Document:

<PAGE>   1
                                                                    EXHIBIT 10.3

                                    ADDENDUM

                                       TO

                                LEASE AGREEMENT

                                 BY AND BETWEEN

                   ROBLEDO INVESTMENTS, LTD. dba JUDSON PLAZA

                                      AND

                           Friedman Industries, Inc.

This addendum is to that certain Lease Agreement entered in of the 16th day of
March 1996, by and between Judson Plaza, Inc., herein being known as Robledo
Investments, Ltd., dba, Judson Plaza, (hereafter referred to as Landlord) and
Friedman Industries, Inc. (hereafter referred to as Tenant). This addendum is
hereby entered into by and between the Parties as follows:

                                  WITNESSETH:

WHEREAS, Tenant has heretofore leased from Landlord space in the amount of 2596
square feet in that certain commercial building known as Judson Plaza located
at 1121 & 1125 Judson Road, Longview, Gregg County, Texas (hereinafter referred
to as the "building"); and

WHEREAS, Tenant desires to EXTEND term of the lease agreement;

NOW, THEREFORE, for and in consideration of the mutual convenience herein
contained in the Lease Agreement, the Parties do hereby agree as follow:

1.   Landlord hereby agreed to extend the term of the lease for additional term
of Eighty four (84) months commencing May 1, 2001 and expiring April 30, 2008.

2.   Monthly rental installment: $2,272.00.

3.   Landlord agrees to paint & carpet space within 60 days of the execution of
this document.

4.   Landlord grants tenant the right to renew the lease for an additional term
of 5 years at a rate increase not to exceed 5%. Tenant shall provide Landlord
notice within 90 days prior to expiration of the primary term should tenant
wish to extend lease.

5.   Landlord agrees to grant tenant a right of first refusal to lease
additional space contiguous and located across the hallway from tenants current
space. Upon notice from Landlord of the availability of additional space, tenant
shall have 7 working days to notify Landlord of their commitment to lease said
space. The rate for the additional space shall be at tenants per square foot
rate.

6.   Landlord and Tenant hereby agree to be bound by all other terms of the
Lease Agreement in regard to this Lease Agreement.

                    DATE AS OF THE 12th DAY OF APRIL, 2001.

LANDLORD:                                       TENANT:

ROBLEDO INVESTMENTS, LTD.                       FRIEDMAN INDUSTRIES, INC.
dba JUDSON PLAZA

BY: /s/   [ILLEGIBLE]                            BY: /s/   WILLIAM E. CROW
   ----------------------------                     ----------------------------
          (Signature)                                      (Signature)<PAGE>   1

                                                                   EXHIBIT 10(i)

                       FIRST AMENDMENT TO CREDIT AGREEMENT

                  This First Amendment to Credit Agreement (this "FIRST
AMENDMENT") is made and entered into as of the 28th day of June, 2001, by and
among EGL, INC., a Texas corporation ("BORROWER"); each of the domestic
Subsidiaries of Borrower; BANK OF AMERICA, N.A., as Administrative Agent for the
Banks, a Bank, the Swing Line Lender, and the Issuing Bank; SOUTHTRUST BANK, as
a Co-Agent, and a Bank; THE BANK OF TOKYO-MITSUBISHI, LTD., as a Co-Agent and a
Bank; and the other lending institutions which are a party to this First
Amendment.

                              W I T N E S S E T H:
                              - - - - - - - - - -

                  WHEREAS, pursuant to that certain Credit Agreement (the
"CREDIT AGREEMENT") dated January 5, 2001, Banks (as that term is defined in the
Credit Agreement and is hereafter used) agreed to make certain loans to Borrower
upon the terms and conditions therein contained; and

                  WHEREAS, Borrower and Banks desire to modify and amend certain
terms and provisions of the Credit Agreement.

                  NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Borrower, the
Administrative Agent, the Co-Agents, and Banks agree as follows:

         1.       Defined Terms. Words and terms used herein which are defined
in the Credit Agreement are used herein as defined therein, except as
specifically modified by the terms of this First Amendment.

         2.       Amendments to Credit Agreement. Upon the full and complete
satisfaction of each of the conditions listed in numerical Section 3 below, the
Credit Agreement shall be modified and amended as follows:

                  2.1 Subparagraph (c) of the definition assigned to
"ACQUISITION CRITERIA" in Section 1.1 of the Credit Agreement is deleted in its
entirety and replaced with the following:

                  (c) the Acquisition Consideration to be paid for that
Acquisition (and its Subsidiaries) is either (i) $20,000,000.00 or less in the
aggregate, determined without duplication of amounts, or (ii) Approved
Consideration.

<PAGE>   2

                  2.2 The definition of "APPLICABLE MARGIN" in Section 1.1 of
the Credit Agreement is deleted in its entirety and the following is substituted
in place thereof:

         "APPLICABLE MARGIN" means with respect to interest rates, unused
         commitment fees, and letter of credit fees, as applicable, the
         percentage per annum set forth opposite the designated ranges of the
         Consolidated Funded Debt to Consolidated EBITDA Ratio:

<TABLE>
<CAPTION>
Consolidated Funded          Applicable Margin
Debt to Consolidated        LIBOR Tranches and        Applicable Margin        Applicable Margin
EBITDA Ratio               Letter of Credit Fee       Prime Rate Tranche        Commitment Fee
--------------------       --------------------       ------------------       -----------------

<S>                                <C>                        <C>                    <C>
< .50x                             1.25%                      0%                     0.25%
-

> .50x but < 1.00x                 1.50%                      0%                     0.25%
           -

> 1.00 but < 1.50x                 1.75%                    0.25%                   0.375%
           -

> 1.50x but < 2.00x                2.00%                    0.50%                   0.375%
            -

> 2.00 but < 2.50x                 2.50%                    1.00%                    0.50%
           -

> 2.50                             2.75%                    1.25%                    0.50%
</TABLE>

                  The Consolidated Funded Debt to Consolidated EBITDA Ratio for
purposes of determining the Applicable Margin shall be based upon Schedule B of
the most recent Compliance Certificate delivered to the Administrative Agent
pursuant to Section 5.2(a) or Section 5.2(b).

                  Any adjustments to the Applicable Margin shall become
effective on the 45th day following the last day of each fiscal quarter (except
the last fiscal quarter of each fiscal year) or on the 90th day following the
last day of each fiscal year as applicable; provided, however, that if any such
Compliance Certificate is not delivered when required hereunder, unless
otherwise agreed to by the Administrative Agent in writing, the Applicable
Margin shall be deemed to be the maximum percentage amount in the above table
from such 45th or 90th day until such Compliance Certificate is received by the
Administrative Agent, and further provided that notwithstanding any of the
foregoing, until delivery by Borrower of its Compliance Certificate for the
fiscal quarter ending on December 31, 2001, the Applicable Margin shall not be
less than the percentages per annum listed in the above table for the range when
the Consolidated Funded Debt to Consolidated EBITDA Ratio is greater than 2.00
to 1.00 but less than or equal to 2.50 to 1.0.

                  Upon any change in the Applicable Margin, the Administrative
Agent shall promptly notify the Borrower and the Banks of the new Applicable
Margin.

                  2.3 The definition of "CONSOLIDATED EBIT" in Section 1.1 of
the Credit Agreement is deleted in its entirety and the following is substituted
in place thereof:

                                       2
<PAGE>   3

         "CONSOLIDATED EBIT" means, for any applicable period, an amount equal
         to (i) Consolidated Net Income, plus (ii) each of the following to the
         extent actually deducted in determining Consolidated Net Income (a)
         Consolidated Interest Expense, (b) Consolidated Tax Expense, and (c) a
         pre-tax adjusted non-recurring charge up to $81,900,000.00 for the
         fiscal quarter ending December 31, 2000, and a pre-tax adjusted
         non-recurring charge up to $7,500,000.00 for the fiscal quarter ending
         on March 31, 2001, minus (iii) the pre-tax adjusted amount of any
         non-recurring gains.

                  2.4 The definition of "CONSOLIDATED EBITDA" in Section 1.1 of
the Credit Agreement is deleted in its entirety and the following is substituted
in place thereof:

         "CONSOLIDATED EBITDA" means, for any applicable period, an amount equal
         to (i) Consolidated Net Income, plus (ii) each of the following to the
         extent actually deducted in determining Consolidated Net Income (a)
         Consolidated Interest Expense, (b) Consolidated Tax Expense, (c) the
         amount of all depreciation and amortization expense deducted in
         determining Consolidated Net Income, all calculated on a consolidated
         basis for the Borrower and its Subsidiaries and as determined in
         accordance with GAAP, and (d) a pre-tax adjusted non-recurring charge
         up to $81,900,000.00 for the fiscal quarter ending December 31, 2000,
         and a pre-tax adjusted non-recurring charge up to $7,500,000.00 for the
         fiscal quarter ending on March 31, 2001, minus (iii) the pre-tax
         adjusted amount of any non-recurring gains.

                  2.5 The definition of "CONSOLIDATED NET INCOME" in Section 1.1
of the Credit Agreement is deleted in its entirety and the following is
substituted in place thereof:

         "CONSOLIDATED NET INCOME" means, for any period, the net income (or
         loss), after provision or benefit for taxes of the Borrower and its
         Subsidiaries on a consolidated basis for such period, determined in
         accordance with GAAP.

                                       3
<PAGE>   4

                  2.6 The definition of "ENGAGEMENT LETTER" in Section 1.1 of
the Credit Agreement is deleted in its entirety and the following is substituted
in place thereof:

         "ENGAGEMENT LETTER" means, collectively, (a) the letter agreement dated
         as of October 24, 2000, from the Administrative Agent and agreed to by
         Borrower, regarding, among other things, the administrative agency fee
         payable to Administrative Agent, as amended, and (b) the letter
         agreement dated as of May 31, 2001, from the Administrative Agent and
         agreed to by Borrower, regarding, among other things, the additional
         administrative agency fee payable to Administrative Agent in connection
         with the First Amendment to this Agreement, dated June 28, 2001.

                  2.7 Subparagraph (f) of the definition of "PERMITTED DEBT" in
Section 1.1 of the Credit Agreement is deleted in its entirety and the following
is substituted in place thereof:

                  (f) in addition to the Debt listed in subparagraphs (a), (b),
         (c), (d), and (e) of this definition: (i) Debt of Borrower or any
         Subsidiary owing to the Administrative Agent (or any Affiliate of the
         Administrative Agent) under or with respect to the credit facility
         provided by the Administrative Agent in its corporate capacity under
         the Foreign Credit Reimbursement Agreement of even date herewith (the
         "FOREIGN CREDIT DEBT"), which is listed in Schedule 4.21 as the $10
         million multi-currency line of credit, and (ii) additional Debt
         (including, without limitation, purchase money indebtedness and secured
         trade payables and any Debt assumed by Borrower in connection with an
         Acquisition) of Borrower and its Subsidiaries not to exceed at any time
         an outstanding aggregate principal amount of such additional Debt equal
         to $20,000,000.00.

                  2.8 Subparagraph (d) of the definitions of "PERMITTED
INVESTMENTS" in Section 1.1 of the Credit Agreement is deleted in its entirety
and the following is substituted in place thereof:

                  (d) investments listed on Schedule 4.21, together with
         investments up to an aggregate amount of $20,000,000.00, at any one
         time outstanding, in any Person (other than Borrower or a Subsidiary).

                  2.9 The following terms and definitions are added to and made
a part of Section 1.1 of the Credit Agreement:

                  "CONSOLIDATED DOMESTIC ACCOUNTS RECEIVABLE" means all of
         Borrower's and its domestic Subsidiaries' now owned or hereafter
         acquired (a) domestic accounts receivable, domestic book debts and
         other forms of domestic obligations, whether arising out of goods sold
         or services rendered or from any other transaction; (b) rights in, to
         and under all domestic purchase orders or domestic receipts for goods
         or services; (c) rights to any goods represented or purported to be
         represented by any of the foregoing (including unpaid sellers'

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<PAGE>   5

         rights of rescission, replevin, reclamation and stoppage in transit and
         rights to returned, reclaimed, or repossessed goods); (d) moneys due or
         to become due to such Borrower or any of its domestic Subsidiaries
         under all domestic purchase orders and domestic contracts for the sale
         of goods or the performance of services or both by Borrower or that
         domestic Subsidiary, including the proceeds of the foregoing; (e) any
         notes, drafts, letters of credit, insurance proceeds or other
         instruments, documents and writings evidencing or supporting the
         foregoing; and (f) all collateral security and guarantees of any kind
         given by any other Person with respect to any of the foregoing.

