agreement; or

           (d)       except for  indebtedness  evidenced by this Agreement,  the
                     Note and the Security  Documents,  and except for any other
                     indebtedness contemplated in this Agreement or any Security
                     Document,   incur  or   agree   to   incur  or  issue   any
                     indebtedness,   extend  any  guarantees   (other  than  for
                     performance  by another  Company as owner under any charter
                     of a Vessel or any lease of an Aircraft), or make any other
                     commitments with respect  thereto;  provided that EGF V may
                     borrow up to a maximum  outstanding  amount at any one time
                     of $10,000,000  under the Warehousing  Agreement so long as
                     such  borrowings are repaid within 180 days of the day such
                     borrowings are made; or

           (e)       create,  assume or permit to exist any Security Interest or
                     encumbrance  upon any of its properties or Equipment except
                     Permitted Liens; or

           (f)       consolidate  or amalgamate  with, or merge into,  any other
                     entity other than EGF V or a subsidiary of EGF V; or

           (g)       employ a  manager  of any of the  Vessels  or the  Aircraft
                     other than the Approved Manager; or

           (h)       except as  contemplated  by this Agreement or in accordance
                     with  Clause  7.03,  sell,  convey,  transfer,   lease,  or
                     otherwise dispose of (i) Pledged Equipment or (ii) all or a
                     substantial  part of its assets (whether by one transaction
                     or a series of transactions and whether related or not); or

           (i)       change the location of its  principal  place of business on
                     less than thirty (30) days written notice to the Agent; or

           (j)       amend,  supplement  or  modify,  or permit  the  amendment,
                     supplementation  or  modification  of, any of the Agreement
                     and  Articles  of  Limited  Partnership  of EGF V,  Trader,
                     California, Columbus, Clement or Montgomery;

           (k)       so  long  as the  Pledge  Agreement  is in  effect,  amend,
                     supplement   or   modify,    or   permit   the   amendment,
                     supplementation   or  modification   of,  the  Articles  of
                     Incorporation and By-laws of CLVI and MVI;

           (l)       except under terms  agreed to by the Agent,  enter into any
                     charter,  contract  of  affreightment,   lease  or  similar
                     agreement  with  respect to any of the  Vessels or Aircraft
                     which  contains any  prohibition on Vessel or Aircraft sale
                     without the prior  consent of the  charterer or lessee,  as
                     the case may be,  unless such sale  provision is subject to
                     rights  which  the  Security  Trustee  has in the  event of
                     default under the relevant Mortgage; or

           (m)       enter into any charter, contract of affreightment, lease or
                     similar  agreement  with  respect to any Vessel or Aircraft
                     which (i) has an  indicated  duration  in excess of six (6)
                     months or (ii) at the time such  contract  is entered  into
                     materially  adversely  affects the collateral  value of any
                     Vessel or  Aircraft or the legal  position of the  Lenders;
                     provided,  that  the  Companies  may  enter  into  any such
                     charter,  contract  of  affreightment,   lease  or  similar
                     agreement  which  is  on   substantially   the  same  terms
                     (including relevant  assignments and consents),  with rates
                     subject to market conditions,  as those previously accepted
                     by the Agent.

7.03                 (a) The  Companies  shall be  entitled  to  dispose  of any
                     portion of the Pledged Equipment provided that (i) prior to
                     such  disposition no Default or Event of Default shall have
                     occurred  and be  then  continuing,  (ii)  the  disposition
                     occurs in an arm's-length  transaction at fair market value
                     for  cash  consideration  and  (iii)  with  respect  to the
                     disposition of:

                     (A)       Pledged Equipment other than Containers,  (I) the
                               Agent shall have received prior written notice of
                               the  intention  of the  Companies  to effect such
                               disposition and (II) after December 31, 1997, 60%
                               of the proceeds of such  disposition  (or 100% of
                               the  proceeds  in the event  that a Default or an
                               Event of Default would occur as a consequence  of
                               such  disposition)  are  deposited  into the Cash
                               Collateral   Account   within   5  days  of  such
                               disposition; and

                     (B)       Containers,  the  Companies  shall deliver to the
                               Agent  within  45 days of the end of each  fiscal
                               quarter of each  financial year of EGF V a report
                               showing (x) the details of the disposition of any
                               Containers  for  such  quarterly  period  and (y)
                               after  December  31,  1997,  confirmation  of the
                               deposit into the Cash  Collateral  Account of 60%
                               of the  proceeds  (or 100% of the proceeds in the
                               event that a Default  or Event of  Default  would
                               occur  as  a  consequence  of  such  disposition)
                               within  45  days  of the  end of  such  quarterly
                               period.

           (b)       Notwithstanding  anything to the  contrary in the  Security
                     Documents,  should the  Companies be entitled to dispose of
                     any Pledged  Equipment in accordance  with Clause  7.03(a),
                     the Agent  shall  release  the  security  interest  in such
                     assets and shall release the corresponding Company from its
                     obligations under the relevant Security Documents.

           (c)       Each of the Companies jointly and severally agrees that if,
                     and so often as, the Companies  are not in compliance  with
                     Clause  7.01(g)(3),  they will, within (x) sixty (60) days,
                     in the case of  subclause  (i) below,  and (y) thirty  (30)
                     days,  in the  case  of  subclause  (ii)  below,  of  being
                     notified   by  the   Agent  of  such   requirement   (which
                     notification   shall  be  conclusive  and  binding  on  the
                     Companies) or becoming aware of such non-compliance:

                     (i)       provide   the  Lenders   with,   or  procure  the
                               provision  to the  Lenders  of,  such  additional
                               Pledged  Equipment as shall be  acceptable to the
                               Lenders to bring the  Companies  into  compliance
                               with Clause 7.01(g)(3),  which additional Pledged
                               Equipment  shall  consist of such assets,  and be
                               mortgaged to the Agent by such  documentation and
                               be entered into between such parties as the Agent
                               may approve or require  (and, if the Companies do
                               not make proposals  satisfactory  to the Agent in
                               relation  to such  additional  Pledged  Equipment
                               within   ten  (10)   days  of  the  date  of  the
                               notification  by the  Agent to the  Companies  as
                               aforesaid,  shall be  deemed to have  elected  to
                               prepay in accordance with (ii) below); or

                     (ii)      prepay (in  accordance  with  Clauses 4.02 except
                               that  such  prepayment  shall be made on the next
                               succeeding  Repayment Date) such part of the Loan
                               (together with accrued interest  thereon) as will
                               ensure  that the  Companies  comply  with  Clause
                               7.01(g)(3).  If the prepayment shall not occur on
                               the last day of an Interest Period, the Companies
                               will  pay to the  Agent  for the  account  of the
                               Lenders  such amounts as the Agent may certify as
                               necessary to compensate  the Lenders for any loss
                               or  expense   on   account  of  funds   borrowed,
                               contracted  for or  utilized in order to fund the
                               Loan.

           (d)       On or prior to December 31, 1997, the Companies may request
                     that amounts held on deposit in the Cash Collateral Account
                     be released to them to be applied  towards the  purchase of
                     additional   Pledged  Equipment   provided  that  (x)  such
                     additional   Pledged   Equipment   takes  such   form,   is
                     constituted  by  such  documentation  and is  entered  into
                     between  such  parties as the Agent may  approve or require
                     and is  otherwise  satisfactory  to the Agent and (y) after
                     the  purchase of such  additional  Pledged  Equipment,  the
                     Companies are either in compliance  with Clause  7.01(g)(3)
                     or they comply with Clause 7.03(c);

           (e)       For the  purposes of Clause  7.01(g)(3)  and  7.03(a),  the
                     market value of the Vessels,  Aircraft and Containers shall
                     be  determined  as follows:  (1) EGF V shall provide to the
                     Agent its internal  Valuations  at the  intervals  provided
                     herein  and at  such  additional  times  as the  Agent  may
                     reasonably  request.  (2) At any such time as the Agent may
                     reasonably  request,  the  Companies  shall  furnish to the
                     Agent a Valuation made by the appraisers in respect of each
                     category  of  Equipment  appointed  by the  Agent  from the
                     Approved List (which  Valuation  shall be at the expense of
                     the Companies  with respect to the first such Valuation and
                     thereafter  shall be for the account of the party specified
                     in subclause  (c)(4)  below).  The Agent and the  Companies
                     agree  to  accept  any  Valuation  made by such  appraisers
                     appointed as aforesaid as conclusive evidence of the market
                     value of the Vessels,  Aircraft or Containers,  as the case
                     may  be,  at  the  date  of  such  Valuation.   (3)  If  an
                     independent  Valuation is obtained as provided in subclause
                     (2)  above,  the  cost of such  Valuation  shall be for the
                     account  of the  Agent  if the  Valuation  provided  by the
                     appraisers establishes that the Companies are in compliance
                     with  Clause  7.01(g)(3).   If,  however,  the  appraisers'
                     Valuation   establishes  that  the  Companies  are  not  in
                     compliance  with  Clause  7.01(g)(3),   the  cost  of  such
                     appraisers'  Valuation  shall  be for  the  account  of the
                     Companies.

           (f)       For the  purpose  of Clause  7.03 (c) and (d),  the  market
                     value of any additional security provided or to be provided
                     to the Lenders shall be reasonably  determined by the Agent
                     through   reference  to  well   established  and  generally
                     accepted markets, indexes and exchanges for such additional
                     security.

           (g)       In  connection  with any  additional  security  provided in
                     accordance  with Clause 7.03 (c) or (d), the Lenders  shall
                     be entitled to receive  certified  copies of such documents
                     of the kinds to which  sub-clauses (a), (b), (c), (d), (e),
                     (f),  (g),  (h),  (i),  (j),  (k),  (l),  (m),  (n) and (u)
                     (inclusive) of Clause 5.01 refer which apply to the type of
                     security  provided and such favorable legal opinions as the
                     Agent shall reasonably require.

7.04       The Companies  shall at all times  maintain at the offices of CBK the
           Cash  Collateral  Account in the name of the  Companies and under the
           sole  dominion and control of the  Security  Trustee,  which  account
           shall be a special  interest-bearing account and the accrued interest
           shall be  payable  to the  Companies.  Each of the  Companies  hereby
           grants to the Security Trustee a security  interest in all monies and
           property  from time to time in the Cash  Collateral  Account  and the
           proceeds  thereof.  The  balance  from  time  to  time  in  the  Cash
           Collateral Account shall constitute part of the collateral  hereunder
           and  shall  not  constitute  payment  of the Loan  until  applied  as
           provided in Clause 4.03.

8.         SECURITY TRUSTEE AND AGENT

8.01       Recital.  Each of the  Companies  has  authorized  the  execution and
           delivery of this Clause 8 pursuant to which the Security Trustee will
           act as the Mortgagee of each of the Vessels and Aircraft, as Security
           Trustee and secured party with respect to the Containers, as Assignee
           and secured  party with  respect to the  insurances  of the  Vessels,
           Aircraft and Containers,  as Pledgee, Assignee and secured party with
           respect to the Pledged Shares and the limited  partnership  interests
           in  Clement  and  Montgomery,  as secured  party with  respect to the
           beneficial interest in the Trust Agreement, and as secured party with
           respect to any proceeds thereof.

