Document:

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                                 Page 234 of 272

                                  EXHIBIT 10-14
                                  -------------

                          PORTFOLIO PURCHASE AGREEMENT
                          ----------------------------

         PORTFOLIO PURCHASE AGREEMENT, effective as of September 1, 2000 by and
among CHEYENNE LEASING COMPANY, a New York joint venture ("Cheyenne"), GENESEE
VENTURES, INC., a New York corporation ("Genesee Ventures"), TAYLOR-BOLANE
ASSOCIATES, INC., a New York corporation ("Taylor-Bolane"), GENESEE CORPORATION,
a New York corporation ("Genesee"), ICON CHEYENNE LLC, a Delaware limited
liability company ("Purchaser") and each of the members of Purchaser as set
forth on the signature page hereto, each a Delaware limited partnership
(individually, a "Member" and, collectively, the "Members"). With respect to the
particular Assets listed on the Schedule of Assets as being owned by it, each of
Cheyenne and Genesee Ventures is sometimes individually referred to herein as
the "Seller". Cheyenne, Genesee Ventures (in its capacity as a joint venture
partner of Cheyenne and not as a Seller) and Taylor-Bolane are sometimes
collectively referred to herein as the "Sale Parties".

                              W I T N E S S E T H:

         WHEREAS, Seller desires to sell or cause the sale to Purchaser, and
Purchaser desires to purchase from Seller, certain assets and interests pursuant
to the terms of this Agreement;

         WHEREAS, Genesee Ventures and Taylor-Bolane are the joint venture
partners of Cheyenne, and, in such capacities, are joining in this Agreement for
the purpose of being directly obligated by the provisions of Articles 5, 6, 7,
11, 13 and 14 and Sections 3.5 and 3.6(a) hereof, as applicable;

         WHEREAS, Genesee is the parent corporation of Genesee Ventures and the
owner of a majority or more of Cheyenne, and is joining this Agreement for the
purpose of being directly obligated by the provisions of Articles 8, 11, 13 and
14 and Sections 3.5 and 3.6(a) hereof, as applicable; and

         WHEREAS, the Members are all of the members of Purchaser and are
joining this Agreement for the purpose of being directly obligated by the
provisions of Articles 10, 13 and 14 and Section 3.6(b) hereof, as applicable.

         NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein and other valuable consideration, and subject to the terms and
conditions herein, the parties hereto agree as follows:
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                                Page 235 of 272

                                   DEFINITIONS
                                   -----------

         The parties agree that the following terms used in this Agreement shall
have the following meanings:

         "Affiliate" means, when used with reference to a specific Person, (a)
any Person that directly or indirectly through one or more intermediaries
controls or is controlled by or is under common control with the specified
Person, (b) any person that is a shareholder, officer, director or partner in,
the specified Person or of which the specified Person is a shareholder, officer,
director or partner, or (c) any Person that is the beneficial owner of, or
controls, ten percent (10%) or more of any class of voting securities of, or any
analogous equity interest in, the specified Person.

         "Agreement" means this Portfolio Purchase Agreement, as amended and in
effect from time to time.

         "Aggregate Purchase Price" has the meaning set forth in Section 3.1
hereof.

         "Applicable Law" means any law, rule, regulation, order, judgment or
decree issued or promulgated by any Governmental Authority.

         "Arrangement Fee" has the meaning set forth in Section 3.5 hereof.

         "Assets" means all of the following assets:

                  (a)      all of Seller's title to, interest in and rights
                           under the Equipment;

                  (b)      all of Seller's title to, interest in and rights
                           under the Leases; and

                  (c)      all of Seller's title to, interest in and rights
                           under the related Lease Documents.

         "Assignment and Assumption Agreement" means an instrument in the form
attached hereto as Exhibit B-1 or B-2, as applicable, or other form acceptable
to Purchaser in its sole discretion.

         "Assumed Liabilities" has the meaning set forth in Section 2.2 hereof.

         "Bankruptcy Event" means (a) when a Person (i) commences a voluntary
case, (ii) consents to the entry of an order for relief against it in an
involuntary case, (iii) consents to the appointment of a Custodian of it or for
all or substantially all of its property, (iv) makes a general assignment for
the benefit of its creditors, (v) is the debtor in an involuntary case which is
not dismissed within sixty (60) days of the commencement thereof, (vi) fails to
pay its debts as such debts become due, or (vii) takes corporate, company or
partnership action in furtherance of any of the foregoing; or (b) when a court
of competent jurisdiction enters an order or decree under any Bankruptcy Law
that (i) provides for relief against a Person in an involuntary case, (ii)
appoints a Custodian of a Person for all or substantially all of its property,
or (iii) orders the liquidation of a Person.
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                                Page 236 of 272

         "Bankruptcy Law" means Title 11, United States Code or any similar
federal or state law for the relief of debtors.

         "Bill of Sale" means an instrument in the form attached hereto as
Exhibit A-1 or A-2, as applicable, or other form acceptable to Purchaser in its
sole discretion.

         "Business Day" means any day on which banks may conduct business in New
York, New York.

         "Certificate of Delivery and Acceptance" means the certificate of
delivery and acceptance executed by a Lessee at the commencement of a Lease with
respect to the Equipment which is subject to the Lease indicating that such
Equipment has been accepted by the Lessee, and affirming that such Lease is in
full force and effect.

         "Cheyenne" has the meaning set forth in the preamble hereof.

         "Cheyenne Obligors" has the meaning set forth in Section 14.1 hereof.

         "Claim" has the meaning set forth in Section 13.1 hereof.

         "Closing" means a closing at which Seller and Purchaser transfer and
deliver all documents and instruments necessary to consummate the purchase and
sale of all or a portion of the Assets having an aggregate Equipment Cost not
less than the minimum amount established, from time to time, by Purchaser in its
sole discretion.

         "Closing Date" means the date on which the parties hereto shall close
the purchase and sale of all or a portion of the Assets.

         "Closing Schedule" has the meaning set forth in Section 4.2 hereof.

         "Consent and Amendment" means the consent and amendment executed by
Seller, as borrower, Purchaser and Lender in connection with the assumption of
the applicable Non-Recourse Debt, acknowledging such transaction and, if
applicable, effecting certain amendments to the Loan Documents, all in the form
attached hereto as Exhibit D-1 or D-2, as applicable, or in a form otherwise
acceptable to Purchaser in its sole discretion.

         "Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.

         "Default" shall mean any event which, but for the giving of notice, or
the passage of time, or both, would constitute an event of default.

         "Document Sets" means the two (2) document sets retained by Seller and
Purchaser, respectively, and containing copies of all Lease Documents and Loan
Documents, which copies are consecutively numbered for identification purposes.

         "DOJ" shall mean the United States Department of Justice.

         "Effective Date" means the effective date as set forth in the preamble
to this Agreement.

         "Equipment" means the equipment described in the Schedule of Assets.
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                                Page 237 of 272

         "Equipment Cost" means the original cost of the Equipment, including
any delivery and installation costs and any sales taxes and other similar "soft"
costs.

         "FTC" shall mean the United States Federal Trade Commission.

         "GAAP" means United States Generally Accepted Accounting Principals
consistently applied.

         "Genesee Ventures" has the meaning set forth in the preamble hereof.

         "Governmental Authority" means any federal, state or local governmental
body, including any court, administrative board, general commission or
arbitrator or otherwise.

         "HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act
of 1976.

         "Indemnified Party" has the meaning set forth in Section 13.5 hereof.

         "Indemnifying Party" has the meaning set forth in Section 13.5 hereof.

         "Lease Documents" means, as applicable, originals, certified
photostatic copies or copies of the Leases, Certificates of Delivery and
Acceptance, guaranties, Remarketing Agreements, financing statements on Form
UCC-1, opinions of counsel, corporate or other diligence documents, certificates
of title, insurance certificates and/or letters of self-insurance, vendor
documents, compliance certificates, landlord's estoppel certificates and any
other present or future documents and instruments applicable to the transactions
contemplated by the Lease, together with any and all modifications and
amendments to the foregoing, all in form and substance reasonably acceptable to
Purchaser.

         "Leases" means the leases described in the Schedule of Assets,
including, to the extent applicable, an original (unless any such original is
held by the original lessor thereunder, and then a certified copy) of each
master lease, if any, and an original (unless any such original is held by a
Lender as security for a Non-Recourse Debt, and then a certified copy) of each
applicable Rental Schedule (but not other rental schedules), if any, but in any
event an original (unless any such original is held by a Lender as security for
a Non-Recourse Debt, and then a certified copy) of all documents and instruments
of similar tenor which constitute chattel paper under the applicable Uniform
Commercial Code, and any modifications and amendments to the foregoing.

         "Lender" means the lender under a Loan Document.

         "Lessee" means the lessee under a Lease.

         "Liens" means:

                  (a)      any encumbrance, mortgage, pledge, lien, charge or
                           security interest of any kind upon any property or
                           assets of the applicable Person, whether now owned or
                           hereafter acquired, or upon the income or profits
                           therefrom;
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                                Page 238 of 272

                  (b)      any arrangement or agreement which prohibits the
                           applicable Person from creating encumbrances,
                           mortgages, pledges, liens, charges or security
                           interests, or any arrangement or agreement
                           subordinating the interest of the applicable Person
                           to another Person;

                  (c)      the acquisition of, or the agreement to acquire, any
                           property or asset upon conditional sale or subject to
                           any other title retention agreement, device or
                           arrangement (including a capitalized lease); or

                  (d)      the sale, assignment, pledge or transfer for security
                           of any accounts, general intangibles or chattel paper
                           of the applicable Person, with or without recourse.

         "Loan Documents" means, as applicable, all promissory notes, loan
agreements, security agreements, financing statements on Form UCC-1, and other
present or future documents and instruments evidencing or securing the
Non-Recourse Debt, together with any and all modifications and amendments to the
foregoing.

         "Material Adverse Effect" shall mean an effect on the specified Person
which could materially and adversely affect the business, assets or condition,
financial or otherwise, or the results of operations, of the specified Person or
any subsidiary (on an individual basis) or the Person and its subsidiaries (on a
consolidated basis), or the ability of the specified Person to meet its
obligations under the Lease Documents, Loan Documents or Seller Documents (or
similar instruments), as applicable, or the validity or enforceability of any of
the foregoing.

         "Non-Recourse Debt" means the outstanding non-recourse debt of Seller
secured by the Assets as set forth on the Schedule of Non-Recourse Debt.
         "Notice and Acknowledgment of Assignment" means the notice and
acknowledgment of assignment executed by Seller, as lessor, Lessee, as lessee,
Purchaser and Lender in connection with the assignment of the applicable Leases,
acknowledging such transactions and confirming certain information for the
benefit of Purchaser, all in the form attached hereto as Exhibit C-1, C-2 or
C-3, as applicable, or in a form otherwise acceptable to Purchaser in its sole
discretion.

         "Noticed Claims" has the meaning set forth in Section 13.3 hereof.

         "Obligors" has the meaning set forth in Section 14.1 hereof.

         "Permitted Liens" means Liens as expressly contemplated by the Lease
Documents and the Lien of the applicable Lender.

         "Person" means an individual person, corporation, company, association,
partnership, joint venture, trust, business trust, trustee, organization,
business, or government or any governmental agency or political subdivision
thereof.

         "Purchase Price" has the meaning set forth in Section 3.2 hereof.
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                                Page 239 of 272

         "Purchaser" has the meaning set forth in the preamble hereof.

         "Rental Schedule" means the rental schedule, if any, executed by Lessee
pursuant to a master lease, if any, all as further described on the Schedule of
Assets.

         "Remarketing Agreements" has the meaning set forth in Section 5.6(g)
hereof.

         "Sale Parties" has the meaning set forth in the preamble hereof.

         "Schedule of Assets" means the schedule attached hereto as Schedule 1,
which sets forth a description of the Assets and the portion of the Aggregate
Purchase Price allocable to each Lease and the Equipment covered thereunder and
Lease Documents related thereto.

         "Schedule of Non-Recourse Debt" means the schedule attached hereto as
Schedule 2, which sets forth a description of the Non-Recourse Debt and
identifies the Loan Documents and the Lenders.

         "Seller" has the meaning set forth in the preamble hereof.

         "Seller Documents" means this Agreement, the Bill of Sale, the
Assignment and Assumption Agreement, the Notice and Acknowledgment of
Assignment, the Consent and Amendment, any other documents and instruments
necessary to assign legal or equitable title to the Assets, financing statements
on Form UCC-3 assigning any "protective" or "informational" filings against
Lessees (unless such filings have been assigned to one or more Lenders), or, in
the absence of such filings, financing statements on Form UCC-1 constituting
protective or informational filings against such Lessees and naming any
applicable Lender as assignee, if required, and any other document, instrument
or agreement attached to any of the foregoing or otherwise related thereto, all
in form and substance acceptable to Purchaser in its sole discretion.

         "Taylor-Bolane" has the meaning set forth in the preamble hereof.

         PURCHASE AND SALE OF ASSETS; ASSUMPTION OF CERTAIN LIABILITIES
         --------------------------------------------------------------

           Purchase and Sale of Assets
           ---------------------------
         Subject to the terms and conditions hereof, Seller hereby agrees to
sell, transfer, assign and deliver to Purchaser from time to time, and Purchaser
hereby agrees to purchase, acquire and take assignment and delivery from Seller
of, the Assets, free and clear of all Liens other than Permitted Liens.

           Assumption of Certain Liabilities
           ---------------------------------
         Subject to the terms and conditions hereof, Purchaser hereby agrees to
assume from time to time only the liabilities and obligations of Seller under
the Leases and related Lease Documents, and with respect to the Non-Recourse
Debt (collectively, the "Assumed Liabilities"), in each case arising from and
after the Closing Date with respect to the particular Assets to which the
Assumed Liabilities relate.
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                                Page 240 of 272

                  AGGREGATE PURCHASE PRICE; ADJUSTMENT; PAYMENT
                  ---------------------------------------------

           Aggregate Purchase Price
           ------------------------
         The aggregate purchase price for the Assets shall be an amount equal to
Fifteen Million Two Hundred Twenty-One Thousand Seven Hundred Seventy-One
Dollars ($15,221,771), subject to adjustment as set forth in Section 3.3 hereof
(the "Aggregate Purchase Price").

           Allocation of Aggregate Purchase Price
           --------------------------------------
         The Aggregate Purchase Price shall be allocated among the Assets as set
forth in the Schedule of Assets. The portion of the Aggregate Purchase Price
allocable to the Assets being purchased and sold at a Closing is sometimes
referred to as the "Purchase Price".

           Adjustment of Purchase Price
           ----------------------------
         The Purchase Price with respect to the Assets to be purchased at each
Closing shall be adjusted by (a) subtracting therefrom an amount equal to the
aggregate amount of all cash received under the applicable Leases, including
payments of casualty or stipulated loss values, early termination values and
other amounts received by Seller, on or after September 1, 2000 and (b) adding
thereto interest at the rate of (i) ten percent (10%) per annum through December
1, 2000 and (ii) eight percent (8%) thereafter, in each case on the balance of
the Purchase Price, as adjusted from time to time in accordance with this
Section 3.3, outstanding from September 1, 2000 to the applicable Closing Date.

           Payment
           -------
         At each Closing, Purchaser shall pay to Seller the Purchase Price by
wire transfer of immediately available funds in US dollars to an account or
accounts designated by Seller in writing.

           Arrangement Fee
           ---------------
         At each Closing, Cheyenne shall be responsible for the payment of an
arrangement fee (the "Arrangement Fee") to Spinnaker Capital Corporation in an
amount equal to the product of (a) Two Hundred Twenty-Five Thousand Dollars
($225,000) multiplied by (b) a fraction, the numerator of which shall be the
Purchase Price of the Assets being purchased and sold at such Closing exclusive
of any interest added thereto pursuant to Section 3.3 hereof, and the
denominator of which shall be the Aggregate Purchase Price exclusive of any such
interest. and The Sale Parties and Genesee jointly and severally agree to
indemnify and hold Purchaser harmless from and against any and all Claims
resulting or arising from any failure or breach by Cheyenne of its obligation
under this Section 3.5.

           Taxes, Fees
           -----------
         (a) Seller shall be liable for all fees and charges (exclusive of stamp
taxes), if any, created by the filing and the recording of all financing
statements on Form UCC-3 assigning any "protective" or "informational" filings
against Lessees (unless such filings have been assigned to one or more Lenders),
or in the absence of such filings, financing statements on Form UCC-1
constituting protective or informational filings against such Lessees and naming
any applicable Lender as assignee. The Sale Parties and Genesee jointly and
severally agree to indemnify and hold Purchaser harmless from and against any
and all Claims resulting or arising from any failure or breach by Seller of its
obligations under this Section 3.6(a).

         (b) Purchaser shall be liable for all (i) federal, state and local
sales taxes created by or as a result of the transactions contemplated hereby,
(ii) all stamp taxes, if any, created by the
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                                Page 241 of 272

filing and the recording of all documents and instruments reflecting Purchaser's
interest in any of the Assets sold hereunder and (iii) all fees, charges and
stamp taxes, if any, created by the filing and the recording of all documents
and instruments naming Purchaser as debtor and naming a Lender as secured party.
In the event that a taxing jurisdiction shall audit or otherwise question
Seller's failure to pay any sales tax in connection with the transactions
contemplated hereby, Purchaser agrees to provide Seller with any applicable
resale exemption certificate or other evidence of its exemption from such tax.
Purchaser and the Members jointly and severally agree to indemnify and hold the
Sale Parties harmless from and against any and all Claims resulting or arising
from any failure or breach by Purchaser of its obligations under this Section
3.6(b).