                   "CONSOLIDATED DOMESTIC ACCOUNTS RECEIVABLE COVERAGE RATIO"
         means, as of the end of any fiscal quarter of Borrower, the ratio of
         (a) Consolidated Domestic Accounts Receivable at that time, to (b) the
         sum of the combined aggregate outstanding principal balances of the
         Revolving Loan Notes, plus the outstanding principal balance of the
         Swing Line Note, plus the Letter of Credit Exposure at that time, plus
         the outstanding obligations with respect to the Foreign Credit Debt.

                   "SECURITY AGREEMENT" means the Security Agreements made by
         the Borrower and the domestic Subsidiaries of the Borrower in favor of
         the Administrative Agent, in substantially the form of Exhibits K-1,
         and K-2 granting the Administrative Agent a security interest in, among
         other things, the accounts receivable of each such Person to secure the
         Credit Obligations, as may be modified, amended, and supplemented from
         time to time. References in this Agreement to a Subsidiary Security
         Agreement shall be to the Security Agreement set forth in Exhibit K-2.

                  2.10 Section 5.5 of the Credit Agreement is deleted in its
entirety and the following is substituted in place thereof:

                  Financial Covenants. The Administrative Agent shall determine
         compliance with the following financial covenants based upon the
         applicable Schedule of the most recent Compliance Certificate delivered
         to the Administrative Agent pursuant to Sections 5.2(a) or 5.2(b).

                  (a) Consolidated Net Worth. Borrower shall not permit its
         Consolidated Net Worth to be less than an amount equal to (i)
         $363,390,000.00, plus (ii) 50% of the cumulative quarterly Consolidated
         Net Income of the Borrower for each fiscal quarter of Borrower ending
         after December 31, 2000, and which the Borrower has positive
         consolidated net earnings for that fiscal quarter; plus (iii) 100% of
         the net proceeds received by Borrower after December 31, 2000, from any
         sale or issuance of any equity securities of, or any other additions to
         capital by, the Borrower or its Subsidiaries. Compliance with this
         paragraph (a) shall be determined based upon Schedule B of the
         applicable Compliance Certificate.

                                       5
<PAGE>   6

                  (b) Maximum Consolidated Funded Debt to Total Capitalization
         Ratio. Borrower shall not permit its Consolidated Funded Debt to Total
         Capitalization Ratio to be greater than.40 to 1.00. Compliance with
         this paragraph (b) shall be determined based upon Schedule B of the
         applicable Compliance Certificate.

                  (c) Maximum Consolidated Funded Debt to Consolidated EBITDA
         Ratio. As of the last day of each fiscal quarter of the Borrower, the
         Borrower shall not permit its Consolidated Funded Debt to Consolidated
         EBITDA Ratio to be greater than (i) 3.00 to 1.00 for any fiscal quarter
         ending prior to March 31, 2002, (ii) 2.50 to 1.00 for any fiscal
         quarter of Borrower ending on or after March 31, 2002, or prior to June
         30, 2002, and (iii) 2.00 to 1.00 for any fiscal quarter of Borrower
         ending on or after June 30, 2002. Compliance with this paragraph (c)
         shall be determined based upon Schedule B of the applicable Compliance
         Certificate.

                  (d) Minimum Consolidated Fixed Charge Coverage Ratio. As of
         the last day of each fiscal quarter of the Borrower, the Borrower shall
         not permit its Consolidated Fixed Charge Coverage Ratio to be less than
         (i) 1.35 to 1.00 for any fiscal quarter of Borrower ending prior to
         March 31, 2002, (ii) 1.75 to 1.00 for any fiscal quarter of Borrower
         ending on or after March 31, 2002, and prior to June 30, 2002, and
         (iii) 2.00 to 1.00 for any fiscal quarter of Borrower ending on or
         after June 30, 2002. Compliance with this paragraph (e) shall be
         determined based upon Schedule B of the applicable Compliance
         Certificate.

                  (e) Minimum Consolidated Domestic Accounts Receivable Coverage
         Ratio. As of the last day of any fiscal quarter of Borrower, the
         Borrower shall not permit its Consolidated Domestic Accounts Receivable
         Coverage Ratio to be less than 1.25 to 1.00. Compliance with this
         paragraph (e) shall be determined based upon Schedule B of the
         applicable Compliance Certificate.

                  2.11 Section 5.7 of the Credit Agreement is deleted in its
entirety and the following is substituted in place thereof:

                  Liens; Negative Pledges. The Borrower and each domestic
         Subsidiary shall execute and deliver to the Administrative Agent a
         Subsidiary Security Agreement and all financing statements and related
         agreements and endorsements required by the Administrative Agent with
         respect to the Subsidiary Security Agreement. The Borrower shall not,
         and shall not permit any of its Subsidiaries to, create, assume, incur,
         or suffer to exist any Lien on any of its real or personal property
         whether now owned or hereafter acquired, or assign any right to receive
         its income, except for Permitted Encumbrances. Further, Borrower shall
         not, and shall not permit any of its Subsidiaries to, agree with any

                                       6
<PAGE>   7

         other Person (directly or indirectly), in connection with Permitted
         Debt or otherwise, that it will not create, assume, incur, assume, or
         suffer to exist any Liens.

                  2.12 Section 5.10 of the Credit Agreement is deleted in its
entirety and the following is substituted in place thereof:

                  Distributions. Borrower shall not declare or pay Distributions
         in excess of $5,000,000.00 during any rolling four fiscal quarter
         period.

                  2.13 Section 6.1(e) of the Credit Agreement is deleted in its
entirety and the following is substituted in place thereof:

                  Material Debt Default.

                           (i) Any principal, interest, fees, or other amounts
                  due on any Debt of Borrower or any of its Subsidiaries (other
                  than the Credit Obligations, but, including, without
                  limitation, the Permitted Foreign Credit Debt) is not paid
                  when due, whether by scheduled maturity, required prepayment,
                  acceleration, demand, or otherwise, and such failure is not
                  cured within the applicable grace period, if any, and the
                  aggregate amount of all Debt of such Persons so in default
                  exceeds $1,000,000;

                           (ii) any other event shall occur or condition shall
                  exist under any agreement or instrument relating to any Debt
                  of any such Person (other than the Credit Obligations, but,
                  including, without limitation, the Permitted Foreign Credit
                  Debt) the effect of which is to accelerate or to permit the
                  acceleration of the maturity of any such Debt, whether or not
                  any such Debt is actually accelerated, and such event or
                  condition shall not be cured within the applicable grace
                  period, if any, and the aggregate amount of all Debt of such
                  Persons so in default exceeds $1,000,000; and

                           (iii) any Debt of any such Person shall be declared
                  to be due and payable or required to be prepaid (other than by
                  a regularly scheduled prepayment) prior to the stated maturity
                  thereof, and the aggregate amount of all Debt of such Persons
                  so accelerated exceeds $1,000,000.

                  2.14 Exhibit "G" to the Credit Agreement is deleted in its
entirety and replaced with Exhibit "G" to this First Amendment.

                  2.15 Exhibits "K-1" and "K-2" to this First Amendment are
added to and made a part of the Credit Agreement as Exhibits "K-1" and "K-2"
thereof.

                                       7
<PAGE>   8

         3. Conditions Precedent. The obligations of Administrative Agent, the
Swing Line Lender, the Issuing Bank, each Co-Agent, and the other Banks under
this First Amendment, and the effectiveness of the amendments to the Credit
Agreement set forth herein, are subject to the full, complete, and timely
satisfaction of each of the following conditions precedent:

                  (a) The Administrative Agent shall have received and approved
         an executed original of this First Amendment, executed by authorized
         officers of Borrower and each domestic Subsidiary of Borrower and by
         the Majority Banks;

                  (b) The Administrative Agent shall have received and approved
         (subject to the terms of the Credit Agreement, as hereby amended) a
         fully executed counterpart of the Security Agreement and all related
         financing statements and related documents and instruments required by
         the Administrative Agent;

                  (c) Borrower shall have paid to each Bank executing this First
         Amendment an upfront fee equal to 0.25% of that Bank's Revolving Loan
         Commitment as independent consideration for that Bank's agreement to
         enter into this First Amendment and shall have reimbursed the
         Administrative Agent for all its reimbursable costs and expenses
         (including without limitation, attorneys' fees) incurred in connection
         with the preparation, negotiation, review, and execution of this First
         Amendment and the transaction described herein, and have paid the
         Administrative Agent for all other amounts then due and owing by
         Borrower to Banks and the Administrative Agent under the Credit
         Agreement, the Engagement Letter, and the Revolving Loan Notes; and

                  (d) The representations and warranties contained in Article 4
         of the Credit Agreement shall be true and unbreached and no Event of
         Default shall have occurred and be then existing.

         4. Waiver. Borrower has failed to comply with the terms of Section
5.5(a) of the Credit Agreement (Consolidated Funded Debt to Consolidated EBITDA
Ratio) for the period ending on March 31, 2001, and Section 5.5(d) of the Credit
Agreement (Consolidated Fixed Charge Coverage Ratio) for the period ending on
March 31, 2001. At the request of Borrower, upon the full and complete
satisfaction of each condition listed in numerical Section 3 above, compliance
by Borrower with the foregoing described covenants for the applicable period
stated herein is waived. The waiver contained in this First Amendment is
specifically limited to a waiver of the foregoing described covenants for the
period stated herein and Borrower's failure to comply with such covenants during
the period provided for in the first sentence shall not constitute an Event of
Default or a Default. This waiver shall not constitute a waiver of either (a)
any further violation of the foregoing described covenants (as amended hereby)
beyond such periods, or (ii) any violation of any other provision of the Credit
Agreement, or any

                                       8
<PAGE>   9

Event of Default thereunder, whether now existing or occurring after the date of
this First Amendment, or (iii) of any right of Administrative Agent and each
Bank to require strict compliance with the Credit Agreement, as hereby amended.
Lender specifically reserves all of the rights and remedies they may have under
the Credit Agreement or otherwise as the result of any violation or Event of
Default (other than those waived herein). This First Amendment constitutes the
only evidence of the waiver of compliance by Borrower with the above-described
covenants.

         5. Joinder. Each domestic Subsidiary of Borrower joins in the execution
and delivery of this First Amendment to (a) evidence that the Subsidiary
Guaranty, Security Agreement, and other Credit Documents executed by each of
them remain in full force and effect, and are not limited or impaired by the
execution and delivery of this First Amendment, or the occurrence of any other
event, and (ii) to join in and be bound by the releases and other agreements
made in numerical Section 6 of this First Amendment.

         6. Release. Borrower and each of the domestic Subsidiaries on their own
behalf and on behalf of their predecessors, successors and assigns
(collectively, the "RELEASING PARTIES"), hereby acknowledge and stipulate that
as of the date of this Agreement, none of the Releasing Parties has any claims
or causes of action of any kind whatsoever against Administrative Agent or any
Bank or any of their officers, directors, employees, agents, attorneys, or
representatives, or against any of their respective predecessors, successors, or
assigns. Each of the Releasing Parties hereby forever releases, remises,
discharges and holds harmless Administrative Agent and each Lender and all of
their officers, directors, employees, agents, attorneys and representatives, and
all of their respective predecessors, successors, and assigns, from any and all
claims, causes of action, demands, and liabilities of any kind whatsoever,
whether direct or indirect, fixed or contingent, liquidated or nonliquidated,
disputed or undisputed, known or unknown, which any of the Releasing Parties has
or may acquire in the future relating in any way to any event, circumstance,
action, or failure to act concerning the Credit Agreement, the other Credit
Documents or the transactions contemplated therein from the beginning of time
through the date of this First Amendment.

