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<SEC-DOCUMENT>0000950134-02-002346.txt : 20020415
<SEC-HEADER>0000950134-02-002346.hdr.sgml : 20020415
ACCESSION NUMBER:		0000950134-02-002346
CONFORMED SUBMISSION TYPE:	10KT405
PUBLIC DOCUMENT COUNT:		16
CONFORMED PERIOD OF REPORT:	20011231
FILED AS OF DATE:		20020320

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			TRINITY INDUSTRIES INC
		CENTRAL INDEX KEY:			0000099780
		STANDARD INDUSTRIAL CLASSIFICATION:	RAILROAD EQUIPMENT [3743]
		IRS NUMBER:				750225040
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10KT405
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-06903
		FILM NUMBER:		02579820

	BUSINESS ADDRESS:	
		STREET 1:		2525 STEMMONS FREEWAY
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75207-2401
		BUSINESS PHONE:		2146314420

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	TRINITY STEEL CO INC
		DATE OF NAME CHANGE:	19720407
</SEC-HEADER>
<DOCUMENT>
<TYPE>10KT405
<SEQUENCE>1
<FILENAME>d94851e10kt405.txt
<DESCRIPTION>FORM 10-K TRANSITION REPORT FOR DECEMBER 31, 2001
<TEXT>
<PAGE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                             ---------------------
                                   FORM 10-K
                             ---------------------
(MARK ONE)
     [ ]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                                       OR

     [X]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

       FOR THE TRANSITION PERIOD FROM APRIL 1, 2001 TO DECEMBER 31, 2001.

                         COMMISSION FILE NUMBER 1-6903

                            TRINITY INDUSTRIES, INC.
             (Exact name of registrant as specified in its charter)

<Table>
<S>                                                 <C>
                     DELAWARE                                           75-0225040
             (State of Incorporation)                      (I.R.S. Employer Identification No.)

              2525 STEMMONS FREEWAY
                  DALLAS, TEXAS                                         75207-2401
     (Address of principal executive offices)                           (Zip Code)
</Table>

       Registrant's telephone number, including area code (214) 631-4420

           Securities Registered Pursuant to Section 12(b) of the Act

<Table>
<Caption>
                                                    Name of each exchange
         Title of each class                         on which registered
         -------------------                        ---------------------
<S>                                     <C>
COMMON STOCK, $1.00 PAR VALUE.........  NEW YORK STOCK EXCHANGE, INC.
RIGHTS TO PURCHASE SERIES A JUNIOR
  PARTICIPATING PREFERRED STOCK, $1.00
  PAR VALUE...........................  NEW YORK STOCK EXCHANGE, INC.
</Table>

        Securities Registered Pursuant to Section 12(g) of the Act: NONE
                             ---------------------

     INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS. YES   [X]  No  [ ].

     INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM
405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS
FORM 10-K.  [X]

     THE AGGREGATE MARKET VALUE OF VOTING STOCK HELD BY NONAFFILIATES OF THE
REGISTRANT WAS $776,996,742 AS OF FEBRUARY 28, 2002.

     AT FEBRUARY 28, 2002 THE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING WAS
44,371,946.

     THE INFORMATION REQUIRED BY PART III OF THIS REPORT, TO THE EXTENT NOT SET
FORTH HEREIN, IS INCORPORATED BY REFERENCE FROM THE REGISTRANTS DEFINITIVE PROXY
STATEMENT RELATING TO THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 13,
2002.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

                            TRINITY INDUSTRIES, INC.

                                   FORM 10-K

                               TABLE OF CONTENTS

<Table>
<Caption>
                                     CAPTION                             PAGE
                                     -------                             ----
<S>        <C>                                                           <C>
                                      PART I
Item  1.   Business....................................................     1
Item  2.   Properties..................................................     9
Item  3.   Legal Proceedings...........................................     9
Item  4.   Submission of Matters to a Vote of Security Holders.........     9

                                     PART II
Item  5.   Market for the Company's Common Stock and Related
             Stockholder Matters.......................................    10
Item  6.   Selected Financial Data.....................................    11
Item  7.   Management's Discussion and Analysis of Financial Condition
             and Results of Operations.................................    12
Item  7a.  Quantitative and Qualitative Disclosures About Market
             Risk......................................................    21
Item  8.   Financial Statements and Supplementary Data.................    22
Item  9.   Changes In and Disagreements with Accountants on Accounting
             and Financial Disclosure..................................    41

                                     PART III
Item 10.   Directors and Executive Officers of the Company.............    42
Item 11.   Executive Compensation......................................    42
Item 12.   Security Ownership of Certain Beneficial Owners and
             Management................................................    42
Item 13.   Certain Relationships and Related Transactions..............    42

                                     PART IV
Item 14.   Exhibits, Financial Statement Schedules and Reports on Form
             8-K.......................................................    43
</Table>

                                        i
<PAGE>

                                     PART I

ITEM 1.  BUSINESS

     GENERAL DEVELOPMENT OF BUSINESS.  Trinity Industries, Inc., incorporated in
1933, is one of the nation's leading diversified industrial companies providing
a variety of high volume, repetitive products and services for the
transportation, industrial, and construction sectors of the marketplace. We
compete in cyclical markets and are continuously looking for opportunities to
improve our competitive positions.

     In September 2001, we changed our year-end from March 31 to December 31.
Unless stated otherwise, all references to fiscal year 2000 shall mean the full
fiscal year ended on March 31, 2000 and fiscal year 2001 shall mean the full
fiscal year ended March 31, 2001. The nine months ended December 31, 2001 covers
the period from April 1, 2001 to December 31, 2001.

     In October 2001, we completed our merger transaction with privately owned
Thrall Car Manufacturing Company. This merger combines Trinity's strength in
tank car production, Thrall's strength in auto rack manufacturing and research
and development expertise across the entire spectrum of railcars.