                                     CLOSING
                                     -------

             In General
             ----------
           Subject to the satisfaction or written waiver of the conditions set
forth in Section 12, Purchaser and Seller shall close the purchase by Purchaser
of the Assets in one or more tranches, with the first such tranche occurring on
or about October 20, 2000 and any subsequent tranches each occurring on the
later of such date or five (5) Business Days after Seller's delivery to
Purchaser of each of the documents and instruments set forth and described in
Section 4.2 hereof. Subject to the terms and conditions hereof, the parties
hereto intend to be and remain obligated to consummate the transactions
contemplated hereby and the parties intend that there shall be no termination or
"upset" date or otherwise with respect to such obligations.

           Procedure
           ---------
         With respect to each proposed closing, Seller shall deliver to
Purchaser at least five (5) Business Days prior to a proposed Closing Date:

                  (a)      a schedule (the "Closing Schedule") setting forth a
                           description of the Assets to be sold to Purchaser at
                           such Closing, the Equipment Cost of the Equipment
                           included therein, which Equipment Cost shall not, in
                           the aggregate, be less than the minimum amount
                           established, from time to time, by Purchaser in its
                           sole discretion, and the Purchase Price, calculated
                           in accordance with Section 3 hereof;

                  (b)      each Lease Document and Loan Document relevant to the
                           proposed transaction as collectively certified by
                           Seller to be all of the Lease Documents and Loan
                           Documents relevant to the proposed transaction and
                           identical to the corresponding documents contained in
                           the Document Sets at the relevant page numbers;

                  (c)      an original of each Seller Document relevant to the
                           proposed transaction; and

                  (d)      such other documents and information as Purchaser may
                           reasonably request.

           Closing Costs
           -------------
         Except to the extent otherwise expressly set forth herein, each party
hereto shall be liable for its own costs and expenses, including attorneys'
fees, in connection with this Agreement and the transactions contemplated
hereby.
<PAGE>
                                Page 242 of 272

               REPRESENTATIONS AND WARRANTIES OF THE SALE PARTIES
               --------------------------------------------------

         As of the date of this Agreement and as of each Closing Date, the Sale
Parties jointly and severally represent and warrant to Purchaser as follows:

           Organization
           ------------
         Cheyenne is a joint venture validly existing under the laws of the
State of New York and is qualified to do business and in good standing as a
foreign joint venture under the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its business requires such
qualification, except where the failure to be so qualified would not result in a
Material Adverse Effect. Cheyenne has full power, authority and legal right to
(a) execute and deliver, and to perform and observe the provisions of this
Agreement and each of the other Seller Documents to which Cheyenne is a party,
(b) execute and deliver, and to perform and observe the provisions of each of
the Lease Documents and Loan Documents, to which it is a party, (c) acquire,
hold, and lease the Equipment and (d) carry out the transactions contemplated in
this Agreement and each of the other Seller Documents to which it is a party.

           Authority
           ---------
         (a) The execution and delivery of this Agreement and each of the other
Seller Documents to which Cheyenne is a party, and the consummation of each of
the transactions contemplated hereby and thereby, have been duly and validly
authorized by or on behalf of Cheyenne; and this Agreement and such other Seller
Documents have been, or will be when executed, duly executed and delivered by
Cheyenne and constitute the valid and legally binding obligations of Cheyenne,
enforceable in accordance with their respective terms, except as enforcement may
be limited by bankruptcy, insolvency or similar laws or general principles of
equity affecting the enforcement of creditors' rights generally from time to
time in effect.

         (b) The execution and delivery of this Agreement and each of the other
Seller Documents to which Cheyenne is a party, the compliance with the
provisions hereof and thereof, and the consummation of the transactions herein
and therein contemplated have not and will not result in (i) a breach or
violation of (A) any Applicable Law applicable to Cheyenne now in effect, (B)
any provision of the constituent documents of Cheyenne, (C) any agreement or
instrument to which Cheyenne is a party or by which it or any of its properties
or assets is bound or affected, (ii) the acceleration of any obligation of
Cheyenne, or (iii) the creation of any Lien upon the Equipment.

           Title to Assets
           ---------------
         (a) Immediately prior to the time of a Closing, Cheyenne will have good
and marketable indefeasible title to, and shall be the sole owner of, the Assets
listed on the applicable Closing Schedule as being owned by it, and there shall
have been no other sale, assignment, encumbrance or pledge thereof by Cheyenne,
except Permitted Liens, and immediately upon the transfer and assignment
contemplated by this Agreement, Purchaser shall have good and marketable
indefeasible title to, and will be the sole owner of, the Assets listed on the
applicable Closing Schedule as being owned by Cheyenne, subject to Permitted
Liens.

         (b) The information set forth in the Schedule of Assets, Schedule of
Non-Recourse Debt and each Closing Schedule with respect to the Assets and the
Non-Recourse Debt to be assigned by Cheyenne is true, correct and complete in
all respects.
<PAGE>
                                Page 243 of 272

           Litigation
           ----------
         There are no actions, suits, proceedings or investigations at law or in
equity pending or, to the reasonable knowledge of the Sale Parties, threatened,
before any Governmental Authority against or affecting Cheyenne or any of its
Affiliates which, if decided adversely, could have a Material Adverse Effect on
such Person.

           Compliance With Law, Etc.
           -------------------------
         Cheyenne is not (a) in violation of any term or provision of its
constituent documents, or (b) in violation of or default under any term or
provision of any agreement or instrument to which Cheyenne is a party or by
which Cheyenne or any of its properties or assets is bound or affected, or (c)
in violation of any judgment, order, writ, injunction, decree or demand of any
court or Governmental Authority, or (d) in violation of any Applicable Law by
which Cheyenne or any of its properties or assets is bound or affected. The
execution, delivery and performance of this Agreement and each of the other
Seller Documents, and the consummation of the transactions contemplated hereby
and thereby will not violate or constitute a Default under the constituent
documents of Cheyenne or any term or provision of any agreement or instrument to
which Cheyenne is a party or by which Cheyenne or any of its properties or
assets is bound or affected, and none of such agreements or instruments imposes
or is made in contemplation of any obligation which is or will be inconsistent
with any other obligation imposed upon Cheyenne under this Agreement or any of
the other Seller Documents. Except for any filings and approvals required under
the HSR Act, no approval by, authorization of, or filing with any Governmental
Authority or any third party is necessary in connection with the execution and
delivery of this Agreement or any of the other Seller Documents by Cheyenne.

           Leases and Loans
           ----------------
         (a) Each of the Leases and the other Lease Documents to be assigned by
Cheyenne at a Closing has been duly authorized, executed and delivered by
Cheyenne and the Lessees, the Lessees have accepted the Equipment under such
Leases, and the Leases and the other Lease Documents are and will, at the time
of such Closing, be valid, binding and enforceable against the Lessees in
accordance with their respective terms and in full force and effect. The
representations and warranties made by the Lessees in such Lease Documents are
true and correct on and as of the Closing Date as if made thereon (unless such
representations and warranties specifically relate to an earlier date); the
Lessees have not taken any action which might result in the creation of any Lien
on the Equipment, except Permitted Liens; no change has occurred in the
condition, financial or otherwise, of any Lessee which might have a Material
Adverse Effect on such Lessee; Cheyenne has not breached any of its obligations
under any the Lease Documents; all permits, licenses and certificates which are
necessary to permit the use of the Equipment in accordance with the provisions
of the Leases have been obtained and are in full force and effect; there has
been no material damage or event of loss with respect to the Equipment nor is
there any condemnation proceeding pending with respect thereto; no Default
exists under any of such Leases or the other Lease Documents; each Lessee
executed only one (1) original counterpart of each Lease, denominated as
counterpart no. 1 or "Original"; no such Lease is a "consumer lease" as defined
in Section 2A-103(1)(e) of the Uniform Commercial Code; and the Lessees under
such Leases are responsible for the maintenance of the Equipment and such Leases
require the Lessees to assume all risk of loss for such Equipment.

         (b) Each of the Loan Documents evidencing and securing the Non-Recourse
Debt to be assumed from Cheyenne at a Closing has been duly authorized, executed
and delivered by Cheyenne. The representations and warranties made by Cheyenne
in such Loan Documents are
<PAGE>
                                Page 244 of 272

true and correct on and as of the Closing Date as if made thereon (unless such
representations and warranties specifically relate to an earlier date); Cheyenne
has not taken any action which might result in the creation of any Lien on the
Equipment, except Permitted Liens; Cheyenne has not breached any of its
obligations under any of such Loan Documents; and no Default exists under any of
such Loan Documents.

         (c) Cheyenne has delivered to Purchaser on or before the applicable
Closing Date, a true, correct and complete copy of the Lease Documents and Loan
Documents to be assigned by it at a Closing.

         (d) The Lessees' obligations under the Leases to be assigned by
Cheyenne are absolute and unconditional and are not subject to any reductions,
abatements, set offs, defenses or counterclaims and, to the Sale Parties'
knowledge, no such rights have been asserted or threatened with respect to such
Leases. No payment under any of the Lease Documents to be assigned by Cheyenne
has been prepaid.

         (e) Cheyenne has complied in connection with the transactions
contemplated by the Lease Documents and Loan Documents to be assigned by it, and
will continue to so comply as of the Closing Date, with all Applicable Laws,
including, without limitation, usury, equal credit opportunity,
truth-in-lending, disclosure, and recording laws.

         (f) Except as set forth on Schedule 5.6(f) attached hereto, which
Schedule describes in reasonable detail all self-insurance arrangements approved
by Cheyenne with respect to one or more Leases to be assigned by it, the Lessees
under such Leases, and Cheyenne under the related Non-Recourse Debt, are
required to maintain casualty insurance with respect to the Equipment; as of the
Closing Date, all policies of insurance required by such Lease Documents and
Loan Documents have been validly issued and remain in full force and effect; and
Cheyenne has caused and will cause to be performed any and all acts required to
assign its rights and interests to Purchaser, including, without limitation,
notification of insurers, assignment of policies or interests therein and
establishment of co-insured and joint loss payee rights in favor of Purchaser.

         (g) Except as set forth on Schedule 5.6(g) attached hereto, which
Schedule identifies all remarketing agreements ("Remarketing Agreements")
between Cheyenne and various third parties with respect to the Assets, all
brokers and other persons having a claim for a commission, fee or like
arrangement arising out of any Lease to be assigned by Cheyenne or the related
Non-Recourse Debt have been fully paid and satisfied, and all such brokers or
other Persons are duly licensed and authorized to refer such transactions to
Cheyenne.

         (h) As of the Closing Date, none of the Lessees leasing Equipment under
Leases to be assigned by Cheyenne is subject to any proceedings under any
Bankruptcy Law.

         (i) The Leases to be assigned by Cheyenne and the related Non-Recourse
Debt are United States dollar-denominated obligations.

         (j) Neither the Leases or the Remarketing Agreements to be assigned by
Cheyenne nor the related Non-Recourse Debt requires the prior consent of or
notification to the Lessees or the Lenders or contain any other restriction on
the transfer, assignment or assumption, as applicable, of such Leases or
Non-Recourse Debt (other than a consent or waiver of any such restriction that
has been obtained prior to the Closing Date, and a copy of which has been
provided to Purchaser prior to the Closing Date).
<PAGE>
                                Page 245 of 272

         (k) No Lease to be assigned by Cheyenne is an obligation of any
Governmental Authority.

         (l) The Lessees under the Leases to be assigned by Cheyenne, and the
Lenders under the related Non-Recourse Debt have been notified of the assignment
of such Leases to, and the assumption of such Non-Recourse Debt by, Purchaser
and each such Lessee and Lender has executed a Notice and Acknowledgment of
Assignment, a Consent and Amendment and/or one or more similar documents
acceptable to Purchaser, in its sole discretion, as applicable, a copy of each
of which has been provided to Purchaser prior to the Closing Date.

         (m) All of the Leases to be assigned by Cheyenne have been created in
the ordinary course of business of Cheyenne or were acquired by Cheyenne in the
ordinary course of its business. All such Leases are and have been reported on
Cheyenne's tax returns as "true leases", and Cheyenne has not received any
notice from the Internal Revenue Service challenging Cheyenne's treatment of any
such Lease as a true lease.

         (n) Except as otherwise set forth on Schedule 5.6(n) attached hereto,
which Schedule describes in reasonable detail all titling arrangements pursuant
to which any motor vehicles included in the Assets listed on the Schedule of
Assets as being owned by Cheyenne is titled other than in the name of Cheyenne,
all titled motor vehicles included in the Assets are titled in the name of
Cheyenne.

         (o) Except as otherwise set forth on Schedule 5.6(o) attached hereto,
the end of Lease purchase options available to the Lessees under the Leases to
be assigned by Cheyenne are at fair market value.

           Financial Statements
           --------------------
         All financial statements of Cheyenne, any Affiliate of Cheyenne and any
other Person furnished to Purchaser in connection herewith were prepared in
accordance with GAAP (except as therein otherwise set forth), and fairly present
the financial condition of the Persons covered thereby at the dates thereof and
the results of their operations for the periods covered thereby (subject to
year-end adjustments in the case of interim financial statements), and no such
Person has any known contingent liabilities of any material amount which are not
referred to in such financial statements or in the notes thereto. The assets of
each such Person are set forth in such financial statements.

           Changes in Condition
           --------------------
         Since the date of the most recently delivered financial statements
referred to in Section 5.7 hereof, such Persons have not been subject to any
Material Adverse Effect. Since such date, none of such Persons has entered into
any material transaction outside of the ordinary course of business.

           Tax Returns
           -----------
         Cheyenne and each of its Affiliates has filed all tax returns which are
required to be filed, and, if applicable, each such Person has paid, or made
adequate provision for the payment of, all taxes which have or may become due
pursuant to such returns, to assessments received or as a result of any matters
raised by audits or other causes known to such Person. The charges, accruals and
reserves on the books of such Person in respect of any taxes or other
governmental charges are adequate.
<PAGE>
                                Page 246 of 272

           Solvency
           --------
         (a) The fair salable value of the assets of Cheyenne exceeds, as of the
date hereof, and will, immediately following each Closing and after giving
effect to the application of the proceeds of such Closing, exceed the amount
that will be required to be paid on or in respect of its existing debts and
other liabilities (including contingent liabilities) as they mature.

         (b) The assets of Cheyenne do not, as of the date hereof, and will not,
immediately following each Closing and after giving effect to the application of
the proceeds of such Closing, constitute unreasonably small capital to carry out
its business as conducted or as proposed to be conducted.

         (c) Cheyenne does not intend to, or believe that it will, incur debts
beyond its ability to pay such debts as they mature taking into account the
timing of and amounts of cash to be received by Cheyenne, and the timing of and
amounts of cash to be payable on or in respect of indebtedness of Cheyenne.

           No Liability
           ------------
         Cheyenne has no liabilities or obligations to any Person in connection
with its acquisition and holding of the Assets listed on the Schedule of Assets
as being owned by it other than obligations pursuant to the related Non-Recourse
Debt.

           Disclosure
           ----------
         Neither this Agreement or any other Seller Document nor any Lease
Document or Loan Document contains any untrue statement of material fact or
omits to state a material fact necessary in order to make the statements
contained therein not misleading. There is no fact known to the Sale Parties
which has or in the future may (so far as the Sale Parties can now foresee) have
a Material Adverse Effect on Cheyenne.

           Incorporation by Reference
           --------------------------
         The representations and warranties of Cheyenne contained in each of the
Seller Documents, Lease Documents and Loan Documents are true and correct, and
such representations and warranties are incorporated in this Agreement as though
fully set forth herein.

           Brokers
           -------
         Except for the Arrangement Fee payable by Cheyenne to Spinnaker Capital
Corporation, no broker or any other Person has any claim for any commission fee
or the like arising out of or in connection with the transactions contemplated
hereby.

           Disclaimer
           ----------
         EXCEPT AS SPECIFICALLY SET FORTH HEREIN AND IN THE SCHEDULES AND
EXHIBITS HERETO, THE FOREGOING REPRESENTATIONS AND WARRANTIES ARE EXPRESSLY IN
LIEU OF ANY OTHER EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES OF THE SALE
PARTIES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, THE SELECTION, QUALITY OR
CONDITION OF THE EQUIPMENT, ITS MERCHANTABILITY, ITS SUITABILITY, ITS FITNESS
FOR A PARTICULAR PURPOSE, THE OPERATION OR PERFORMANCE OF THE EQUIPMENT OR THE
MAINTENANCE THEREOF OR PATENT INFRINGEMENT OR THE LIKE.
<PAGE>
                                Page 247 of 272

               REPRESENTATIONS AND WARRANTIES OF GENESEE VENTURES
               --------------------------------------------------

         As of the date of this Agreement and as of each Closing Date, Genesee
Ventures further represents and warrants to Purchaser as follows:

           Organization
           ------------
         Genesee Ventures is a corporation duly formed, validly existing and in
good standing under the laws of the State of New York, and is qualified to do
business and in good standing as a foreign corporation under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification, except where the failure to be so
qualified would not result in a Material Adverse Effect. Genesee Ventures has
full power, authority and legal right to (a) execute and deliver, and to perform
and observe the provisions of this Agreement and each of the other Seller
Documents to which it is a party, (b) execute and deliver, and to perform and
observe the provisions of each of the Lease Documents and Loan Documents to
which it is a party, (c) acquire, hold, and lease the Equipment, if applicable,
and (d) carry out the transactions contemplated in this Agreement and each of
the other Seller Documents to which it is a party.