         7. NO CONTROL BY BANKS. BORROWER AGREES AND ACKNOWLEDGES THAT ALL OF
THE COVENANTS AND AGREEMENTS PROVIDED FOR AND MADE BY BORROWER IN THIS FIRST
AMENDMENT, THE CREDIT AGREEMENT, AND IN THE OTHER CREDIT DOCUMENTS ARE THE
RESULT OF EXTENSIVE AND ARMS-LENGTH NEGOTIATIONS AMONG BORROWER, ADMINISTRATIVE
AGENT, AND BANKS. THE ADMINISTRATIVE AGENT'S AND BANKS' RIGHTS AND REMEDIES
PROVIDED FOR IN THE CREDIT AGREEMENT AND IN THE OTHER CREDIT DOCUMENTS ARE
INTENDED TO PROVIDE THE ADMINISTRATIVE AGENT AND BANKS WITH A RIGHT TO MONITOR
BORROWER'S ACTIVITIES AS THEY RELATE TO THE LOAN TRANSACTIONS PROVIDED FOR IN
THE CREDIT AGREEMENT, WHICH RIGHT IS BASED ON THE ADMINISTRATIVE AGENT'S AND
BANKS' VESTED INTEREST IN

                                       9
<PAGE>   10

BORROWER'S ABILITY TO PAY THE NOTES AND PERFORM THE OTHER OBLIGATIONS. NONE OF
THE COVENANTS OR OTHER PROVISIONS CONTAINED IN THE CREDIT AGREEMENT SHALL, OR
SHALL BE DEEMED TO, GIVE THE ADMINISTRATIVE AGENT OR ANY BANK THE RIGHT OR POWER
TO EXERCISE CONTROL OVER, OR OTHERWISE IMPAIR, THE DAY-TO-DAY AFFAIRS,
OPERATIONS, AND MANAGEMENT OF BORROWER.

         8.  Lien Continuation: Miscellaneous. The liens granted in the Credit
Documents are hereby ratified and confirmed as continuing to secure the payment
of the Revolving Loan Notes. Nothing herein shall in any manner diminish, impair
or extinguish the Revolving Loan Notes, as reissued in connection herewith. The
liens granted in the Credit Documents are not waived. Borrower ratifies and
acknowledges the Credit Documents as valid, subsisting, and enforceable and
agrees that the indebtedness evidenced by the Revolving Loan Notes is just, due,
owing and unpaid, and is subject to no offsets, deductions, credits, charges or
claims of whatsoever kind or character, and further agrees that all offsets,
credits, charges and claims of whatsoever kind or character are fully settled
and satisfied.

         9.  Representations and Warranties. Borrower certifies that the
representations and warranties made by Borrower in Article 4 of the Credit
Agreement are true and correct as of the date of this First Amendment (except
with respect to the Events of Default described in numerical section 4 above).

         10. Miscellaneous.

             10.1 Preservation of the Credit Agreement. Except as specifically
         amended and modified by the terms of this First Amendment, all of the
         terms, provisions, covenants, warranties, and agreements contained in
         the Credit Agreement and in the other Credit Documents shall remain in
         full force and effect (any irreconcilable conflicts or inconsistencies
         between the terms of this First Amendment and the Credit Agreement, or
         any other Credit Document, shall be governed and controlled by this
         First Amendment).

             10.2 Counterparts. This First Amendment may be executed in two or
         more counterparts, and it shall not be necessary that any one of the
         counterparts be executed by all of the parties hereto. Each fully or
         partially executed counterpart shall be deemed an original, but all
         such counterparts taken together shall constitute but one and the same
         instrument.

             10.3 NO ORAL AGREEMENTS. THIS WRITTEN AGREEMENT AND THE OTHER
         WRITTEN CREDIT DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
         PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
         CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
         ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

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                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       11
<PAGE>   12

                  IN WITNESS WHEREOF, the parties have executed this First
Amendment as of the date first above written.

                                        BORROWER:
                                        --------

                                        EGL, INC.

                                        By: ___________________________________
                                                Douglas A. Seckel, Treasurer

                                        ADMINISTRATIVE AGENT:

                                        BANK OF AMERICA, N.A., as
                                        Administrative Agent

                                        By: ___________________________________
                                                David A. Johanson,
                                                Vice President

                                        CO-AGENTS:

                                        SOUTHTRUST BANK

                                        By: ___________________________________
                                                John E. Elam, Jr.,
                                                Group Vice President

                                        THE BANK OF TOKYO-MITSUBISHI, LTD.

                                        By: ___________________________________
                                                Joey Powell, Banking Officer

                                        By: ___________________________________
                                                John Mearns,
                                                Vice President and Manager

                                       12
<PAGE>   13

                                        BANKS:

                                        BANK OF AMERICA, N.A.

                                        By: ___________________________________
                                                William B. Borus,
                                                Senior Vice President

                                        SOUTHTRUST BANK

                                        By: ___________________________________
                                                John E. Elam, Jr.,
                                                Group Vice President

                                        THE BANK OF TOKYO-MITSUBISHI, LTD.

                                        By: ___________________________________
                                                Joey Powell, Banking Officer

                                        By: ___________________________________
                                                John Mearns,
                                                Vice President and Manager

                                        CREDIT LYONNAIS NEW YORK BRANCH

                                        By: ___________________________________
                                                Attila Koc,
                                                Senior Vice President

                                        BNP PARIBAS

                                        By: ___________________________________
                                                Angela Bentley,
                                                Associate

                                       13
<PAGE>   14

                                        THE NORTHERN TRUST COMPANY

                                        By: ___________________________________
                                                Fred W. McClendon,
                                                Vice President

                                        WELLS FARGO BANK TEXAS,
                                        NATIONAL ASSOCIATION

                                        By: ___________________________________
                                                Patricia F. Taylor,
                                                Vice President

                                        BANK HAPOALIM B.M.

                                        By: ___________________________________
                                                Thomas J. Hepperle,
                                                Vice President

                                        By: ___________________________________
                                                Michael J. Byrne,
                                                Vice President and
                                                Senior Lending Officer

                                       14
<PAGE>   15

                                        SUBSIDIARIES:

                                        EGL EAGLE GLOBAL LOGISTICS, LP, a
                                        Delaware limited partnership

                                        By: EGL MANAGEMENT, LLC , a  Delaware
                                            limited liability company,
                                            its general partner

                                            By: _______________________________

                                            Name: _____________________________

                                            Title: ____________________________

                                        EGL DELAWARE LIMITED LIABILITY
                                        COMPANY, a Delaware limited liability
                                        company

                                        By: ___________________________________

                                        Name: _________________________________

                                        Title: ________________________________

                                        EGL Management, LLC, a Delaware limited
                                        liability company

                                        By: ___________________________________

                                        Name: _________________________________

                                        Title: ________________________________

                                        EGL (Canada) HOLDING CO., a Delaware
                                        corporation

                                        By: ___________________________________

                                        Name: _________________________________

                                        Title: ________________________________

                                       15
<PAGE>   16

                                        EAGLE MARITIME SERVICES, INC., a Texas
                                        corporation

                                        By: ___________________________________

                                        Name: _________________________________

                                        Title: ________________________________

                                        EAGLE USA IMPORT BROKERS, INC., a Texas
                                        corporation

                                        By: ___________________________________

                                        Name: _________________________________

                                        Title: ________________________________

                                        EAGLE URBAN RENEWAL CORPORATION,
                                        a New Jersey Urban Renewal Entity

                                        By: ___________________________________

                                        Name: _________________________________

                                        Title: ________________________________

                                        EAGLE INTERNATIONAL HOLDINGS, INC., a
                                        Delaware corporation

                                        By: ___________________________________

                                        Name: _________________________________

                                        Title: ________________________________

                                        EAGLE PARTNERS, a Texas general
                                        partnership

                                        By: EUSA HOLDINGS, INC., a Delaware
                                            corporation, Managing Partner

                                            By: _______________________________

                                            Name: _____________________________

                                            Title: ____________________________

                                       16
<PAGE>   17

                                        EAGLE PARTNERS, LP, a Texas limited
                                        partnership

                                        By: EUSA Holdings, Inc., its general
                                            partner

                                        By: ___________________________________

                                        Name: _________________________________

                                        Title: ________________________________

                                        EUSA PARTNERS, INC., a Delaware
                                        corporation

                                        By: ___________________________________

                                        Name: _________________________________

                                        Title: ________________________________

                                        CIRCLE INTERNATIONAL, INC., a Delaware
                                        corporation

                                        By: ___________________________________

                                        Name: _________________________________

                                        Title: ________________________________

                                        CIRCLE INTERNATIONAL GROUP, INC., a
                                        Delaware corporation

                                        By: ___________________________________

                                        Name: _________________________________

                                        Title: ________________________________

                                        EUSA HOLDINGS, INC., a Delaware
                                        corporation

                                        By: ___________________________________

                                        Name: _________________________________

                                        Title: ________________________________

                                                   Address: 15350 Vickery Drive
                                                   Houston, Texas 77032

                                       17
<PAGE>   18

                                   EXHIBIT "G"

                                JOINDER AGREEMENT
                                 ([Subsidiary])

                  [Subsidiary], a corporation (the "SUBSIDIARY"), hereby agrees
with (a) Bank of America, N.A., as Administrative Agent (the "ADMINISTRATIVE
AGENT"), under the Credit Agreement dated as of January 5, 2001, among EGL,
Inc., a Texas corporation, the financial institutions parties thereto, and the
Administrative Agent (as modified from time to time, the "CREDIT AGREEMENT," the
capitalized terms of which are used herein unless otherwise defined herein), and
(b) the other parties to the Guaranty dated as of January 5, 2001, and the
Subsidiary Security Agreement dated as of ___________, 2001, each executed in
connection with the Credit Agreement, as follows:

                  In accordance with Sections 5.19 and 5.21, of the Credit
Agreement as applicable, the Subsidiary hereby (a) joins the Guaranty and the
Subsidiary Security Agreement as a party thereto and assumes all the obligations
of a Guarantor (as defined in the Guaranty) under the Guaranty and a Debtor (as
defined in the Security Agreement) under the Subsidiary Security Agreement, (b)
agrees to be bound by the provisions of the Guaranty and the Subsidiary Security
Agreement as if the Subsidiary had been an original party to the Guaranty and
the Subsidiary Security Agreement, and (c) confirms that, after joining the
Guaranty and the Subsidiary Security Agreement as set forth above, the
representations and warranties set forth in the Credit Agreement, the Guaranty,
and the Subsidiary Security Agreement, with respect to the Subsidiary are true
and correct in all material respects as of the date of this Joinder Agreement.
In connection with the foregoing, the Subsidiary has and does hereby grant a
security interest in and to its Collateral (as that term is defined in the
Subsidiary Security Agreement), which is hereby made a part thereof, as security
for the obligations secured by the Subsidiary Security Agreement.

                  For purposes of notices under the Guaranty and under the
Security Agreement, the notice address for the Subsidiary is as follows:

                  _____________________________________

                  _____________________________________

                  _____________________________________

                  Attention: __________________________

                  Telephone: (___)_____________________

                  Telecopy:  (___)_____________________

                  Schedule I to the Security Agreement is supplemented with the
information regarding the Subsidiary set forth on Schedule I (Security
Agreement) to this Joinder Agreement.

                                      G-1
<PAGE>   19

                  THIS WRITTEN AGREEMENT AND THE CREDIT DOCUMENTS REPRESENT THE
FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

                  IN WITNESS WHEREOF this Joinder Agreement is executed and
delivered as of the ______ day of _______________________________.