     Trinity became a Delaware Corporation in 1987. The Company's principal
executive offices are located at 2525 Stemmons Freeway, Dallas, Texas
75207-2401, and our telephone number is 214-631-4420.

     FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS.  Financial information about
our industry segments for the nine months ended December 31, 2001 and fiscal
years 2001 and 2000 is presented in Part II, Item 7 "Management's Discussion and
Analysis of Financial Condition and Results of Operations" on pages 12 through
21.

     NARRATIVE DESCRIPTION OF BUSINESS.  The Company is engaged in the
manufacture, marketing, and leasing of a variety of products consisting of the
following five business groups:

     TRINITY RAIL GROUP.  Our railcar group primarily serves two markets: North
America and Europe. We develop and manufacture a comprehensive selection of
railcars used for transporting a wide variety of liquids, gases and dry cargo.
We are the leading railcar manufacturer in North America. Our railcar operations
offer a wide range of car types to take advantage of changing industry trends
and developing market opportunities including:

- - Tank Cars -- Tank cars transport products such as liquified petroleum gas,
  liquid fertilizer, sulfur, sulfuric acids and corn syrup.

- - Auto Carrier Cars -- Auto carrier cars transport automobiles and sport utility
  vehicles.

- - Hopper Cars -- Covered hopper cars carry cargo such as grain, dry fertilizer,
  plastic pellets and cement. Open-top hoppers are most often used to haul coal.

- - Box Cars -- Box cars transport products such as food goods, auto parts, wood
  products and paper.

- - Intermodal Cars -- Intermodal cars transport intermodal containers and
  trailers, which are generally interchangeable among railcar, truck and ship,
  thus making it possible to move cargo without repeated loading and unloading.

- - Gondola Cars -- Rotary gondolas are used for coal service, and top-loading
  gondola cars transport a variety of other heavy bulk commodities such as scrap
  metals, steel products, machinery and lumber.

- - Specialty Cars -- Specialty cars are designed to address the special needs of
  a particular industry or customer, such as pressure differential cars used to
  haul fine grain food products such as sugar and flour, waste hauling gondolas
  and side dump cars.

     We also manufacture and sell railcar parts, such as auto carrier doors and
accessories, hatch rings, discharge gates, covers, floors, yokes, couplers,
axles, hitches, bogies, brakes, center plates and chutes. These parts are
ultimately used in manufacturing and repair of railcars.

     We have the ability to maintain, repair and modify railcars through our
repair network, Trinity Railcar Repair, Inc. This network consists of five major
repair facilities and fourteen mini/mobile repair shops. The repair network
locations are spread across the United States, including locations in Georgia,
Montana, Pennsylvania and Texas.

     Our customers include railroads, leasing companies, and shippers, such as
utilities, petrochemical companies, grain shippers, and major construction

                                        1
<PAGE>

and industrial companies. We compete against five major railcar manufacturers.

     We hold patents of varying duration for use in our manufacture of railcar
and component products. We cannot quantify the importance of such patents, but
patents are believed to offer a marketing advantage in certain circumstances. No
material revenues are received from licensing of these patents.

     CONSTRUCTION PRODUCTS GROUP.  Our Construction Products segment is composed
of highway safety products, concrete and aggregates, beams and girders used in
highway construction and weld pipe fittings.

     We are one of the largest manufacturers of roadside safety products in
North America. Our products include highway safety guardrails and patented
products such as guardrail end terminals, crash cushions, and other protective
barriers that absorb and dissipate the force of impact in collisions between
vehicles and fixed roadside objects. Our predominantly galvanized steel product
lines use the principles of momentum transfer and kinetic energy absorption to
safely decelerate errant vehicles. The Federal Highway Administration determines
which products are eligible for federal funds for highway projects and has
approved most of our products as acceptable permanent and construction zone
highway hardware according to requirements of the National Cooperation Highway
Research Program.

     We hold patents and are a licensee for certain of our guardrail and
end-treatment products that enhance our competitive position for these products.

     We sell highway safety products in all 50 U.S. states, Canada, Mexico and
other countries. We compete against several national and regional guardrail
producers.

     We supply ready mix concrete and construction aggregates, such as crushed
stone, sand and gravel, asphalt rock and recycled concrete, primarily in Texas.
Our customers are primarily owners, contractors and subcontractors in the
construction and foundation industry who are located near our plant locations.
We compete with ready mix concrete producers and aggregate producers located in
Texas, Louisiana, and Arkansas.

     Weld pipe fittings, such as caps, elbows, return bends, tees, concentric
and eccentric reducers and full and reducing outlet tees, are sold primarily to
pipeline, petrochemical, and non-petrochemical process industries. We compete
with numerous companies throughout the United States. Competition for fittings
has been intense during the previous three years.

     We manufacture structural steel beams and girders for the construction of
new, restored and/or replacement railroad bridges, county, municipal and state
highway bridges and power generation plants. We sell bridge construction and
support products primarily to owners, general contractors and subcontractors on
highway and railroad construction products. Our competitors primarily include
fabricators with facilities located in Texas, Oklahoma and Arkansas.

     INLAND BARGE GROUP.  We are the largest producer of inland barges in the
United States and one of the largest producers of fiberglass barge covers. Our
six manufacturing facilities are located along the United States inland river
system allowing for rapid delivery to our customers.

     We manufacture a variety of dry-cargo barges, such as deck barges and, open
or covered hopper barges that transport various commodities, such as grain, coal
and aggregates. We also produce tank barges used to transport liquid products at
high or low temperatures. Fiberglass reinforced lift covers are primarily for
grain and rolling covers are for other bulk commodities, such as steel, paper,
salt and cement.