           Authority
           ---------
         (a) The execution and delivery of this Agreement and each of the other
Seller Documents to which Genesee Ventures is a party, and the consummation of
each of the transactions contemplated hereby and thereby, have been duly and
validly authorized by or on behalf of Genesee Ventures; and this Agreement and
such other Seller Documents have been, or will be when executed, duly executed
and delivered by Genesee Ventures and constitute the valid and legally binding
obligations of Genesee Ventures, enforceable in accordance with their respective
terms, except as enforcement may be limited by bankruptcy, insolvency or similar
laws or general principles of equity affecting the enforcement of creditors'
rights generally from time to time in effect.

         (b) The execution and delivery of this Agreement and each of the other
Seller Documents to which Genesee Ventures is a party, the compliance with the
provisions hereof and thereof, and the consummation of the transactions herein
and therein contemplated have not and will not result in (i) a breach or
violation of (A) any Applicable Law applicable to Genesee Ventures now in
effect, (B) any provision of the constituent documents of Genesee Ventures, (c)
any agreement or instrument to which Genesee Ventures is a party or by which it
or any of its properties or assets is bound or affected, (ii) the acceleration
of any obligation of Genesee Ventures, or (iii) the creation of any Lien upon
the Equipment.

           Title to Assets
           ---------------
         (a) Immediately prior to the time of a Closing, Genesee Ventures will
have good and marketable indefeasible title to, and shall be the sole owner of,
the Assets listed on the applicable Closing Schedule as being owned by it, and
there shall have been no other sale, assignment, encumbrance or pledge thereof
by Genesee Ventures, except Permitted Liens, and immediately upon the transfer
and assignment contemplated by this Agreement, Purchaser shall have good and
marketable indefeasible title to, and will be the sole owner of, the Assets
listed on the applicable Closing Schedule as being owned by Genesee Ventures,
subject to Permitted Liens.

         (b) The information set forth in the Schedule of Assets, Schedule of
Non-Recourse Debt and each Closing Schedule with respect to the Assets and
Non-Recourse Debt to be assigned by Genesee Ventures is true, correct and
complete in all respects.
<PAGE>
                                Page 248 of 272

           Litigation
           ----------
         There are no actions, suits, proceedings or investigations at law or in
equity pending or, to the reasonable knowledge of Genesee Ventures, threatened,
before any Governmental Authority against or affecting Genesee Ventures or any
of its Affiliates which, if decided adversely, could have a Material Adverse
Effect on such Person.

           Compliance With Law, Etc.
           -------------------------
         Genesee Ventures is not (a) in violation of any term or provision of
its constituent documents, or (b) in violation of or default under any term or
provision of any agreement or instrument to which Genesee Ventures is a party or
by which it or any of its properties or assets is bound or affected, or (c) in
violation of any judgment, order, writ, injunction, decree or demand of any
court or Governmental Authority, or (d) in violation of any Applicable Law by
which Genesee Ventures or any of its properties or assets is bound or affected.
The execution, delivery and performance of this Agreement and each of the other
Seller Documents and the consummation of the transactions contemplated hereby
and thereby will not violate or constitute a Default under the constituent
documents or any term or provision of any agreement or instrument to which
Genesee Ventures is a party or by which it or any of its properties or assets is
bound or affected, and none of such agreements or instruments imposes or is made
in contemplation of any obligation which is or will be inconsistent with any
other obligation imposed upon Genesee Ventures under this Agreement or any of
the other Seller Documents. Except for any filings and approvals required under
the HSR Act, no approval by, authorization of, or filing with any Governmental
Authority or any third party is necessary in connection with the execution and
delivery of this Agreement or any of the other Seller Documents by Genesee
Ventures.

           Leases and Loans
           ----------------
         (a) Each of the Leases and the other Lease Documents to be assigned by
Genesee Ventures at a Closing has been duly authorized, executed and delivered
by Genesee Ventures and the Lessees, the Lessees have accepted the Equipment
under such Leases, and the Leases and the other Lease Documents are and will, at
the time of such Closing, be valid, binding and enforceable against the Lessees
in accordance with their respective terms and in full force and effect. The
representations and warranties made by the Lessees in such Lease Documents are
true and correct on and as of the Closing Date as if made thereon (unless such
representations and warranties specifically relate to an earlier date); the
Lessees have not taken any action which might result in the creation of any Lien
on the Equipment, except Permitted Liens; no change has occurred in the
condition, financial or otherwise, of any Lessee which might have a Material
Adverse Effect on such Lessee; Genesee Ventures has not breached any of its
obligations under any the Lease Documents; all permits, licenses and
certificates which are necessary to permit the use of the Equipment in
accordance with the provisions of the Leases have been obtained and are in full
force and effect; there has been no material damage or event of loss with
respect to the Equipment nor is there any condemnation proceeding pending with
respect thereto; no Default exists under any of such Leases or the other Lease
Documents; each Lessee executed only one (1) original counterpart of each Lease,
denominated as counterpart no. 1 or "Original"; no such Lease is a "consumer
lease" as defined in Section 2A-103(1)(e) of the Uniform Commercial Code; and
the Lessees under such Leases are responsible for the maintenance of the
Equipment and such Leases require the Lessees to assume all risk of loss for
such Equipment.

         (b) Each of the Loan Documents evidencing and securing the Non-Recourse
Debt to be assumed from Genesee Ventures at a Closing has been duly authorized,
executed and
<PAGE>
                                Page 249 of 272

delivered by Genesee Ventures. The representations and warranties made by
Genesee Ventures in such Loan Documents are true and correct on and as of the
Closing Date as if made thereon (unless such representations and warranties
specifically relate to an earlier date); Genesee Ventures has not taken any
action which might result in the creation of any Lien on the Equipment, except
Permitted Liens; Genesee Ventures has not breached any of its obligations under
any of such Loan Documents; and no Default exists under any of such Loan
Documents.

         (c) Genesee Ventures has delivered to Purchaser on or before the
applicable Closing Date, a true, correct and complete copy of the Lease
Documents and Loan Documents to be assigned by and assumed from it at a Closing.

         (d) The Lessees' obligations under the Leases to be assigned by Genesee
Ventures are absolute and unconditional and are not subject to any reductions,
abatements, set offs, defenses or counterclaims and, to Genesee Ventures'
knowledge, no such rights have been asserted or threatened with respect to such
Leases. No payment under any of the Lease Documents to be assigned by Genesee
Ventures has been prepaid.

         (e) Genesee Ventures has complied in connection with the transactions
contemplated by the Lease Documents and Loan Documents to be assigned by it, and
will continue to so comply as of the Closing Date, with all Applicable Laws,
including, without limitation, usury, equal credit opportunity,
truth-in-lending, disclosure, and recording laws.

         (f) Except as set forth on Schedule 6.6(f) attached hereto, which
Schedule describes in reasonable detail all self-insurance arrangements approved
by Genesee Ventures with respect to one or more Leases to be assigned by it, the
Lessees under such Leases, and Genesee Ventures under the related Non-Recourse
Debt, are required to maintain casualty insurance with respect to the Equipment;
as of the Closing Date, all policies of insurance required by such Lease
Documents and Loan Documents have been validly issued and remain in full force
and effect; and Genesee Ventures has caused and will cause to be performed any
and all acts required to assign its rights and interests to Purchaser,
including, without limitation, notification of insurers, assignment of policies
or interests therein and establishment of co-insured and joint loss payee rights
in favor of Purchaser.

         (g) Except as set forth on Schedule 6.6(g) attached hereto, which
Schedule identifies all Remarketing Agreements between Genesee Ventures and
various third parties with respect to the Assets, all brokers and other persons
having a claim for a commission, fee or like arrangement arising out of any
Lease to be assigned by Genesee Ventures or the related Non-Recourse Debt have
been fully paid and satisfied, and all such brokers or other Persons are duly
licensed and authorized to refer such transactions to Genesee Ventures.

         (h) As of the Closing Date, none of the Lessees leasing Equipment under
Leases to be assigned by Genesee Ventures is subject to any proceedings under
any Bankruptcy Law.

         (i) The Leases to be assigned by Genesee Ventures and the related
Non-Recourse Debt are United States dollar-denominated obligations.

         (j) Neither the Leases or the Remarketing Agreements to be assigned by
Genesee Ventures nor the related Non-Recourse Debt requires the prior consent of
or notification to the Lessees or the Lenders or contain any other restriction
on the transfer, assignment or assumption, as applicable, of such Leases or
Non-Recourse Debt (other than a consent or waiver of any such
<PAGE>
                                Page 250 of 272

restriction that has been obtained prior to the Closing Date, and a copy of
which has been provided to Purchaser prior to the Closing Date).

         (k) No Lease to be assigned by Genesee Ventures is an obligation of any
Governmental Authority.

         (l) The Lessees under the Leases to be assigned by Genesee Ventures,
and the Lenders under the related Non-Recourse Debt have been notified of the
assignment of such Leases to, and the assumption of such Non-Recourse Debt by,
Purchaser and each such Lessee and Lender has executed a Notice and
Acknowledgment of Assignment, a Consent and Amendment and/or one or more similar
documents acceptable to Purchaser, in its sole discretion, as applicable, a copy
of each of which has been provided to Purchaser prior to the Closing Date.

         (m) All of the Leases to be assigned by Genesee Ventures have been
created in the ordinary course of business of Genesee Ventures or were acquired
by Genesee Ventures in the ordinary course of its business. All such Leases are
and have been reported on Genesee Ventures' tax returns as "true leases", and
Genesee Ventures has not received any notice from the Internal Revenue Service
challenging Genesee Ventures' `treatment of any such Lease as a true lease.

         (n) Except as otherwise set forth on Schedule 6.6(n) attached hereto,
which Schedule describes in reasonable detail all titling arrangements pursuant
to which any motor vehicles included in the Assets listed on the Schedule of
Assets as being owned by Genesee Ventures is titled other than in the name of
Genesee Ventures, all titled motor vehicles included in the Assets are titled in
the name of Genesee Ventures.

         (o) Except as otherwise set forth on Schedule 6.6(o) attached hereto,
the end of Lease purchase options available to the Lessees under the Leases to
be assigned by Genesee Ventures are at fair market value.

           Financial Statements
           --------------------
         All financial statements of Genesee Ventures, any Affiliate of Genesee
Ventures and any other Person furnished to Purchaser in connection herewith were
prepared in accordance with GAAP (except as therein otherwise set forth), and
fairly present the financial condition of the Persons covered thereby at the
dates thereof and the results of their operations for the periods covered
thereby (subject to year-end adjustments in the case of interim financial
statements), and no such Person has any known contingent liabilities of any
material amount which are not referred to in such financial statements or in the
notes thereto. The assets of each such Person are set forth in such financial
statements.

           Changes in Condition
           --------------------
         Since the date of the most recently delivered financial statements
referred to in Section 6.7 hereof, such Persons have not been subject to any
Material Adverse Effect. Since such date, none of such Persons has entered into
any material transaction outside of the ordinary course of business.

           Tax Returns
           -----------
         Genesee Ventures and each of its Affiliates has filed all tax returns
which are required to be filed, and, if applicable, each such Person has paid,
or made adequate provision for the payment of, all taxes which have or may
become due pursuant to such returns, to assessments
<PAGE>
                                Page 251 of 272

received or as a result of any matters raised by audits or other causes known to
such Person. The charges, accruals and reserves on the books of such Person in
respect of any taxes or other governmental charges are adequate.

           Solvency.
           ---------
         (a) The fair salable value of the assets of Genesee Ventures exceeds,
as of the date hereof, and will, immediately following each Closing and after
giving effect to the application of the proceeds of such Closing, exceed the
amount that will be required to be paid on or in respect of its existing debts
and other liabilities (including contingent liabilities) as they mature.

         (b) The assets of Genesee Ventures do not, as of the date hereof, and
will not, immediately following each Closing and after giving effect to the
application of the proceeds of such Closing, constitute unreasonably small
capital to carry out its business as conducted or as proposed to be conducted.

         (c) Genesee Ventures does not intend to, or believe that it will, incur
debts beyond its ability to pay such debts as they mature taking into account
the timing of and amounts of cash to be received by Genesee Ventures, and the
timing of and amounts of cash to be payable on or in respect of indebtedness of
Genesee Ventures.

           No Liability
           ------------
         Genesee Ventures has no liabilities or obligations to any Person in
connection with its acquisition and holding of the Assets listed on the Schedule
of Assets as being owned by it other than obligations pursuant to the related
Non-Recourse Debt.

           Disclosure
           ----------
         Neither this Agreement or any other Seller Document nor any Lease
Document or Loan Document contains any untrue statement of material fact or
omits to state a material fact necessary in order to make the statements
contained therein not misleading. There is no fact known to Genesee Ventures
which has or in the future may (so far as Genesee Ventures can now foresee) have
a Material Adverse Effect on Genesee Ventures.

           Incorporation by Reference
           --------------------------
         The representations and warranties of Genesee Ventures contained in
each of the Seller Documents, Lease Documents and Loan Documents are true and
correct, and such representations and warranties are incorporated in this
Agreement as though fully set forth herein.

           Brokers
           -------
         Except for the Arrangement Fee payable by Cheyenne to Spinnaker Capital
Corporation, no broker or any other Person has any claim for any commission fee
or the like arising out of or in connection with the transactions contemplated
hereby.

           Disclaimer
           ----------
         EXCEPT AS SPECIFICALLY SET FORTH HEREIN AND IN THE SCHEDULES AND
EXHIBITS HERETO, THE FOREGOING REPRESENTATIONS AND WARRANTIES ARE EXPRESSLY IN
LIEU OF ANY OTHER EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES OF GENESEE
VENTURES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, THE SELECTION, QUALITY OR
CONDITION OF THE EQUIPMENT, ITS MERCHANTABILITY, ITS SUITABILITY, ITS FITNESS
FOR A
<PAGE>
                                Page 252 of 272

PARTICULAR PURPOSE, THE OPERATION OR PERFORMANCE OF THE EQUIPMENT OR THE
MAINTENANCE THEREOF OR PATENT INFRINGEMENT OR THE LIKE.

                 REPRESENTATIONS AND WARRANTIES OF TAYLOR-BOLANE
                 -----------------------------------------------

         As of the date of this Agreement and as of each Closing Date,
Taylor-Bolane further represents and warrants to Purchaser as follows:

           Organization
           ------------
         Taylor-Bolane is a corporation duly formed, validly existing and in
good standing under the laws of the State of New York, and is qualified to do
business and in good standing as a foreign corporation under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification, except where the failure to be so
qualified would not result in a Material Adverse Effect. Taylor-Bolane has full
power, authority and legal right to (a) execute and deliver, and to perform and
observe the provisions of this Agreement and each of the other Seller Documents
to which it is a party, (b) execute and deliver, and to perform and observe the
provisions of each of the Lease Documents and Loan Documents to which it is a
party, (c) acquire, hold, and lease the Equipment, if applicable, and (d) carry
out the transactions contemplated in this Agreement and each of the other Seller
Documents to which it is a party.

           Authority
           ---------
         (a) The execution and delivery of this Agreement and each of the other
Seller Documents to which Taylor-Bolane is a party, and the consummation of each
of the transactions contemplated hereby and thereby, have been duly and validly
authorized by or on behalf of Taylor-Bolane; and this Agreement and such other
Seller Documents have been, or will be when executed, duly executed and
delivered by Taylor-Bolane and constitute the valid and legally binding
obligations of Taylor-Bolane, enforceable in accordance with their respective
terms, except as enforcement may be limited by bankruptcy, insolvency or similar
laws or general principles of equity affecting the enforcement of creditors'
rights generally from time to time in effect.

         (b) The execution and delivery of this Agreement and each of the other
Seller Documents to which Taylor-Bolane is a party, the compliance with the
provisions hereof and thereof, and the consummation of the transactions herein
and therein contemplated have not and will not result in (i) a breach or
violation of (A) any Applicable Law applicable to Taylor-Bolane now in effect,
(B) any provision of the constituent documents of Taylor-Bolane, (c) any
agreement or instrument to which Taylor-Bolane is a party or by which it or any
of its properties or assets is bound or affected, (ii) the acceleration of any
obligation of Taylor-Bolane, or (iii) the creation of any Lien upon the
Equipment.

           Compliance With Law, Etc.
           -------------------------
         Taylor-Bolane is not (a) in violation of any term or provision of its
constituent documents or (b) in violation of or default under any term or
provision of any agreement or instrument to which Taylor-Bolane is a party or by
which it or any of its properties or assets is bound or affected, or (c) in
violation of any judgment, order, writ, injunction, decree or demand of any
court or Governmental Authority, or (d) in violation of any Applicable Law by
which Taylor-Bolane or any of its properties or assets is bound or affected. The
execution, delivery and performance of this Agreement and each of the other
Seller Documents and the consummation of the transactions contemplated hereby
and thereby will not violate or constitute a Default under
<PAGE>
                                Page 253 of 272

the constituent documents or any term or provision of any agreement or
instrument to which Taylor-Bolane is a party or by which it or any of its
properties or assets is bound or affected, and none of such agreements or
instruments imposes or is made in contemplation of any obligation which is or
will be inconsistent with any other obligation imposed upon Taylor-Bolane under
this Agreement or any of the other Seller Documents. Except for any filings and
approvals required under the HSR Act, no approval by, authorization of, or
filing with any Governmental Authority or any third party is necessary in
connection with the execution and delivery of this Agreement or any of the other
Seller Documents by Taylor-Bolane.