8.02       Granting Clause. To secure the payment of all sums of money from time
           to time owing to the Lenders under this  Agreement,  the Note and the
           Security  Documents in the maximum  principal  amount of  $38,000,000
           plus any amounts due under the Interest Rate  Agreements  and accrued
           interest  thereon and all other  amounts  owing to the Lenders or the
           Security  Trustee  pursuant  to  this  Agreement,  the  Note  and the
           Security  Documents  ("Indebtedness"),  and  the  performance  of the
           covenants  of the  Companies  herein and  therein  contained,  and in
           consideration  of the premises and of the covenants  herein contained
           and of the extensions of credit by the Lenders, and of the sum of One
           Dollar paid to the Companies by the Security Trustee at or before the
           delivery  hereof,  the receipt  whereof is hereby  acknowledged,  the
           Security  Trustee  does  hereby  declare  that it  will  hold as such
           trustee in trust for the benefit of the  Lenders,  from and after the
           execution and delivery thereof,  all of its right, title and interest
           as mortgagee in, to and under each of the Mortgages, its right, title
           and  interest as  Assignee  and  secured  party  under the  Insurance
           Assignment,  its right,  title and interest as Pledgee,  Assignee and
           secured party under the Pledge  Agreement,  the Assignment of Limited
           Partnership  Interests and the Beneficial Interest Security Agreement
           and its right,  title and  interest as  Security  Trustee and secured
           party under the Security Agreement.

           The right,  title and interest of the Security  Trustee in and to the
           property,  rights and privileges  described above, from and after the
           execution   and  delivery   thereof,   and  all  property   hereafter
           specifically  subjected to the lien of the indenture  created  hereby
           and by the Security  Documents by any amendment hereto or thereto are
           herein collectively called the "Estate".

           TO HAVE AND TO HOLD the  Estate  unto the  Security  Trustee  and its
successors and assigns forever.

           BUT IN TRUST,  NEVERTHELESS,  for the equal and proportionate benefit
           and  security  of the  Lenders and their  respective  successors  and
           assigns without any priority of any one over any other.

           UPON CONDITION that,  unless and until an Event of Default under this
           Agreement  shall have  occurred  and be  continuing,  the  respective
           Company  having title to each Vessel and Aircraft shall be permitted,
           to the  exclusion  of the Security  Trustee,  to possess and use each
           Vessel and  Aircraft  and EGF V shall be permitted to possess and use
           the Containers.

           IT IS  HEREBY  COVENANTED,  DECLARED  AND  AGREED  that all  property
           subject  or to become  subject  hereto is to be held,  subject to the
           further covenants, conditions, uses and trusts hereinafter set forth,
           and each of the Companies, for itself and its successors and assigns,
           hereby  covenants and agrees to and with the Security Trustee and its
           successors in said trust, for the equal and proportionate benefit and
           security of the Lenders as hereinafter set forth.

8.03       Appointment of Agent.

           Each Lender  hereby  appoints and  authorizes  the Agent to take such
           action as agent on its behalf and to exercise  such powers under this
           Agreement,  the Notes and the Security  Documents as are delegated to
           the Agent by the terms hereof and thereof,  together with such powers
           as are reasonably incidental thereto (including,  without limitation,
           the power to  determine  whether  the  Companies  will be required to
           grant a Security Interest in any of their assets where the provisions
           of this Agreement provide for the Agent to make such  determination).
           As to any matters not expressly  provided for by this Agreement,  the
           Notes  or the  Security  Documents  (including,  without  limitation,
           enforcement  or  collection  of the  Notes),  the Agent  shall not be
           required to exercise any discretion or take any action,  but shall be
           required  to act or to  refrain  from  acting  (and  shall  be  fully
           protected  in  so  acting  or   refraining   from  acting)  upon  the
           instructions of the Majority Lenders,  and such instructions shall be
           binding upon all Lenders and all holders of Notes; provided, however,
           that the Agent shall not be required to take any action which exposes
           the  Agent  to  personal  liability  or  which  is  contrary  to this
           Agreement or applicable  law. The Agent agrees to give to each Lender
           prompt  notice of each  notice  and other  report  given to it by the
           Companies pursuant to the terms of this Agreement.

8.04.      Acts of Lenders.

           Any request,  demand,  direction,  consent,  notice,  waiver or other
           action provided by this Agreement to be given or taken by Lenders may
           be  embodied  in and  evidenced  by one or any  number of  concurrent
           written  instruments  of  substantially  similar tenor signed by such
           Lenders in person or by an agent duly appointed in writing,  and such
           action shall become effective when such instrument or instruments are
           delivered to the Security Trustee. Such a written instrument (and the
           action embodied  therein and evidenced  thereby) is herein  sometimes
           referred to as the "Act" of the Lenders  party to such  instrument or
           instruments.  Proof of the  execution of any such  instrument or of a
           writing appointing any such agent shall be sufficient for any purpose
           of this  Agreement  and shall be  conclusive in favor of the Security
           Trustee or of the  Companies  if made in the manner  provided in this
           Clause 8.04.

           The  fact  and  date  of the  execution  by any  person  of any  such
           instrument  or writing may be proved by the affidavit of a witness of
           such  execution or by the  certificate  of any notary public or other
           officer   authorized  by  law  to  take   acknowledgments  of  deeds,
           certifying  that  the  person  signing  such  instrument  or  writing
           acknowledged to him the execution thereof.

           Any  request,  demand,  authorization,  direction,  notice,  consent,
           waiver or other action by a Lender shall bind any subsequent assignee
           of such Lender.

8.05.      Notices, etc., to Agent, Security Trustee and the Companies.

           Any  request,  demand,  authorization,  direction,  notice,  consent,
           waiver or Act of Lenders or other  document  provided or permitted by
           this Agreement to be made upon, given or furnished to, or filed with,

           (1)  the  Agent  or the  Security  Trustee  by any  Lender  or by the
           Companies  shall be sufficient  for every purpose  hereunder if made,
           given,  furnished or filed in writing to or with the Security Trustee
           as provided in Clause 16 hereof,

           (2) the  Companies by any Lender or by the Security  Trustee shall be
           sufficient for every purpose hereunder if made,  given,  furnished or
           filed in writing to or with the  Companies  as  provided in Clause 16
           hereof.

8.06       Notice to Lenders; Waiver.

           Where  this  Indenture  provides  for notice to Lenders of any event,
           such notice shall be  sufficiently  given  (unless  otherwise  herein
           expressly  provided) if in writing and mailed,  postage  prepaid,  by
           certified or registered mail,  return receipt  requested,  telexed or
           telefaxed  to each  Lender in care of the  Agent,  not later than the
           latest date, and not earlier than the earliest  date,  prescribed for
           the giving of such notice.

           Where this Agreement  provides for notice in any manner,  such notice
           may be waived in  writing  by the person  entitled  to  receive  such
           notice,  either  before or after the event,  and such waiver shall be
           the equivalent of such notice.  Waivers of notice by Lenders shall be
           filed  with the  Security  Trustee,  but such  filing  shall not be a
           condition  precedent  to the validity of any action taken in reliance
           upon such waiver.

8.07       Satisfaction and Discharge of Indenture; Release of Estate.

           When all  payments to the Lenders in respect of the Loan or otherwise
           due under this Agreement,  the Note and any Security  Documents shall
           have been made,  the Security  Trustee  shall release the Estate from
           the lien of the  indenture  created by this Clause 8 and the Security
           Documents and neither the Security Trustee nor the Lenders shall have
           any further  interest  in or other right with  respect to the Estate.
           Notwithstanding  the  satisfaction  and  discharge  of the  indenture
           created by this Clause 8 and the Security Documents,  the obligations
           of the  Companies  to the Security  Trustee  under Clause 8.23 hereof
           shall survive.

8.08       Power of Sale; Suits for Enforcement.

           (a) In case one or more Events of Default under this Agreement or the
           Security  Documents  shall  have  occurred  and  shall  not have been
           remedied, the Security Trustee and/or the Agent (as the case may be),
           personally  or by agents,  with or without  entry,  upon the  written
           instructions  of the  Majority  Lenders,  exercise  such  rights  and
           remedies as are provided in the Agreement and the Security Documents.

8.09       Security Trustee May File Proofs of Claim.

           In case of the pendency of any receivership, insolvency, liquidation,
           bankruptcy,  reorganization,  arrangement, adjustment, composition or
           other  judicial  proceeding  relative to any of the  Companies or the
           property  of any of  them,  the  Security  Trustee  (irrespective  of
           whether the sums owing to the Lenders under this Agreement,  the Note
           and  the  Security  Documents  shall  then  be  due  and  payable  in
           accordance with this Agreement, the Note or the Security Documents or
           otherwise)  shall be entitled  and  empowered  to  intervene  in such
           proceeding  or  otherwise  and shall be  entitled,  upon the  written
           instructions of the Majority Lenders,

           (a) to file and prove a claim for the whole  amount of the sums owing
           and unpaid under the Agreement,  the Note and the Security  Documents
           and  interest  thereon and to file such other  papers or documents as
           may be  necessary  or  advisable  to have the claims of the  Security
           Trustee  (including  any  claim  for  the  reasonable   compensation,
           expenses,  disbursements  and advances of the Security  Trustee,  its
           agents and  counsel)  and of the  Lenders  allowed  in such  judicial
           proceeding;  any claim filed by the Security  Trustee shall expressly
           preserve all rights and remedies of each Lender in the Estate, and

           (b) to collect and receive  any moneys or other  property  payable or
           deliverable on any such claims and to distribute the same;

           and any receiver,  assignee,  trustee,  liquidator,  sequestrator (or
           other  similar  official) in any such  judicial  proceeding is hereby
           authorized  by each  Lender to make  such  payments  to the  Security
           Trustee,  and if the Security  Trustee shall consent to the making of
           such payments directly to such Lender, to pay to the Security Trustee
           any  amount  due to it for  the  reasonable  compensation,  expenses,
           disbursements  and advances of the Security  Trustee,  its agents and
           counsel,  and any other amounts due the Security Trustee under Clause
           8.23 hereof.

           Nothing  herein  contained  shall be deemed to authorize the Security
           Trustee  to  authorize  or consent to or accept or adopt on behalf of
           any Lender any plan of  reorganization,  arrangement,  adjustment  or
           composition  affecting the sums owing under the Agreement or the Note
           or the rights of any Lender,  or to authorize the Security Trustee to
           vote in respect  of the claim of any  Lender in any such  proceeding,
           except upon the written instructions of such Lender.

8.10       Indenture Trustee May Enforce Claims.

           All rights of action and claims under this  Agreement,  the Note, the
           Mortgages,  the Beneficial Interest Security Agreement, the Insurance
           Assignments,   the  Pledge  Agreement,   the  Assignment  of  Limited
           Partnership  Interests,  the Security Agreement or any other Security
           Document,  may be prosecuted and enforced by the Security  Trustee in
           its own name as trustee  of an express  trust,  and any  recovery  of
           judgment  shall,  after  provision for the payment of the  reasonable
           compensation,  expenses,  disbursements  and advances of the Security
           Trustee,  its agents and counsel,  be for the ratable  benefit of the
           Lenders.

8.11       Restoration of Rights and Remedies.

           If the Security  Trustee or any Lender has  instituted any proceeding
           to enforce any right or remedy or in the  exercise of any power under
           this Clause 8 or any of the Security Documents by foreclosure,  entry
           or otherwise and such  proceeding has been  discontinued or abandoned
           for any reason,  or has been  determined  adversely  to the  Security
           Trustee or to such  Lender,  then and in every such case the relevant
           Company or  Companies,  the Security  Trustee and the Lenders  shall,
           subject  to  any  determination  in  such  proceeding,   be  restored
           severally  and  respectively  to their  former  positions  and rights
           hereunder,  including the position and rights of the Security Trustee
           with respect to the Estate,  and  thereafter  all rights,  powers and
           remedies of the Security  Trustee and the Lenders  shall  continue as
           though no such proceeding had been instituted.