                                             [SUBSIDIARY]

                                        By: ___________________________________

                                        Name: _________________________________

                                        Title: ________________________________

                                      G-2
<PAGE>   20

                                   EXHIBIT K-1

                           BORROWER SECURITY AGREEMENT

                  THIS SECURITY AGREEMENT is made and entered into as of the
____ day of __________, 2001, by EGL, INC., a Texas corporation ("Debtor"),
whose address is 15350 Vickery Drive, Houston, Texas 77032, in favor of BANK OF
AMERICA, N.A., whose address is 700 Louisiana, P.O. Box 2518, Houston, Harris
County, Texas 77252-2518, in its capacity as Administrative Agent, Swing Line
Lender, and Issuing Bank under the hereinafter defined Loan Agreement, and each
Bank from time to time party to such Loan Agreement.

                                   WITNESSETH:

                  WHEREAS, pursuant to a Credit Agreement (as may be modified
and amended from time to time, the "Loan Agreement") dated January 5, 2001, by
and among Debtor, the Administrative Agent, the Issuing Bank, the Swing Line
Lender, and the Banks from time to time a party to the Loan Agreement, the Banks
have agreed to extend credit to the Debtor; and

         WHEREAS, it is a condition precedent to the obligation of the Banks to
extend credit to the Debtor under the Loan Agreement that the Debtor shall have
executed and delivered this Security Agreement to the Administrative Agent as
the Secured Party for the ratable benefit of the Banks.

         NOW, THEREFORE, for and in consideration of the premises and the
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Debtor hereby agrees
with Banks as follows:

                            ARTICLE 1 - GENERAL TERMS

         Section 1.1 Terms Defined Above. As used in this Security Agreement,
the terms "Loan Agreement" and "Debtor" shall have the respective meanings
indicated above.

         Section 1.2 Terms Defined in Loan Agreement. Each capitalized term used
but not defined herein shall have the meaning assigned to such term in the Loan
Agreement (regardless of whether or not specific reference is made to the Loan
Agreement).

         Section 1.3 Certain Definitions. As used in this Security Agreement,
the following terms shall have the following meanings unless the context
otherwise requires:

                  "ACCOUNTS RECEIVABLE" shall mean all accounts under and as
         defined in the UCC, including, without limitation, accounts
         receivables, health care receivables, book debts and other forms of
         obligations,

                                     K-1-1
<PAGE>   21

         whether arising out of goods sold or services rendered or from any
         other transaction; (b) rights in, to and under all purchase orders or
         receipts for goods or services; (c) rights to any goods represented or
         purported to be represented by any of the foregoing (including unpaid
         sellers' rights of rescission, replevin, reclamation and stoppage in
         transit and rights to returned, reclaimed, or repossessed goods); (d)
         moneys due or to become due to Debtor under all purchase orders and
         contracts for the sale of goods or the performance of services or both
         by Debtor (whether or not yet earned by performance of the part of by
         Debtor), including the proceeds of the foregoing; (e) any notes,
         drafts, letters of credit, insurance proceeds or other instruments,
         documents and writings evidencing or supporting the foregoing; and (f)
         all collateral security and guarantees of any kind given by any other
         person with respect to any of the foregoing.

                  "CHATTEL PAPER" shall mean all chattel paper (as such term is
         defined in the UCC) of Debtor, including, without limitation, equipment
         leases and conditional rate agreements.

                  "COLLATERAL" shall have the meaning set forth in Section 2.1
         hereof.

                  "DEPOSIT ACCOUNTS" shall mean all deposit accounts (as such
         term is defined in the UCC) of Debtor which are located at any Bank (or
         any affiliate of any Bank).

                  "DOCUMENTS" shall mean all documents (as such term is defined
         in the UCC) of Debtor, including, without limitation, documents of
         title, warehouse receipts, and bills of lading.

                  "EVENT OF DEFAULT" shall have the meaning assigned to such
         term in the Loan Agreement.

                  "GENERAL INTANGIBLES" shall mean all general intangibles (as
         such term is defined in the UCC) of Debtor, including, without
         limitation, the right to use rights to the payment of money,
         trademarks, copyrights, patents, contracts, licenses, and franchises
         (excluding contracts, licenses, and franchises which prohibit the
         assignment or grant of a security interest by Debtor), limited and
         general partnership interests and joint venture interests, federal
         income tax refunds, trade names, distributions on certificated
         securities and uncertificated securities, computer programs and other
         computer software, inventions, designs, trade secrets, goodwill,
         proprietary rights, customer lists, supplier contracts, sale orders,
         correspondence, advertising materials, payments due in connection with
         any requisition, confiscation, condemnation, seizure or forfeiture of
         any property, reversionary interests in pension and profit-sharing
         plans, and reversionary, beneficial, and residual interests in trusts,
         credits with and other claims against any person, together with any
         collateral for any of the

                                     K-1-2
<PAGE>   22

         foregoing and the rights under any security agreement granting a
         security interest in such collateral.

                  "INSTRUMENTS" shall mean all instruments (as such term is
         defined in the UCC) of Debtor, including, without limitation,
         promissory notes.

                  "RELATED RIGHTS" shall mean all Chattel Paper, Documents,
         General Intangibles, and/or Instruments relating to the Accounts and
         Inventory, and all rights now or hereafter existing in and to all
         security agreements, leases, and other contracts securing or otherwise
         relating to the Accounts and Inventory, or any such Chattel Papers,
         Documents, General Intangibles, and/or Instruments.

                  "SECURED PARTY" shall mean Bank of America N.A., in its
         capacity as Administrative Agent under the Loan Agreement.

                  "SECURITY AGREEMENT" shall mean this Security Agreement, as
         the same may be amended, modified, restated, or supplemented from time
         to time.

                  "SUPPORTING OBLIGATIONS" shall have the meaning set forth in
         the UCC for that term.

                  "TRANSFER" shall have the meaning set forth in Section 4.1.

                  "UCC" shall mean the Uniform Commercial Code in effect at any
         time in the State of Texas.

         Section 1.4 Terms Defined in UCC. All terms used herein which are
defined in the UCC shall have the same meaning herein unless the context
otherwise requires.

                          ARTICLE 2 - SECURITY INTEREST

         Section 2.1 Grant of Security Interest. Debtor, for value received, the
receipt and sufficiency of which are hereby acknowledged, and to induce each
Bank to extend credit to Debtor, hereby pledges, assigns, conveys, transfers,
and grants to Secured Party, for the ratable benefit of Banks, a first security
interest in, general lien upon, and right of set-off against the following
described personal property of Debtor, whether now owned or existing or
hereafter acquired or arising and wherever located (the "Collateral"):

                  (a) all of Debtor's Accounts, Deposit Accounts, and all
         Related Rights; and

                  (b) all Supporting Obligations, proceeds, cash proceeds, cash
         equivalents, products, replacements, additions and improvements to,
         substitutions for, and accessions of any and all property described in
         Subsection

                                     K-1-3
<PAGE>   23

         (a) of this Section 2.1.

         Section 2.2 Obligations Secured. The security interest in, general lien
upon, and right of set-off against the Collateral is granted to secure the
performance of all obligations of (a) Debtor to pay and perform all Credit
Obligations (as such term is defined in the Loan Agreement, which shall include
all Interest Hedge Agreements), (b) of Debtor (or any Subsidiary) under the
Foreign Credit Reimbursement Agreement of even date herewith, between the Debtor
and the Administrative Agent, and (d) any of the foregoing that arises after the
filing of a petition by or against Debtor under the Bankruptcy Code, even if the
Obligations do not accrue because of the automatic stay under Bankruptcy Code
ss. 362 or otherwise (clauses (a), and (b) collectively, the "SECURED
OBLIGATIONS").

                   ARTICLE 3 - REPRESENTATIONS AND WARRANTIES

         Section 3.1 Representations and Warranties. In order to induce Banks to
enter into the Loan Agreement and to extend credit to Debtor, Debtor hereby
confirms and warrants to Secured Party (which representations and warranties
will survive the execution of this Security Agreement) that this Security
Agreement creates a valid and binding first priority security interest in the
Collateral securing the Secured Obligations, except for Permitted Encumbrances.
The execution and delivery of this Security Agreement has benefitted each Debtor
directly and indirectly, and has not rendered any Debtor insolvent or so
undercapitalized that it is unable to pay its debts as they become due.

                      ARTICLE 4 - COVENANTS AND AGREEMENTS

         Debtor will at all times comply with the covenants contained in this
Article 4 from the date hereof and for so long as any part of the Secured
Obligations is outstanding.

         Section 4.1 Title; Prohibited Liens and Filings. Debtor agrees to
protect the title to the Collateral and to defend the same against all claims
and demands of all persons or entities claiming any interest therein adverse to
Secured Party. Debtor will not pledge, mortgage, encumber, create, or suffer a
lien to exist on any of the Collateral, or sell, assign, lend, rent, lease, or
otherwise transfer or dispose of (collectively called "TRANSFER") any of the
Collateral to or in favor of any person or entity, except as provided for in the
Loan Agreement and this Security Agreement. Debtor will not file or execute or
permit to be filed or recorded any financing statement or other security
instrument with respect to the Collateral other than in favor of Secured Party
or in connection with a Permitted Encumbrance.

         Section 4.2 Section 4.2 Possession of Collateral. Secured Party, for
the ratable benefit of Banks, shall be deemed to have possession of any of the
tangible Collateral in transit to it or set apart for it. Otherwise the tangible
Collateral shall remain in Debtor's constructive possession and control at all
times, at Debtor's risk of loss, and shall, unless in transit or rolling stock,
be kept at the locations represented in the Loan

                                     K-1-4
<PAGE>   24

Agreement or as otherwise disclosed to Secured Party in accordance with the
terms of the Loan Agreement.

         Section 4.3 Filings by Secured Party Authorized. Debtor hereby
authorizes Secured Party to file financing statements, without the signature of
Debtor, describing the Collateral or any other property of Debtor.

         Section 4.4 Filing Reproductions. At the option of Secured Party, a
photocopy or other reproduction of this Security Agreement or of a financing
statement covering the Collateral shall be sufficient and may be filed as a
financing statement.

         Section 4.5 Delivery of Information. Debtor will promptly transmit to
Secured Party, for the ratable benefit of Banks, all information that Debtor may
have or receive with respect to the Collateral which might in any way materially
affect Bank's rights or remedies with respect to the Collateral.

         Section 4.6 Financing Statement Filings; Notifications. Debtor
recognizes that financing statements pertaining to the Collateral have been or
will be filed in all jurisdictions necessary to perfect the security interests
granted hereby. Debtor will promptly notify Secured Party of any condition or
event that may change the proper location for the filing of any financing
statements or other public notice or recordings for the purpose of perfecting a
security interest in the Collateral. Without limiting the generality of the
foregoing, Debtor will: (a) notify Secured Party within a reasonable period of
time in advance of any change to a jurisdiction other than as represented in the
Loan Agreement, (i) in the location of Debtor's place of business or its state
of organization, (ii) in the location of the office where Debtor keeps its
records concerning the original of all the Related Rights, (iii) in the
"location" of Debtor within the meaning of Section 9-103(c) of the UCC, or (iv)
in the location where any tangible Collateral is located; and (b) promptly
notify Secured Party of any change in Debtor's name or in any assumed name used
by Debtor. In any notice furnished pursuant to this Section, Debtor will
expressly state that the notice is required by this Security Agreement and
contains facts that will or may require additional filings of financing
statements or other notices for the purpose of continuing perfection of Secured
Party's and Bank's security interest in the Collateral.

         Section 4.7 Control. Subject to the terms of the Loan Agreement, Debtor
will cooperate with Secured Party in obtaining control, for purposes of the UCC,
with respect to all Deposit Accounts and other applicable Collateral.

         Section 4.8 Limitations on Obligations Concerning Maintenance of
Collateral. Debtor agrees that its has the risk of loss with respect to the
Collateral, and the Secured Party has no duty to collect any income accruing on
the Collateral or to preserve any rights relating to the Collateral.

                                     K-1-5
<PAGE>   25

         Section 4.9 No Disposition of Collateral. Neither the Administrative
Assistant nor any Bank authorizes, and Debtor agrees not to (except in the
ordinary course of business):

                  (a) Make any sales or leases of the Collateral;

                  (b) License any of the Collateral; and

                  (c) Grant any other security interest in any of the Collateral
         (except as provided herein).