                    REPRESENTATIONS AND WARRANTIES OF GENESEE
                    -----------------------------------------

        As of the date of this Agreement and as of each Closing Date, Genesee
represents and warrants to Purchaser as follows:

           Organization
           ------------
         Genesee is a corporation duly formed, validly existing and in good
standing under the laws of the State of New York, and is qualified to do
business and in good standing as a foreign corporation under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification, except where the failure to be so
qualified would not result in a Material Adverse Effect. Genesee has full power,
authority and legal right to (a) execute and deliver, and to perform and observe
the provisions of this Agreement and each of the other Seller Documents to which
it is a party and (b) carry out the transactions contemplated in this Agreement
and each of the other Seller Documents to which it is a party.

           Authority
           ---------
         (a) The execution and delivery of this Agreement and each of the other
Seller Documents to which Genesee is a party, and the consummation of each of
the transactions contemplated hereby and thereby, have been duly and validly
authorized by or on behalf of Genesee; and this Agreement and such other Seller
Documents have been, or will be when executed, duly executed and delivered by
Genesee and constitute the valid and legally binding obligations of Genesee,
enforceable in accordance with their respective terms, except as enforcement may
be limited by bankruptcy, insolvency or similar laws or general principles of
equity affecting the enforcement of creditors' rights generally from time to
time in effect.

         (b) The execution and delivery of this Agreement and each of the other
Seller Documents to which Genesee is a party, the compliance with the provisions
hereof and thereof, and the consummation of the transactions herein and therein
contemplated have not and will not result in (i) a breach or violation of (A)
any Applicable Law applicable to Genesee now in effect, (B) any provision of the
constituent documents of Genesee, (c) any agreement or instrument to which
Genesee is a party or by which it or any of its properties or assets is bound or
affected, (ii) the acceleration of any obligation of Genesee, or (iii) the
creation of any Lien upon the Equipment.

           Compliance With Law, Etc.
           -------------------------
         Genesee is not (a) in violation of any term or provision of its
constituent documents or (b) in violation of or default under any term or
provision of any agreement or instrument to which Genesee is a party or by which
it or any of its properties or assets is bound or affected, or (c) in violation
of any judgment, order, writ, injunction, decree or demand of any court or
Governmental Authority, or (d) in violation of any Applicable Law by which
Genesee or any of
<PAGE>
                                Page 254 of 272

its properties or assets is bound or affected. The execution, delivery and
performance of this Agreement and each of the other Seller Documents and the
consummation of the transactions contemplated hereby and thereby will not
violate or constitute a Default under the constituent documents or any term or
provision of any agreement or instrument to which Genesee is a party or by which
it or any of its properties or assets is bound or affected, and none of such
agreements or instruments imposes or is made in contemplation of any obligation
which is or will be inconsistent with any other obligation imposed upon Genesee
under this Agreement or any of the other Seller Documents. Except for any
filings and approvals required under the HSR Act, no approval by, authorization
of, or filing with any Governmental Authority or any third party is necessary in
connection with the execution and delivery of this Agreement or any of the other
Seller Documents by Genesee.

                   REPRESENTATIONS AND WARRANTIES OF PURCHASER
                   -------------------------------------------

         Purchaser represents and warrants to Seller as of the date of this
Agreement and as of each Closing Date as follows:

           Organization
           ------------
         Purchaser is a limited liability company duly formed, validly existing
and in good standing under the laws of the State of Delaware. It has full power,
authority and legal right to execute and deliver, and to perform and observe the
provisions of this Agreement and each of the other Seller Documents to which it
is a party.

           Authority
           ---------
         (a) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly authorized by
Purchaser; and this Agreement has been duly executed and delivered by Purchaser
and constitutes the valid and legally binding obligation of Purchaser,
enforceable in accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency or similar, laws or general principles of equity
affecting the enforcement of creditors' rights generally from time to time in
effect.

         (b) The execution and delivery of this Agreement, the compliance with
the provisions hereof, and the consummation of the transactions herein
contemplated have not and will not result in a breach or violation of (i) any
Applicable Law applicable to Purchaser now in effect, (ii) any provision of the
constituent documents of Purchaser, (iii) any agreement or instrument to which
Purchaser is a party or by which it is bound, or (iv) the acceleration of any
obligation of Purchaser.

           Litigation
           ----------
         There are no actions, suits or proceedings or investigations at law or
in equity, pending or, to the reasonable knowledge of Purchaser, threatened
before Governmental Authority against or affecting Purchaser which, if decided
adversely to Purchaser, could have a Material Adverse Effect on Purchaser.

           No Consent
           ----------
         Except for any filings and approvals required under the HSR Act, no
approval, consent or withholding of objection is required from any Governmental
Authority with respect to the entering into or performance by Purchaser of this
Agreement and the transactions contemplated hereby.
<PAGE>
                                 Page 255 of 272

                  REPRESENTATIONS AND WARRANTIES OF THE MEMBERS
                  ---------------------------------------------

         Each Member represents and warrants to Seller as of the date of this
Agreement and as of each Closing Date as follows:

           Organization
           ------------
         The Member is a limited partnership duly formed, validly existing and
in good standing under the laws of the State of Delaware. It has full power,
authority and legal right to execute and deliver, and to perform and observe the
provisions of this Agreement and each of the other Seller Documents to which it
is a party.

           Authority
           ---------
         (a) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly authorized by
the Member; and this Agreement has been duly executed and delivered by the
Member and constitutes the valid and legally binding obligation of the Member,
enforceable in accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency or similar, laws or general principles of equity
affecting the enforcement of creditors' rights generally from time to time in
effect.

         (b) The execution and delivery of this Agreement, the compliance with
the provisions hereof, and the consummation of the transactions herein
contemplated have not and will not result in a breach or violation of (i) any
Applicable Law applicable to the Member now in effect, (ii) any provision of the
constituent documents of the Member, (iii) any agreement or instrument to which
the Member is a party or by which it is bound, or (iv) the acceleration of any
obligation of the Member.

           Litigation
           ----------
         There are no actions, suits or proceedings or investigations at law or
in equity, pending or, to the reasonable knowledge of the Member, threatened
before Governmental Authority against or affecting the Member which, if decided
adversely to the Member, could have a Material Adverse Effect on the Member.

           No Consent
           ----------
         Except for any filings and approvals required under the HSR Act, no
approval, consent or withholding of objection is required from any Governmental
Authority with respect to the entering into or performance by the Member of this
Agreement and the transactions contemplated hereby.

                            COVENANTS PENDING CLOSING
                            -------------------------

           Portfolio Administration
           ------------------------
         The Sale Parties and Genesee Ventures covenant and agree that from and
after the date hereof, they shall consult with Purchaser with respect to all
matters pertaining to the administration of the Assets, including any
enforcement of rights and remedies under the Leases, and all matters relating to
the rights and obligations of each Seller with respect to any applicable Lender.
Furthermore, the Sale Parties shall not take any action or omit to take any
action required to be taken with respect to any of the foregoing without
obtaining the prior written approval of Purchaser.
<PAGE>
                                Page 256 of 272

           Proceedings
           -----------
         If and to the extent that there shall exist any action or proceeding
before any Governmental Authority that shall seek or threaten to set aside,
restrain, enjoin or prevent the Closing or the completion and consummation of
the transactions contemplated hereby, including any injunction restraining the
holding of the 2000 annual shareholders meeting of Genesee, then the Sale
Parties and/or Genesee, as applicable, shall vigorously oppose any such
proceeding and use their best efforts to have any such action or proceeding
dismissed, terminated, stayed or otherwise so that the Closing may be completed
and the transactions contemplated hereby can be consummated without any such
interference.

           Antitrust Notification
           ----------------------
         Purchaser and the Sale Parties shall cause to be filed with the FTC and
the DOJ the notification and report forms required pursuant to the HSR Act with
respect to the transactions contemplated hereby, together with a request for
early termination of the waiting period thereunder. The parties agree with
respect to such filings that they shall (a) after any request by the FTC or DOJ,
promptly file any information or documents requested by the FTC or DOJ, (b)
notify each other of any communications with the FTC or DOJ which relate to the
transactions contemplated hereby, and (c) otherwise cooperate with respect to
such filings. Purchaser shall pay the HSR Act filing fee.

              CONDITIONS PRECEDENT TO OBLIGATIONS FOR EACH CLOSING
              ----------------------------------------------------

           Purchaser's Obligation
           ----------------------
         The obligation of Purchaser to consummate a Closing hereunder shall be
subject to the satisfaction at or prior to such Closing of each of the following
conditions or the waiver by Purchaser of such condition(s):

         (a)      Representations and Warranties
                  ------------------------------
         The representations and warranties of the Sale Parties, Genesee
Ventures and Genesee contained in this Agreement, and of Seller contained in
each of the Seller Documents, Lease Documents and Loan Documents to which it is
a party, delivered in respect of a Closing, if applicable, shall be true and
correct on and as of the Closing Date, as if such representations and warranties
had been made on and as of the Closing Date, except to the extent that such
representations and warranties relate solely to an earlier date (in which case
such representations and warranties shall be correct on and as of such earlier
date).

         (b)      Covenants and Agreements
                  ------------------------
         Each of the Sale Parties and Genesee Ventures shall have performed and
complied with all of its obligations under this Agreement and each of the Seller
Documents to which it is a party that are to be performed or complied with by it
on or prior to the Closing Date.

         (c)      Documents
                  ---------
         Seller shall have delivered or caused to be delivered to Purchaser each
of the documents and instruments set forth and described in Section 4.2 hereof,
duly executed by Seller, and if applicable, the Lessee or the Lender, and each
of the foregoing shall be satisfactory to Purchaser and its counsel in their
sole discretion. Seller shall have delivered counterpart no. 1 or the "Original"
(unless any such counterpart no. 1 or Original is held by a Lender as security
for a Non-Recourse Debt, and then a certified copy) of each Lease to Purchaser.
<PAGE>
                                Page 257 of 272

         (d)      Filings and Titles
                  ------------------

         Seller shall have duly filed or recorded, as applicable, with all
applicable Governmental Authorities, any Seller Documents, Lease Documents or
Loan Documents to the extent filing or recording thereof shall be required or
permitted thereby. Seller shall have filed financing statements on Form UCC-3
assigning any "protective" or "informational" filings against Lessees (unless
such filings have been assigned to one or more Lenders), or, in the absence of
such filings, financing statements on Form UCC-1 constituting protective or
informational filings against such Lessees and naming any applicable Lender as
assignee, if required. Except as set forth on Schedules 5.6(n) and 6.6(n), the
titles to all titled motor vehicles included in the Assets described by the
applicable Closing Schedule shall have been assigned by Seller to Purchaser.
Seller and the third parties to the titling arrangements described in Schedules
5.6(n) and 6.6(n) shall have taken such action, including, without limitation,
the written clarification and/or amendment of any agency relationship and the
assignment of any beneficial interest and/or replacement or any trustee under
any titling trust described therein, as Purchaser shall require in its sole
discretion.

         (e)      Authority; Incumbency
                  ---------------------
         At the request of Purchaser, each of the Sale Parties and Genesee
Ventures shall have delivered to Purchaser a resolution of its governing body
authorizing the transactions contemplated by the Closing, together with an
incumbency certificate regarding incumbency and authority of its officers in
connection with the transactions contemplated by the Closing.

         (f)      Approvals
                  ---------
         All required licenses, approvals, consents and notifications necessary
in respect of the execution and delivery of the Seller Documents, the
modification of the Loan Documents on terms acceptable to Purchaser in its sole
discretion and the transactions contemplated hereby, including, without
limitation all notifications, reports and clearances required under the HSR Act,
if any, shall have been obtained or made, and executed or certified copies
thereof shall have been delivered to Purchaser. All time periods under the HSR
Act shall have expired.

         (g)      Proceedings; No Violation of Law
                  --------------------------------

         It shall not constitute a violation of law for Purchaser to consummate
the Closing.

         (h)      Opinion of Counsel
                  ------------------
         At the request of Purchaser, each of the Sale Parties, Genesee Ventures
and Genesee shall have delivered to Purchaser an opinion of Nixon Peabody LLP in
the form attached hereto as Exhibit E-1.

         (i)      Releases
                  --------
         Seller shall or shall have caused to be filed all releases or
termination statements with respect to any preexisting Liens on the Assets
(other than those with respect to the Assumed Liabilities and Permitted Liens)
and taken all such other actions as may be required to release and terminate
such Liens that are consistent with the quality of title required hereby.

         (j)      Defaults
                  --------
<PAGE>
                                Page 258 of 272

         No breach or Default or event of default shall have occurred and be
continuing under the Lease Documents or Loan Documents.

         (k)      Insurance
                  ---------

         Except with respect to any Lessee listed on Schedule 5.6(f) or 6.6(f)
as having in place a self-insurance arrangement previously approved by Seller,
Seller shall have instructed the Lessee to add Purchaser as an additional
insured and loss payee (or, in the case of Lessees under Lease Documents
relating to Equipment securing Non-Recourse Debt due and owing to HSBC as
successor in interest to Republic National Bank of New York, as an additional
insured only) on any and all insurance required for the benefit of lessor under
the Lease Documents relating to the Equipment.

         (l)      Certificate of Sale Parties, Genesee Ventures and Genesee
                  ---------------------------------------------------------

         Purchaser shall have received certificates signed by a duly authorized
officer of each of the Sale Parties, Genesee Ventures and Genesee, dated the
Closing Date, certifying as to the fulfillment, on the Closing Date, of the
conditions specified in Sections 12.1(a) and (b) hereof.

         (m)      Aggregate Equipment Cost
                  ------------------------

         The Aggregate Equipment Cost of the Equipment to be purchased at the
Closing shall not be less than the minimum amount established, from time to
time, by Purchaser in its sole discretion.

         (n)      Due Diligence
                  -------------

         Purchaser shall have received responses from Seller with respect to the
open due diligence items set forth on Schedule 12.1(n) attached hereto
applicable to the Assets to be purchased such Closing and/or the related
Non-Recourse Debt, as applicable, and be satisfied with such responses in its
sole discretion.

         (o)      Remarketing Agreements
                  ----------------------

         All Remarketing Agreements with respect to the Assets described by the
applicable Closing Schedule shall have been assigned by Seller to Purchaser.

           Seller's Obligation
           -------------------
         The obligation of each Seller to consummate a Closing hereunder shall
be subject to the satisfaction of the following conditions or the waiver by
Seller of such condition(s):

         (a)      Representations and Warranties
                  ------------------------------
         The representations and warranties of Purchaser contained in this
Agreement and of Purchaser contained in each of the Seller Documents to which it
is a party delivered in respect of a Closing, if applicable, shall be true and
correct on and as of the Closing Date, as if such representations and warranties
had been made on and as of the Closing Date, except to the extent
<PAGE>
                                Page 259 of 272

that such representations and warranties relate solely to an earlier date (in
which case such representations and warranties shall be correct on and as of
such earlier date).

         (b)      Covenants and Agreements
                  ------------------------
         Purchaser shall have performed and complied with all of its obligations
under this Agreement and each of the Seller Documents to which it is a party
that are to be performed or complied with by it on or prior to the Closing Date.

         (c)      Documents
                  ---------
         Any and all documents delivered by Purchaser to Seller in connection
with a Closing and the transactions contemplated by this Agreement shall be
reasonably satisfactory in all respects to Seller and Seller's counsel.

         (d)      Authority; Incumbency
                  ---------------------
         Purchaser shall have delivered to Seller a resolution of its Board of
Managers or members authorizing the transactions contemplated by the Closing,
together with an incumbency certificate regarding the incumbency and authority
of the officers of Purchaser in connection with the transactions contemplated by
the Closing.

         (e)      Approvals; No Violation of Law
                  ------------------------------
         All notifications, reports and clearances, if any, required under the
HSR Act shall have been obtained or made, and executed or certified copies
thereof shall have been delivered to Seller. All time periods under the HSR Act
shall have expired. There shall be no order of any court restraining the holding
of the 2000 shareholders meeting of Genesee or the Closing. It shall not
constitute a violation of law for Seller to consummate the Closing.

         (f)      Purchase Price; Acquisition Fee
                  -------------------------------
         Purchaser shall have paid to Seller the Purchase Price by wire transfer
of immediately available funds to an account or accounts designated in writing
by Seller.

         (g)      Certificate of Purchaser
                  ------------------------

         Seller shall have received a certificate of Purchaser signed by a duly
authorized officer of Purchaser, dated the Closing Date, certifying as to the
fulfillment, on the Closing Date, of the conditions specified in Sections 12.2
(a) and (b) hereof.

         (h)      Opinion of Counsel
                  ------------------

         At the request of Seller, Purchaser shall have delivered to each of the
Sale Parties, Genesee Ventures and Genesee an opinion of Lou Cusano, General
Counsel of Purchaser in the form attached hereto as Exhibit E-2.