8.12       Rights and Remedies Cumulative.

           No right,  power or remedy herein  conferred  upon or reserved to the
           Security Trustee or to the Lenders is intended to be exclusive of any
           other right, power or remedy. Every right, power and remedy shall, to
           the extent  permitted by law, be cumulative  and in addition to every
           other  right,  power and remedy  given  hereunder or now or hereafter
           existing at law or in equity or otherwise  and may be exercised  from
           time  to  time  and as  often  and in  such  order  as may be  deemed
           expedient by the Security Trustee or the Lenders. The exercise of any
           right,  power or  remedy  shall not be  construed  as a waiver of the
           right to exercise  at the same time or  thereafter  any other  right,
           power or remedy.

8.13       Delay or Omission not Waiver.

           No delay or omission  of the  Security  Trustee,  the Agent or of any
           Lender to exercise any right, power or remedy accruing upon any Event
           of Default shall impair any such right, power or remedy or constitute
           a waiver of any such  Event of Default  or an  acquiescence  therein.
           Every right,  power and remedy  given by this  Agreement or by law to
           the Security Trustee,  the Agent or the Lenders may be exercised from
           time  to  time,  and as  often  as may be  deemed  expedient,  by the
           Security Trustee, the Agent or by the Lenders, as the case may be.

8.14       Control by Lenders.

           The Majority  Lenders have the right,  during the  continuance  of an
Event of Default:

           (a) to require  the  Security  Trustee  to  proceed  to enforce  this
           Agreement,  the Note and the  Security  Documents  either by judicial
           proceedings  for the  enforcement  of the payment of such unpaid sums
           and  the  foreclosure  of  the  Mortgages,   enforcement   under  the
           Beneficial  Interest Security Agreement,  the Insurance  Assignments,
           Pledge Agreement, the Assignment of Limited Partnership Interests and
           Security  Agreement and the sale of the Estate or, at the election of
           the  Security  Trustee,  by the exercise of the power of entry and/or
           sale conferred by the relevant Security Document, and

           (b) to direct the time, method and place of conducting any proceeding
           for any remedy  available to the Security  Trustee or exercising  any
           trust or power conferred on the Security Trustee; provided that

                     (i)       such direction  shall not be in conflict with any
                               rule  of  law  or  with  the  provisions  of  the
                               Security Documents or this Agreement, and

                     (ii)      the  Security  Trustee may take any other  action
                               deemed  proper by the Security  Trustee  which is
                               not inconsistent with such direction.

8.15       Waiver of Appraisement, etc., Laws.

           Each of the  Companies  hereby  covenants  (to the extent that it may
           lawfully do so) that it will not at any time insist  upon,  or plead,
           or in any manner  whatsoever  claim or take the benefit or  advantage
           of, any appraisement,  valuation,  stay,  extension or redemption law
           wherever  enacted,  now or at any time hereafter in force, to prevent
           or hinder the  enforcement of the indenture  created by this Clause 8
           or the Security  Documents or the absolute sale of the Estate, or any
           part thereof,  or the possession thereof by any purchaser at any sale
           under the Security Documents;  and each such Company,  for itself and
           all who may claim  under it, so far as it now or  hereafter  lawfully
           may,  hereby waives the benefit of all such laws.  Each such Company,
           for  itself  and all who may claim  under it,  waives,  to the extent
           lawful,  all right to have the property in the Estate marshalled upon
           any foreclosure hereof, and agrees that any court having jurisdiction
           to foreclose  this  Indenture  may order the sale of the Estate as an
           entirety.

           If any law in this Clause 8.15 referred to and now in force, of which
           the Owner or its successors might take advantage  despite this Clause
           8.15,  shall hereafter be repealed or cease to be in force,  such law
           shall not thereafter be deemed to constitute any part of the contract
           herein contained or to preclude the application of this Clause 8.15.

8.16       Acceptance of Trusts.

           CBK hereby accepts the trusts imposed upon it as Security  Trustee by
           this  Agreement,  and the Security  Trustee  covenants  and agrees to
           perform  the same as  herein  expressed  and  agrees to  receive  and
           disburse  all monies  constituting  part of the Estate in  accordance
           with the terms hereof.

8.17       Certain Duties and Responsibilities of the Security Trustee.

           (a)       Except during the continuance of an Event of Default,

           (i) the Security  Trustee  undertakes to perform such duties and only
           such duties as are  specifically set forth herein and in the Security
           Documents, and no implied covenants or obligations shall be read into
           this  Agreement  or  the  Security  Documents  against  the  Security
           Trustee,  and the  Security  Trustee  agrees that it will not manage,
           control,  use,  sell,  dispose of or otherwise  deal with the Estate,
           except as  required  by the terms of the  Security  Documents  and as
           otherwise provided herein; and

           (ii) in the absence of bad faith on its part,  the  Security  Trustee
           may  conclusively  rely,  as to the truth of the  statements  and the
           correctness of the opinions expressed  therein,  upon certificates or
           opinions  furnished to the  Security  Trustee and  conforming  to the
           requirements  of  this  Agreement;  but  in  the  case  of  any  such
           certificates   or  opinions   which  by  any  provision   hereof  are
           specifically  required to be furnished to the Security  Trustee,  the
           Security  Trustee  shall  be  under a duty  to  examine  the  same to
           determine  whether or not they  conform to the  requirements  of this
           Agreement.

           (b) In case an Event of Default has occurred and is  continuing,  the
           Security  Trustee shall exercise such of the rights and powers vested
           in it by this Agreement and the Security Documents, and shall use the
           same  degree of care and skill in their  exercise,  as a prudent  man
           would exercise or use under the  circumstances  in the conduct of his
           own affairs.

           (c) No provision of this Agreement  shall be construed to relieve the
           Security Trustee from liability for its own grossly negligent action,
           its  own  grossly  negligent  failure  to  act,  or its  own  willful
           misconduct, except that

           (i)       this  subsection  (c) shall not be  construed  to limit the
                     effect of subsection (a) of this Clause 8.17;

           (ii)      the Security  Trustee  shall not be liable for any error of
                     judgment made in good faith by a director,  officer,  agent
                     or employee  of the  Security  Trustee,  unless it shall be
                     proved  that  the   Security   Trustee  was   negligent  in
                     ascertaining the pertinent facts;

           (iii)     the  Security  Trustee  shall not be liable with respect to
                     any action taken or omitted to be taken by it in good faith
                     in accordance  with the  direction of the Majority  Lenders
                     relating to the time,  method and place of  conducting  any
                     proceeding  for  any  remedy   available  to  the  Security
                     Trustee,  or exercising  any trust or power  conferred upon
                     the Security Trustee, under this Indenture; and

           (iv)      no provision of this  Agreement  shall require the Security
                     Trustee to expend or risk its own funds or otherwise  incur
                     any financial  liability in the  performance  of any of its
                     duties  hereunder,  or in the exercise of any of its rights
                     or powers.

           (d) Whether or not therein expressly so provided,  every provision of
           this Agreement  relating to the conduct or affecting the liability of
           or affording  protection to the Security  Trustee shall be subject to
           the provisions of this Section 8.17.

8.18       Notice of Default.

           As  promptly  as possible  after an officer of the  Security  Trustee
           shall obtain actual knowledge of any default hereunder,  the Security
           Trustee  shall  transmit  by mail,  telefax  or telex  notice of such
           default to the Lenders,  unless such default shall have been cured or
           waived.  For the purpose of this  Section  8.18,  the term  "default"
           means any event which is an Event of Default.

8.19       Certain Rights of Security Trustee and the Agent.

           Except as otherwise provided in Section 8.17 hereof:

           (a) the  Security  Trustee  and the  Agent may rely upon and shall be
           protected in acting or  refraining  from acting in reliance  upon any
           resolution,  certificate,  statement,  instrument,  opinion,  report,
           notice,  request,  direction,  consent, order, bond or other paper or
           document  reasonably  believed  by it to be genuine  and to have been
           signed or presented by the proper person or persons;

           (b) any request or direction of the Companies  mentioned herein shall
           be  sufficiently  evidenced by a certificate  or request signed by an
           officer  or  director  of  EGF V or  its  general  partner  or a duly
           authorized attorney-in-fact for EGF V;

           (c)  whenever  in  the   administration   of  the  indenture  or  the
           obligations created by this Agreement and the Security Documents, the
           Security  Trustee  or the  Agent,  as the case may be,  shall deem it
           desirable  that a matter  be  proved or  established  before  taking,
           suffering or omitting any action  hereunder,  the Security Trustee or
           the Agent (unless other evidence be herein  specifically  prescribed)
           may, in the absence of bad faith on its part, rely upon a certificate
           signed by an officer or  director of any of the  Companies  or a duly
           authorized attorney-in-fact for such Company or Companies;

           (d) the  Security  Trustee and the Agent may consult with counsel and
           the  written  advice  of such  counsel  shall  be full  and  complete
           authorization and protection in respect of any action taken, suffered
           or omitted by it hereunder in good faith and in reliance thereon;

           (e)  neither  the  Security  Trustee nor the Agent shall be under any
           obligation to exercise any of the rights or powers vested in it or in
           the  Lenders  by this  Agreement  or the  Security  Documents  at the
           request or direction of any of the Lenders, unless such Lenders shall
           have  offered to the Security  Trustee or the Agent,  as the case may
           be,  reasonable  security or indemnity  (including the advancement of
           funds)  against the costs,  expenses and  liabilities  which might be
           incurred by it in compliance with such request or direction;

           (f) neither the Security Trustee nor the Agent shall be bound to make
           any investigation into the facts or matters stated in any resolution,
           certificate, statement, instrument, opinion, report, notice, request,
           direction,  consent,  order, bond or other paper or document, but the
           Security Trustee or the Agent, as the case may be, in its discretion,
           may make such  further  inquiry or  investigation  into such facts or
           matters as it may see fit;

           (g) the  Security  Trustee may  execute  any of the  trusts,  and the
           Security  Trustee  and  the  Agent  may  execute  any of  the  powers
           hereunder or perform any duties  hereunder,  either directly or by or
           through agents or attorneys; and

           (h) neither the  Security  Trustee nor the Agent shall be  personally
           liable, in case of entry by it upon the Estate,  for debts contracted
           or liabilities or damages  incurred in the management or operation of
           the Estate.

8.20       Security Trustee not Responsible for Recitals; Warranty.

           Neither the Security  Trustee nor the Agent makes any  representation
           as to the value or condition of the Estate or any part thereof, as to
           the  title  of any of the  Companies  thereto  or as to the  security
           afforded  thereby or hereby,  or as to the validity or genuineness of
           any  security  at any time  pledged or  deposited  with the  Security
           Trustee or the Agent hereunder.  Neither the Security Trustee nor the
           Agent shall have any  responsibility  with respect to the  recording,
           re-recording,   filing   or   re-filing,   under   the  laws  of  any
           jurisdiction,  of this  Indenture or any other  document or statement
           that may be required or permitted to be recorded,  re-recorded, filed
           or re-filed  under any such laws to perfect or protect  the  security
           interests created by or pursuant to Clause 8.02 of this Agreement.