                    ARTICLE 5 - RIGHTS, REMEDIES AND DEFAULT

         Section 5.1 Rights and Remedies With Respect to Collateral. Upon the
happening and during the continuance of any Event of Default, Banks, acting
through the Secured Party, are hereby fully authorized and empowered (without
the necessity of any further consent or authorization from Debtor) and the right
is expressly granted to Banks, and Debtor hereby appoints and makes Secured
Party, for the ratable benefit of Banks, as Debtor's true and lawful
attorney-in-fact and agent for Debtor and in Debtor's name, place, and stead
with full power of substitution, in Secured Party's and Bank's name or Debtor's
name or otherwise, for the ratable benefit of Banks, but at Debtor's cost and
expense, to exercise, without notice, all or any of the following powers at any
time with respect to all or any of the Collateral: (a) notify account debtors or
the obligors on the Related Rights to make and deliver payment and/or provide
performance directly to Secured Party, for the ratable benefit of Banks; (b)
demand, sue for, collect, receive, and give acquittance for any and all moneys
due or to become due by virtue of the Collateral, and otherwise deal with
proceeds; (c) receive, take, endorse, assign and deliver any and all checks,
notes, drafts, documents and other negotiable and non-negotiable instruments and
chattel paper and Related Rights taken or received by Secured Party, for the
ratable benefit of Banks in connection therewith; (d) settle, compromise,
compound, prosecute or defend any action or proceeding with respect thereto; (e)
deal in or with the Collateral as fully and effectively as if Secured Party, for
the ratable benefit of Banks were the absolute owner thereof; and (f) extend or
alter the time or manner of payment or performance of any or all thereof, grant
waivers and make any allowance or other adjustment with reference thereto;
provided, however, Secured Party shall be under no obligation or duty to
exercise any of the powers hereby conferred upon it and shall be without
liability for any act or failure to act in connection with the collection of, or
the preservation of any rights under or the depreciation in value of, any
Collateral. Debtor hereby irrevocably authorizes and directs each person or
entity who shall be a party to or liable for the performance or payment of any
of the Related Rights, upon receipt of written notice from Secured Party to pay
or otherwise perform or accept performance of the obligations under the Related
Rights to, with or for Secured Party, for the ratable benefit of Banks directly,
and to continue to do so until otherwise notified by Secured Party. Each such
person or entity shall have no duty to inquire or investigate as to whether an
Event of Default shall have actually occurred or whether this Security Agreement
shall have terminated, and no such person or entity

                                     K-1-6
<PAGE>   26

shall be liable to Debtor or its successors or assigns for acting in reliance on
Secured Party's notification as provided in this Section.

         Section 5.2 Additional Default Remedies. Without limiting any of the
above powers or the provisions of the Loan Agreement, to the extent permitted by
applicable law, Secured Party, for the ratable benefit of Banks may, upon the
happening and during the continuance of any Event of Default, apply, set-off,
collect, sell in one or more sales, lease, or otherwise transfer any or all of
the Collateral, in its then condition or following any commercially reasonable
preparation or processing, in such order as Secured Party may elect, and any
such sale may be made either at public or private sale at its place of business
or elsewhere, or at any brokers' board or securities exchange, either for cash
or upon credit or for future delivery, at such price as Secured Party may deem
fair, and Secured Party, for the ratable benefit of Banks, may be the purchaser
of any or all of the Collateral so sold and may hold the same thereafter in its
own right, free from any claim of Debtor or right of redemption. No such
purchase or holding by Secured Party, for the ratable benefit of Banks, shall be
deemed a retention by Secured Party, for the ratable benefit of Banks in
satisfaction of the Secured Obligations. If, notwithstanding the foregoing
provisions, any applicable provision of the UCC or other applicable law requires
Secured Party to give reasonable notice of any such sale or disposition or other
action, and reasonable notice is not defined in such law, Debtor hereby agrees
that ten (10) days prior written notice shall constitute reasonable notice.
Secured Party may require Debtor to assemble the Collateral and make it
available to Secured Party. Any sale hereunder may be conducted by an auctioneer
or any officer or agent of Secured Party. After the occurrence and during the
continuance of an Event of Default, Secured Party, for the ratable benefit of
Banks, shall have the right to take possession of any or all of the Collateral
and to take possession of all books, records, documents, information,
agreements, and other property of Debtor or in Debtor's possession or control
relating to the Collateral, and for such purpose may enter upon any premises
upon which any of the Collateral or any of such books, records, information,
agreements or other property are situated and remove the same therefrom without
any liability for trespass or damages occasioned thereby.

         Section 5.3 Proceeds. After the happening and during the continuance of
any Event of Default, the proceeds of any sale or other transfer of the
Collateral and all sums received or collected by Secured Party from or on
account of the Collateral shall be applied by Secured Party in the manner set
forth in ss.9.504 of the UCC (unless otherwise required by the Loan Agreement or
any other applicable law). In connection with the exercise of Secured Party's
rights hereunder, Debtor hereby grants to Secured Party, after the happening and
during the continuance of an Event of Default, the right to receive, change the
address for delivery, open, and dispose of mail addressed to Debtor, and to
execute, assign and endorse negotiable and other instruments, documents or other
evidence of payment, shipment, storage, or transfer for any form of Collateral
on behalf of and in the name of Debtor to the extent any such action is
reasonably necessary to collect proceeds of the Collateral.

                                     K-1-7
<PAGE>   27

         Section 5.4 Deficiency. Debtor shall remain liable to Banks for any
unpaid Secured Obligations, advances, costs, charges, and expenses incurred by
Secured Party in connection herewith, together with interest thereon, and shall
pay the same immediately to Secured Party at Secured Party's offices.

         Section 5.5 Secured Party's Duties. The powers conferred upon Secured
Party, on behalf of Banks, by this Security Agreement are solely to protect
Banks' interest in the Collateral, and shall not impose any duty upon Secured
Party, on behalf of Banks, to exercise any such powers. Secured Party, on behalf
of Banks, shall be under no duty whatsoever to make or give any presentment,
demand for performance, notice of nonperformance, protest, notice of protest,
notice of dishonor, notice of intent to accelerate, notice of acceleration, or
other notice or demand in connection with any Collateral or the Secured
Obligations, except as specifically provided in this Security Agreement and the
Loan Agreement or as required by applicable law, or to take any steps necessary
to preserve any rights against prior parties. Neither Secured Party nor the
Banks shall be liable for failure to collect or realize upon the Collateral, or
for any delay in so doing, nor shall Secured Party or the Banks be under any
duty to take any action whatsoever with regard thereto. Secured Party shall use
reasonable care in the custody and preservation of any Collateral in its
possession but need not take any steps to keep the Collateral identifiable.
Secured Party shall have no duty to comply with any recording, filing or other
legal requirements necessary to establish or maintain the validity, priority or
enforceability of, or Secured Party's or Banks' respective rights in, any of the
Collateral.

         Section 5.6 Secured Party's Actions. Debtor waives (i) any right to
require Secured Party, for and on behalf of the Banks, to proceed against any
person or entity, exhaust any Collateral, or have any person or entity joined
with Debtor in any suit arising out of the Secured Obligations or this Security
Agreement or pursue any other remedy in Secured Party's or Banks' power; (ii)
any and all notice of acceptance of this Security Agreement or of creation,
modification, rearrangement, renewal or extension for any period of any of the
Secured Obligations from time to time; and (iii) any defense arising by reason
of any disability or other such defense. All dealings between Debtor and Secured
Party and Banks, whether or not in connection with the Secured Obligations,
shall conclusively be presumed to have been had or consummated in reliance upon
this Security Agreement and the Loan Agreement. Until all the Secured
Obligations shall have been paid in full, Debtor shall have no right to
subrogation, and Debtor waives any benefit of and any right to participate in
any Collateral or security whatsoever now or hereafter held by Secured Party,
for and on behalf of the Banks. Debtor authorizes Secured Party, for and on
behalf of the Banks, without notice or demand and without any reservation of
rights against Debtor and without affecting Debtor's liability hereunder or on
the Secured Obligations, from time to time to (a) take and hold any other
property as collateral, other than the Collateral, as security for any or all of
the Secured Obligations, and exchange, enforce, waive and release any or all of
the Collateral or such other property; (b) after the occurrence and during the
continuance of an Event of Default, apply the Collateral or such other property
and direct the order or manner of sale thereof as Secured Party, in its
discretion, may

                                     K-1-8
<PAGE>   28

determine; (c) renew, extend for any period, accelerate, modify, compromise,
settle, or release the obligation of any person or entity with respect to any or
all of the Secured Obligations or the Collateral; and (d) waive, enforce,
modify, amend, or supplement any of the provisions of the Credit Documents
(other than this Security Agreement).

         Section 5.7 Cumulative Security. The execution and delivery of this
Security Agreement in no manner shall impair or affect any other security (by
endorsement or otherwise) for the Secured Obligations. No security taken
hereafter as security for the Secured Obligations shall impair in any manner or
affect this Security Agreement. All such present and future additional security
is to be considered as cumulative security.

         Section 5.8 Continuing Agreement. This is a continuing agreement, and
the grant of a security interest hereunder shall remain in full force and
effect. All the rights of Secured Party and Banks hereunder shall continue to
exist until the Secured Obligations are paid and the Revolving Credit
Commitments are terminated; and upon the full satisfaction of the foregoing,
Secured Party, for and on behalf of the Banks, upon request of Debtor, shall
execute a written termination statement reassigning to Debtor, without recourse,
the Collateral and all rights conveyed hereby and returning possession of the
Collateral, if applicable, to Debtor. Otherwise this Security Agreement shall
continue irrespective of the fact that the liability of Debtor or any other
person or entity may have ceased, or irrespective of the validity or
enforceability of any note or any other loan document to which Debtor or any
other person or entity may be a party, and notwithstanding the reorganization or
bankruptcy of Debtor or any other person or entity, or any other event or
proceeding affecting Debtor or any other person or entity. Rights Under Uniform
Commercial Code. Regardless of whether the Uniform Commercial Code is in effect
in the jurisdiction where such rights under this Security Agreement are
asserted, Secured Party, for the ratable benefit of Banks, shall have the
rights, powers and remedies of a secured party under the UCC or any similar law
in any other jurisdiction whose laws are applicable. Secured Party and Banks may
exercise their right of set-off with respect to the Secured Obligations as
provided for in the Loan Agreement, as if the Secured Obligations were
unsecured.

         Section 5.9 Exercise of Rights, Etc. Time shall be of the essence for
the performance of any act under this Security Agreement or the Secured
Obligations by Debtor, but neither Secured Party's or any Bank's acceptance of
partial or delinquent payments nor any forbearance, failure or delay by Secured
Party in exercising any right shall be deemed a waiver of any obligation of
Debtor or of any right of Secured Party, for the ratable benefit of Banks, or
preclude any other or further exercise thereof; and no single or partial
exercise of any right shall preclude any other or further exercise thereof, or
the exercise of any other right.

         Section 5.10 Remedy and Waiver. Secured Party may remedy any Event of
Default and may waive any Event of Default (with the consent of the Majority
Banks) without waiving the Event of Default remedied or waiving any prior or
subsequent Event of Default.

                                     K-1-9
<PAGE>   29

         Section 5.11 Non-Judicial Remedies. To the fullest extent permitted by
law, Secured Party, for the ratable benefit of Banks, may enforce its rights
hereunder without prior judicial process or judicial hearing, and Debtor
expressly waives, renounces, and knowingly relinquishes any and all legal rights
which might otherwise require Secured Party, for the ratable benefit of Banks,
to enforce their rights by judicial process. In so providing for non-judicial
remedies, Debtor recognizes that such remedies are consistent with the usage of
the trade, are responsive to commercial necessity and are the result of bargain
at arm's length. Nothing herein is intended to prevent Secured Party, Banks or
Debtor from resorting to judicial process at either party's option.