                                 INDEMNIFICATION
                                 ---------------

           Sale Parties' and Genesee Indemnity
           -----------------------------------
         (a) The Sale Parties jointly and severally hereby agree to indemnify
and hold Purchaser and its members, managers, officers, employees, agents and
attorneys, harmless from and against any and all claims, liabilities, losses,
damages, costs and expenses, including, without
<PAGE>
                                Page 260 of 272

limitation, the reasonable fees and disbursements of counsel (collectively,
"Claims" and, individually, a "Claim"), resulting or arising from any breaches
or inaccuracies in any certification, representation or warranty made by
Cheyenne in or pursuant to this Agreement or any of the other Seller Documents
to which Cheyenne is a party or any failure or breach by Cheyenne of any
covenant, obligation, or undertaking made by Cheyenne in this Agreement or any
of the other Seller Documents to which Cheyenne is a party, except any such
Claims resulting from Purchaser's gross negligence or willful misconduct.

         (b) Genesee Ventures hereby agrees to indemnify and hold Purchaser and
its members, managers, officers, employees, agents and attorneys, harmless from
and against any and all Claims, resulting or arising from any breaches or
inaccuracies in any certification, representation or warranty made by Genesee
Ventures in or pursuant to this Agreement or any of the other Seller Documents
to which Genesee Ventures is a party or any failure or breach by Genesee
Ventures of any covenant, obligation, or undertaking made by Genesee Ventures in
this Agreement or any of the other Seller Documents to which Genesee Ventures is
a party, except any such Claims resulting from Purchaser's gross negligence or
willful misconduct.

          (c) Taylor-Bolane hereby agrees to indemnify and hold Purchaser and
its members, managers, officers, employees, agents and attorneys, harmless from
and against any and all Claims, resulting or arising from any breaches or
inaccuracies in any certification, representation or warranty made by
Taylor-Bolane in or pursuant to this Agreement or any of the other Seller
Documents to which Taylor-Bolane is a party or any failure or breach by
Taylor-Bolane of any covenant, obligation, or undertaking made by Taylor-Bolane
in this Agreement or any of the other Seller Documents to which Taylor-Bolane is
a party, except any such Claims resulting from Purchaser's gross negligence or
willful misconduct.

         (d) Genesee hereby agrees to indemnify and hold Purchaser and its
members, managers, officers, employees, agents and attorneys, harmless from and
against any and all Claims, resulting or arising from any breaches or
inaccuracies in any certification, representation or warranty made by Genesee,
Cheyenne, Genesee Ventures and/or Taylor-Bolane in or pursuant to this Agreement
or any of the other Seller Documents to which any such party is a party or any
failure or breach by Genesee, Cheyenne, Genesee Ventures and/or Taylor-Bolane of
any covenant, obligation, or undertaking made by it in this Agreement or any of
the other Seller Documents to which any such party is a party, except any such
Claims resulting from Purchaser's gross negligence or willful misconduct.

           Purchaser's and Members' Indemnity
           ----------------------------------
         Purchaser and the Members jointly and severally hereby agree to
indemnify and hold the Sale Parties and their respective partners, officers,
employees, agents and attorneys, harmless from and against any and all Claims
resulting or arising from any breaches or inaccuracies in any representation or
warranty made by Purchaser and/or the Members in or pursuant to this Agreement
or any of the other Seller Documents to which Purchaser and/or any of the
Members is a party or any failure or breach by Purchaser and/or any of the
Members of any covenant, obligation, or undertaking made by it in this Agreement
or any of the other Seller Documents to which it is a party, except any such
Claims resulting from the Sale Parties' gross negligence or willful misconduct.

           Limitations on Recourse and Indemnification
           -------------------------------------------

<PAGE>
                                Page 261 of 272

         (a) None of the Sale Parties, Genesee Ventures or Genesee, as
applicable, shall have any liability to Purchaser for, or obligation to
indemnify Purchaser with respect to, any breach of any representation or
warranty of the Sale Parties or of Genesee Ventures set forth in Section 5.6 or
Section 6.6 hereof, as applicable, with respect to a particular Lease or other
Lease Document if Purchaser received a representation and warranty identical in
substance to the breached representation or warranty from the Lessee thereunder
in a Notice and Acknowledgment of Assignment and has recourse to the Lessee with
respect thereto.

         (b) None of the Sale Parties, Genesee Ventures, Taylor-Bolane or
Genesee shall have any obligation to indemnify Purchaser, and neither Purchaser
nor any Member shall have any obligation to indemnify the Sale Parties, until
the aggregate amount for which the Sale Parties, Genesee Ventures, Taylor-Bolane
and Genesee or Purchaser and the Members, as applicable, would otherwise be
obligated to indemnify Purchaser or the Sale Parties, as applicable, hereunder
shall exceed an aggregate of Fifteen Thousand Dollars ($15,000), and then to the
full extent (i.e. from the first Dollar) of all Claims. Furthermore, the
aggregate amount of the Sale Parties', Genesee Ventures' and Taylor-Bolane's
obligations to indemnify Purchaser pursuant to the terms of this Agreement shall
not under any circumstances exceed the Aggregate Purchase Price.

         (c) The maximum aggregate amount of Genesee's obligation to indemnify
Purchaser pursuant to the terms of this Agreement shall not under any
circumstances exceed the Aggregate Purchase Price, and shall reduce one hundred
twenty (120) days after the scheduled termination date of each Rental Schedule
by an amount equal to the Purchase Price applicable to such Rental Schedule and
the related Assets as set forth on the Schedule of Assets and the obligation of
Genesee to indemnify Purchaser pursuant to the terms of this Agreement shall
terminate on July 31, 2004 except solely with respect to Claims ("Noticed
Claims") for which Purchaser shall have notified Genesee in writing of a claim
for indemnification with respect thereto on or before such date. The obligation
of Genesee to indemnify Purchaser pursuant to the terms of this Agreement shall
terminate with respect to Noticed Claims when such obligations have been paid
and/or performed in full.

           Survival of Representations and Warranties
           ------------------------------------------
         The representations and warranties of the Sale Parties and Genesee
Ventures set forth in Sections 5.3, 5.6, 6.3 and 6.6 hereof (and the
indemnification obligations of the Sale Parties, Genesee Ventures and, subject
to Section 13.3 hereof, Genesee under this Article 13 with respect thereto)
shall survive for a period of six (6) months after the sale of the Equipment
subject to the applicable Lease and thereafter shall terminate and be of no
further force or effect, except as to matters for which Purchaser has given
notice to the Sale Parties, Genesee Ventures and/or Genesee, as applicable, of
its claim for indemnification prior thereto, which notice shall be given in the
manner and in the form required by Section 13.5 hereof. All other
representations and warranties of the parties contained in this Agreement and
the attachments hereto (and the indemnification obligations of the parties under
this Article 13 with respect thereto) shall survive each Closing and the
consummation of the transactions contemplated hereby for a period corresponding
to any applicable statute of limitations.

           Claims
           ------
         (a) In the event that a party (the "Indemnified Party") desires to make
a claim against another party hereto (the "Indemnifying Party") under this
Section 13 in connection with any action, suit, proceeding or demand at any time
instituted against or made upon the Indemnified Party for which the Indemnified
Party may seek indemnification hereunder, the Indemnified
<PAGE>
                                Page 262 of 272

Party shall notify the Indemnifying Party of such Claim and of the Indemnified
Party's claim of indemnification with respect thereto, provided that failure of
the Indemnified Party to give such notice shall not relieve the Indemnifying
Party of its obligations under this Section 13 except to the extent, if at all,
that the Indemnifying Party shall have been prejudiced thereby. Upon receipt of
such notice from the Indemnified Party, the Indemnifying Party shall be entitled
to participate in the defense of such Claim and shall be entitled to fully
assume the defense of such Claim, and in the case of such an assumption upon
written notice to the Indemnified Party of its intention to do so, the
Indemnifying Party shall have the authority to negotiate, compromise and settle
such Claim, provided that no such settlement shall impose on the Indemnified
Party any cost, expense or liability which the Indemnifying Party is not
indemnifying under this Section 13. The Indemnified Party shall retain the right
to employ its own counsel and to participate in the defense of any Claim, the
defense of which has been assumed by the Indemnifying Party pursuant hereto, but
the Indemnified Party shall bear and shall be solely responsible for its own
costs and expenses in connection with such participation, unless (i) the
employment thereof has been specifically authorized by the Indemnifying Party,
(ii) such Indemnified Party has been advised by counsel reasonably satisfactory
to the Indemnifying Party that there may be one or more legal defenses available
to it which are different from or additional to those available to the
Indemnifying Party and in the reasonable judgment of such counsel it is
advisable for such Indemnified Party to employ separate counsel, or (iii) the
Indemnifying Party has failed to assume the defense of such action in accordance
herewith and employ counsel reasonably satisfactory to the Indemnified Party.

         (b) In the event of any Claim under this Section 13, the Indemnified
Party shall advise the Indemnifying Party in writing of the amount and
circumstances surrounding such Claim. With respect to a liquidated Claim, if
within forty-five (45) days after receiving written notice from the Indemnified
Party, the Indemnifying Party has not contested such Claim in writing, the
Indemnifying Party will pay the full amount thereof, or, in the case of the
Members, their respective pro rata portions thereof, within thirty (30) days
after the expiration of such period.

                                  MISCELLANEOUS
                                  -------------

           Suretyship Waivers
           ------------------
         (a) Each of Genesee Ventures, Taylor-Bolane and Genesee (collectively,
the "Cheyenne Obligors") and the Members (together with the Cheyenne Obligors,
the "Obligors") agrees that its indemnification obligations pursuant to Sections
3.5, 3.6 and 13 hereof, as applicable, are irrevocable, absolute, independent
and unconditional, and shall not be affected by any circumstance which
constitutes a legal or equitable discharge of a guarantor or surety other than
payment in full of the Claims. In furtherance of the foregoing, and without
limiting the generality thereof, each of the Obligors agrees as follows: (i)
Purchaser or the Sale Parties, as applicable, may from time to time, without
notice or demand and without affecting the validity or enforceability of this
Agreement or giving rise to any limitation, impairment or discharge of such
Obligor's liability hereunder, (A) renew, extend, accelerate or otherwise change
the time, place, manner or terms of payment of the Claims, (B) settle,
compromise, release or discharge, or accept or refuse any offer of performance
with respect to, or substitutions for, the Claims or any agreement relating
thereto and/or subordinate the payment of the same to the payment of any other
obligations, (C) request and accept guaranties of the obligations with respect
to the Claims and take and hold other security for the payment of the Claims,
(D) release, exchange, compromise, subordinate or modify, with or without
consideration, any other security for payment of the Claims, any guaranties of
the obligations with respect to the Claims, or any other obligation of any
Person with respect to the Claims, (E) enforce and apply any other security now
<PAGE>
                                Page 263 of 272

or hereafter held by or for the benefit of Purchaser or the Sale Parties, as
applicable, in respect of the Claims and direct the order or manner of sale
thereof, or exercise any other right or remedy that Purchaser or the Sale
Parties, as applicable, may have against any such security, as Purchaser or the
Sale Parties, as applicable, in its or their discretion may determine consistent
with any applicable security agreement, including foreclosure on any such
security pursuant to one or more judicial or non-judicial sales, whether or not
every aspect of any such sale is commercially reasonable, and (F) exercise any
other rights available to Purchaser or the Sale Parties, as applicable, under
this Agreement, at law or in equity; and (ii) this Agreement and the obligations
of such Obligor hereunder shall be valid and enforceable and shall not be
subject to any limitation, impairment or discharge for any reason (other than
payment in full of all Claims), including without limitation the occurrence of
any of the following, whether or not the Obligors shall have had notice or
knowledge of any of them: (A) any failure to assert or enforce or agreement not
to assert or enforce, or the stay or enjoining, by order of court, by operation
of law or otherwise, of the exercise or enforcement of, any claim or demand or
any right, power or remedy with respect to the Claims or any agreement relating
thereto, or with respect to any guaranty of or other security for the payment of
the Claims, (B) any waiver, amendment or modification of, or any consent to
departure from, any of the terms or provisions (including without limitation
provisions relating to events of default) of this Agreement, any of the other
Seller Documents or any agreement or instrument executed pursuant thereto, or of
any guaranty or other security for the payment of the Claims, (C) the Claims, or
any agreement relating thereto, at any time being found to be illegal, invalid
or unenforceable in any respect, (D) the application of payments received from
any source to the payment of indebtedness other than the Claims, even though
Purchaser or the Sale Parties, as applicable, might have elected to apply such
payment to any part or all of the Claims, (E) any failure to perfect or continue
perfection of a security interest in any other collateral which secures the
payment of any of the Claims, (F) any defenses, set-offs or counterclaims which
any of the Obligors may allege or assert against Purchaser or the Sale Parties,
as applicable, in respect of the Claims, including but not limited to failure of
consideration, breach of warranty, payment, statute of frauds, statute of
limitations, accord and satisfaction and usury, and (G) any other act or thing
or omission, or delay to do any other act or thing, which may or might in any
manner or to any extent vary the risk of any of the Obligors as an obligor in
respect of the Claims.

         (b) Each of the Obligors hereby waives, for the benefit of Purchaser or
the Sale Parties, as applicable: (i) any right to require Purchaser or the Sale
Parties, as applicable, as a condition of payment or performance by such
Obligor, to (A) proceed against any obligor, any guarantor of the obligations
with respect to the Claims or any other Person, (B) proceed against or exhaust
any other security held from any obligor, any guarantor of the obligations with
respect to the Claims or any other Person, (C) proceed against or have resort to
any balance of any deposit account or credit on the books of Purchaser or the
Sale Parties, as applicable, in favor of any obligor or any other Person, or (D)
pursue any other remedy in the power of Purchaser or the Sale Parties, as
applicable, whatsoever; (ii) any defense arising by reason of the incapacity,
lack of authority or any disability or other defense of any obligor including,
without limitation, any defense based on or arising out of the lack of validity
or the unenforceability of the Claims or any agreement or instrument relating
thereto or by reason of the cessation of the liability of any obligor from any
cause other than payment in full of all Claims; (iii) any defense based upon any
statute or rule of law which provides that the obligation of a surety must be
neither larger in amount nor in other respects more burdensome than that of the
principal; (iv) any defense based upon Purchaser's or the Sale Parties', as
applicable, errors or omissions in the administration of the Claims, except
behavior which amounts to bad faith; (v) (A) any legal or equitable discharge
<PAGE>
                                Page 264 of 272

of any of the Obligors' obligations hereunder, (B) the benefit of any statute of
limitations affecting any of the Obligor's liability hereunder or the
enforcement hereof, (C) any rights to set-offs, recoupments and counterclaims,
and (D) promptness, diligence and any requirement that Purchaser or the Sale
Parties, as applicable, protect, secure, perfect or insure any other security
interest or Lien or any property subject thereto; (vi) notices, demands,
presentments, protests, notices of protest, notices of dishonor and notices of
any action or inaction, notices of default under this Agreement or any agreement
or instrument related hereto, notices of any renewal, extension or modification
of the Claims or any agreement related thereto, notices of any extension of
credit to any Person and notices of any of the matters referred to in the
preceding paragraph and any right to consent to any thereof; and (vii) to the
fullest extent permitted by law, any defenses or benefits that may be derived
from or afforded by law which limit the liability of or exonerate guarantors or
sureties.

         (c) Until all Claims shall have been paid in full, each of the Cheyenne
Obligors and the Members shall withhold exercise respectively of (i) any claim,
right or remedy, direct or indirect, that it now has or may hereafter have
against the Sale Parties and/or any of the Cheyenne Obligors or Purchaser and/or
any of the Members, as applicable, or any of its or their assets in connection
with this Agreement or any of the other Seller Documents or the performance by
it or them of its or their obligations hereunder, in each case whether such
claim, right or remedy arises in equity, under contract, by statute, under
common law or otherwise and including without limitation (A) any right of
subrogation, reimbursement or indemnification that such Cheyenne Obligor or
Member, as applicable, now has or may hereafter have against the Sale Parties
and/or any of the Cheyenne Obligors or Purchaser and/or any of the Members, as
applicable, (B) any right to enforce, or to participate in, any claim, right or
remedy that Purchaser or the Sale Parties, as applicable, now has or may
hereafter have against the Sale Parties and/or any of the Cheyenne Obligors or
Purchaser and/or any of the Members, as applicable, and (C) any benefit of, and
any right to participate in, any other collateral or security now or hereafter
held by Purchaser or the Sale Parties, as applicable, and (ii) any right of
contribution such Cheyenne Obligor or Member, as applicable, may have against
any guarantor of any of the Claims. Each of the Cheyenne Obligors and Members,
as applicable, further agrees that, to the extent the waiver of its rights of
subrogation, reimbursement, indemnification and contribution as set forth herein
is found by a court of competent jurisdiction to be void or voidable for any
reason, any rights of subrogation, reimbursement or indemnification it may have
against the Sale Parties and/or any of the Cheyenne Obligors or Purchaser and/or
any of the Members, as applicable, or against any other collateral or security,
and any rights of contribution it may have against any such guarantor, shall be
junior and subordinate to any rights Purchaser or the Sale Parties, as
applicable, may have against the Sale Parties and/or any of the Cheyenne
Obligors or Purchaser and/or any of the Members, as applicable, to all right,
title and interest Purchaser or the Sale Parties, as applicable, may have in any
such other collateral or security, and to any right Purchaser or the Sale
Parties, as applicable, may have against any such guarantor.