     Our Inland Barge segment customers primarily include commercial marine
transportation companies. Many companies have the capability to enter into, and
from time to time do enter into, the inland barge manufacturing business. The
Company strives to compete through efficiency in operations and quality of
product.

     INDUSTRIAL PRODUCTS GROUP.  We are a leading producer of tank containers
and tank heads for pressure vessels. We manufacture tanks in the United States,
Mexico and Brazil. We market a portion of our industrial products in Mexico
under the brand name of TATSA. The following paragraphs describe the types of
tanks and heads that we purchase.

     Pressure liquefied petroleum gas containers are used by industrial plants,
utilities and small businesses and in suburban and rural areas for residential
heating and cooking needs. We manufacture

                                        2
<PAGE>

fertilizer containers for highway and railway transport, bulk storage, farm
storage and the application and distribution of anhydrous ammonia. Our tanks
range from 120-gallon tanks for residential use to 120,000-gallon bulk storage
containers. We sell our containers to experienced propane dealers and
technicians. We generally deliver the containers to our customers who install
and fill the containers. Our competitors include large and small manufacturers.

     We manufacture container heads, which are pressed metal components used in
the manufacturing of many of our finished products. In addition, we sell
container heads to other manufacturers. We manufacture the container heads in
various shapes, and we produce pressure rated or non-pressure rated container
heads, depending on their intended use. We use a significant portion of the
heads we manufacture in the production of our tank cars and containers. We also
sell our heads to a broad range of other manufacturers. Competition for heads in
recent years has been intense and has resulted in sharply reduced prices for
these products.

     TRINITY RAILCAR LEASING AND MANAGEMENT SERVICES GROUP.  Through our wholly
owned subsidiaries, primarily Trinity Industries Leasing Company, we lease
specialized types of railcars, both tank cars and freight cars. As of December
31, 2001, we owned or leased approximately 22,000 railcars that were 93.6%
leased. Additionally, we managed another 37,000 railcars on behalf of
independent third parties.

     We lease our railcars to industrial companies in the petroleum, chemical,
agricultural, energy and other industries that supply their own railcars to the
railroads. The terms of our railcar leases generally vary from one to twenty
years and provide for fixed monthly rentals, with an additional mileage charge
when usage exceeds a specified maximum.

     The leasing business in which we are engaged is very competitive and there
are a number of well-established companies that actively compete with us in the
business of owning and leasing railcars. There are also a number of banks,
investment partnerships and other financial institutions which compete with us
in railcar leasing.

     ALL OTHER.  All Other includes our captive insurance and transportation
companies, structural towers, and other peripheral businesses.

     FOREIGN OPERATIONS.  Trinity's foreign operations are primarily in Mexico,
Romania, the United Kingdom, the Czech Republic, Brazil, Switzerland and
Slovakia. Sales to foreign customers, primarily in Europe and Mexico,
represented 7.6%, 5.3% and 2.6% of our consolidated revenues for the nine months
ended December 31, 2001 and for fiscal years 2001 and 2000, respectively. As of
December 31, 2001 and March 31, 2001 and 2000, we had approximately 11.0%,
14.4%, and 13.8% of our long-lived assets located outside the United States.

     We manufacture railcars and LP Gas Containers at our Mexico facilities for
export to the United States. Any material change in the quotas, regulations, or
duties on imports imposed by the United States government and its agencies or on
exports by the government of Mexico or its agencies could adversely affect our
operations in Mexico. Our foreign activities are also subject to various other
risks of doing business in foreign countries, including currency fluctuations,
political changes, changes in laws and regulations and economic instability.
Although our operations have not been materially affected by any of such factors
to date, any substantial disruption of business as it is currently conducted
could adversely affect our operations at least in the short term.

     BACKLOG.  As of December 31, 2001, our backlog for new railcars was $153.7
million and was $133.6 million for Inland Barge products. Included in the
backlog for the railcars is $31.3 million of railcars to be sold to the Rail
Leasing and Management Services Group. All of our backlog is expected to be
delivered in the 12 months ending December 31, 2002.

     As of March 31, 2001, our backlog for new railcars was $408.5 million and
was $141.1 million for Inland Barge products. Included in the backlog for the
railcars was $85.3 million of railcars to be sold to the Rail Leasing and
Management Services Group.

     MARKETING.  We sell substantially all of our products through our own
salesmen operating from offices in the following states and foreign countries:
Alabama, Arkansas, Arizona, Connecticut, Florida, Illinois, Kentucky, Louisiana,
Michigan, Minnesota, Mississippi, Missouri, New Hampshire, New Jersey, New York,
Ohio, Pennsylvania, Tennessee, Texas, Vermont, Utah, Brazil, Mexico, Romania,
Sweden, and Canada. We also use independent sales representatives to a limited
extent. Except in the case of

                                        3
<PAGE>

weld fittings, guardrail and standard size LPG containers, we ordinarily
fabricate our products to our customer's specifications contained in a purchase
order.

     RAW MATERIALS AND SUPPLIERS.

     RAILCAR MANUFACTURING.  Products manufactured at our railcar manufacturing
facilities require a significant supply of raw materials such as steel as well
as numerous specialty components such as brakes, wheels and axles. Steel is
available from numerous domestic and foreign sources. Specialty components
purchased from third parties comprise approximately 50% of the cost of the
production of each railcar. Although the number of alternative suppliers of
specialty components has declined in recent years, at least two suppliers
continue to produce most components. We continually monitor supply inventory
levels to ensure adequate support for our production. We maintain good
relationships with our suppliers and have not experienced any significant
interruptions in recent years in the supply of raw materials or specialty
components. Changes in the price of components and raw materials have not had a
material effect on earnings.