           Neither the Security  Trustee nor the Agent (i) makes any warranty or
           representation  to any  Lender  and shall not be  responsible  to any
           Lender for any statements,  warranties,  or representations  (whether
           written or oral) made in or in connection  with this  Agreement,  the
           Notes or the  Security  Documents;  (ii)  shall  not have any duty to
           ascertain or to inquire as to the performance or observance of any of
           the terms,  covenants or conditions of this  Agreement,  the Notes or
           the Security Documents on the part of the Companies or to inspect the
           property (including the books and records) of the Companies.

8.21       Capacity in Which Acting.

           CBK as Security  Trustee and Agent,  is acting  hereunder  not in its
           individual  capacity  but solely as trustee and agent,  respectively,
           except as otherwise expressly provided herein, and all persons having
           any claim against the Security  Trustee and/or the Agent by reason of
           the  transactions  contemplated  hereby shall look only to the Estate
           for payment or satisfaction  and neither the Security Trustee nor the
           Agent  shall  not  be  accountable  under  any  circumstances  in its
           individual  capacity,  except for its own wilful  misconduct or gross
           negligence.

           With  respect  to the Loan and the Note  issued to it, CBK shall have
           the same  rights and powers  under this  Agreement,  the Note and the
           Security  Documents  as any other Lender and may exercise the same as
           though it were not the Security Trustee and the Agent,  respectively,
           and the term "Lender" or "Lenders" shall,  unless otherwise expressly
           indicated,  include CBK hereunder in its individual capacity. CBK and
           its  affiliates  may  accept  deposits  from,  lend  money to, act as
           trustee under indentures of, accept  investment  banking  engagements
           from and generally engage in any kind of business with, the Companies
           and any of the  Companies'  subsidiaries  and any  Person  who may do
           business  with  or own  securities  of  the  Companies  or  any  such
           subsidiary,  all as if CBK  were  not the  Security  Trustee  and the
           Agent, respectively,  and without any duty to account therefor to the
           Lenders.

8.22       Funds May be Held by Security Trustee.

           Subject  to Clause  8.34  hereof,  any  monies  held by the  Security
           Trustee  hereunder  as part of the Estate may,  until paid out by the
           Security  Trustee as herein  provided,  be  carried  by the  Security
           Trustee on deposit with itself,  and neither the Security Trustee nor
           the Agent shall have any liability for interest upon any such monies.

8.23       Compensation and Reimbursement.

           The Companies hereby jointly and severally agree:

           (a) except as otherwise  expressly  provided herein, to reimburse the
           Security  Trustee and the Agent upon its  request for all  reasonable
           expenses, disbursements and advances incurred or made by the Security
           Trustee  or the  Agent,  as the case may be, in  accordance  with any
           provision of this Agreement and the Security Documents (including the
           reasonable  expenses and  disbursements  of its agents and  counsel),
           except  any  such  expense,   disbursement   or  advance  as  may  be
           attributable to its gross negligence or willful misconduct; and

           (b) to indemnify  each of the Security  Trustee and the Agent (in its
           individual  capacity  and as  trustee  or  agent,  respectively,  and
           including its successors,  assigns, officers,  directors,  agents and
           servants) for, and to hold it harmless against,  any loss,  liability
           or expense incurred without gross negligence or willful misconduct on
           its part,  arising out of or in  connection  with the  acceptance  or
           administration  of the indenture or agency  created by this Agreement
           and the Security Documents,  including, but not limited to, the costs
           and  expenses of defending  itself  against any claim or liability in
           connection  with the exercise or  performance of any of its powers or
           duties hereunder,  and any loss, liability,  expense or claim arising
           out of its  possession,  management,  control use or operation of the
           Estate.

           As security for the  performance of the  obligations of the Companies
           under this Clause 8.23,  the Security  Trustee and the Agent shall be
           secured  under this  Indenture  and Agreement by a lien on the Estate
           prior to the lien thereon of the Lenders, and for the payment of such
           expense, reimbursements and indemnity the Security Trustee shall have
           the right to use and apply any  moneys  held by it  hereunder  in the
           Estate.

           The  indemnity  contained  in this  Clause  8.23  shall  survive  the
           termination of this Agreement and the Security Documents.

8.24       Corporate Trustee Required; Eligibility.

           There shall at all times be a Security Trustee  hereunder which shall
           be CBK or any other  corporation  organized and doing  business under
           the laws of the  United  States of  America or of any State or of any
           foreign   government   recognized  by  the  Securities  and  Exchange
           Commission pursuant to Sections 406-408 of the Trust Indenture Reform
           Act of 1990, 15 USC ss.77jjj,  authorized under such laws to exercise
           corporate trust powers,  having a combined  capital and surplus of at
           least  $150,000,  subject to supervision or examination by Federal or
           State authority, and any other applicable law or regulation.  If such
           corporation   publishes  reports  of  condition  at  least  annually,
           pursuant to law or to the  requirements of the aforesaid  supervising
           or examining authority, then for the purpose of this Clause 8.24, the
           combined capital and surplus of such  corporation  shall be deemed to
           be its  combined  capital and surplus as set forth in its most recent
           report of condition so published. If at any time the Security Trustee
           shall cease to be eligible in accordance  with the provisions of this
           Clause 8.24, it shall resign  immediately  in the manner and with the
           effect hereinafter specified herein.

8.25       Resignation and Removal; Appointment of Successor.

           (a) No  resignation  or removal of the Security  Trustee or the Agent
           and no appointment of a successor  Security Trustee or Agent pursuant
           to this Clause 8.25 shall become  effective  until the  acceptance of
           appointment by the successor  Security  Trustee or Agent, as the case
           may be, under Clause 8.26 hereof.  Until such acceptance the Security
           Trustee or Agent, as the case may be, shall continue to carry out its
           duties hereunder.

           (b) The  Security  Trustee  and the Agent  may  resign at any time by
           giving written notice thereof to the Companies and the Lenders. If an
           instrument  of acceptance  by a successor  Security  Trustee or Agent
           shall not have  been  delivered  to the  Companies  and the  Security
           Trustee or Agent, as the case may be, within 30 days after the giving
           of such notice of  resignation,  the  resigning  Security  Trustee or
           Agent  may  petition  any  court of  competent  jurisdiction  for the
           appointment of a successor Security Trustee or Agent, as the case may
           be.

           (c) Each of the Security  Trustee and the Agent may be removed at any
           time  by Act of  the  Majority  Lenders,  delivered  to the  Security
           Trustee or the Agent, as the case may be, and to the Companies.

           (d)  If at any time:

           (i)       the  Security  Trustee  shall  cease to be  eligible  under
                     Clause 8.24 hereof and shall fail to resign  after  written
                     request therefor by any such Lender, or

           (ii)      the Security Trustee or the Agent shall become incapable of
                     acting or shall be adjudged a bankrupt or  insolvent,  or a
                     receiver of the  Security  Trustee or the Agent or of their
                     respective  properties  shall be  appointed,  or any public
                     officer  shall  take  charge  or  control  of the  Security
                     Trustee or the Agent or of their  respective  properties or
                     affairs for the purpose of rehabilitation,  conservation or
                     liquidation, any Lender may petition any court of competent
                     jurisdiction for the removal of the Security Trustee or the
                     Agent,  as the  case  may  be,  and  the  appointment  of a
                     successor Security Trustee or Agent, as the case may be.

           (e) If the Security Trustee or the Agent shall resign,  be removed or
           become incapable of acting, or if a vacancy shall occur in the office
           of Security  Trustee or the Agent for any cause, the Majority Lenders
           shall promptly select a successor  Security  Trustee or Agent, as the
           case may be, and the Companies  shall appoint such selected person as
           a  successor  Security  Trustee  or Agent,  as the case may be. If no
           successor  Security  Trustee or Agent shall have been so appointed by
           the Lenders and the Companies and accepted  appointment in the manner
           hereinafter provided,  the Security Trustee or Agent, as the case may
           be, or any Lender for at least six  months  may,  on behalf of itself
           and all others  similarly  situated,  petition any court of competent
           jurisdiction  for the appointment of a successor  Security Trustee or
           Agent, as the case may be.

           (f) Each of the  Security  Trustee and the Agent shall give notice of
           each  resignation and each removal of the Security  Trustee or Agent,
           as the case may be,  and each  appointment  of a  successor  Security
           Trustee  or Agent by  mailing  written  notice  of such  event to the
           Lenders. Each notice shall include the name of the successor Security
           Trustee or Agent,  as the case may be, and the  address of its office
           for purposes of Clause 8.05 hereof.

8.26       Acceptance of Appointment by Successor.

           Every successor  Security Trustee or Agent appointed  hereunder shall
           execute, acknowledge and deliver to the Companies and to the retiring
           Security  Trustee  or  Agent,  as the  case  may  be,  an  instrument
           accepting such appointment,  and thereupon the resignation or removal
           of the retiring  Security Trustee or Agent shall become effective and
           such  successor  Security  Trustee or Agent,  without any further act
           deed,  or  conveyance,  shall  become  vested  with all the  estates,
           properties,  rights,  powers,  trusts  and  duties  of  the  retiring
           Security  Trustee  or Agent,  as the case may be;  but such  retiring
           Security Trustee or Agent shall, upon payment of its charges, execute
           and deliver,  together with the successor  Security Trustee or Agent,
           an  amendment  hereto,  and such  amendments  to the  Mortgages,  the
           Beneficial Interest Security Agreement, Insurance Assignments, Pledge
           Agreement,  the  Assignment  of  Limited  Partnership  Interests  and
           Security  Agreement,  in due  form,  and in the  required  number  of
           counterparts,  as  may  be  required  for  recording,  conveying  and
           transferring to such successor Security Trustee or Agent, as the case
           may be, upon the trusts herein expressed all the estates, properties,
           rights,  powers and trusts of the retiring Security Trustee or Agent,
           as the case may be, and shall duly  assign,  transfer  and deliver to
           such successor  Security Trustee or Agent all property and money held
           by such  retiring  Security  Trustee  or  Agent,  as the case may be,
           hereunder.  Upon request of any such  successor  Security  Trustee or
           Agent,  the Companies  shall execute any and all instruments for more
           fully and  certainly  vesting  in and  confirming  to such  successor
           Security  Trustee  or Agent  all such  estates,  properties,  rights,
           powers and trusts.

           No successor  Security Trustee shall accept its appointment unless at
           the time of such acceptance such successor  Security Trustee shall be
           qualified and eligible under Clause 8.24.

8.27       Merger, Conversion, Consolidation or Succession to Business.

           Any Person into which the Security Trustee may be merged or converted
           or with which it may be  consolidated,  or any Person  resulting from
           any merger, conversion or consolidation to which the Security Trustee
           shall be a party,  or any Person  succeeding to all or  substantially
           all of the corporate trust business of the Security Trustee, shall be
           the successor of the Security Trustee hereunder, provided such Person
           shall be otherwise  qualified and eligible under Clause 8.24, without
           the  execution  or filing of any paper or any further act on the part
           of any of the parties hereto.