         (d) Neither Purchaser nor the Sale Parties, as applicable, shall have
any obligation to disclose or discuss with any Obligor, its assessment, or any
Obligor's assessment, of the financial condition of any of the Sale Parties or
Purchaser, as applicable. Each of the Obligors has adequate means to obtain
information from the Sale Parties or Purchaser, as applicable, on a continuing
basis concerning the financial condition of the Sale Parties or Purchaser, as
applicable, and its ability to perform its obligations under this Agreement and
the other Seller Documents, and each Obligor assumes the responsibility for
being and keeping informed of the financial condition of the Sale Parties and
Purchaser, as applicable, and of all circumstances
<PAGE>
                                Page 265 of 272

bearing upon the risk of nonpayment of the Claims. Each Obligor hereby waives
and relinquishes any duty on the part of Purchaser or the Sale Parties, as
applicable, to disclose any matter, fact or thing relating to the business,
operations or condition of the Sale Parties or Purchaser, as applicable, now
known or hereafter known by Purchaser or the Sale Parties, as applicable.

           Communications
           --------------
         All notices, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally or
if mailed by certified mail, return receipt requested, postage prepaid, or sent
by written telecommunications, receipt confirmed, as follows, or as may be
changed, from time to time, by a party hereto by written notice to the other
parties given in accordance with this Section 14.2:

                  If to Purchaser or the Members, to:

                  ICON Cheyenne LLC
                  c/o ICON Capital Corp.
                  599 Lexington Avenue
                  New York, NY 10022
                  Attention: General Counsel
                  Fax:  (212) 418-4739
                  Telephone:  (212) 418-4700
<PAGE>
                                Page 266 of 272

                  With copies to:

                  ICON Cheyenne LLC c/o ICON Capital Corp.
                  Four Embarcadero Center, Suite 1810
                  San Francisco, CA 94111
                  Attention:  President
                  Fax:  (415) 981-4299
                  Telephone:  (415) 981-4266
                  (Note: Commencing April 1, 2001, the address to be used is 260
                  California, 7th Floor, San Francisco, CA 94111)

                  and

                  Nixon Peabody LLP
                  101 Federal Street
                  Boston, MA 02110
                  Attention: Craig D. Mills
                  Fax:  (617) 345-1300
                  Telephone:  (617) 345-1000

                  If to Cheyenne, to:

                  Cheyenne Leasing Company
                  400 Andrews Street, Suite 307
                  Rochester, NY 14604
                  Attention:  James F. Taylor
                  Fax: (716) 263-2722
                  Telephone:  (716) 546-3140

                  If to Genesee Ventures, to:

                  Genesee Ventures, Inc.
                  P.O. Box 762
                  Rochester, NY 14603
                  Attention:  Andy Yeager
                  Fax:  (716) 546-5011
                  Telephone:   (716) 263-9205

                  With a copy to:

                  Genesee Corporation
                  455 St. Paul Street
                  Rochester, NY 14605
                  Attention:  Mark Leunig
                  Fax:  (716) 263-9444
                  Telephone:  (716) 263-9440

                  If to Taylor-Bolane, to:
<PAGE>
                                Page 267 of 272

                  Taylor-Bolane Associates, Inc.
                  400 Andrews Street, Suite 307
                  Rochester, NY 14604
                  Attention:  James Taylor
                  Fax:  (716) 263-2722
                  Telephone:   (716) 263-2620

                  If to Genesee, to:

                  Genesee Corporation
                  455 St. Paul Street
                  Rochester, NY 14605
                  Attention:  Mark Leunig
                  Fax:  (716) 263-9444
                  Telephone:  (716) 263-9440

           Entire Agreement and Amendment
           ------------------------------
         This Agreement, together with the Schedules and exhibits attached
hereto contains the entire understanding of the parties, supersedes all prior
agreements and understandings relating to the subject matter hereof and shall
not be amended except by a written instrument hereafter signed by all of the
parties hereto.

           Governing Law
           -------------
         THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY, EFFECT AND PERFORMANCE.

           Sections and Section Headings
           -----------------------------
         All enumerated subdivisions of this Agreement are herein referred to as
"section" or "subsection." The headings of sections and subsections are for
reference only and shall not limit or control the meaning thereof.

           Successors and Assigns
           ----------------------
         This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Neither this
Agreement nor the obligations of any party hereunder shall be assignable or
transferable by such party without the prior written consent of the other party
hereto. This Section 14.6 is not intended, and shall not be construed, to
prohibit or in any manner restrict or limit the right of Taylor-Bolane to
transfer its joint venture interest in Cheyenne to an Affiliate of Genesee
Ventures, which right is hereby acknowledged.

           Counterparts
           ------------
         This Agreement may be executed in multiple counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
<PAGE>
                                Page 268 of 272

           Further Assurances
           ------------------
         The parties hereto agree to execute and deliver, or to be caused to be
executed and delivered, such further instruments or documents, including any
filings or registrations, to cooperate with respect to any audits or other
proceedings, including any actions necessary with respect to compliance with the
HSR Act, and to take such other action as may be reasonably required to carry on
the transactions contemplated herein.

           Confidentiality
           ---------------
         (a) Except as otherwise contemplated herein, no party hereto will,
prior to the final Closing, make any disclosures (public or private) concerning
the existence or contents of this Agreement or cause to be publicized in any
manner whatsoever, by way of interviews, responses to questions or inquiries,
press releases or otherwise, any aspect of the transaction described herein
without prior written notice to and written approval of the other party, which
approval will not be unreasonably withheld; provided, however, that this Section
14.9(a) shall not prevent any party from issuing any press release or making any
public statement which such party determines to be required by law or by any
self-regulating securities exchange (it being understood that the parties will
consult with each other before issuing any such press release or making any such
public statement).

         (b) From and after the final Closing, each of the Sale Parties and
Genesee Ventures shall not, and shall cause its Affiliates, employees, advisors
and agents to not, directly or indirectly, use any information concerning any of
the Assets for any purpose not related to the transactions contemplated hereby
without prior written notice to and written approval of Purchaser.

                  [Remainder of Page Intentionally Left Blank]
<PAGE>
                                Page 269 of 272

         IN WITNESS WHEREOF, and intending to be legally bound hereby, the
parties hereto have caused this Agreement to be duly executed and delivered by
their respective duly authorized officers as an instrument under seal as of the
date and year first above written.

                                   PURCHASER:
                                   ----------

                                   ICON CHEYENNE LLC

                                   By:  /s/ Paul B. Weiss

                                   Title: Authorized Signer

                                   CHEYENNE:
                                   ---------

                                   CHEYENNE LEASING COMPANY

                                   By its joint venture partners:

                                   GENESEE VENTURES, INC.

                                   By:  /s/John B. Henderson

                                   Title:  V. P. and Treasurer

                                   TAYLOR-BOLANE ASSOCIATES, INC.

                                   By: /s/ Diane M. Lee

                                   Title: Vice President

                                   GENESEE VENTURES:
                                   -----------------

                                   GENESEE VENTURES, INC.

                                   By:  /s/ John B. Henderson

                                   Title:  V. P. and Treasurer

                                   TAYLOR BOLANE:
                                   --------------

                                   TAYLOR-BOLANE ASSOCIATES, INC.

                                   By:  /s/ Diane M. Lee

                                   Title:  Vice President

                                   GENESEE CORPORATION:
                                   --------------------
<PAGE>
                                 Page 270 of 272

                                   GENESEE CORPORATION

                                   By:  /s/ John B. Henderson

                                   Title:  Sr.  V.P. and CFO

                                   MEMBERS:
                                   --------

                                   ICON Cash Flow Partners, L.P. Seven

                                   By:  ICON Capital Corp., its general partner

                                   By:  /s/ Paul B. Weiss

                                   Its: President

                                   ICON Cash Flow Partners, L.P. Six

                                   By:  ICON Capital Corp., its general partner

                                   By:  /s/ Paul B. Weiss

                                   Its: President

                                   ICON Income Fund Eight A L.P.

                                   By:  ICON Capital Corp., its general partner

                                   By:  /s/ Paul B. Weiss

                                   Its: President

                                   ICON Income Fund Eight B L.P.

                                   By:  ICON Capital Corp., its general partner

                                   By:  /s/ Paul B. Weiss

                                   Its: PresidentLOAN AGREEMENT

          AGREEMENT,  dated  October  ____,  1995,  between  CAP  ROCK  ELECTRIC
COOPERATIVE,  INC. ("Borrower"),  a corporation organized and existing under the
laws  of  the  State  of  Texas  (the  "state")  and  NATIONAL  RURAL  UTILITIES
COOPERATIVE FINANCE  CORPORATION ("CFC") , a corporation  organized and existing
under the laws of the District of Columbia.

                                    RECITALS

          WHEREAS, the Borrower has applied to CFC for a loan for the purpose(s)
set forth in  Schedule  1 hereto  and CFC is  willing to make such a loan to the
Borrower on the terms and conditions stated herein;

          NOW,  THEREFORE,  for and in  consideration  of the  premises  and the
mutual  covenants  hereinafter  contained,  the  parties  hereto  agree and bind
themselves as follows:

                                    ARTICLE I

                                   DEFINITIONS

Capitalized  terms that are not defined  herein  shall have the  meanings as set
forth in the Mortgage.

          "Advance"  or  "Advances"  shall  mean  advances  by CFC  to  Borrower
pursuant to the terms .and conditions of this Agreement.

     "Amortization Basis Date" shall mean three (3) years from the date hereof,

          "Business Day" shall mean any day that CFC is open for business.

          "CFC  Commitment"  shall have the  meaning  as  defined in  schedule 1
hereto.

          "CFC Fixed Rate" shall mean such fixed rate as is then  available  for
loans  similarly  classified  pursuant to CFC's policies and procedures  then in
effect.

          "CFC Fixed Rate Term"  shall mean the  specific  period of time that a
CFC Fixed Rate is in effect.

          "CFC  Variable  Rate"  shall  mean the  rates  established  by CFC for
variable  interest rate long-term  loans  similarly  classified  pursuant to the
long-term loan programs established by CFC from time to time.

          "Conversion  Request"  shall  mean a  request  in form  and  substance
satisfactory to CFC, that requests an interest rate conversion.

          "Depreciation   and   Amortization   Expense"  shall  mean  an  amount
constituting  the  depreciation and amortization of the Borrower as computed for
purposes of Form 7.

          "Distributions" shall have the meaning defined in Section 5.1.

          "Debt service  Coverage Ratio ("DSC")" shall mean the ratio determined
as follows:  for any  calendar  year add (ii  Patronage  Capital  and  Operating
Margins, (ii) Non-Operating Margins-Interest, (iii) Interest Expense, (iv)

<PAGE>

Depreciation and  Amortization  Expense for such year, -and (v) cash received in
respect of generation and transmission and other capital credits, and divide the
sum so obtained by the sum of all  payments )& principal  and  Interest  Expense
during  such  calendar  year;  provided,  however,  that in the  event  that any
Long-Term  Debt has been  refinanced  during such year the payments of Principal
and  Interest  Expense  required to be made .during such year on account of such
Long-Term Debt shall be based (in lieu of actual payments required to be made on
such refinanced  Debt) upon the larger of (1) an  annualization  of the payments
required to be made with respect to the  refinancing  debt during the portion of
such year such  refinancing debt is outstanding or (ii) the payment of Principal
and Interest Expense required to be made during the following year on account of
such refinancing debt.

          "Equities and Margins" shall mean  Borrower's  equities and margins as
computed pursuant to generally accepted accounting principles.

          "Equity"  shall mean the aggregate of Borrower's  Equities and Margins
as computed pursuant to generally accepted accounting principles.

          "Form 7" shall mean the form so identified by CFC, or, if no such form
is applicable to the accounts of the Borrower, such reference shall apply to the
corresponding  information  otherwise  determined in accordance  with  generally
accepted accounting principles.

          "Interest  Expense"  shall mean an amount  constituting  the  interest
expense  with  respect to Total  Long-Term  Debt of the Borrower as computed for
purposes of Form 7. In computing Interest Expense,  there shall be added, to the
extent  not  otherwise  included,  an amount  equal to  33-1/fl of the excess of
Restricted  Rentals paid by the Borrower over 2% of the Borrower's  Equities and
Margins.

     "LCTC" shall mean the Loan Capital Term Certificate as described in section
S.E. hereto.

          "Long-Term  Debt" shall mean any amount  included  in Total  Long-Term
Debt pursuant to generally accepted accounting principles.

          "Maturity Date" shall have the meaning as defined in the Note.

          "Mortgage" shall have the meaning as described in schedule 1 hereto.

          "Mortgaged  Property"  shall  have  the  meaning  as  defined  in  the
Mortgage.

          "Non-Operating    Margins-Interest"   shall   mean   the   amount   of
non-operating margins-interest of Borrower as computed for purposes of Form 7.

          "Note"  shall mean a promissory  note  executed by the Borrower in the
form of Exhibit A hereto.

          "Patronage  Capital or Margins" shall mean the amount of net patronage
capital or margins of the Borrower as computed for purposes of Form 7.

          "Payment Date" shall mean the last day of each of the months  referred
to in Schedule I hereto.

          "Payment Notice" shall mean a notice furnished by CFC to Borrower that
indicates  the precise  amount of each payment of principal and interest and the
total amount of each payment.

          "Termination Date" shall mean a date four years after the date hereof.

<PAGE>

          "Total Assets" shall mean an amount  constituting,  be total assets of
the Borrower as computed for purposes of Form 7.

     "Total Long-Term Debt" shall mean an amount constituting the long-term debt
of the Borrower as computed far purposes of Form 7

          "Total  Utility  Plant" shall mean the amount  constituting  the total
utility plant of the Borrower  computed in accordance  with  generally  accepted
accounting principles

                                   ARTICLE II

                         REPRESENTATIONS AND WARRANTIES

          Section 2. The Borrower represents and warrants that:

     A. Good  Standing.  The Borrower is a  corporation  duly  incorporated  and
validly existing and in good corporate  standing under the laws of the State, is
duly  qualified  in those  states in which it is  required  to be  qualified  to
conduct its  business  and has  corporate  power to enter into and perform  this
Agreement, to borrow hereunder and to give security as provided for herein.

     B.  Authority.  The execution,  delivery and performance by the Borrower of
this Agreement,  the Note (as hereinafter  defined) and the Mortgage (as defined
in  schedule 1 hereto)  and the  performance  of the  transactions  contemplated
thereby have been duly authorized by all necessary corporate action and will not
violate any provision of law or of the Articles of  Incorporation  or By-Laws of
the  Borrower  or result in a breach  of, or  constitute  a default  under,  any
agreement,  indenture or other instrument to which the Borrower is a party or by
which it may be bound.

          C.  Litigation.  There are no suits or  proceedings  pending or to the
knowledge of the Borrower  threatened  against or affecting  the Borrower or its
properties which, if adversely determined,  would have a material adverse effect
upon the financial  condition or the business of the  Borrower.  The Borrower is
not, to its knowledge,  in default with respect to any judgment,  order, rule or
regulation  of any court,  governmental  agency or other  instrumentality  which
would have a material adverse effect on the Borrower.

          D. Financial  Statements.  The balance sheet of the Borrower as at the
date  identified  in Schedule 1 hereto,  and the  statement of operations of the
Borrower for the period  ending on said date,  heretofore  furnished to CFC, are
complete and correct. Said balance sheet fairly presents the financial condition
of the Borrower as at said date and said statement of operations fairly reflects
its operations for the period ending on said date The Borrower has no contingent
obligation or unusual  forward or long-term  commitments  except as specifically
stated in said  balance  sheet or  herein,  There has been no  material  adverse
change in the  financial  condition or  operations of the Borrower from that set
forth in said financial  statements  except changes  disclosed in writing to CFC
prior to the date hereof.

     E. Location of Office.  The principal place of business of the Borrower and
the office where its records concerning accounts and contract rights are kept is
identified in Schedule 1 hereto.

     F. Location of Properties. All property owned by the Borrower is located in
the counties identified in schedule 1 hereto.

     C. No Other  Liens.  As to  property  which is  presently  included  in the
description of Mortgaged  Property (as that term is defined in the Mortgage) the
Borrower has not, without the prior written approval of CFC, signed any security
agreement or filed or permitted to be filed any financing statement

<PAGE>

     with  respect  to assets  owned by it,  other  other  than  agreements  and
financing statements running in favor of CFC., except as disclosed in writing to
CFC prior to the date hereof. I

     H. Required Approvals. No license,  consent or approval of any governmental
agency or  authority  is  required  to enable  the  Borrower  to enter into this
Agreement or to perform any of its  obligations  provided  for herein  except as
disclosed in schedule 1 hereto.

     I. Survival. All representations and warranties made by the Borrower herein
or made in any certificate delivered pursuant hereto shall survive the making of
the Advances and the execution and delivery to CFC of the Note.

                                   ARTICLE III

                                      LOAN

          Section 3.1. Advances.  CFC agrees to make, and the Borrower agrees to
request,  on the terms and conditions of this  Agreement,  Advances from time to
time at the main office of CFC, or at such other place as may be mutually agreed
upon, in an aggregate principal amount not to exceed the CFC Commitment.

          On the  Termination  Date, CFC may stop advancing  funds and limit the
CFC Commitment to the amount  advanced prior to such date. The obligation of the
Borrower to repay the Advances  shall be evidenced by the Note in the  principal
amount  of the  unpaid  principal  amount  of the  Advances  from  time  to time
outstanding.  The  Borrower  shall give CFC written  notice of the date on which
each Advance is to be made.