     AGGREGATES.  Aggregates can be found in abundant quantities throughout the
United States, and many producers exist nationwide. However, as a general rule,
shipments from an individual quarry are limited in geographic scope because the
cost of transporting processed aggregates to customers is high in relation to
the value of the product itself. We operate 14 mining facilities strategically
located in Texas and Louisiana to fulfill some of our needs for aggregates. We
have not experienced difficulty fulfilling the rest of our needs from local
suppliers.

     OTHER.  The principal material used by us in our other operating segments
is steel. We believe that many domestic and foreign sources can provide an
adequate supply of these materials.

     EMPLOYEES.  As of December 31, 2001, Trinity had approximately 15,300
employees, of which approximately 11,900 were production employees and 3,400
were administrative, sales, supervisory and office employees. In connection with
the Thrall merger, we added approximately 1,700 employees as of December 31,
2001. Of this total 500 were administrative.

     ACQUISITIONS.  We made certain acquisitions during the nine months ended
December 31, 2001 and during fiscal 2001 and 2000 accounted for by the purchase
method. The acquired operations have been included in the consolidated financial
statements from the effective dates of the acquisitions. See Note 4 to the
consolidated financial statements.

     ENVIRONMENTAL MATTERS.  We are subject to comprehensive federal, state,
local and foreign environmental laws and regulations relating to the release or
discharge of materials into the environment, the management, use, processing,
handling, storage, transport or disposal of hazardous materials, or otherwise
relating to the protection of human health and the environment. Such laws and
regulations not only expose us to liability for our own negligent acts, but also
may expose us to liability for the conduct of others or for our actions which
were in compliance with all applicable laws at the time these actions were
taken. In addition, such laws may require significant expenditures to achieve
compliance, and are frequently modified or revised to impose new obligations.
Civil and criminal fines and penalties may be imposed for non-compliance with
these environmental laws and regulations. Our operations that involve hazardous
materials also raise potential risks of liability under the common law.

     Environmental operating permits are, or may be, required for our operations
under these laws and regulations. These operating permits are subject to
modification, renewal and revocation. We regularly monitor and review our
operations, procedures and policies for compliance with these laws and
regulations. Despite these compliance efforts, risk of environmental liability
is inherent in the operation of our businesses, as it is with other companies
engaged in similar businesses. Therefore, environmental liabilities may have a
material adverse effect on us in the future.

     We believe that our operations and facilities, owned, managed, or leased,
are in substantial compliance with applicable laws and regulations and that any
noncompliance is not likely to have a material adverse effect on our operations
or financial condition. However, future events, such as changes in or modified
interpretations of existing laws and regulations or enforcement policies, or
further investigation or evaluation of the potential health hazards of products
or business activities, may give rise to additional compliance and other

                                        4
<PAGE>

costs that could have a material adverse effect on our financial conditions and
operations.

     In addition to environmental laws, the transportation of commodities by
railcar or barge raises potential risks in the event of a derailment, spill or
other accident. Generally, liability under existing law in the United States for
a derailment, spill or other accident depends on the negligence of the party,
such as the railroad, the shipper or the manufacturer of the railcar. However,
for certain hazardous commodities being shipped, strict liability concepts may
apply.

GOVERNMENTAL REGULATION

Railcar Industry

     The primary regulatory and industry authorities involved in the regulation
of the railcar industry are the Environmental Protection Agency; the Research
and Special Programs Administration, a division of the Department of
Transportation; the Federal Railroad Administration, a division of the
Department of Transportation; and the Association of American Railroads.

     These organizations establish rules and regulations for the railcar
industry, including construction specifications and standards for the design and
manufacture of railcars; mechanical, maintenance and related standards for
railcars; safety of railroad equipment, tracks and operations; and packaging and
transportation of hazardous materials.

     We believe that our operations are in substantial compliance with these
regulations. We cannot predict whether future changes that affect compliance
costs would have a material adverse effect on financial conditions and
operations.

Inland Barge Industry

     The primary regulatory and industry authorities involved in the regulation
of the barge industry are the United States Coast Guard; the National
Transportation Safety Board; the United States Customs Service; the Maritime
Administration of the United States Department of Transportation; and private
industry organizations such as the American Bureau of Shipping.

     These organizations establish safety criteria, investigate vessel accidents
and recommend improved safety standards. Violations of these regulations and
related laws can result in substantial civil and criminal penalties as well as
injunctions curtailing operations. We believe that our operations are in
substantial compliance with these regulations.

Occupational Safety and Health Administration and similar regulations

     Our operations are subject to regulation of health and safety matters by
the United States Occupational Safety and Health Administration. We believe that
we employ appropriate precautions to protect our employees and others from
workplace injuries and harmful exposure to materials handled and managed at our
facilities. However, claims may be asserted against us for work-related
illnesses or injury, and our operations may be adversely affected by the further
adoption of occupational health and safety regulations in the United States or
in foreign jurisdictions in which we operate. While we do not anticipate having
to make material expenditures in order to remain in substantial compliance with
these health and safety laws and regulations, we are unable to predict the
ultimate cost of compliance. Accordingly, there can be no assurance that the
Company will not become involved in future litigation or other proceedings or if
the Company were found to be responsible or liable in any litigation or
proceeding, that such costs would not be material to the Company.

     OTHER MATTERS.  To date, we have not suffered any material shortages with
respect to obtaining sufficient energy supplies to operate our various plant
facilities or its transportation vehicles. Future limitations on the
availability or consumption of petroleum products, particularly natural gas for
plant operations and diesel fuel for vehicles, could have an adverse effect upon
our ability to conduct our business. The likelihood of such an occurrence or its
duration, and its ultimate effect on our operations, cannot be reasonably
predicted at this time.