8.28       Amendments With Consent of the Security Trustee.

           The Companies and the Security Trustee,  at any time and from time to
           time, may enter into any one or more amendments  supplemental  hereto
           or amendments to the Security Documents,  all in form satisfactory to
           the Security Trustee, for the following purposes:

           (a) to correct or amplify the description of any property at any time
           subject to the lien of the  indenture  created by this  Agreement and
           the Security  Documents  or to subject to the lien of this  Indenture
           any additional property; or

           (b) to  evidence  the  succession  of  another  Person  to any of the
           Companies,  and the assumption by any such successor of the covenants
           of the Companies herein and in the Security Documents contained; or

           (c) to add to the  covenants of the  Companies for the benefit of the
           Lenders,  or to  surrender  any  right or  power  or in the  Security
           Documents herein conferred upon the Companies; or

           (d) to correct or supplement any defective or inconsistent  provision
           herein  or to  convey,  transfer,  assign,  mortgage  or  pledge  any
           property to or with the indenture  created by this  Agreement and the
           Security Documents; or

           (e) to cure any  ambiguity  or to add or modify any other  provisions
           and  agreements  in this  Agreement or any  Security  Document in any
           manner which will not adversely  affect the interests of the Lenders;
           or

           (f) to provide for the appointment of any successor  Security Trustee
           hereunder, in accordance with this Clause 8.

8.29       Amendments with Consent of Lenders (and Agent).

           With the  consent of the  Majority  Lenders,  by Act of such  Lenders
           delivered to the  Companies and the Security  Trustee,  the Companies
           may, and the Security Trustee,  subject to Section 8.30 hereof, shall
           enter into an amendment  supplemental hereto to add any provisions to
           or change in any manner or eliminate  any of the  provisions  of this
           Agreement  or the  Security  Documents  or modify in any  manner  the
           rights of the Lenders under this Agreement or the Security  Documents
           or to release  property from the lien of this  Indenture  pursuant to
           this  Agreement  and the Security  Documents;  provided  that no such
           amendment or waiver shall, without the consent of the all the Lenders
           (and, if such amendment or waiver affects the rights and  obligations
           of the Agent, the Agent),

           (a) change the maturity of the  principal of, or any  installment  of
           interest on, the Indebtedness or any portion  thereof,  or reduce the
           principal amount thereof or the interest thereon, or change the place
           of payment where,  or the coin or currency in which,  or the interest
           thereon,  is payable or impair  the right to  institute  suit for the
           enforcement of any such payment on or after the maturity thereof, or

           (b) create any security  interest with respect to the Estate  ranking
           prior to, or on a parity with, the security  interest created by this
           Agreement  and the Security  Documents,  or deprive any Lender of the
           lien  created by this  Agreement  and the  Security  Documents on the
           Estate,  except as  expressly  permitted  herein  or in any  Security
           Document, or

           (c) change, modify or amend the definition of Majority Lenders, whose
           consent  is  required  for  any  such  amendment  or any  waiver  (of
           compliance  with certain  provisions of this  Indenture or of certain
           defaults hereunder and their consequences)  provided for herein or in
           any Security Document, or

           (d) modify any of the  provisions  of this Clause 8.29 or Clause 8.14
           hereof,  except to increase  any  percentage  herein or therein or to
           provide  that certain  other  provisions  of this  Agreement or other
           documents referred to herein cannot be modified or waived without the
           consent of the Majority Lenders.

8.30       Documents Affecting Immunity or Indemnity.

           If in the opinion of the  Security  Trustee or the Agent any document
           required to be  executed  pursuant to the terms of Clause 8.29 hereof
           affects any  interest or right or duty or  immunity or  indemnity  in
           favor of the  Security  Trustee or the Agent under this  Agreement or
           any Security Document, the Security Trustee or the Agent, as the case
           may be, may in its discretion decline to execute such document.

8.31       Execution of Amendments.

           In executing,  or accepting  the  additional  trusts  created by, any
           amendment permitted by this Clause 8 or the modifications  thereby of
           the trusts  created  hereby,  the Security  Trustee  and/or the Agent
           shall be  entitled to receive  and  (subject  to Clause 8.17  hereof)
           shall be fully  protected  in  relying  upon,  an  opinion of counsel
           satisfactory  to the Security  Trustee or the Agent,  as the case may
           be,  stating that the  execution of such  amendment is  authorized or
           permitted by this Agreement.

           Promptly  after  the  execution  by the  Companies  and the  Security
           Trustee of any  amendment,  the Companies  shall duly mail or deliver
           otherwise  a  conformed  copy  of such  amendment  to the  Agent  (if
           different  from  the  Security  Trustee).  The  validity  of any such
           amendment,  however,  shall not be impaired or affected by failure to
           give such notice or by any defect therein.

8.32       Effect of Amendment.

           Upon the execution of any amendment  hereunder,  this Agreement shall
           be modified in accordance therewith,  and such amendment shall form a
           part of this Agreement for all purposes; and every Lender theretofore
           or thereafter issued and delivered hereunder shall be bound thereby.

8.33       Indemnification by the Companies.

           The Companies  hereby  jointly and severally  covenant and agree that
           the Estate shall be free of any lien, claim or encumbrance created by
           any Company and not  contemplated  or permitted  by the  transactions
           described in this Agreement or in the Security Documents arising as a
           result of claims  against  any of the  Companies  not  related to the
           ownership of the Vessels,  the Aircraft or the Containers and that it
           will promptly take such action as may be necessary to duly  discharge
           any such lien, claim or encumbrance.

8.34       Cash Held by Security Trustee.

           (a) All cash  held by the  Security  Trustee  hereunder  or under any
           Security Document shall be held as a special deposit in trust for the
           purposes for which held.

           (b) Cash held by the Security Trustee hereunder or under any Security
           Document  (i) need not be  segregated;  (ii) shall not be invested or
           reinvested;  and (iii) shall bear  interest  only as may be agreed by
           the Companies and the Security Trustee.

8.35       Distribution of Payments Received After an Event of Default.

           All payments  received and amounts  realized by the Security  Trustee
           after an Event of Default shall have occurred and be  continuing,  as
           well as all payments or amounts then held or  thereafter  received by
           the  Security  Trustee  as part of the  Estate  while  such  Event of
           Default shall be  continuing,  shall be  distributed  by the Security
           Trustee in accordance with the Security Documents.

8.36       Distributions Withheld From the Companies.

           Anything in this Agreement to the contrary  notwithstanding,  after a
           director,  officer,  agent or employee of the Security  Trustee shall
           have actual knowledge of an Event of Default, all amounts which would
           otherwise  be  distributable  to the  Companies  shall be held by the
           Security  Trustee  as part of the  Estate  and,  if such an  Event of
           Default shall cease to be continuing before the time such amounts may
           become   distributable   pursuant  hereto,   such  amounts  shall  be
           distributed to the Companies.

9.         EVENTS OF DEFAULT

9.01       Each of the  following  events shall  constitute  an Event of Default
           (whether  such  event  shall  occur  or  come  about  voluntarily  or
           involuntarily or by operation of law or regulation or pursuant to, or
           in compliance  with,  any  judgment,  decree or order of any court or
           other authority):

           (a)       any  of the  Companies  or any  other  party  to any of the
                     Security  Documents  (i)  fails  to pay on the due date any
                     principal  due in respect of the Loan or the Note;  or (ii)
                     default  shall be made in the  payment of  interest  due in
                     respect of the Loan or the Note, when and as the same shall
                     be due and  payable,  and such  default  shall  continue in
                     respect  thereof  for three  (3)  Business  Days;  or (iii)
                     default  shall  be made in the  payment  of any  other  sum
                     payable pursuant to this Agreement,  the Note or any of the
                     Security  Documents,  or  any  agreement  entered  into  in
                     connection  with  this  Agreement,  the  Note or any of the
                     Security  Documents,  when and as the same shall be due and
                     payable, and such default shall continue in respect thereof
                     for five (5) Business Days; or

           (b)       any of the  Companies  breaches  any  of the  Covenants  in
                     Clause 7.03; or

           (c)       any of the  Companies  defaults  under,  or in the  due and
                     punctual  observance and performance of, any other material
                     provision of this  Agreement and where,  in the  reasonable
                     opinion of the Lenders,  such default is capable of remedy,
                     such  default is not  remedied or the  relevant  Company or
                     Companies  shall not have taken and be diligently  pursuing
                     all necessary  steps to remedy such default  within 15 days
                     after written notice from the Lenders  requesting action to
                     remedy  the  same;   provided,   that  notwithstanding  the
                     foregoing,  any such  default  shall be remedied  within 45
                     days after such written notice; or

           (d)       an Event of Default under any of the Mortgages or any other
                     of  the  Security  Documents  shall  have  occurred  and be
                     continuing; or

           (e)       any representation or warranty made by the Companies or any
                     other  party  to  any  of  the  Security  Documents,  in or
                     pursuant to this Agreement or any of the Security Documents
                     or in any  notice,  certificate,  instrument  or  statement
                     contemplated   hereby  or  thereby  or  made  or  delivered
                     pursuant  hereto or thereto is, or proves to be,  untrue or
                     incorrect in any material respect when made or deemed to be
                     repeated; or

           (f)       (i) any material  indebtedness  of any of the  Companies is
                     not paid when due or becomes prematurely payable or capable
                     of being prematurely declared payable as a consequence of a
                     default with respect thereto or any Security  Interest over
                     any assets of any of the  Companies  is enforced or becomes
                     capable  of being  enforced;  or (ii) any of the  Companies
                     defaults in the payment of any  obligation,  whether direct
                     or  contingent,  for borrowed  money or the  acquisition of
                     capital  equipment  on a finance  lease or title  retention
                     basis or in the  performance  or observance of the material
                     terms of any instrument  pursuant to which such  obligation
                     was created or securing  such  obligation  or providing for
                     any such  acquisition or lease or (iii) a default occurs in
                     respect  of any  such  obligation  of any  person,  firm or
                     corporation,  the payment or  performance of which has been
                     guaranteed,   directly  or   indirectly,   by  any  of  the
                     Companies; or

           (g)       (i) any  preparatory or other steps are taken by any person
                     to  convene  a  meeting  of any of the  Companies  for  the
                     purposes  of  considering  or  passing  any  resolution  or
                     petition for the  winding-up or  dissolution  of any of the
                     Companies  (other  than any  Company  that does not at that
                     time own,  directly or indirectly,  any assets),  or (ii) a
                     petition is  presented  or an order is made or a resolution
                     is passed for the  winding-up or  dissolution of any of the
                     Companies  (other  than any  Company  that does not at that
                     time own, directly or indirectly, any assets), or (iii) any
                     of the Companies  becomes  insolvent or is deemed unable to
                     pay  its  debts  within  the  meaning  of  the  appropriate
                     bankruptcy  laws or any of the Companies  becomes unable to
                     pay  its  debts  as  they  fall  due,  or  (iv)  any of the
                     Companies  stops  or  threatens  to  stop  making  payments
                     generally  or declares or threatens to declare a moratorium
                     or  suspension  of payments with respect to all or any part
                     of its  debts  or  enters  into  any  composition,  scheme,
                     compromise   or  other   arrangement   with  its  creditors
                     generally (or any class of them), or (v) any preparatory or
                     other   steps  are  taken  by  any  person  to  appoint  an
                     administrative or other receiver or similar official of any
                     of the Companies or any of its assets,  or (vi) any meeting
                     of  any  of  the   Companies   is  convened  or  any  other
                     preparatory  or other  steps are taken for the  purpose  of
                     considering an application for an administration  order for
                     any of the  Companies  or such an  administration  order is
                     made by a court, or (vii) anything  analogous to any of the
                     foregoing events occurs in any applicable jurisdiction; or