     Section 3.2. Interest Rate and Payment.  The Note shall be payable and bear
interest as follows:

          A. Payments and Amortization. The Borrower, upon receipt of an invoice
relating to an Advance,  shall  promptly pay interest only on each Payment Date.
Commencing on November 30, 1999 and  continuing on the 30th day of each November
thereafter  until the Note is paid in full,  the Borrower  shall also make equal
annual  payments of  principal in the amount of Five  Hundred  Thousand  Dollars
($500,000,00) each.

If not sooner paid, any amount due on account of the unpaid principal,  interest
accrued thereon and fees, if any, shall be due and payable on the Maturity Date.

Each Payment  Notice shall be sent to the Borrower at least ten (10) days before
the next ensuing Payment Date.

No provision of this Agreement or the Note shall require the payment,  or permit
the  collection,  of  interest  in  excess  of the  highest  rate  permitted  by
applicable law.

          B. Application of Payments. Each payment shall be applied first to any
charges then due on the Note, second to interest accrued on the principal amount
to the due date of such  payment on the Note (or, at the  election of the holder
of the  Note,  to the  date of such  payment  if the same is not paid on its due
date) , and the balance to the reduction of principal against the Note according
to an amortization schedule provided to Borrower from CFC.

     C. Election of Interest  Rate.  Prior to the first Advance on the Note, the
Borrower must select in writing one of the following  interest rates:  (i) a CFC
Fixed Rate; or (ii) the CFC Variable Rate.

Interest shall be computed for the actual number of days elapsed on the basis of
a year of 365 days, until the first day of the complete calendar quarter

<PAGE>

following the Amortization Basis Date. Thereafter, if the loan bears interest at
a CFC Fixed Rate,  interest shall be computed on the basis of a 30-day month and
360-day  year.  If the loan bears  interest at the CFC Variable  Rate,  interest
shall be computed  for the actual  number of days elapsed on the basis of a year
of 365 days.

          (i) Fixed Rate. If the Borrower  elects a CFC Fixed Rate for the Note,
such rate shall be in effect  for a CFC Fixed  Rate  Term.  During the CFC Fixed
Rate Term,  all  Advances  on the Note shall bear  interest  at the rate then in
effect  associated with such CFC Fixed Rate Term, CFC shall provide the Borrower
with at least 60 days prior written notice of the date on which a CFC Fixed Rate
is no longer in effect,  Pursuant to CFC's policies of general  application  for
such  repricing,  the Borrower may choose any of the interest  rate options then
available for similarly classified borrowers repricing from a CFC Fixed Rate, In
the event the  Borrower  does not select an interest  rate in writing when a CFC
Fixed Rate is subject to repricing,  then Advances shall bear interest according
to CFC's then available  interest rate repricing  policies.  CFC agrees that its
long-term  loan  policies  will include a fixed  interest  rate option until the
Maturity Date, provided,  however,  that the Borrower may not select a CFC Fixed
Rate with a CFC Fixed Rate Term that extends beyond the Maturity Date.

          (ii) CFC Variable  Rate. If the Borrower  elects a CFC Variable  Rate,
such CFC Variable  Rate shall apply until the  Maturity  Date of the Note unless
the Borrower elects to convert to a CFC Fixed Rate pursuant to the terms hereof.
In the event Borrower selects a CFC Variable Rate, such rate shall be applicable
to the entire amount advanced or to be advanced on the loan.

          Section 3.3. Conversion of Interest Rates.

          A. CFC Variable Rate to a CFC Fixed Rate. The Borrower may at any time
request to convert from the CFC Variable  Rate to a CFC Fixed Rate by submitting
to CFC a  Conversion  Request.  The rate shall be equal to the rate of  interest
offered by CFC in effect on the date of the  Conversion  Request.  The effective
date of the new interest rate shall be a date  determined by CFC pursuant to its
policies of general  application  following  receipt of the Conversion  Request.
Prior to the time when the CFC Fixed Rate is no longer applicable,  the Borrower
may select the CFC Variable Rate or a CFC Fixed Rate.

          B. CFC Fixed Rate to CFC Variable Rate. The Borrower may at its option
at any time  convert,  at the  discretion  of CFC,  a CFC Fixed  Rate to the CFC
Variable Rate, if the Borrower: (i) submits a Conversion Request requesting that
the CFC  Variable  Rate apply to any  outstanding  loan  balance on the Note and
future Advances pursuant  thereto;  and ii) pays to CFC promptly upon receipt of
an invoice a conversion fee calculated pursuant to CFC's long-term loan policies
as established  from time to :roe for similarly  classified  long-term loans The
effective  date of the CFC  Variable  Rate  shall  be a date  determined  by CFC
pursuant  to its  policies  of  general  application  following  receipt  of the
Conversion Request

          C. A CFC Fixed Rate to Another CFC Fixed Rate.  At the  discretion  of
CFC, the  Borrower may at its option at any time convert any amount  outstanding
on the Note from a CFC Fixed Rate to another CFC Fixed Rate if the  Borrower (i)
submits a  Conversion  Request  requesting  that a CFC Fixed  Rate  apply to any
outstanding  loan balance on the Note and (ii) pays to CFC promptly upon receipt
of an  invoice  any  applicable  conversion  fee  calculated  pursuant  to CFC's
long-term  loan  policies  as  established  from  time  to  time  for  similarly
classified long-term loans, The effective date of the new interest rate shall he
a date  determined  by CFC  pursuant  to its  policies  of  general  application
following receipt of the Conversion Request.

<PAGE>

     Section 3.4. Prepayment.  The Borrower may at any time, on not less than 30
days' written notice to CFC, prepay the Note. in whole or in part, together with
the interest  accrued to the date of prepayment and any prepayment  premium that
CFC may from time to time prescribe.

                                   ARTICLE IV

                              CONDITIONS OF LENDING

          Section 4. The  obligation  of CFC to make any  Advance  hereunder  is
subject to satisfaction of the following conditions:

     A. Legal Matters.  All legal matters  incident to the  consummation  of the
transactions  hereby  contemplated shall be satisfactory to counsel for CFC and,
as to all  matters of local law,  to such local  counsel as counsel  for CFC may
retain.

          B.  Documents.  CFC shall have been  furnished  with executed  copies,
satisfactory to CFC, of this Agreement,  the Note and the Mortgage and certified
copies,  satisfactory to CFC, of all such corporate documents and proceedings of
the Borrower  authorizing  the  transactions  hereby  contemplated as CFC or its
counsel  shall  require.  CFC shall have  received an opinion of counsel for the
Borrower  addressing  such legal matters as CFC or its counsel shall  reasonably
require.

     C. Government Approvals.  The Borrower shall have furnished to CFC true and
correct  copies of all  certificates,  authorizations  and  consents,  including
without  limitation the consents  referred to in Section 2.H. hereof,  necessary
for the execution,  delivery or  performance by the Borrower of this  Agreement,
the Note and the Mortgage.

          D. Representations and Warranties.  The representations and warranties
contained  in  Article  II  shall  (except  as  affected  by  the   transactions
contemplated  by  this  Agreement)  be true on the  date of the  making  of each
Advance  hereunder  with the same  effect as  though  such  representations  and
warranties had been made on such date; no Event of Default  specified in Article
VI and no event  which,  with the lapse of time or the  notice and lapse of time
specified  in  Article  VI would  become  such an Event of  Default,  shall have
occurred and be  continuing  or will have  occurred  after giving  effect to the
Advance on the books of the  Borrower;  there  shall have  occurred  no material
adverse  change in the business or  condition,  financial or  otherwise,  of the
Borrower; and nothing shall have occurred which in the opinion of CFC materially
and adversely affects the Borrower's ability to meet its obligations hereunder

     E.  Mortgage  Filing.  The  Mortgage  shall  have been duly  recorded  as a
mortgage  on real  property  and duly  filed,  recorded or indexed as a security
interest  in  personal  property  wherever  CFC  shall  have  requested,  all in
accordance with applicable law, and the Borrower shall have caused  satisfactory
evidence thereof to be furnished to CFC.

     F. Special  Conditions.  The Borrower shall have complied `with any special
conditions listed in Schedule 1 hereto.

     G.  Requisitions.  The Borrower will requisition all Advances by submitting
its requisition to CFC in form and substance  satisfactory to CFC.  Requisitions
shall be made only for the purpose(s) set forth herein.  The Borrower  agrees to
apply the proceeds of the Advances in accordance with its loan  application with
such modifications as may be mutually agreed.

<PAGE>

                                   ARTICLE IV
                              AFFIRMATIVE COVENANTS

          Section 5. After the date hereof and until payment in full of the Note
and  performance  of all  obligations  of the Borrower  hereunder,  the Borrower
agrees that it will:

          A.      Membership. Remain a member in good standing of CFC.

          B. Financial Ratios; Design of Rates. The Borrower,  subject to events
in the  judgment  of CFC to be beyond  the  control  of the  Borrower,  shall so
operate  and manage its  business as (i) to achieve a DSC of not less than 1.35,
said ratio being  determined by averaging  the two highest  annual ratios during
the most recent  three  calendar  years and (ii) to achieve a ratio of Equity to
Total  Assets of not less than 20~ as of December 31 of each year.  The Borrower
shall  design its rates so that such DSC ratio will be  achieved.  The  Borrower
shall not  decrease  its rates if it has failed to achieve a DSC of 1.35 for the
calendar year prior to such reduction subject only to an order from a regulatory
body properly exercising jurisdiction over the Borrower.

     C.  Annual  Certificates.  Within  ninety (90) days after the close of each
calendar year,  commencing with the year following the year in which the initial
Advance  hereunder  shall  have been made,  deliver  to CFC a written  statement
signed by its General  Manager,  stating that during such year,  and that to the
best  of  said  person's  knowledge,  the  Borrower  has  fulfilled  all  of its
obligations  under this  Agreement,  the Note, and the Mortgage  throughout such
year or, if there has been a default in the fulfillment of any such obligations,
specifying  each such  default  known to said  person  and the nature and status
thereof, In addition,  the Borrower shall deliver to CFC within ninety (90) days
of CFC's  written  request,  which shall be no more  frequently  than once every
year, a certification  regarding the condition of the Mortgaged Property both in
a form and prepared by a professional engineer satisfactory to CFC.

     D. Notice of Change in Place of Business. Notify promptly CFC in writing of
any change in location of its  principal  place of business or the office  where
its records concerning accounts and contract rights are kept.

          E. Loan  Certificate  Purchase.  purchase an LCTC, if required,  in an
amount not to exceed three percent of the face amount of the Note.  The purchase
price of the  LCTC,  if any,  shall  be  calculated  at The time of the  initial
Advance on the loan pursuant to CFC's policies as established  from time to time
for  loans  similarly  classified.  Such  purchase  shall  be paid  for in equal
quarterly  installments  after the date of the initial Advance pursuant to CFC's
policies.  CFC agrees to deliver the LCTC within ninety days  following the date
on which the LCTC has been paid for in full.

          F.  Limitations  on: System  Extensions and Additions;  Operations and
Maintenance Contracts; Power Purchase Contracts;  Power Sales Contracts.  Unless
the  Borrower  shall at the time  have an  Equity  of at least 30 or shall  have
achieved a DSC of at least  1.35 for each of the last two  calendar  years,  the
Borrower will not, without the prior written consent of CFC (a) construct, make,
lease,  purchase or otherwise  acquire any extensions or additions to its system
which provide direct service to any ultimate  consumer  having an anticipated or
contract demand in excess of twenty-five (25) percent of the Borrower's  maximum
system electrical demand recorded during the past twelve months;  (b) enter into
any  contract or  contracts  for the sale to the  ultimate  consumer of electric
power and energy in excess of twenty-five (25) percent of the Borrower's maximum
system  demand for the prior  year;  (c(  subject to the terms of the  Mortgage,
enter  into  any  contract  or  contracts  for  the  use by  others  of all or a
substantial part of its property; and (d) enter into any

<PAGE>

contract or contracts  for the purchase of electric  power or energy which would
alter the source for the prior year of more than 251 of the Borrower's source of
wholesale power or for any transmission interconnection or pooling arrangements.

          G.  Financial  Books;  Financial  Reports;  Right of  Inspection.  The
Borrower will at all times keep, and safely preserve,  proper books, records and
accounts  in which full and true  entries  will be made of all of the  dealings,
business and affairs of the Borrower,  in accordance  with generally  acceptable
accounting  principles.  When  requested by CFC,  the Borrower  will prepare and
furnish  CFC from time to time  hereunder  not  later  than the last day of each
month financial and statistical  reports on its condition and operations for the
previous month.  Such reports shall be in such form and include such information
as may be  specified  by  CFC,  including  without  limitation  an  analysis  of
Borrower's revenues,  expenses and consumer accounts. The Borrower will cause to
be prepared  and  furnished  to CFC from time to time  hereunder,  at least once
during each 12-month  period during the term hereof,  a full and complete report
of its financial  condition and of its  operations as of the end of the calendar
year in form  and  substance  satisfactory  to CFC,  audited  and  certified  by
independent  certified  public  accountants  nationally  recognized or otherwise
satisfactory  to CFC and  accompanied  by a  report  of such  audit  in form and
substance satisfactory to CFC. Such report shall be furnished within 120 days of
the end of the such calendar year. CFC,  through its  representatives,  shall at
all times during reasonable business hours and upon prior notice have access to,
and the right to inspect  and make  copies of,  any or all  books,  records  and
accounts, and any or all invoices, contracts, leases, payrolls, canceled checks,
statements  and other  documents and papers of every kind belonging to or in the
possession of the Borrower or in anyway pertaining to its property or business.

          H.  Limitations  on Mergers  and Sale,  Lease or  Transfer  of capital
Assets;  Application of Proceeds.  Without the prior written consent of CFC, the
Borrower will not consolidate  with, or merge, or sell all or substantially  all
of its business or assets,  to another entity or person.  If no Event of Default
(and no event  which  with  notice or lapse of time and notice  would  become an
Event of Default) shall have occurred and be continuing,  Borrower may,  without
the prior written  consent of CFC, sell,  lease or transfer any capital asset in
exchange for fair market value  consideration  paid to the Borrower if the value
of such capital  asset is less than 5% of Total  Utility Plant and the aggregate
value of capital assets sold,  leased or  transferred in any 12-month  period is
less than 10% of Total Utility Plant.  Subject to the terms of the Mortgage,  if
the Borrower does sell, lease or transfer any capital assets,  then the proceeds
thereof (less ordinary and  reasonable  expenses  incident to such  transaction)
shall  immediately  (i)  be  applied  as a  prepayment  of  the  Note,  to  such
installments  as may be  designated  by CFC at the tome of any such  prepayment;
(ii) on the case of dispositions of equipment, material or scrap, applied to the
purchase of other  property  useful on the  Borrower's  business,  although  not
necessarily of the same kind as the property  disposed of, which shall forthwith
become subject to the lien of the Mortgage;  or (iii) applied to the acquisition
or  construction  of other  property  or in  reimbursement  of the costs of such
property.

          I.  Limitation  on  Dividends,   Patronage   Refunds  and  Other  Cash
Distributions,  Without the prior written consent of CFC, the Borrower will not,
in any calendar year,  declare or pay any dividends,  or pay or determine to pay
any patronage  refunds,  or retire any patronage  capital or make any other cash
distributions  (such dividends,  refunds,  retirements  and-other  distributions
being  hereinafter  collectively  called  "Distributions")  -  to  its  members,
stockholders  or consumers if after giving effect to any such  Distribution  the
total  Equity of the  Borrower  will not equal or exceed 30% of its total assets
and  other  debits;  provided,  however,  the  Borrower  may make  Distributions
(exclusive of any Distributions to the estates of deceased

<PAGE>

patrons)  up to an  amount  not in excess of 25% of the  Patronage  Capital  and
Margins of the Borrower in the preceding year; provided,  further, however, that
in no event will the Borrower make any Distributions if there is unpaid when due
any  installment of principal of (premium,  if any) or interest on its Notes, if
the Borrower is otherwise in default hereunder or if, after giving effect to any
such Distribution, the Borrower's total current and accrued assets would be less
than its total current and accrued liabilities.  For the purpose of this section
a "cash  distribution"  shall be deemed to include any general  cancellation  or
abatement of charges for electric energy or services  furnished by the Borrower,
but not the repayment of a membership  fee upon  termination of a membership and
not the rebate of an  abatement  of costs  incurred by the  Borrower,  such as a
reduction of wholesale power cost previously incurred,

          J.  Limitations  on  Loans,  Investments  and Other  Obligations.  The
Borrower will not, without the prior written consent of CFC,  hereafter make any
loan or  advance  to,  or make  any  investment  in,  or  purchase  or make  any
commitment  to  purchase  any stock,  bonds,  notes or other  securities  of, or
guaranty,  assume or  otherwise  become  obligated or liable with respect to the
obligations of, any other person, firm or corporation,  except (i) securities or
deposits issued,  guaranteed or fully insured as to payment by the United States
Government  or any agency  thereof,  (ii)  capital  term  certificates  or other
securities  of CFC,  (iii)  capital  credits,  (iv) loans,  deposits,  advances,
investments,  securities  and  obligations  which the Borrower has, prior to the
date hereof,  committed itself to make,  purchase or undertake,  as the case may
be, and as to which CFC has provided the Borrower with written approval prior to
the date  hereof,  and (v) such other  loans,  guarantees,  deposits,  advances,
investments  and  obligations as may from time to time to be made,  purchased or
undertaken  by the  Borrower,  provided,  however,  that the  aggregate  cost of
investments,  plus the total  unpaid  principal  amount  of  loans,  guarantees,
deposits, advances and obligations, permitted under this clause (v) shall not in
the  aggregate at any time exceed the greater of 10% of Total  Utility  Plant or
50% of total Equities and Margins.