                                        5
<PAGE>

     EXECUTIVE OFFICERS OF THE COMPANY.  The following table sets forth the
names and ages of all executive officers of the Company, all positions and
offices with the Company presently held by them, the year each person first
became an executive officer and the term of each person's office:

<Table>
<Caption>
                                                                                    OFFICER     TERM
NAME(1)                                  AGE   OFFICE                                SINCE    EXPIRES
- -------                                  ---   ------                               -------   --------
<S>                                      <C>   <C>                                  <C>       <C>
Timothy R. Wallace.....................  48    Chairman, President & Chief           1985     May 2002
                                               Executive Officer
John L. Adams..........................  57    Executive Vice President              1999     May 2002
Mark W. Stiles.........................  53    Senior Vice President & Group         1993     May 2002
                                               President
Jim S. Ivy.............................  58    Vice President & Chief Financial      1998     May 2002
                                               Officer
Michael E. Flannery....................  42    Chief Executive Officer of Trinity    2001     May 2002
                                               Rail Group, LLC
Andrea F. Cowan........................  39    Vice President, Shared Services       2001     May 2002
Jack L. Cunningham, Jr. ...............  57    Vice President, Labor Relations       1982     May 2002
Michael G. Fortado.....................  58    Vice President & Secretary            1997     May 2002
John M. Lee............................  41    Vice President, Business              1994     May 2002
                                               Development
Charles Michel.........................  48    Controller                            2001     May 2002
Joseph F. Piriano......................  64    Vice President, Purchasing            1992     May 2002
S. Theis Rice..........................  51    Vice President, Legal Affairs         2002     May 2002
Linda S. Sickels.......................  50    Vice President, Government            1995     May 2002
                                               Relations
Neil O. Shoop..........................  58    Treasurer                             1985     May 2002
</Table>

- ---------------

(1) Mr. Adams joined the Company in 1999. Prior to that, Mr. Adams served as
    chief executive officer for a national financial institution. Mr. Ivy joined
    the Company in 1998. Prior to that, Mr. Ivy was a senior audit partner for a
    national public accounting firm. Mr. Flannery joined the Company in 2001.
    Prior to that he was Chief Administrative Officer and General Counsel of
    Duchossois Industries, Inc. and Vice Chairman of Thrall Car Manufacturing
    Company, a railcar manufacturing company that merged with a subsidiary of
    the Company in October of 2001. Ms. Cowan joined the Company in January 2000
    as a divisional officer. Prior to that she was a consultant to Trinity for
    six months having spent fifteen years with the State of Texas in a variety
    of positions relating to policy and finance. Mr. Fortado joined the Company
    in 1997. Prior to that, Mr. Fortado served one year as senior vice
    president, general counsel, and corporate secretary for an oil and gas
    exploration company and prior to that as vice president, corporate
    secretary, and assistant general counsel for an integrated energy company.
    Mr. Michel joined the Company in 2001. Prior to that he served as Vice
    President and Chief Financial Officer of a national restaurant/entertainment
    company from 1994 to 2001. All of the other above-mentioned executive
    officers have been in the full time employment of the Company or its
    subsidiaries for more than five years. Although the titles of certain such
    officers have changed during the past five years, all have performed
    essentially the same duties during such period of time except for Timothy R.
    Wallace, Mark W. Stiles and S. Theis Rice. Mr. Wallace became Chairman and
    Chief Executive Officer on December 31, 1998. He was previously the
    President and Chief Operating Officer. In addition to Group President, Mr.
    Stiles became Senior Vice President on June 10, 1999. Mr. Rice was most
    recently serving as President of the Company's European operations.

     FORWARD LOOKING STATEMENTS.  This annual report on Form 10-K contains
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Any statements contained herein that are not
historical facts are forward-looking statements and involve risks and
uncertainties. These forward-looking statements include expectations, beliefs,
plans, objectives, future financial performance, estimates, projections, goals
and forecasts. Potential factors which could cause our actual results of
operations

                                        6
<PAGE>

to differ materially from those in the forward-looking statements include:

- - market conditions and demand for our products;

- - the cyclical nature of both the railcar and barge industries;

- - abnormal periods of inclement weather in areas where construction products are
  sold and used;

- - the timing of introduction of new products;

- - the timing of customer orders;

- - price erosion;

- - changes in mix of products sold;

- - the extent of utilization of manufacturing capacity;

- - availability of supplies and raw materials;

- - price competition and other competitive factors;

- - changing technologies;

- - steel prices;

- - interest rates and capital costs;

- - taxes;

- - the stability of the governments and political and business conditions in
  certain foreign countries, particularly Mexico and Romania;

- - changes in import and export quotas and regulations;

- - business conditions in emerging economies; and

- - legal, regulatory and environmental issues.

     Any forward-looking statement speaks only as of the date on which such
statement is made. Trinity undertakes no obligation to update any
forward-looking statement to reflect events or circumstances after the date on
which such statement is made.

     ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS.  We wish to caution you
that there are risks and uncertainties that could cause our actual results to be
materially different from those indicated by forward-looking statements that we
make from time to time in filings with the Securities and Exchange Commission,
news releases, reports, proxy statements, registration statements and other
written communications, as well as oral forward-looking statements made from
time to time by representatives of our Company. These risks and uncertainties
include, but are not limited to, those risks described below. Additional risks
and uncertainties not presently known to us or that we currently deem immaterial
also may impair our business operations. The cautionary statements below discuss
important factors that could cause our business, financial condition, operating
results and cash flows to be materially adversely effected.

     The cyclical nature of our business results in lower revenues during
economic downturns.  We operate in cyclical industries. Downturns in overall
economic conditions usually have a significant adverse effect on cyclical
industries due to a decreased demand for new and replacement products. This
decreased demand could continue to result in lower sales volumes, lower prices
and/or a loss of profits. In addition, our recent acquisition of Thrall has
increased our exposure to the effects of the cyclical nature of the railcar
business. The railcar industry is in a deep down cycle and operating with a
minimal backlog. If this down cycle continues, we could experience increased
losses and could make additional plant closures and incur related costs.