           (h)       a marshall,  sheriff or other official takes  possession of
                     the whole or any material  part of the assets of any of the
                     Companies  or a  distress,  execution  or other  process is
                     levied or enforced  upon or sued out against the whole or a
                     material  part of the  assets of any of the  Companies  and
                     such taking or process is not released or terminated within
                     the time provided herein or in the Security Documents; or

           (i)       there  shall  occur  a  material   adverse  change  in  the
                     financial  conditions,  results of  operations or financial
                     position  of any of the  Companies  taken as a whole or any
                     event occurs which  renders it unlawful or  impossible  for
                     (i) any of the  Companies  to  perform  or  observe,  or to
                     procure  the  performance  or  observance  of,  any  of its
                     material  obligations  or  undertakings  contained  in this
                     Agreement,  the Note, or any of the Security Documents,  or
                     (ii) the Lenders to exercise any of the material rights and
                     remedies  conferred on the Lenders under this  Agreement or
                     any of the Security Documents; or

           (j)       any authorization,  approval,  consent, license, exemption,
                     filing or  registration or other  requirement  necessary to
                     enable  any of the  Companies  to  comply  with  any of its
                     material  obligations  or  undertakings  contained  in this
                     Agreement,  the Note or any of the  Security  Documents  is
                     materially modified, revoked or withheld or does not remain
                     in full force and effect; or

           (k)       without  the prior  consent of the Agent,  FSI shall (i) be
                     removed or resign from its  position or  otherwise  fail to
                     continue  as  general  partner  of  EGF  V  or  (ii)  sell,
                     transfer,  exchange  or  otherwise  dispose  of  all or any
                     portion of its general partnership interest in EGF V; or

           (l)       without the prior consent of the Agent,  any of TVI, CVI or
                     COVI shall (i) be removed or resign  from its  position  or
                     otherwise  fail to continue  as general  partner of each of
                     Trader, California or Columbus,  respectively or (ii) sell,
                     transfer,  exchange  or  otherwise  dispose  of  all or any
                     portion  of its  general  partnership  interest  in each of
                     Trader, California or Columbus, respectively; or

           (m)       any of the  Vessels or Aircraft  shall  become a Total Loss
                     and either (x) the Agent does not  receive  within 120 days
                     (or such  longer  period as the Agent may agree)  following
                     the  occurrence  of such  Total  Loss,  insurance  proceeds
                     arising from such Total Loss in an amount not less than the
                     amount for which such Vessel or  Aircraft,  as the case may
                     be, is required to be insured  under the relevant  Mortgage
                     as at the date of the event or circumstances giving rise to
                     such  Total  Loss  or any of the  insurers  shall  disclaim
                     coverage  with  respect  to  such  Total  Loss  or (y)  the
                     Companies do not provide the Lenders  with,  or procure the
                     provision to the Lenders of,  additional  Pledged Equipment
                     in accordance with Clause 7.03(c)(i) of this Agreement. For
                     the purpose of this  Clause  9.01(m),  (i) an actual  Total
                     Loss of such Vessel or Aircraft,  as the case may be, shall
                     be deemed to have  occurred  at the date and time when such
                     Vessel or Aircraft, as the case may be, was lost but if the
                     date of the loss is unknown the actual  Total Loss shall be
                     deemed to have occurred on the date on which such Vessel or
                     Aircraft,  as the case may be,  was last  reported,  (ii) a
                     constructive Total Loss shall be deemed to have occurred at
                     the date and time at which  notice of  abandonment  of such
                     Vessel  or  Aircraft,  as the case may be,  is given to the
                     insurers   of  such   Vessel  or   Aircraft   and  (iii)  a
                     compromised,  agreed or arranged Total Loss shall be deemed
                     to have  occurred on the date of the  relevant  compromise,
                     agreement or arrangement; or

           (n)       for any reason  whatsoever,  any of the Vessels or Aircraft
                     ceases to be managed  by the  Approved  Manager,  in either
                     case  on  terms  substantially  in  accordance  with  those
                     approved by the Agent; or

           (o)       the security  constituted by any of the Security  Documents
                     is materially imperilled or jeopardised; or

           (p)       this  Agreement,  the  Note  or any of the  other  Security
                     Documents  ceases  at any time to be the  legal,  valid and
                     binding  obligations  of any of the  Companies or any other
                     party thereto (other than the Lenders); or

           (q)       any encumbrance other than one permitted hereunder or under
                     the  Security  Documents  shall be created  over any of the
                     assets or property of any of the Companies; or

           (r)       a final judgment  against any of the Companies in an amount
                     greater than or equal to One Million  Dollars  ($1,000,000)
                     shall be rendered and,  within thirty (30) days after entry
                     thereof,  such judgment  shall not have been  discharged or
                     execution   stayed  or,   within   thirty  days  after  the
                     expiration of any such stay,  such judgment  shall not have
                     been discharged.

9.02       Upon the occurrence of any other Event of Default:

           (a)       the Agent,  by notice to the  Companies,  may terminate the
                     obligations of the Lenders under this Agreement,  whereupon
                     the same shall be so terminated; and/or

           (b)       if  it  is an  Event  of  Default  specified  in  paragraph
                     (g)(iii)-(vi)  of Clause  9.01,  the  Lender's  obligations
                     hereunder  shall  automatically  terminate  and the  unpaid
                     balance of the Loan and  accrued  interest  thereon and all
                     other amounts payable under this  Agreement,  the Notes and
                     the  Security   Documents  shall  be  immediately  due  and
                     payable, without presentment,  demand, protest or notice of
                     any kind, all of which are hereby expressly waived; and/or

           (c)       the Agent,  by notice to the  Companies,  may  declare  the
                     Loan,  accrued  interest  thereon  and  all  other  amounts
                     payable  under this  Agreement,  the Note and the  Security
                     Documents either  immediately due and payable or payable on
                     demand,  whereupon the Loan,  accrued  interest thereon and
                     all other amounts  payable under this  Agreement,  the Note
                     and the Security Documents shall become immediately due and
                     payable  or (as the case may be)  payable  on demand by the
                     Agent and in such event the Agent may also by notice to the
                     Companies require that the Companies refrain from declaring
                     or paying any dividend or making any other  distribution of
                     assets or profits to any partner or shareholder; and/or

           (d)       the  Agent may take any other  action,  exercise  any other
                     right or pursue any other remedy  conferred  upon the Agent
                     by  this  Agreement  and/or  by all or any of the  Security
                     Documents  or by  any  applicable  law or  regulation  as a
                     consequence of such Event of Default.

9.03       Upon the  occurrence of an Event of Default,  the Agent may apply all
           moneys received by the Agent (including proceeds realized on the sale
           or  liquidation of any collateral  security,  insurance  proceeds and
           other moneys of any of the Companies or for the account of any of the
           Companies the application of which has not elsewhere herein or in the
           Security Documents been specifically provided for) as follows:

                     FIRST,  to  the  payment  or   reimbursement   of  all  the
                     reasonable  costs  of the  Agent  incurred  or  made in the
                     exercise,  protection  or  pursuance  by the  Agent  of its
                     rights or remedies  under this  Agreement,  the Note or any
                     Security  Document  including,  but  not  limited  to,  the
                     expenses of any sale or of any taking,  attorneys' fees and
                     court costs,  together  with  interest  thereon as provided
                     herein  and to  provide  adequate  indemnity  to the  Agent
                     against security interests, liens, charges, encumbrances or
                     rights claiming priority over or equality with the Security
                     Interest or liens created under the Security Documents;

                     SECOND, to the payment of accrued interest on and principal
                     of the Loan and the Note whether due or not;

                     THIRD,  to the  payment  of all other  sums  payable by the
                     Companies to the Lenders  whether  under this  Agreement or
                     otherwise,  including without limitation sums payable under
                     any Interest Rate  Agreements  between any of the Companies
                     and the Lenders, whether due or not, together with interest
                     thereon as provided  herein and of all damages,  liquidated
                     or otherwise; and

                     FOURTH, to the payment of any surplus thereafter  remaining
                     to the Borrowers or to whomsoever may be entitled thereto.

9.04       the Agent may exercise any right of  counterclaim,  setoff,  banker's
           lien or  otherwise  which it may have with respect to moneys or other
           property of the Companies held by the Agent.

9.05       the Agent may to the extent permitted by applicable law bring suit at
           law, in equity, in admiralty or in any other  appropriate  proceeding
           or forum for any  purpose  including,  but not limited to (i) for the
           specific  performance  of any covenant or agreement  contained in any
           Security Document; (ii) for any injunction against a violation of any
           of the  terms  thereof;  (iii) in aid of the  exercise  of any  power
           granted  thereby or by law; or (iv) to recover  judgment  for any and
           all  amounts  due on the  Loan or the  Note  or  under  any  Security
           Document.

10.        FEES AND EXPENSES

10.01      The Companies shall jointly and severally pay to the Agent:

           (a)       an amendment fee as separately agreed between the Companies
                     and CBK upon  execution  and  delivery by the Agent of this
                     Agreement.

           (b)       an annual agency fee of $40,000 per annum payable quarterly
                     in advance.

10.02      The Companies  shall  reimburse the Agent  promptly on demand for all
           reasonable costs, fees and expenses  (including,  but not limited to,
           legal fees and expenses and Valuations as provided  herein)  incurred
           by the Agent or the Lenders in connection with:



<PAGE>



           (a)       the   negotiation,   preparation   and  execution  of  this
                     Agreement and the Security Documents; and/or


           (b)       the maintaining,  preserving or enforcing of, or attempting
                     to  preserve  or enforce,  any of their  rights  under this
                     Agreement  and the  Security  Documents  (or any of  them);
                     and/or

           (c)       any variation of, or amendment or supplement to, any of the
                     terms  of  this  Agreement,   the  Note  and  the  Security
                     Documents (or any of them); and/or

           (d)       any  consent  or  waiver  required  from  the  Agent or the
                     Lenders  arising  from  this  Agreement,  the  Note and the
                     Security  Documents  (or any of  them),  and in each  case,
                     regardless  of whether  the same is  actually  implemented,
                     completed or granted, as the case may be.

10.03      The  Companies  shall  jointly and  severally pay promptly all stamp,
           documentary  and other like duties and Taxes to which this Agreement,
           the Note and the Security  Documents  (or any of them) may be subject
           or give rise and shall  indemnify the Agent and the Lenders on demand
           against any and all liabilities with respect to or resulting from any
           delay or omission on the part of the Companies to pay any such duties
           or Taxes.

11.        PAYMENTS AND CALCULATIONS

11.01      All payments to be made by the Companies to the Agent for the Lenders
           under this Agreement,  the Note and any of the Security  Documents to
           which the Companies are a party shall be made by not later than 11.00
           a.m.  (New York City time) on the due date in same day  Dollar  funds
           settled  through the New York Interbank  Payments  System (or in such
           other Dollar  funds and/or  settled in such other manner as the Agent
           shall  specify as being  customary at the time for the  settlement of
           transactions  of the  type  contemplated  by this  Agreement)  to the
           Agent,  or to such  other  account  with such other bank as the Agent
           shall from time to time notify to the Companies.