         Section 5.12 Assignment of Secured Party's Duties. Secured Party's
duties and rights hereunder may be assigned and transferred from time to time to
another Bank or other Person in accordance with the terms of the Loan Agreement,
in which case, such transferee shall have the rights and duties of Secured Party
under this Security Agreement.

         Section 5.13 Compliance With Other Laws. Administrative Agent and each
Bank may comply with any applicable state or federal law requirements in
connection with a disposition of the Collateral and compliance will not be
considered adversely to affect the commercial reasonableness of any sale of the
Collateral.

                            ARTICLE 6 - MISCELLANEOUS

         Section 6.1 Preservation of Liability. Neither this Security Agreement
nor the exercise by Secured Party, for the ratable benefit of Banks, of (or the
failure to so exercise) any right conferred herein or by law shall be construed
as relieving any person or entity liable on the Secured Obligations from
liability on the Obligations and for any deficiency thereon.

         Section 6.2 Survival of Agreements. All representations and warranties
of Debtor herein, and all covenants and agreements herein not fully performed
before the effective date of this Security Agreement, shall survive such date.

         Section 6.3 Notice. Except as otherwise provided herein, all notices,
demands, requests, and communications permitted or required under this Agreement
shall be delivered in the time and manner as required by the Loan Agreement.

         Section 6.4 Amendment and Waiver. This Security Agreement may not be
amended nor may any of its terms be waived except in writing duly signed by the
party against whom enforcement of the amendment or waiver is sought.

         Section 6.5 Invalidity. If any provision of this Security Agreement is
rendered or declared illegal, invalid, or unenforceable by reason of any
existing or subsequently enacted legislation or by a judicial decision that has
become final, all of the remaining provisions shall remain in full force and
effect.

                                     K-1-10
<PAGE>   30

         Section 6.6 Successors and Assigns. The covenants, representations,
warranties, and agreements herein set forth shall be binding upon Debtor and
shall inure to the benefit of Secured Party, for the ratable benefit of Banks,
and their heirs, legal representatives, successors, and assigns.

         Section 6.7 Conflicting Provisions. To the extent any irreconcilable
conflicts or inconsistencies exist between the terms of this Security Agreement
and the Loan Agreement, the terms of the Loan Agreement shall govern and
control.

         Section 6.8 CONSTRUCTION. THIS SECURITY AGREEMENT HAS BEEN MADE IN AND
THE SECURITY INTEREST GRANTED HEREBY IS GRANTED IN, AND EACH SHALL BE GOVERNED
BY THE LAWS OF, THE STATE OF TEXAS (EXCEPT TO THE EXTENT THAT THE LAWS OF ANY
OTHER JURISDICTION GOVERN THE PERFECTION, PRIORITY, OR FORECLOSURE OF THE
SECURITY INTEREST GRANTED HEREBY) AND OF THE UNITED STATES OF AMERICA, AS
APPLICABLE, IN ALL RESPECTS, INCLUDING MATTERS OF CONSTRUCTION, VALIDITY,
ENFORCEMENT, AND PERFORMANCE.

         Section 6.9 ENTIRE AGREEMENT. THIS SECURITY AGREEMENT CONSTITUTES THE
ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF
AND SHALL SUPERSEDE ANY PRIOR AGREEMENT BETWEEN THE PARTIES HERETO, WHETHER
WRITTEN OR ORAL, RELATING TO THE SUBJECT HEREOF. FURTHERMORE, IN THIS REGARD,
THIS SECURITY AGREEMENT AND THE OTHER WRITTEN CREDIT DOCUMENTS REPRESENT,
COLLECTIVELY, THE FINAL AGREEMENT AMONG THE PARTIES THERETO AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENT
OF SUCH PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                     K-1-11
<PAGE>   31

                  IN WITNESS HEREOF, Debtor and Secured Party have caused this
instrument to be duly executed as of the date first above written.

                                        DEBTOR:

                                        EGL, INC.

                                        By: ___________________________________
                                                Douglas A. Seckel, Treasurer

ACKNOWLEDGED AND AGREED
TO BY SECURED PARTY:

BANK OF AMERICA, N.A.,
as Administrative Agent on behalf
of itself and each of the other Banks

By: _____________________________________
        David A. Johanson,
        Vice President

                                     K-1-12
<PAGE>   32

                                   EXHIBIT K-2

                          SUBSIDIARY SECURITY AGREEMENT

                  THIS SECURITY AGREEMENT is made and entered into as of the
_____ day of __________, 2001, by each of the undersigned companies
(collectively, "DEBTORS", whether one or more, each a "DEBTOR"), each whose
address for purposes of this financing statement is 15350 Vickery Drive,
Houston, Texas 77032, in favor of BANK OF AMERICA, N.A., whose address is 700
Louisiana, P.O. Box 2518, Houston, Harris County, Texas 77252-2518, in its
capacity as Administrative Agent, Swing Line Lender, and Issuing Bank under the
hereinafter defined Loan Agreement, and each Bank from time to time party to
such Loan Agreement.

                              W I T N E S S E T H:
                              - - - - - - - - - -

                  WHEREAS, pursuant to a Credit Agreement (as modified and
amended from time to time, the "LOAN AGREEMENT") dated July 5, 2001, by and
among EGL, INC., a Texas corporation ("BORROWER"), the Administrative Agent, the
Issuing Bank, the Swing Line Lender, and the Banks from time to time a party to
the Loan Agreement, the Banks have agreed to extend credit to the Borrower; and

                  WHEREAS, it is a condition precedent to the obligation of the
Banks to extend credit to the Borrower under the Loan Agreement that the Debtors
shall have executed and delivered this Security Agreement to the Administrative
Agent as Secured Party for the ratable benefit of the Banks.

                  NOW, THEREFORE, for and in consideration of the premises and
the agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, each Debtor hereby
agrees with Banks as follows:

                            ARTICLE 1 - GENERAL TERMS

         Section 1.1 Terms Defined Above. As used in this Security Agreement,
the terms "BORROWER," "LOAN AGREEMENT" and "DEBTOR" and shall have the
respective meanings indicated above.

         Section 1.2 Terms Defined in Loan Agreement. Each capitalized term used
but not defined herein shall have the meaning assigned to such term in the Loan
Agreement (regardless of whether or not specific reference is made to the Loan
Agreement).

         Section 1.3 Certain Definitions. As used in this Security Agreement,
the following terms shall have the following meanings unless the context
otherwise requires:

                  "ACCOUNTS RECEIVABLE" shall mean all accounts under and as
         defined in the UCC, including, without limitation, accounts
         receivables,

                                     K-2-1
<PAGE>   33

         health care receivables, book debts and other forms of obligations,
         whether arising out of goods sold or services rendered or from any
         other transaction; (b) rights in, to and under all purchase orders or
         receipts for goods or services; (c) rights to any goods represented or
         purported to be represented by any of the foregoing (including unpaid
         sellers' rights of rescission, replevin, reclamation and stoppage in
         transit and rights to returned, reclaimed, or repossessed goods); (d)
         moneys due or to become due to Debtor under all purchase orders and
         contracts for the sale of goods or the performance of services or both
         by Debtor (whether or not yet earned by performance of the part of by
         Debtor), including the proceeds of the foregoing; (e) any notes,
         drafts, letters of credit, insurance proceeds or other instruments,
         documents and writings evidencing or supporting the foregoing; and (f)
         all collateral security and guarantees of any kind given by any other
         person with respect to any of the foregoing.

                  "CHATTEL PAPER" shall mean all chattel paper (as such term is
         defined in the UCC) of a Debtor, including, without limitation,
         equipment leases and conditional rate agreements.

                  "COLLATERAL" shall have the meaning set forth in Section 2.1
         hereof.

                  "DEPOSIT ACCOUNTS" shall mean all deposit accounts (as such
         term is defined in the UCC) of Debtor which are located at any Bank (or
         any affiliate of any Bank).

                  "DOCUMENTS" shall mean all documents (as such term is defined
         in the UCC) of a Debtor, including, without limitation, documents of
         title, warehouse receipts, and bills of lading.

                  "EVENT OF DEFAULT" shall have the meaning assigned to such
         term in the Loan Agreement.

                  "GENERAL INTANGIBLES" shall mean all general intangibles (as
         such term is defined in the UCC) of a Debtor, including, without
         limitation, the right to use rights to the payment of money,
         trademarks, copyrights, patents, contracts, licenses, and franchises
         (excluding contracts, licenses, and franchises which prohibit the
         assignment or grant of a security interest by a Debtor), limited and
         general partnership interests and joint venture interests, federal
         income tax refunds, trade names, distributions on certificated
         securities and uncertificated securities, computer programs and other
         computer software, inventions, designs, trade secrets, goodwill,
         proprietary rights, customer lists, supplier contracts, sale orders,
         correspondence, advertising materials, payments due in connection with
         any requisition, confiscation, condemnation, seizure or forfeiture of
         any property, reversionary interests in pension and profit-sharing
         plans, and reversionary, beneficial, and residual interests in trusts,
         credits with and

                                     K-2-2
<PAGE>   34

         other claims against any person, together with any collateral for any
         of the foregoing and the rights under any security agreement granting a
         security interest in such collateral.

                  "INSTRUMENTS" shall mean all instruments (as such term is
         defined in the UCC) of any Debtor, including, without limitation
         promissory notes.

                  "PERMITTED ENCUMBRANCE" shall have the meaning assigned to
         such term in the Loan Agreement.

                  "RELATED RIGHTS" shall mean all Chattel Paper, Documents,
         General Intangibles, and/or Instruments relating to the Accounts and
         Deposit Accounts, and all rights now or hereafter existing in and to
         all security agreements, leases, and other con-tracts securing or
         otherwise relating to the Accounts and Deposit Accounts, or any such
         Chattel Papers, Documents, General Intangibles, and/or Instruments.

                  "SECURED PARTY" shall mean Bank of America, in its capacity as
         Administrative Agent under the Loan Agreement.

                  "SECURITY AGREEMENT" shall mean this Security Agreement, as
         the same may be amended, modified, restated, or supplemented from time
         to time.

                  "SUPPORTING OBLIGATIONS" shall have the meaning set forth in
         the UCC for that term.

                  "TRANSFER" shall have the meaning set forth in Section 4.1.

                  "UCC" shall mean the Uniform Commercial Code in effect at any
         time and from time to time in the State of Texas.

         Section 1.4 Terms Defined in UCC. All terms used herein which are
defined in the UCC shall have the same meaning herein unless the context
otherwise requires.

                          ARTICLE 2 - SECURITY INTEREST

         Section 2.1 Grant of Security Interest. Each Debtor, for value
received, the receipt and sufficiency of which are hereby acknowledged, and to
induce each Bank to extend credit to Borrower, hereby pledges, assigns, conveys,
transfers, and grants to Secured Party, for the ratable benefit of Banks, a
first security interest in, general lien upon, and right of set-off against the
following described personal property of that Debtor, whether now owned or
existing or hereafter acquired or arising and wherever located (the
"COLLATERAL"):

                  (a) all of each Debtor's Accounts, Deposit Accounts, and all
         Related Rights; and

                                     K-2-3
<PAGE>   35

                  (b) all supporting obligations and all proceeds, cash
         proceeds, cash equivalents, products, replacements, additions and
         improvements to, substitutions for, and accessions of any and all
         property described in Subsection (a) of this Section 2.1.

         Section 2.2 Obligations Secured. The security interest in, general lien
upon, and right of set-off against the Collateral is granted to secure the
performance of all obligations of (a) Borrower to pay and perform all Credit
Obligations (as such term is defined in the Loan Agreement, which shall include
all Interest Hedge Agreements), (b) of each Debtor under its Subsidiary Guaranty
of even date herewith, executed by that Debtor in connection with the Loan
Agreement and under this Security Agreement, and of Borrower (or any Debtor)
under the Foreign Credit Reimbursement Agreement of even date herewith between
Borrower and with the Administrative Agent (and under the guaranty issued by
each Debtor pursuant thereto), and (d) any of the foregoing that arises after
the filing of a petition by or against Debtor under the Bankruptcy Code, even if
the Obligations do not accrue because of the automatic stay under Bankruptcy
Code ss. 362 or otherwise (clauses (a), and (b) collectively, the "SECURED
OBLIGATIONS").