     We have potential exposure to environmental liabilities, which may increase
costs and lower profitability.  Our operations are subject to extensive and
frequently changing federal, state and local environmental laws and regulations,
including those dealing with air quality and the handling and disposal of waste
products, fuel products and hazardous substances. In particular, we may incur
remediation costs and other related expenses because:

- - Some of our manufacturing facilities were constructed and operated before the
  adoption of current environmental laws and the institution of compliance
  practices; and

- - Some of the products that we manufacture are used to transport hazardous
  materials.

     Furthermore, although we intend to conduct appropriate due diligence with
respect to environmental matters in connection with future acquisitions, we may
be unable to identify or be indemnified for all potential environmental
liabilities relating to any acquired business. Environmental liabilities
incurred by us, if not covered by adequate insurance or indemnification, will
increase our respective costs and have a negative impact on our profitability.
                                        7
<PAGE>

     We compete in highly competitive industries, which may impact our
respective financial results. We face aggressive competition in all geographic
markets and each industry sector in which we operate. As a result, competition
on pricing is often intense. The effect of this competition could reduce our
revenues, limit our ability to grow, increase pricing pressure on our products,
and otherwise affect our financial results.

     Risks related to our operations outside of the United States could
adversely impact our respective operating results.  Our operations outside of
the United States are subject to the risks associated with cross-border business
transactions and activities. Political, legal, trade or economic changes or
instability could limit or curtail our respective foreign business activities
and operations. Some foreign countries where we operate have regulatory
authorities that regulate railroad safety, railcar design and railcar component
part design, performance and manufacture used on their railroad systems. If we
fail to obtain and maintain certifications of our railcars and railcar parts
within the various foreign countries where we operate, we may be unable to
market and sell our railcars in those countries. In addition, unexpected changes
in regulatory requirements, tariffs and other trade barriers, more stringent
rules relating to labor or the environment, adverse tax consequences and price
exchange controls could limit operations and make the manufacture and
distribution of our products difficult. Furthermore, any material change in the
quotas, regulations or duties on imports imposed by the U.S. government and
agencies or on exports by the government of Mexico or its agencies could affect
our ability to export the railcars and liquefied petroleum gas containers that
we manufacture in Mexico. The uncertainty of the legal environment in these and
other areas could limit our ability to enforce our respective rights
effectively.

     Because we do not have employment contracts with our key management
employees, we may not be able to retain their services in the future.  Our
success depends on the continued services of our key management employees, none
of whom currently have employment agreements with us. Although we have
historically been successful in retaining the services of our key management, we
may be unable to do so in the future. The loss of the services of one or more
key members of our management team could result in increased costs associated
with attracting and retaining a replacement and could disrupt our operations and
result in a loss of revenues.

     Although our businesses were not directly impacted by the recent terrorist
attacks against the United States, the long-term effect of these events, or the
domestic or foreign response to them, could negatively affect our respective
ability to operate profitably in the future.  The terrorist attacks that
occurred in the United States on September 11, 2001, the subsequent military
response by the United States, other terrorist attacks and future events
occurring in response to or in connection with these attacks may negatively
impact the economy in general. In particular, the negative impacts of these
events may affect the industries in which we operate. This could result in
delays in or cancellations of the purchase of our products or shortages in raw
materials or component parts. Any of these occurrences could have a significant
adverse impact on our operating results, revenues and costs.

     Fluctuations in the supply of component parts used in the production of our
products could have a material adverse effect on our ability to cost-
effectively manufacture and sell our products.  A significant portion or our
business depends on the adequate supply of numerous specialty components such as
brakes, wheels, side frames and bolsters at competitive prices. We depend on
outside suppliers for a significant portion of our component part needs. While
we endeavor to be diligent in its contractual relationships with our suppliers,
a significant decrease in the availability of specialty components could
materially increase our cost of goods sold or prevent us from manufacturing our
products on a timely basis.

     Our manufacturer's warranties expose us to potentially significant
claims.  We warrant the workmanship and materials of many of our products under
limited warranties. Accordingly, we may be subject to significant warranty
claims in the future such as multiple claims based on one defect repeated
throughout our mass production process or claims for which the cost of repairing
the defective part is highly disproportionate to the original cost of the part.
We have never experienced any material losses attributable to warranty claims,
but the possibility exists for these types of warranty claims to result in
costly product recalls, significant repair costs and damage to our reputation.
                                        8
<PAGE>

     We may be liable for product liability claims that exceed our insurance
coverage.  The nature of our business subjects us to product liability claims,
especially in connection with the repair and manufacture of products that carry
hazardous or volatile materials. We maintain reserves and liability insurance
coverage at levels based upon commercial norms in the industries in which we
operate and our historical claims experience. However, an unusually large
product liability claim or a string of claims based on a failure repeated
throughout our mass production process may exceed our insurance coverage or
result in damage to our reputation.

     We may incur increased costs due to fluctuations in interest rate and
foreign currency exchange rates.  We are exposed to risks associated with
fluctuations in interest rate and changes in foreign currency exchange rates. We
seek to minimize these risks, when considered appropriate, through the use of
currency and interest rate hedges and similar financial instruments and other
activities, although these measures may not be implemented or effective. Any
material and untimely changes in interest rates or exchange rates could result
in significant losses to us.

ITEM 2.  PROPERTIES.

     We principally operate in various locations throughout the United States
with other facilities in Mexico, Brazil, Romania and Slovakia, all of which are
considered to be in good condition, well maintained and adequate for our
purposes.