     K. Special  Affirmative  Covenants.  The Borrower agrees to comply with any
special affirmative covenant(s) identified in Schedule 1 hereto.

                                   ARTICLE VI

                                EVENTS OF DEFAULT

     Section 6. The following shall be Events of Default under this Agreement;

     A.  Representations and Warranties.  Any representation or warranty made by
the Borrower in Article II hereof or any certificate  furnished to CFC hereunder
shall prove to have been incorrect on any material  respect at the time made and
shall at the time in question be untrue or Incorrect in any material respect and
remain uncured;

     B.  Payment.  Default  shall be made in the  payment  of or on  account  of
interest  on or  principal  of the Note  when  and as the same  shall be due and
payable,  whether by acceleration or otherwise,  which shall remain  unsatisfied
far five (5) Business Days;

     C.  Other  Covenants.   Default  by  the  Borrower  in  the  observance  or
performance of any other covenant or agreement contained in this Loan Agreement,
in the Note or the Mortgage,  which shall remain unremedied for 60 calendar days
after written notice thereof shall have been given to the Borrower by CFC;

<PAGE>

     D. Corporate Existence. The Borrower shall forfeit or otherwise be deprived
of its corporate charter, franchises,  permits, easements,  consents or licenses
required to carry on any material portion of its business;

     E.  Other  Obligations.  Default  by the  Borrower  In the  payment  of any
obligation,  whether  direct  or  contingent,  for  borrowed  money  or  in  the
performance or observance of the terms of any instrument  pursuant to which such
obligation was created or securing such obligation;

     F.  Bankruptcy.  A court having  jurisdiction in the premises shall enter a
decree or order for relief in respect of the  Borrower  in an  involuntary  case
under  any  applicable  bankruptcy,  insolvency  or  other  similar  law  now or
hereafter in effect, or appointing a receiver, liquidator,  assignee, custodian,
trustee,  sequestrator  or  similar  official,  or  ordering  the  winding up or
liquidation of its affairs,  and such decree or order shall remain  unstayed and
in effect for a period of ninety (90)  consecutive  days or the  Borrower  shall
commence a voluntary case under any applicable  bankruptcy,  insolvency or other
similar law now or hereafter in effect, or under any such law, or consent to the
appointment or taking possession by a receiver, liquidator,  assignee, custodian
or  trustee,  of a  substantial  part  of its  property,  or  make  any  general
assignment for the benefit of creditors; or

          C. Dissolution or Liquidation. Other than as provided in subsection R.
above,  the  dissolution  or  liquidation  of the  Borrower,  or  failure by the
Borrower  promptly  to  forestall  or  remove  any  execution,   garnishment  or
attachment  of such  consequence  as will  impair its  ability to  continue  its
business  or  fulfill  its  obligations  and  such  execution,   garnishment  or
attachment  shall  not be  vacated  within  30 days.  The term  "dissolution  or
liquidation of the Borrower", as used in this subsection, shall not be construed
to include the  cessation of the corporate  existence of the Borrower  resulting
either  from a merger or  consolidation  of the  Borrower  into or with  another
corporation  following a transfer of all or  substantially  all its assets as an
entirety, under the conditions permitting such actions.

                                   ARTICLE VII

                                    REMEDIES

          Section 7. If any of the Events of Default  listed in Section 6 hereof
shall occur after the date of this  Agreement and shall not have been  remedied,
then  CFC  may  pursue  all  rights  and  remedies  available  to CFC  that  are
contemplated  by  this  Agreement  or the  Mortgage  in  the  manner,  upon  the
conditions,  and with the effect  provided in this  Agreement  or the  Mortgage,
including,  but not  limited  to, a suit for  specific  performance,  injunctive
relief or  damages.  Nothing  herein  shall limit the right of CFC to pursue all
right; and remedies available to a creditor following the occurrence of an Event
of Default listed on Section 5 hereof. Each right, power and remedy of CFC shall
be  cumulative  and  concurrent,  and recourse to one or more rights or remedies
shall not constitute a waiver of any other right, power or remedy.

<PAGE>

                                  ARTICLE VIII
                                  MISCELLANEOUS

          Section 8.1. Notices.  All notices,  requests and other communications
provided for herein  including,  without  limitation,  any  modifications of, or
waivers,  requests or consents  under,  this Agreement shall be given or made in
writing  (including,  without  limitation,  by  telecopy)  and  delivered to the
intended  recipient at the "Address for Notices"  specified below; or, as to any
party, at such other address as shall be designated by such party in a notice to
each other  party.  Except as  otherwise  provided in this  Agreement,  all such
communications  shall be  deemed to have been duly  given  when  transmitted  by
telecopier or  personally  delivered  or, in the case of a mailed  notice,  upon
receipt, in each case given or addressed as provided for herein. The Address for
Notices of the respective parties are as follows:

                                             National Rural Utilities
                                             Cooperative Finance Corporation
                                             Woodland Park
                                             2201 Cooperative Way
                                             Herndon, Virginia 22071
                                             Fax:     (703) 709-5776

     Attention: Governor The Borrower:

                   The address set forth in Schedule 1 hereto

          Section 8.2. Expenses. The Borrower will pay all costs and expenses of
CFC,  including  reasonable  fees of counsel,  incurred in  connection  with the
enforcement of this Agreement,  the Note, the Mortgage and the other instruments
provided  for herein or with the  preparation  for such  enforcement  if CFC has
reasonable grounds to believe that such enforcement may be necessary.

          Section 8.3. Late Payments.  If payment of any amount due hereunder is
not received at CFC's office in Herndon, Virginia, or such other location as CFC
may  designate to the Borrower  within five (5) Business Days after the due date
thereof or such other time period as CFC may prescribe  from time to time in its
policies of general application in connection with any late payment charge (such
unpaid  amount  being  herein  called the  `delinquent  amount",  and the period
beginning  after such due date  until  payment of the  delinquent  amount  being
hereon  called the  "late-payment  period"),  the  Borrower  will pay to CFC, in
 .addition to all other amounts due under the terms of the Note, the Mortgage and
this Agreement, any late-payment charge as may be fixed by CFC from time to time
on the delinquent amount for the late-payment period.

          Section 8.4. Filing Fees. To the extent permitted by law, the Borrower
agrees  to pay all  expenses  of CFC  (including  the fees and  expenses  of its
counsel)  in  connection  with  the  filing  or  recordation  of  all  financing
statements  and  instruments  as may be required by CFC in connection  with this
Agreement,  including,  without limitation,  all documentary stamps, recordation
and  transfer  taxes and other costs and taxes  incident to  recordation  of any
document or instrument in connection herewith.  Borrower agrees to save harmless
and indemnify CFC from and against any liability  resulting  from the failure to
pay any required documentary stamps,  recordation and transfer taxes,  recording
costs, or any other expenses  incurred by CFC in connection with this Agreement.
The  provisions of this  subsection  shall survive the execution and delivery of
this  Agreement and the payment of all other amounts due hereunder or due on the
Note.

<PAGE>

          Section 8.5. Ho Waiver. No failure on the part of CFC to exercise, and
no delay in exercising,  any right  hereunder  shall operate as a waiver thereof
nor shall any single or partial exercise by CFC of any right hereunder  preclude
any other or further exercise thereof or the exercise of any other right.

     SECTION 8.6.  GOVERNING LAW. THIS AGREEMENT AND THE NOTE SHALL BE DEEMED TO
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE  WITH, THE LAWS OR THE  COMMONWEALTH
OR VIRGINIA,

          Section  8.7,  Holiday  Payments.  If any  payment  to be  made by the
Borrower  hereunder  shall become due on a day which is not a Business Day, such
payment shall be made on the next succeeding  Business Day and such extension of
time shall be included in computing any interest in respect of such payment.

     Section  8.8.  Rescission  Fee. The Borrower may elect not to borrow all or
any portion of the CFC  Commitment in which event CFC shall release the Borrower
from its obligations  hereunder,  provided the Borrower complies with such terms
and conditions as CFC may impose for such release including, without limitation,
payment of any rescission fee that CFC may from time to time prescribe.

     Section 8.9.  Modifications.  No modification or waiver of any provision of
this  Agreement  or the  Note,  and no  consent  to any  departure  by  Borrower
therefrom,  shall in any event be effective  unless the same shall be in writing
by the party granting such modification, waiver or consent.

     Section  8.10.  Merger and  Integration.  This  Agreement  and the attached
exhibits and matters  incorporated by reference  contain the entire agreement of
the parties  hereto with  respect to the  matters  covered and the  transactions
contemplated  hereby.  Section  8.11.  Headings.  The headings and  sub-headings
contained  in the  titling  of  this  Agreement  are  intended  to be  used  for
convenience only and do not constitute part of this Agreement.

          Section 8.12.  Severability.  If any term, provision or condition,  or
any part  thereof,  of this  Agreement or the  Mortgage  shall for any reason be
found or held invalid or unenforceable  by any  governmental  agency or court of
competent jurisdiction, such invalidity or unenforceability shall not affect the
remainder of such term,  provision or condition nor any other term, provision or
condition,  and this Agreement,  the Note, and the Mortgage shall survive and be
construed as af such invalid or unenforceable  term,  provision or condition had
not been contained therein.

          Section  8.13.  Right of Setoff.  upon the  occurrence  and DURING the
continuance  of any Event of Default,  CFC is hereby  authorized at any time and
from time to time,  without prior notice to the Borrower,  to exercise rights of
setoff or recoupment  and apply any and all amounts held, or hereafter  held, by
CFC or owed to the Borrower or for the credit or account of the Borrower against
any  and  all of the  obligations  of the  Borrower  now or  hereafter  existing
hereunder or under the Note.  CFC agrees to notify the Borrower  promptly  after
any such setoff or recoupment  and the  application  thereof,  provided that the
failure  to give such  notice  shall not  affect the  validity  of such  setoff,
recoupment or application.  The rights of CFC under this section are in addition
to  any  other  rights  and  remedies  (including  other  rights  of  setoff  or
recoupment) which CFC may have. Borrower waives all rights of setoff, deduction,
recoupment or counterclaim.

     Section 8.14. Schedule 1. schedule 1 attached hereto is an integral part of
this Agreement.

<PAGE>

Section 8.15 Prior Loan Documents, It is understood and agreed that with respect
to all long-term loan agreements  previously entered into by and between CFC and
Borrower and all  promissory  notes  thereto  secured  under the Mortgage  (both
hereinafter  being referred to as "PriorLoan  Documents")  the Borrower shall be
required,  after the date hereof,  to meet reporting and financial  covenants as
set forth in this  Agreement  :rather  than  those  set forth in the Prior  Loan
Documents.  In the event of any conflict  between any  reporting  and  financial
covenant set forth in a Prior Loan  Document  and any  reporting  and  financial
covenant in this  Agreement,  the  requirements  as set forth in this  Agreement
shall apply.  Nothing in this section  shall,  however,  eliminate or modify any
special condition, special affirmative covenant or special negative covenant, if
any, unless specifically agreed to in writing by CFC. Furthermore,  the interest
rate  options  available  to  Borrower  as set  forth  in this  Agreement  shall
supersede the interest rate options as set forth in any Prior Loan Documents.

<PAGE>

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

                                            CAP ROCK ELECTRIC COOPERATIVE, INC.
          (SEAL)
                                            By:  /s/ Russell E. Jones
                                            Russell E. Jones
                                            Chairman of the Board

Attest:  /s/ Alfred Schwartz
Secretary

            NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION
(SEAL)

                                            By:  /s/ Not Legible
                                            For Governor

Attest:  /s/ Not Legible
Assistant Secretary-Treasurer

<PAGE>

                                   SCHEDULE 1

1.   The purpose of this loan is to refinance investments by the Borrower in its
     subsidiary,  New West  Resources.  and .loans  extended by the  Borrower or
     guaranteed by the Borrower in connection with New West Resources.

2.        The  Mortgage  shall mean the Second  Restated  Mortgage  and security
          Agreement, dated as of even date with this Loan Agreement, between the
          Borrower  and  CFC,  as it may have  been or  shall  be  supplemented,
          amended, consolidated, or restated from time to time..

3.   The date of the  Borrower's  balance  sheet  referred to in Section 2.D. is
     March 31, 1994.

4.        The principal place of business of the Borrower referred to in Section
          2.E.     is 500 West Wall, Suite 400, Midland, Texas 79701.

5.        All of the  property  of the  Borrower  is located in the  counties of
          Andrews,  Borden, Collin,  Dawson, Ector, Rannin,  Risher,  Glasscock,
          Howard, Hunt, Iricn, Martin, Midland, Mitchell, Nolan, Reagan, Scurry,
          Sterling, Tom Green and Lipton in the State of Texas.

6.       The governmental authority referred to in Section 2.H. is not
          applicable.

7.       The Borrower selects the following Note:
<TABLE>
<S>            <C>                             <C>                                         <C>

 --------------------------------------------------------------------------------------------------------------------
                 Loan                                 Note                                  Note Term Maturity
             Designation                              Amount                            Date
 --------------------------------------------------------------------------------------------------------------------
 --------------------------------------------------------------------------------------------------------------------
                A-9043                                $15,000,000.                       October       , 2005     I
 --------------------------------------------------------------------------------------------------------------------
</TABLE>

8.        The Payment Date months are February, May, August, and November.

     9. Amortization of Advances shall be based upon the method indicated below:

                                                      level principal

                                                      level debt service

                                    XX                other

10.       The special condition(s) referred to in Section 4F. is (are)

          (a)      The  obligation  of CFC to make any  Advance  is  subject  to
                   receipt  by  CFC  of an  annual  financial  statement  of the
                   Borrower  for its fiscal year ending  March 31,  1995,  which
                   financial statement shall be audited by Arthur Anderson & Co.
                   and shall  otherwise be satisfactory in form and substance to
                   CFC.

     11. The special  affirmative  covenant(s)  referred  to in Section  5.K. is
(are) as follows:

          (a)      In addition to the annual payments of principal  described in
                   Section 3.2 )A), within thirty (30) days of receipt by any of
                   the Borrower, New West Resources or other affiliated entities
                   of any cash  payment as a result of any of their  investments
                   in or loans  extended to Araxas Energy  Corporation,  whether
                   such cash is paid for purposes of repaying debt, repurchasing
                   stock,  making dividends or other  distributions,  or for any
                   other reason

<PAGE>

     whatsoever,  the  Borrower  shall  pay to CFC an equal  amount  of cash for
application by CFC to the prepayment of the principal amount of the Note.

          (b)      During the term of the Loan,  the Borrower  shall  deliver to
                   CFC   monthly   operating   statements   for  Araxas   Energy
                   Corporation,  New West Resources and the Borrower  before the
                   twentieth  day  of  the  month  following  the  month  of the
                   statement.

     1.2.  The address of the  Borrower  referred to in Section 8.1. is 500 West
Wall, Suite 400, Midland, Texas 79701.

13.       Notwithstanding anything contained in Section 3.4 to the contrary, any
          prepayment  of the  principal  amount  of the Note  made  pursuant  to
          Affirmative  Covenant  11(a) of this  Schedule I shall be permitted by
          CFC without payment of any prepayment premium.

<PAGE>

                             SECURED PROMISSORY NOTE

     a corporation  ("Borrower"),  for value received  promises to pay,  without
setoff,  deduction,  recoupment or counterclaim,  to the order of NATIONAL RURAL
UTILITIES  COOPERATIVE FINANCE CORPORATION  ("Payee") at the Payee's main office
or such other place as  designated  by the Payee,  in lawful money of the United
States, the sum of the aggregate unpaid principal amount of all Advances made by
the  Payee  pursuant  to the Loan  Agreement,  dated as of even  date  herewith,
between  the  Borrower  and the Payee as may be  amended  from time to time (the
"Loan  Agreement"),  on the dates provided in the Loan Agreement (except that if
not sooner paid,  any balance shall be due and payable on a date years after the
date hereof,  such date being the Maturity Date) , with interest thereon in like
money  from  the  respective  dates  of each  Advance  (as  defined  in the Loan
Agreement) hereunder,  at the rate or rates and payable at the times provided in
said Loan  Agreement  together  with any  other  amount  payable  under the Loan
Agreement.

     This Note is secured  under a Mortgage and Security  Agreement  dated as of
between  the  Borrower  and  the  Payee,  as  it  may  have  been  or  shall  be
supplemented, amended, consolidated or restated from time to time ("Mortgage") .
This  Note is the Note  referred  to in,  and has been  executed  and  delivered
pursuant to, the Loan Agreement.

          The principal hereof and interest accrued thereon and any other amount
due under the Loan  Agreement may be declared to be forthwith due and payable in
the mariner,  upon the conditions,  and with the effect provided in the Mortgage
or the Loan Agreement.

          The  Borrower  waives  demand,  presentment  for  payment,  notice  of
dishonor, protest, notice of protest, and notice of non-payment of this Note.

          IN WITNESS  WHEREOF the  Borrower has caused this Note to be signed in
its  corporate  name and its  corporate  seal to be  hereunto  affixed and to be
attested by its duly authorized officers, all as of the day and year first above
written.

  -------------------------------
                                 (Name of Borrower)
          (SEAL)
                               By:
                               ------------------------------
                                (President)
          Attest: _
          ------------------------------
          (Secretary)

          Loan No.:
          ------------------------------

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