                   ARTICLE 3 - REPRESENTATIONS AND WARRANTIES

         Section 3.1 Representations and Warranties. In order to induce Banks to
enter into the Loan Agreement and to extend credit to Borrower, each Debtor
hereby confirms and warrants to Secured Party (which representations and
warranties will survive the execution of this Security Agreement) that this
Security Agreement creates a valid and binding first priority security interest
in the Collateral securing the Secured Obligations, except for Permitted
Encumbrances. The execution and delivery of this Security Agreement has
benefitted each Debtor directly and indirectly, and has not rendered any Debtor
insolvent or so undercapitalized that it is unable to pay its debts as they
become due.

                      ARTICLE 4 - COVENANTS AND AGREEMENTS

                  Each Debtor will at all times comply with the covenants
contained in this Article 4 from the date hereof and for so long as any part of
the Secured Obligations is outstanding.

         Section 4.1 Title; Prohibited Liens and Filings. Each Debtor agrees to
protect the title to the Collateral and to defend the same against all claims
and demands of all persons or entities claiming any interest therein adverse to
Secured Party. Debtor will not pledge, mortgage, encumber, create, or suffer a
lien to exist on any of the Collateral, or sell, assign, lend, rent, lease, or
otherwise transfer or dispose of (collectively called "TRANSFER") any of the
Collateral to or in favor of any person or entity, except as provided for in the
Loan Agreement and this Security Agreement. Debtor will not file or execute or
permit to be filed or recorded any financing statement or other security
instrument with respect to the Collateral other than in favor of Secured Party
or in connection with a Permitted Encumbrance.

                                     K-2-4
<PAGE>   36

         Section 4.2 Possession of Collateral. Secured Party, for the ratable
benefit of Banks, shall be deemed to have possession of any of the tangible
Col-lateral in transit to it or set apart for it. Otherwise the tangible
Collateral shall remain in each Debtor's constructive possession and control at
all times, at each Debtor's risk of loss, and shall, unless in transit or
rolling stock, be kept at the locations represented in the Loan Agreement or as
otherwise disclosed to Secured Party in accordance with the terms of the Loan
Agreement.

         Section 4.3 Filings by Secured Party Authorized. Each Debtor hereby
authorizes Secured Party to file financing statements, without the signature of
each Debtor, describing the Collateral or any other property of that Debtor

         Section 4.4 Filing Reproductions. At the option of Secured Party, a
photocopy or other reproduction of this Security Agreement or of a financing
statement covering the Collateral shall be sufficient and may be filed as a
financing statement.

         Section 4.5 Delivery of Information. Each Debtor will promptly transmit
to Secured Party, for the ratable benefit of Banks, all information that the
Debtor may have or receive with respect to the Collateral which might in any way
materially affect Bank's rights or remedies with respect to the Collateral.

         Section 4.6 Financing Statement Filings; Notifications. Each Debtor
recognizes that financing statements pertaining to the Collateral have been or
will be filed in all jurisdictions necessary to perfect the security interests
granted hereby. Each Debtor will promptly notify Secured Party of any condition
or event that may change the proper location for the filing of any financing
statements or other public notice or recordings for the purpose of perfecting a
security interest in the Collateral. Without limiting the generality of the
foregoing, each Debtor will: (a) notify Secured Party within a reasonable period
of time in advance of any change to a jurisdiction other than as represented in
the Loan Agreement, (i) in the location of any Debtor's place of business or its
state of organization, (ii) in the location of the office where any Debtor keeps
its records concerning the original of all the Related Rights, (iii) in the
"location" of any Debtor within the meaning of the UCC, or (iv) in the location
where any tangible Collateral is located; and (b) promptly notify Secured Party
of any change in any Debtor's name or in any assumed name used by any Debtor. In
any notice furnished pursuant to this Section, each Debtor will expressly state
that the notice is required by this Security Agreement and contains facts that
will or may require additional filings of financing statements or other notices
for the purpose of continuing perfection of Secured Party's and Bank's security
interest in the Collateral.

         Section 4.7 Control. Subject to the terms of the Loan Agreement, each
Debtor will cooperate with Secured Party in obtaining control, for purposes of
the UCC, with respect to all Deposit Accounts and other applicable Collateral.

         Section 4.8 Limitations on Obligations Concerning Maintenance of
Collateral. Each Debtor agrees that its has the risk of loss with respect to the
Collateral, and the

                                     K-2-5
<PAGE>   37

Secured Party has no duty to collect any income accruing on the Collateral or to
preserve any rights relating to the Collateral.

         Section 4.9 No Disposition of Collateral. Neither the Administrative
Assistant nor any Bank authorizes, and each Debtor agrees not to (except in the
ordinary course of business):

                  (a) Make any sales or leases of the Collateral;

                  (b) License any of the Collateral; and

                  (c) Grant any other security interest in any of the Collateral
         (except as provided herein).

                    ARTICLE 5 - RIGHTS, REMEDIES AND DEFAULT

         Section 5.1 Rights and Remedies With Respect to Collateral. Upon the
happening and during the continuance of any Event of Default, Banks, acting
through the Secured Party, are hereby fully authorized and empowered (without
the necessity of any further consent or authorization from any Debtor) and the
right is expressly granted to Banks, and each Debtor hereby appoints and makes
Secured Party, for the ratable benefit of Banks, as each Debtor's true and
lawful attorney-in-fact and agent for each Debtor and in each Debtor's name,
place, and stead with full power of substitution, in Secured Party's and Bank's
name or each Debtor's name or otherwise, for the ratable benefit of Banks, but
at each Debtor's cost and expense, to exercise, without notice, all or any of
the following powers at any time with respect to all or any of the Collateral:
(a) notify account debtors or the obligors on the Related Rights to make and
deliver payment and/or provide performance directly to Secured Party, for the
ratable benefit of Banks; (b) demand, sue for, collect, receive, and give
acquittance for any and all moneys due or to become due by virtue of the
Collateral, and otherwise deal with proceeds; (c) receive, take, endorse, assign
and deliver any and all checks, notes, drafts, documents and other negotiable
and non-negotiable instruments and chattel paper and Related Rights taken or
received by Secured Party, for the ratable benefit of Banks in connection
therewith; (d) settle, compromise, compound, prosecute or defend any action or
proceeding with respect thereto; (e) deal in or with the Collateral as fully and
effectively as if Secured Party, for the ratable benefit of Banks were the
absolute owner thereof; and (f) extend or alter the time or manner of payment or
performance of any or all there-of, grant waivers and make any allowance or
other adjustment with reference thereto; provided, however, Secured Party shall
be under no obligation or duty to exercise any of the powers hereby conferred
upon it and shall be without liability for any act or failure to act in
connection with the collection of, or the preservation of any rights under or
the depreciation in value of, any Collateral. Each Debtor hereby irrevocably
authorizes and directs each person or entity who shall be a party to or liable
for the performance or payment of any of the Related Rights, upon receipt of
written notice from Secured Party to pay or otherwise perform or accept
performance of the obligations under the Related Rights to, with or for Secured
Party, for the ratable benefit

                                     K-2-6
<PAGE>   38

of Banks directly, and to continue to do so until otherwise notified by Secured
Party. Each such person or entity shall have no duty to inquire or investigate
as to whether an Event of Default shall have actually occurred or whether this
Security Agreement shall have terminated, and no such person or entity shall be
liable to any Debtor or its successors or assigns for acting in reliance on
Secured Party's notification as provided in this Section.

         Section 5.2 Additional Default Remedies. Without limiting any of the
above powers or the provisions of the Loan Agreement, to the extent permitted by
applicable law, Secured Party, for the ratable benefit of Banks may, upon the
happening and during the continuance of any Event of Default, apply, set-off,
collect, sell in one or more sales, lease, or otherwise transfer any or all of
the Collateral, in its then condition or following any commercially reasonable
preparation or processing, in such order as Secured Party may elect, and any
such sale may be made either at public or private sale at its place of business
or elsewhere, or at any brokers' board or securities exchange, either for cash
or upon credit or for future delivery, at such price as Secured Party may deem
fair, and Secured Party, for the ratable benefit of Banks, may be the purchaser
of any or all of the Collateral so sold and may hold the same thereafter in its
own right, free from any claim of any Debtor or right of redemption. No such
purchase or holding by Secured Party, for the ratable benefit of Banks, shall be
deemed a retention by Secured Party, for the ratable benefit of Banks in
satisfaction of the Secured Obligations. If, notwithstanding the foregoing
provisions, any applicable provision of the UCC or other applicable law requires
Secured Party to give reasonable notice of any such sale or disposition or other
action, and reasonable notice is not defined in such law, each Debtor hereby
agrees that ten (10) days prior written notice shall constitute reasonable
notice. Secured Party may require each Debtor to assemble the Collateral and
make it available to Secured Party. Any sale hereunder may be conducted by an
auctioneer or any officer or agent of Secured Party. After the occurrence and
during the continuance of an Event of Default, Secured Party, for the ratable
benefit of Banks, shall have the right to take possession of any or all of the
Collateral and to take possession of all books, records, documents, information,
agreements, and other property of any Debtor or in any Debtor's possession or
control relating to the Collateral, and for such purpose may enter upon any
premises upon which any of the Collateral or any of such books, records,
information, agreements or other property are situated and remove the same
therefrom without any liability for trespass or damages occasioned thereby.

         Section 5.3 Proceeds. After the happening and during the continuance of
any Event of Default, the proceeds of any sale or other transfer of the
Collateral and all sums received or collected by Secured Party from or on
account of the Collateral shall be applied by Secured Party in the manner set
forth in ss.9.504 of the UCC (unless otherwise required by the Loan Agreement or
any other applicable law). In connection with the exercise of Secured Party's
rights hereunder, each Debtor hereby grants to Secured Party, after the
happening and during the continuance of an Event of Default, the right to
receive, change the address for delivery, open, and dispose of mail addressed to
any Debtor, and to execute, assign and endorse negotiable and other

                                     K-2-7
<PAGE>   39

instruments, documents or other evidence of payment, shipment, storage, or
transfer for any form of Collateral on behalf of and in the name of any Debtor
to the extent any such action is reasonably necessary to collect proceeds of the
Collateral.

         Section 5.4 Deficiency. Each Debtor and Borrower shall remain jointly
and severally liable to Banks for any unpaid Secured Obligations, advances,
costs, charges, and expenses incurred by Secured Party in connection herewith,
together with interest thereon, and shall pay the same immediately to Secured
Party at Secured Party's offices.

         Section 5.5 Secured Party's Duties. The powers conferred upon Secured
Party, on behalf of Banks, by this Security Agreement are solely to protect
Banks' interest in the Collateral, and shall not impose any duty upon Secured
Party, on behalf of Banks, to exercise any such powers. Secured Party, on behalf
of Banks, shall be under no duty whatsoever to make or give any presentment,
demand for performance, notice of nonperformance, protest, notice of protest,
notice of dishonor, notice of intent to accelerate, notice of acceleration, or
other notice or demand in connection with any Collateral or the Secured
Obligations, except as specifically provided in this Security Agreement and the
Loan Agreement or as required by applicable law, or to take any steps necessary
to preserve any rights against prior parties. Neither Secured Party nor the
Banks shall be liable for failure to collect or realize upon the Collateral, or
for any delay in so doing, nor shall Secured Party or the Banks be under any
duty to take any action whatsoever with regard thereto. Secured Party shall use
reasonable care in the custody and preservation of any Collateral in its
possession but need not take any steps to keep the Collateral identifiable.
Secured Party shall have no duty to comply with any recording, filing or other
legal requirements necessary to establish or maintain the validity, priority or
enforceability of, or Secured Party's or Banks' respective rights in, any of the
Collateral.