<Table>
<Caption>
                             APPROXIMATE
                             SQUARE FEET         PRODUCTIVE
                        ----------------------    CAPACITY
                          OWNED       LEASED      UTILIZED
                        ----------   ---------   ----------
<S>                     <C>          <C>         <C>
Rail Group............   6,125,500   1,952,000      20%
Construction Products
  Group...............   2,347,000      10,000      85%
Inland Barge Group....     692,000      45,000      85%
Industrial Products
  Group...............     648,500          --      50%
Executive Offices.....     173,000          --      N/A
All Other.............      35,000          --       0%
                        ----------   ---------
                        10,021,000   2,007,000
                        ==========   =========
</Table>

ITEM 3. LEGAL PROCEEDINGS.

     In December 1999, a grand jury sitting in the Western District of Louisiana
returned a two-count felony indictment against Trinity Baton Rouge, Inc., a
wholly owned subsidiary of Trinity. The indictment charges Trinity Baton Rouge,
Inc. with transporting hazardous waste without a proper manifest to an
unpermitted facility in violation of the Resource Conservation Recovery Act.
Trinity Baton Rouge, Inc. continues to deny all charges in the indictment and is
defending this matter vigorously.

     In September 1999, the United States Environmental Protection Agency filed
a complaint against Trinity seeking penalties of approximately $225,000. The
complaint alleges that Trinity failed to file certain submissions timely to the
United States Environmental Protection Agency in an alleged violation of the
Emergency Planning Community Right to Know Act. Trinity denies all allegations
and is defending this matter vigorously.

     We are involved in various other claims and lawsuits incidental to our
business. In the opinion of management, these claims and suits in the aggregate
will not have a material adverse effect on our consolidated financial
statements.

ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     None.

                                        9
<PAGE>

                                    PART II

ITEM 5.MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS.

     The Company's common stock is traded on the New York Stock Exchange with
the ticker symbol "TRN". The following table shows the price range of the
Company's common stock for the nine months ended December 31, 2001 and fiscal
year 2001:

<Table>
<Caption>
                                            PRICES
                                        ---------------
FISCAL YEAR 2001                         HIGH     LOW
- ----------------                        ------   ------
<S>                                     <C>      <C>
Quarter ended June 30, 2000...........  $23.56   $18.50
Quarter ended September 30, 2000......   23.38    18.37
Quarter ended December 31, 2000.......   26.63    22.56
Quarter ended March 31, 2001..........   25.00    18.97
</Table>

<Table>
<Caption>
NINE MONTHS ENDED
DECEMBER 31, 2001                        HIGH     LOW
- -----------------                       ------   ------
<S>                                     <C>      <C>
Quarter ended June 30, 2001...........  $23.80   $17.50
Quarter ended September 30, 2001......   27.85    20.70
Quarter ended December 31, 2001.......   28.04    21.33
</Table>

     The Company's transfer agent and registrar is The Bank of New York, New
York, NY.

HOLDERS

     At December 31, 2001, the Company had approximately 1,991 record holders of
common stock. The par value of the stock is $1.

DIVIDENDS

     Since April 1, 2000, Trinity has paid quarterly dividends of $0.18 per
common share and has paid 152 consecutive quarterly dividends. On March 14,
2002, the board of directors declared a quarterly dividend of $0.06 per share.
See Management's Discussion and Analysis of Financial Condition and Results of
Operations.

RECENT SALES OF UNREGISTERED SECURITIES

     On October 26, 2001, Trinity completed a merger with Thrall Car
Manufacturing Company, Inc. Pursuant to the terms of the merger agreement,
Trinity issued 7,150,000 shares of common stock to Thrall Car Management
Company, Inc. The 7,150,000 shares issued to Thrall Car Management Company, Inc.
were not registered and were issued pursuant to the exemptions provided by
Regulation D of the Securities Act of 1933, as amended.

     On November 9, 2001, Trinity acquired the outstanding interest of Transport
Capital, LLC from a group of individuals for 34,000 shares of common stock. The
34,000 shares were not registered and were issued in reliance on the exemption
provided by Section 4(2) of the Securities Act of 1933, as amended.

                                        10
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA.

     The following financial information for the nine months ended December 31,
2001 and 2000 and for the four years ended March 31, 2001 has been derived from
the Company's consolidated financial statements. This information should be read
in conjunction with Management's Discussion and Analysis of Financial Condition
and Results of Operations and the consolidated financial statements and notes
thereto included elsewhere herein.

<Table>
<Caption>
                                     NINE MONTHS ENDED
                                        DECEMBER 31,                  YEAR ENDED MARCH 31,
                                   ----------------------   -----------------------------------------
                                     2001        2000         2001       2000       1999       1998
                                   --------   -----------   --------   --------   --------   --------
                                              (UNAUDITED)
                                            (IN MILLIONS EXCEPT PERCENT AND PER SHARE DATA)
<S>                                <C>        <C>           <C>        <C>        <C>        <C>
STATEMENT OF OPERATIONS DATA:
Revenues.........................  $1,347.8    $1,485.6     $1,904.3   $2,740.6   $2,926.9   $2,473.0
Operating profit (loss)(1).......     (16.4)       (7.9)       (66.1)     279.0      284.9      255.9
Net income (loss)(2).............     (34.7)      (34.7)       (74.4)     165.5      185.3      103.7
Basic net income (loss) per
  common share(2)................     (0.90)      (0.92)       (1.98)      4.17       4.31       2.41
Diluted net income (loss) per
  common share(2)................  $  (0.90)   $  (0.92)    $  (1.98)  $   4.15   $   4.25   $   2.36
Weighted average common shares
  outstanding:
     Basic.......................      38.7        37.6         37.5       39.7       43.0       43.1
     Diluted.....................      38.7        37.6         37.5       39.9       43.6       43.9
Dividend per share...............  $   0.54    $   0.54     $   0.72   $   0.72   $   0.69   $   0.68
BALANCE SHEET DATA:
Total assets.....................  $1,952.0    $1,755.4     $1,825.9   $1,738.5    1,684.9    1,573.9
Long-term debt(3)................     476.3        44.5        504.0       95.4      120.6      149.6
Stockholders' equity.............  $1,009.4       926.0        879.0    1,015.1      959.1      887.5
Ratio of total debt to total
  capital........................      32.1%       32.7%        38.0%      20.7%      23.9%      22.0%
Book value per share.............  $  22.79    $  25.16     $  23.89   $  26.50   $  23.22   $  20.40
</Table>

- ---------------

(1) Includes charges of:
     - $64.3 million for unusual charges for the nine months ended December 31,
       2001,
     - $85.1 million for unusual charges for the nine months ended December 31,
       2000, and
     - $140.9 million for unusual charges for fiscal year 2001.