11.02      If any sum payable by the Companies under this Agreement, the Note or
           any of the  Security  Documents  to which any of the  Companies  is a
           party shall become due on a day which is not a Business  Day, the due
           date therefor shall be extended to the next succeeding  Business Day,
           unless such Business Day falls in the next calendar  month,  in which
           event such due date shall be the immediately  preceding Business Day,
           and interest  shall be payable on such sum during any such  extension
           at the rate payable on the original due date.

11.03      The Agent shall  maintain  accounts  showing the amounts from time to
           time lent by the  Lenders  under this  Agreement,  and all other sums
           owing  by the  Companies  under  this  Agreement,  the  Note  and the
           Security  Documents  and all payments in respect  thereof made by the
           Companies  from  time to  time.  Such  accounts,  in the  absence  of
           manifest error,  shall be conclusive  evidence as to any amounts from
           time to time owing by the Companies  under this  Agreement,  the Note
           and the Security Documents.

11.04      All  payments of  interest,  commitment  fees and any other  payments
           hereunder  of  an  annual  or  periodic   nature  shall  accrue  from
           day-to-day  and shall be calculated on the basis of the actual number
           of days elapsed in a 360 day year.

12.        NO COUNTERCLAIM, TAXATION

12.01      All payments to be made by or on behalf of the Companies to the Agent
           pursuant  to  this  Agreement,  the  Note  and  any of  the  Security
           Documents to which any of the  Companies is a party shall be made (a)
           without  set-off,  counterclaim or condition  whatsoever and (b) free
           and clear of, and without deduction for or on account of, any present
           or future Taxes unless the Company are required by law or  regulation
           to make any such payment subject to any Taxes.


<PAGE>





12.02      In the event  that any of the  Companies  is  required  by any law or
           regulation  to make any  deduction or  withholding  on account of any
           Taxes  which  arise as a  consequence  of any  payment due under this
           Agreement,  the Note or any of the Security Documents to which any of
           the Companies is a party, then:

           (a)       the  Companies  shall notify the Agent  promptly as soon as
                     they become aware of such requirement;

           (b)       the Companies shall remit promptly the amount of such Taxes
                     to the  appropriate  taxation  authority,  and in any event
                     prior to the date on which penalties attach thereto;

           (c)       such  payment  shall be  increased by such amount as may be
                     necessary  to ensure  that the Agent  receives a net amount
                     which,  after deducting or withholding such Taxes, is equal
                     to the full amount which the Agent would have  received had
                     such payment not been subject to such Taxes; and

           (d)       the  Companies  shall  indemnify  the Lenders and the Agent
                     against any liability of the Lenders for such Taxes.

12.03      Not later than thirty days after each deduction or withholding of any
           such  Taxes,  the  Companies  shall  forward to the  Lender  evidence
           satisfactory  to the Agent that such Taxes have been  remitted to the
           appropriate taxation authority.

13.        CHANGES IN CIRCUMSTANCES

13.01      In the event that by reason of:

           (a)       the  introduction  of, or any change in, any applicable law
                     or  regulation,  or any  change  in the  interpretation  or
                     application thereof; or

           (b)       compliance  by the Lenders with any  directive,  request or
                     requirement (whether or not having the force of law) of any
                     central bank, government, or analogous monetary authority,

           it  becomes  unlawful,  prohibited  or  contrary  to such  directive,
           request or requirement  for the Lenders to maintain or give effect to
           any of their obligations as contemplated by this Agreement,  then the
           Agent  shall  notify the  Borrowers  thereof  and, if the Loan or any
           portion thereof has been advanced by the Lenders, the Borrowers shall
           consult  with  Agent to  determine  ways to avoid the  effect of such
           measures but if no such  mechanism  can be  determined  the Borrowers
           shall prepay the Loan forthwith in accordance  with the terms of this
           Agreement  and  the   obligations  of  the  Lenders  shall  thereupon
           terminate.

13.02      If the Agent shall  reasonably  conclude and certify to the Companies
           that:

           (a)       the effect of any applicable law,  regulation or regulatory
                     requirements, or the interpretation or application thereof,
                     or any change therein (including the imposition of Taxes on
                     payments  hereunder,  other than Taxes on the  overall  net
                     income of the Lenders); or

           (b)       the  effect of  complying  with any  applicable  directive,
                     request or requirement  (whether or not having the force of
                     law)  of  any  central  bank,   governmental  or  analogous
                     monetary authority (including any type of liquidity,  stock
                     or capital  adequacy  controls or other banking or monetary
                     controls or requirements  which affects the manner in which
                     the Lenders allocate capital resources to their obligations
                     hereunder),

           is to:

           (i)       increase  the cost to the  Lenders  of  making,  funding or
                     maintaining their commitment hereunder or the Loan or being
                     a party to this Agreement; or

           (ii)      reduce  the  amount  of any  payment  to the  Agent for the
                     Lenders under this Agreement or the effective return to the
                     Lenders on their capital under this Agreement,

           then,  and in any such case,  the Agent shall notify the Companies as
           soon as  practicable  thereof  and the  Companies  shall from time to
           time, jointly and severally,  pay to the Agent on demand such amounts
           as the Agent shall  reasonably  specify to be necessary to compensate
           the Lenders for such increased cost or such reduction.

13.03      If and each time that prior to any  Interest  Period the Agent  shall
           have determined in good faith that, by reason of  circumstances  (the
           "Circumstances")   affecting  the  London  Interbank  Dollar  Market,
           either:

           (a)       adequate and fair means do not exist for  ascertaining  the
                     rate of  interest  applicable  to the  Loan  (or  any  part
                     thereof)  during such Interest  Period pursuant to Clause 3
                     hereof; or

           (b)       Dollars  are not  available  to the Lender in order to fund
                     the Loan (or any part thereof) during such Interest Period,

           then the  Agent  shall as soon as  practicable  give  notice  of such
           determination  to the  Companies  and, if such notice  shall be given
           prior to the advance of the Loan (or the  relevant  part  thereof) by
           the Lender,  the right of the Borrowers to borrow  hereunder shall be
           suspended  during the  continuance  of the  Circumstances,  provided,
           however,  that  during the thirty days  following  such  notice,  the
           Companies  and the Agent  shall  negotiate  in good faith in order to
           arrive  at an  alternative  interest  rate or (as the case may be) an
           alternative  basis for the  Lenders to fund or  continue  to fund the
           Loan (or the relevant part thereof) during such Interest  Period.  If
           within such thirty day period an alternative interest rate or (as the
           case may be) an alternative  basis to fund or to continue to fund the
           Loan (or the relevant part thereof) is agreed upon, such  alternative
           interest  rate or (as the case may be) such  alternative  basis shall
           take effect in  accordance  with its terms.  If the Companies and the
           Agent fail to agree on such an  alternative  interest rate or (as the
           case may be) alternative  basis within such thirty day period and the
           Circumstances  are  continuing  at the end of such thirty day period,
           then the  Agent  shall  set an  interest  period  and  interest  rate
           representing  the cost to the  Lender  of  funding  the Loan plus the
           Margin in Dollars.  If the Circumstances shall continue at the end of
           such  interest  period,  the  procedure in this Clause 13.03 shall be
           repeated.  If the  Companies  shall not agree with such rate then the
           Companies  shall  give not less than 15  Business  Days'  irrevocable
           notice of  prepayment  to the Lender in which case the  commitment of
           the Lenders  hereunder  for the Loan (or the relevant  part  thereof)
           shall  thereupon be canceled  and, if the Loan (or the relevant  part
           thereof) is outstanding,  the Borrowers shall, jointly and severally,
           prepay the Loan (or the relevant part thereof) on the first  Business
           Day after such period in accordance  with the terms of this Agreement
           and the obligations of the Lender shall  thereupon  terminate to such
           extent.

14.        FUNDING LOSSES

14.01      The Companies shall,  jointly and severally,  compensate the Lenders,
           upon its written  certification  (which certification shall set forth
           in  reasonable  detail the basis for  demanding  such amounts and the
           calculation  thereof and shall,  absent  manifest error, be final and
           conclusive and binding upon all parties  hereto),  for all reasonable
           costs,   losses,   expenses  and  liabilities   (including,   without
           limitation,  any loss,  interest,  expense,  penalty or other amounts
           paid or incurred  by the  Lenders  arising  from the  liquidation  or
           re-employment  of deposits  or funds  required by it to make or carry
           the Loan), which the Lenders sustain:

           (a)       if  any   repayment  or  prepayment   (including,   without
                     limitation,  payment after acceleration) of the Loan occurs
                     on a date which is not the last day of an  Interest  Period
                     applicable thereto;

           (b)       as the  result of any  default by any of the  Borrowers  in
                     repaying  the Loan or any other  amounts  arising  from the
                     Loan when required by the terms of this Agreement; or

           (c)       as the result of the occurrence  and/or  continuance of any
                     Event of Default (or event which, with the giving of notice
                     and/or lapse of time or other applicable  condition,  might
                     constitute an Event of Default) and/or the  acceleration of
                     repayment of the Loan pursuant to Clause 9.02.

14.02      If, under any applicable law or regulation, and whether pursuant to a
           judgment  being made or  registered  against the Companies (or any of
           them) or the liquidation of the Companies (or any of them) or for any
           other  reason,  any  payment  due  under or in  connection  with this
           Agreement  is  made or  fails  to be  satisfied  in a  currency  (the
           "payment  currency") other than the currency in which such payment is
           due under or in  connection  with this  Agreement  (the  "contractual
           currency"),  then to the  extent  that  the  amount  of such  payment
           actually  received by the Agent,  when converted into the contractual
           currency at the rate of exchange, falls short of the amount due under
           or in connection  with this  Agreement,  the  Companies,  jointly and
           severally  and  as  a  separate  and  independent  obligation,  shall
           indemnify  and hold  harmless the Lenders  against the amount of such
           shortfall.  For the purposes of this Clause 14.02, "rate of exchange"
           means the rate at which the  Lenders are able on or about the date of
           such payment to purchase the  contractual  currency  with the payment
           currency  and shall take into  account any premium and other costs of
           exchange with respect thereto.

15.        SECURITY

15.01      The  Companies  hereby  undertake  with the Agent and the  Lenders to
           execute,  deliver  and  perform  the  provisions  of, and procure the
           execution,  delivery and  performance  by the other  parties  thereto
           (other than the Agent or the Lenders) of, the Security  Documents and
           the  provisions  thereof at the times and in the manner  provided  in
           this  Agreement  and in the  Security  Documents  so  that  all  such
           documents  shall both at the date of such  execution and delivery and
           at all  times  during  the  Security  Period  be  valid  and  binding
           obligations  of the Companies and such other parties  enforceable  in
           accordance with their respective terms.

16.        COMMUNICATIONS

16.01      Except as otherwise  provided for in this  Agreement,  all notices or
           other communications  arising from this Agreement to any party hereto
           shall be in writing and shall be deemed to be duly given or made when
           delivered  (in the case of  personal  delivery  or  letter)  and when
           dispatched (in the case of telex or telefax) to such party  addressed
           to it at the  address  appearing  below (or at such  address  as such
           party may  hereafter  specify for such purpose to the other by notice
           in writing):

           (a)       in the case of the Companies:

                     PLM Equipment Growth Fund V
                     c/o PLM Financial Services, Inc.
                     One Market
                     Steuart Tower, Suite 800
                     San Francisco, CA   94105
                     Attn:  Corporate Controller and General Counsel
                     Telex:  34430
                     Telefax:  (415) 905-7256

           (b)       in the case of the Lenders:

                     At the respective addresses set forth on Schedule 1 as from
                     time to time amended

           (c)       in the case of the Agent and Security Trustee:

                     Christiania Bank og Kreditkasse,
                     New York Branch
                     11 West 42nd Street, 7th Floor
                     New York, New York  10036
                     Attn: Loan Administration

                     Telex:    824-277 CBNY UF
                     Telefax:  212-827-4888


           A written notice  includes a notice by telex or telefax.  A notice or
           other  communication  received on a non-working day or after business
           hours in the  place of  receipt,  shall be deemed to be served on the
           next following working day in such place.