         Section 5.6 Secured Party's Actions. Each Debtor waives (i) any right
to require Secured Party, for and on behalf of the Banks, to proceed against any
person or entity, exhaust any Collateral, or have any person or entity joined
with any Debtor in any suit arising out of the Secured Obligations or this
Security Agreement or pursue any other remedy in Secured Party's or Banks'
power; (ii) any and all notice of acceptance of this Security Agreement or of
creation, modification, rearrangement, renewal or extension for any period of
any of the Secured Obligations from time to time; and (iii) any defense arising
by reason of any disability or other such defense. All dealings between any
Debtor and Secured Party and Banks, whether or not in connection with the
Secured Obligations, shall conclusively be presumed to have been had or
consummated in reliance upon this Security Agreement and the Loan Agreement.
Until all the Secured Obligations shall have been paid in full, Debtor shall
have no right to subrogation, and each Debtor waives any benefit of and any
right to participate in any Collateral or security whatsoever now or hereafter
held by Secured Party, for and on behalf of the Banks. Each Debtor authorizes
Secured Party, for and on behalf of the Banks, without notice or demand and
without any reservation of rights against Debtor and without affecting any
Debtor's liability hereunder or on the Secured Obligations,

                                     K-2-8
<PAGE>   40

from time to time to (a) take and hold any other property as collateral, other
than the Collateral, as security for any or all of the Secured Obligations, and
exchange, enforce, waive and release any or all of the Collateral or such other
property; (b) after the occurrence and during the continuance of an Event of
Default, apply the Collateral or such other property and direct the order or
manner of sale thereof as Secured Party, in its discretion, may determine; (c)
renew, extend for any period, accelerate, modify, compromise, settle, or release
the obligation of any person or entity with respect to any or all of the Secured
Obligations or the Collateral; and (d) waive, enforce, modify, amend, or
supplement any of the provisions of the Credit Documents (other than this
Security Agreement).

         Section 5.7 Cumulative Security. The execution and delivery of this
Security Agreement in no manner shall impair or affect any other security (by
endorsement or otherwise) for the Secured Obligations. No security taken
hereafter as security for the Secured Obligations shall impair in any manner or
affect this Security Agreement. All such present and future additional security
is to be considered as cumulative security.

         Section 5.8 Continuing Agreement. This is a continuing agreement, and
the grant of a security interest hereunder shall remain in full force and
effect. All the rights of Secured Party and Banks hereunder shall continue to
exist until the Secured Obligations are paid and the Revolving Credit
Commitments are terminated; and upon the full satisfaction of the foregoing,
Secured Party, for and on behalf of the Banks, upon request of each Debtor,
shall execute a written termination statement reassigning to each Debtor,
without recourse, the Collateral owned by it and all rights conveyed hereby and
returning possession of the Collateral, if applicable, to each Debtor. Otherwise
this Security Agreement shall continue irrespective of the fact that the
liability of any Debtor or any other person or entity may have ceased, or
irrespective of the validity or enforceability of any note or any other loan
document to which any Debtor or any other person or entity may be a party, and
notwithstanding the reorganization or bankruptcy of any Debtor or any other
person or entity, or any other event or proceeding affecting any Debtor or any
other person or entity.

         Section 5.9 Rights Under Uniform Commercial Code. Regardless of whether
the Uniform Commercial Code is in effect in the jurisdiction where such rights
under this Security Agreement are asserted, Secured Party, for the ratable
benefit of Banks, shall have the rights, powers and remedies of a secured party
under the UCC or any similar law in any other jurisdiction whose laws are
applicable. Secured Party and Banks may exercise their right of set-off with
respect to the Secured Obligations as provided for in the Loan Agreement, as if
the Secured Obligations were unsecured.

         Section 5.10 Exercise of Rights, Etc. Time shall be of the essence for
the performance of any act under this Security Agreement or the Secured
Obligations by each Debtor, but neither Secured Party's or any Bank's acceptance
of partial or delinquent payments nor any forbearance, failure or delay by
Secured Party in exercising any right shall be deemed a waiver of any obligation
of any Debtor or of any right of Secured Party, for the ratable benefit of
Banks, or preclude any other or further

                                     K-2-9
<PAGE>   41

exercise thereof; and no single or partial exercise of any right shall preclude
any other or further exercise thereof, or the exercise of any other right.

         Section 5.11 Remedy and Waiver. Secured Party may remedy any Event of
Default and may waive any Event of Default (with the consent of the Majority
Banks) without waiving the Event of Default remedied or waiving any prior or
sub-sequent Event of Default.

         Section 5.12 Non-Judicial Remedies. To the fullest extent permitted by
law, Secured Party, for the ratable benefit of Banks, may enforce its rights
hereunder without prior judicial process or judicial hearing, and each Debtor
expressly waives, renounces, and knowingly relinquishes any and all legal rights
which might otherwise require Secured Party, for the ratable benefit of Banks,
to enforce their rights by judicial process. In so providing for non-judicial
remedies, each Debtor recognizes that such remedies are consistent with the
usage of the trade, are responsive to commercial necessity and are the result of
bargain at arm's length. Nothing herein is intended to prevent Secured Party,
Banks or any Debtor from resorting to judicial process at either party's option.

         Section 5.13 Assignment of Secured Party's Duties. Secured Party's
duties and rights hereunder may be assigned and transferred from time to time to
another Bank or other Person in accordance with the terms of the Loan Agreement,
in which case, such transferee shall have the rights and duties of Secured Party
under this Security Agreement.

         Section 5.14 Compliance With Other Laws. Administrative Agent and each
Bank may comply with any applicable state or federal law requirements in
connection with a disposition of the Collateral and compliance will not be
considered adversely to affect the commercial reasonableness of any sale of the
Collateral.

                            ARTICLE 6 - MISCELLANEOUS

         Section 6.1 Preservation of Liability. Neither this Security Agreement
nor the exercise by Secured Party, for the ratable benefit of Banks, of (or the
failure to so exercise) any right conferred herein or by law shall be construed
as relieving any person or entity liable on the Secured Obligations from
liability on the Obligations and for any deficiency thereon.

         Section 6.2 Survival of Agreements. All representations and warranties
of Debtor herein, and all covenants and agreements herein not fully performed
before the effective date of this Security Agreement, shall survive such date.

         Section 6.3 Notice. Except as otherwise provided herein, all notices,
demands, requests, and communications permitted or required under this Agreement
shall be delivered in the time and manner as required by the Loan Agreement.

                                     K-2-10
<PAGE>   42

         Section 6.4 Amendment and Waiver. This Security Agreement may not be
amended nor may any of its terms be waived except in writing duly signed by the
party against whom enforcement of the amendment or waiver is sought.

         Section 6.5 Invalidity. If any provision of this Security Agreement is
rendered or declared illegal, invalid, or unenforceable by reason of any
existing or subsequently enacted legislation or by a judicial decision that has
become final, all of the remaining provisions shall remain in full force and
effect.

         Section 6.6 Successors and Assigns. The covenants, representations,
warranties, and agreements herein set forth shall be binding upon Debtor and
shall inure to the benefit of Secured Party, for the ratable benefit of Banks,
and their heirs, legal representatives, successors, and assigns.

         Section 6.7 Conflicting Provisions. To the extent any irreconcilable
conflicts or inconsistencies exist between the terms of this Security Agreement
and the Loan Agreement, the terms of the Loan Agreement shall govern and
control.

         Section 6.8 CONSTRUCTION. THIS SECURITY AGREEMENT HAS BEEN MADE IN AND
THE SECURITY INTEREST GRANTED HEREBY IS GRANTED IN, AND EACH SHALL BE GOVERNED
BY THE LAWS OF, THE STATE OF TEXAS (EXCEPT TO THE EXTENT THAT THE LAWS OF ANY
OTHER JURISDICTION GOVERN THE PERFECTION, PRIORITY, OR FORECLOSURE OF THE
SECURITY INTEREST GRANTED HEREBY) AND OF THE UNITED STATES OF AMERICA, AS
APPLICABLE, IN ALL RESPECTS, INCLUDING MATTERS OF CONSTRUCTION, VALIDITY,
ENFORCEMENT, AND PERFORMANCE.

         Section 6.9 ENTIRE AGREEMENT. THIS SECURITY AGREEMENT CONSTITUTES THE
ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF
AND SHALL SUPERSEDE ANY PRIOR AGREEMENT BETWEEN THE PARTIES HERETO, WHETHER
WRITTEN OR ORAL, RELATING TO THE SUBJECT HEREOF. FURTHERMORE, IN THIS REGARD,
THIS SECURITY AGREEMENT AND THE OTHER WRITTEN CREDIT DOCUMENTS REPRESENT,
COLLECTIVELY, THE FINAL AGREEMENT AMONG THE PARTIES THERETO AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENT
OF SUCH PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                     K-2-11
<PAGE>   43

                  IN WITNESS HEREOF, Debtor and Secured Party have caused this
instrument to be duly executed as of the date first above written.

                                        DEBTOR:

                                        EGL EAGLE GLOBAL LOGISTICS, LP,
                                        a Delaware limited partnership

                                        By:   EGL MANAGEMENT, LLC , a  Delaware
                                              limited liability company,
                                              its general partner

                                        By: ___________________________________

                                        Name: _________________________________

                                        Title: ________________________________

                                        EGL DELAWARE LIMITED LIABILITY COMPANY,
                                        a Delaware limited liability company

                                        By: ___________________________________

                                        Name: _________________________________

                                        Title: ________________________________

                                        EGL Management, LLC, a Delaware limited
                                        liability company

                                        By: ___________________________________

                                        Name: _________________________________

                                        Title: ________________________________

                                        EGL (Canada) HOLDING CO., a Delaware
                                        corporation

                                        By: ___________________________________

                                        Name: _________________________________

                                        Title: ________________________________

                                        EAGLE MARITIME SERVICES, INC., a Texas
                                        corporation

                                        By: ___________________________________

                                        Name: _________________________________

                                        Title: ________________________________

                                     K-2-12
<PAGE>   44

                                        EAGLE USA IMPORT BROKERS, INC., a Texas
                                        corporation

                                        By: ___________________________________

                                        Name: _________________________________

                                        Title: ________________________________

                                        EAGLE URBAN RENEWAL CORPORATION, a New
                                        Jersey Urban Renewal Entity

                                        By: ___________________________________

                                        Name: _________________________________

                                        Title: ________________________________

                                        EAGLE INTERNATIONAL HOLDINGS, INC., a
                                        Delaware corporation

                                        By: ___________________________________

                                        Name: _________________________________

                                        Title: ________________________________

                                        EAGLE PARTNERS, a Texas general
                                        partnership

                                        By:  EUSA HOLDINGS, INC., a Delaware
                                             corporation, Managing Partner

                                        By: ___________________________________

                                        Name: _________________________________

                                        Title: ________________________________

                                     K-2-13
<PAGE>   45

                                        EAGLE PARTNERS, LP, a Texas limited
                                        partnership

                                        By:  EUSA Holdings, Inc., its general
                                             partner

                                        By: ___________________________________

                                        Name: _________________________________

                                        Title: ________________________________

                                        EUSA PARTNERS, INC., a Delaware
                                        corporation

                                        By: ___________________________________

                                        Name: _________________________________

                                        Title: ________________________________

                                        CIRCLE INTERNATIONAL, INC., a Delaware
                                        corporation

                                        By: ___________________________________

                                        Name: _________________________________

                                        Title: ________________________________

                                        CIRCLE INTERNATIONAL GROUP, INC., a
                                        Delaware corporation

                                        By: ___________________________________

                                        Name: _________________________________

                                        Title: ________________________________

                                        EUSA HOLDINGS, INC., a Delaware
                                        corporation

                                        By: ___________________________________

                                        Name: _________________________________

                                        Title: ________________________________

                                        Address:   15350 Vickery Drive
                                                   Houston, Texas 77032

                                     K-2-14
<PAGE>   46

ACKNOWLEDGED AND AGREED TO:

BANK OF AMERICA, N.A., as Administrative
Agent on behalf of itself and the other Banks

By: __________________________________________
        David Johanson, Vice President

                                     K-2-15

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