17.        ASSIGNMENTS

17.01      This Agreement  shall be binding upon and inure to the benefit of the
           Agent, the Lenders, the Companies and their respective successors and
           permitted assigns.

17.02      The  Companies  may not assign or  transfer  all or any part of their
           rights and/or obligations under this Agreement.

17.03      The Lenders may assign, transfer,  participate or syndicate (with the
           Agent acting as agent), at no cost to the Companies,  all or any part
           of Lenders' rights or obligations under this Agreement,  the Note and
           the  Security  Documents  or change its lending  office,  in any such
           case,  with the prior  consent of EGF V, which  consent  shall not be
           unreasonably  withheld.  Each such Lender shall notify the  Companies
           promptly  following  any such  assignment  or  transfer  or change of
           lending office.

17.04      The Agent may disclose to any potential assignee or transferee of all
           or  any  part  of any  Lender's  rights  or  obligations  under  this
           Agreement,  the  Note  and  the  Security  Documents  or to any  such
           participant  or  any  other  person  who  may  otherwise  enter  into
           contractual  relations  with the Agent or any such Lender in relation
           to this Agreement,  the Note and the Security Documents,  information
           about this Agreement,  the Note and/or the Security Documents (or any
           of them) and the Companies and/or its related entities with the prior
           consent of EGF V, which consent shall not be  unreasonably  withheld,
           and  on  a   confidential   basis  with  respect  to  any   nonpublic
           information.

18.        MISCELLANEOUS

18.01      No  delay or  omission  on the part of the  Agent or the  Lenders  in
           exercising  any right,  power or remedy  under this  Agreement  shall
           impair  such  right,  power or  remedy  or be  construed  as a waiver
           thereof  nor shall any single or partial  exercise of any such right,
           power or remedy preclude any further exercise thereof or the exercise
           of any other right, power or remedy. The rights,  powers and remedies
           herein  provided  are  cumulative  and not  exclusive  of any rights,
           powers and remedies provided by law and may be exercised from time to
           time and as often as the Agent deems expedient.

18.02      Except as  provided  in,  and  subject  to Clause 8, no waiver of any
           provision of this Agreement or the Notes,  or any consent or approval
           to any  departure  by the  Companies  therefrom,  shall be  effective
           unless the same shall be given in writing and signed by the  Majority
           Lenders and then only for the purpose and upon the terms for which it
           is given.

18.03      If at any time any one or more of the provisions in this Agreement is
           or becomes invalid, illegal or unenforceable in any respect under any
           law or regulation,  the validity,  legality and enforceability of the
           remaining  provisions  of  this  Agreement  shall  not be in any  way
           affected or impaired thereby.

18.04      The obligations of the Companies under this Agreement shall remain in
           full force and effect  until the  Lenders  shall  have  received  all
           amounts due or to become due to it  hereunder  and under the Security
           Documents in  accordance  with the terms hereof and thereof.  Without
           prejudice to the foregoing,  the  obligations of the Companies  under
           Clauses 10, 12, 13.02 and 14 shall survive the repayment of the Loan.

18.05      The Clause and  subclause  headings  herein and the Table of Contents
           are for  convenience  only and  shall  not  affect  the  construction
           hereof.

19.        LAW AND JURISDICTION

19.01      THIS AGREEMENT, THE NOTE AND THE SECURITY DOCUMENTS SHALL BE GOVERNED
           BY, AND  CONSTRUED  IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW
           YORK.  EACH OF THE  PARTIES  HERETO,  TO THE  MAXIMUM  EXTENT  IT CAN
           LEGALLY DO SO,  HEREBY WAIVES ITS RIGHT TO A JURY TRIAL IN CONNECTION
           WITH THIS AGREEMENT, THE NOTE AND THE SECURITY DOCUMENTS.

19.02      The Companies  hereby  irrevocably  submit to the jurisdiction of the
           courts of the  State of New York and of the  United  States  District
           Court  for  the  Southern  District  of New  York  in any  action  or
           proceeding  brought against any of them by the Lenders,  the Agent or
           the Security Trustee under this Agreement or any instrument delivered
           hereunder and hereby irrevocably appoint CT Corporation System with a
           place of  business at 1633  Broadway,  New York,  NY 10019,  as their
           attorney-in-fact  and agent for  service of  summons  or other  legal
           process  thereon,  which service may be made by serving a copy of any
           summons or other legal  process in any such action or  proceeding  on
           such agent and such agent is hereby authorized and directed to accept
           by and on behalf of the Companies  service of summons and other legal
           process of any such action or proceeding  against the Companies.  The
           service,  as herein provided,  of such summons or other legal process
           in any such action or proceeding shall be deemed personal service and
           accepted  by the  Companies  as such,  and shall be legal and binding
           upon  the  Companies  for all the  purposes  of any  such  action  or
           proceeding.  Final judgment (a certified or exemplified copy of which
           shall be  conclusive  evidence  of the fact and of the  amount of any
           indebtedness  of the Companies to the Lenders)  against the Companies
           in any such legal action or proceeding shall be conclusive and may be
           enforced  in  other  jurisdictions  by  suit  on  the  judgment.  The
           Companies  further  covenant and agree that so long as the  Companies
           shall be  obligated  to the  Lender  hereunder  the  Companies  shall
           maintain a duly  appointed  agent for the service of summons or other
           legal process in New York, New York, for purposes of any legal action
           or proceeding  brought by the Lender  hereunder.  The Companies  will
           advise the Agent  promptly of any change of address of the  foregoing
           agent or of the substitution of another agent therefor.  In the event
           that  the  foregoing  agent  or  any  other  agent  appointed  by the
           Companies shall not be conveniently  available for such service or if
           the  Companies  fail to  maintain an agent as  provided  herein,  the
           Companies  hereby  irrevocably  appoint  the  person  who then is the
           Secretary  of State of New York as such  attorney-in-fact  and agent.
           Each Company will advise the foregoing agent of the appointment  made
           hereby but failure so to advise shall not affect the appointment made
           hereby.  Notwithstanding  anything herein to the contrary,  the Agent
           may bring any legal  action or  proceeding  in any other  appropriate
           jurisdiction.

20.        RIGHTS OF CONTRIBUTION

20.01      To provide for just and equitable  contribution  among the Companies,
           the  Companies  hereby  agree,  as  between  themselves,  that if any
           payment  is  made by a  Company  (a  "Funding  Company")  under  this
           Agreement,  such Funding  Company shall be entitled to a contribution
           from the other  Companies for such payment,  such  contribution to be
           made in the manner and to the extent set forth in this Clause 20. Any
           amount payable as a contribution  hereunder shall be determined as of
           the date on which the related  payment is made by a Funding  Company.
           Each  other  Company  shall be liable to such  Funding  Company in an
           aggregate  amount,  subject to Clause 20.02 hereof,  equal to (i) the
           ratio of (x) the Net Assets of such Company to (y) the  aggregate Net
           Assets of all of the Companies  multiplied by (ii) the amount of such
           payment made by, or on account of, such Funding Company. For purposes
           of any calculations  pursuant to this Clause 20, "Net Assets" for any
           Company shall mean an amount equal to the excess of the fair saleable
           value of the assets of such Company as at such date  (without  taking
           into  account the rights of such  Company  under this Clause 20), and
           excluding  the value of any shares of stock owned by such  Company in
           any other Company on such date over the amount that would be required
           to pay the probable liabilities of such Company determined as at such
           date (excluding the obligations of such Company under this Clause 20)
           on all of its  debts.  Any  contribution  hereunder  may be  made  by
           adjustment  to the  intercompany  accounts  maintained  by EGF V with
           respect to each Company.

20.02      The Companies  acknowledge  that the right of contribution  hereunder
           shall constitute an asset of the party to which such  contribution is
           owing.

21.        NONRECOURSE

21.01      Notwithstanding  anything  to  the  contrary  contained  herein,  the
           Lenders  agree  that no  judgment  based  on each of the  Note,  this
           Agreement  or the  Security  Documents  shall be sought  or  obtained
           against FSI individually and that any judgment against the Companies,
           and the sole recourse of the Lenders for a default  hereunder,  shall
           be  limited  to the  assets  of the  Companies.  This  limitation  of
           liability shall not apply to any damages  sustained by the Lenders by
           reason of fraud in the making of the Loan by the Companies or FSI.

22.        RELEASE OF CERTAIN COMPANIES

22.01      The  Lenders,  the Agent and the Security  Trustee  hereby agree that
           each of  Balboa,  BMI,  Divisadero,  DVI,  Ashbury  and ASI is hereby
           released from its obligations under this Agreement, the Notes and the
           Security Documents to which it is a party.



<PAGE>



IN WITNESS  whereof the parties  hereto have entered into this  Agreement on the
date first above written.


                     PLM  EQUIPMENT  GROWTH FUND V by its General  Partner,  PLM
                     Financial Services, Inc.



                     By:____________________________ 
                     Its:

 
                     TRADER VESSEL LIMITED  PARTNERSHIP by its General  Partner,
                     Trader Vessel Inc.



                     By:____________________________
                        Its:

                     TRADER VESSEL INC.



                     By:____________________________
                        Its:


                     CALIFORNIA  VESSEL  LIMITED   PARTNERSHIP  by  its  General
                     Partner, California Vessel Inc.


                     By:____________________________
                        Its:

                     CALIFORNIA VESSEL INC.


                     By:____________________________
                        Its:




<PAGE>


                     COLUMBUS VESSEL LIMITED PARTNERSHIP by its General Partner,
                     Columbus Vessel Inc.


                     By:____________________________
                        Its:



                     COLUMBUS VESSEL INC.



                     By:____________________________
                        Its:


                     REDCAR INVESTMENTS LIMITED



                     By:____________________________
                        Its:




                     CHRISTIANIA BANK OG KREDITKASSE, as Lender



                     By:____________________________
                        Its:


                     By:____________________________
                        Its:





<PAGE>


                     ING LEASE STRUCTURED FINANCE B.V., as Lender


                     By:____________________________
                        Its:



                     CHRISTIANIA  BANK OG KREDITKASSE,  NEW YORK BRANCH as Agent
                     and Security Trustee


                     By:____________________________
                        Its:



                     By:____________________________
                        Its:




<PAGE>


                                   SCHEDULE 1


                                   The Lenders


Name                                                     Commitment

Christiania Bank og Kreditkasse                          $25,000,000
New York Branch
11 West 42nd Street, 7th Floor
New York, New York  10036




ING Lease Structured Finance B.V.                        $13,000,000
Karspeldreef 14
Amsterdam - Zuidoost
The Netherlands


<PAGE>


                                   SCHEDULE 2



                                      Liens

1.         Liens in favor of PLM  Worldwide  Leasing  Corp.  in  respect  of the
           Qualified Assets.


<PAGE>


                                   SCHEDULE 3



                               Approved Appraisers