(2) Includes after tax charges or credit of:
     - $50.4 million ($1.30 per share) for unusual charges for the nine months
       ended December 31, 2001,
     - $75.2 million ($2.00 per share) for unusual charges for the nine months
       ended December 31, 2000,
     - $110.9 million ($2.96 per share) for unusual charges for fiscal year
       2001,
     - $14.0 million ($0.32 per share) for the gain on a sale of an investment
       in land in fiscal year 1999, and
     - $43.8 million ($1.00 per share) charge for litigation in fiscal year
       1998.

(3) Long-term debt as of December 31, 2001 and March 31, 2001 increased from the
    levels as of December 31, 2000 due to the Company completing a committed
    revolving bank facility in June 2001 which has been classified as long-term
    debt. The proceeds of the new facility were used to repay short-term debt.
    See note 8 to the consolidated financial statements.

                                        11
<PAGE>

ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
       OF OPERATIONS.

GENERAL

     Management's Discussion and Analysis of Financial Condition and Results of
Operations discusses our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these consolidated financial statements
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. On an on-going basis,
management evaluates its estimates and judgements, including those related to
bad debts, inventories, property, plant and equipment, goodwill, income taxes,
warranty obligations, insurance restructuring costs, and contingencies and
litigation. Management bases its estimates and judgements on historical
experience and on various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis for making judgements
about the carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates
under different assumptions or conditions.

     Management believes the following critical accounting policies, among
others, affect its more significant judgements and estimates used in the
preparation of its consolidated financial statements.

Inventory

     We are required to state our inventories at the lower of cost or market. In
assessing the ultimate realization of inventories, we are required to make
judgements as to future demand requirements and compare that with the current or
committed inventory levels. We have recorded significant changes in inventory
carrying values in recent periods due to discontinuances of product lines as
well as changes in market conditions due to changes in demand requirements. It
is possible that changes in required inventory reserves may continue to occur in
the future due to current market conditions in the railcar business.

Goodwill

     We periodically evaluate acquired businesses for potential impairment
indicators that are based on legal factors, market conditions in the United
States and Europe and operational performance of our acquired businesses. Future
events could cause us to conclude that impairment indicators exist and that
goodwill associated with our acquired businesses is impaired. Any resulting
impairment loss could have a material adverse impact on our financial condition
and results of operations.

Warranties

     We provide for the estimated cost of product warranties at the time we
recognize revenue. We base our estimates on historical product failure rates. We
also provide for specifically identified warranty obligations. Should actual
product failure rates differ from our estimates, revisions to the estimated
warranty liability would be required.

Insurance

     We effectively self-insure for workers' compensation claims. A third-party
administrator processes all such claims. We accrue our workers' compensation
liability based upon an independent actuarial study. To the extent actuarial
assumptions change and claims experience rates differs from historical rates,
our liability may change.

Contingencies and Litigation

     We are currently involved in certain legal proceedings. As discussed in
Note 15 of our consolidated financial statements, as of December 31, 2001, we
have accrued our estimate of the probable costs for the resolution of these
claims. This estimate has been developed in consultation with outside counsel
handling our defense in these matters and is based upon an analysis of potential
results, assuming a combination of litigation and settlement strategies. We do
not believe these proceedings will have a material adverse effect on our
consolidated financial position. It is possible, however, that future results of
operations for any particular quarterly or annual period could be materially
affected by changes in our assumptions related to these proceedings.

                                        12
<PAGE>

BASIS OF PRESENTATION

     We are one of the nation's leading diversified industrial manufacturers. As
of December 31, 2001, we modified our segment reporting to align the reportable
segments with current management responsibilities and internal reporting.

     The new reporting format includes the following business segments: (1) the
Trinity Rail group, which manufactures and sells railcars and component parts;
(2) the Construction Products group, which manufactures and sells highway
guardrail and safety products, concrete and aggregate, girders and beams used in
the construction of highway and railway bridges and weld fittings used in
pressure piping systems; (3) the Inland Barge group, which manufactures and
sells barges and related products for inland waterway services; (4) the
Industrial Products group, which manufactures and sells container heads and
pressure and non-pressure containers for the storage and transportation of
liquefied gases and other liquid and dry products; and (5) the Trinity Railcar
Leasing and Management Services group, which provides services such as fleet
management and leasing. Finally, All Other includes the Company's captive
insurance and transportation companies, structural towers, and other peripheral
businesses.

     Sales from Trinity Rail group to Trinity Railcar Leasing and Management
Services group are recorded in Trinity Rail group and eliminated in
consolidation. Sales of railcars from the lease fleet are included in the
Trinity Railcar Leasing and Management Services group segment.

     See notes to the consolidated financial statements for further discussion
of business segments.

                                        13
<PAGE>

UNUSUAL CHARGES

     During the nine months ended December 31, 2001, Trinity recorded special
pretax charges of approximately $66.4 million, $50.4 million net of tax or $1.30
per share, related primarily to restructuring our Rail group in connection with
the Thrall merger and other matters. Of these charges, $64.3 million were
charged to operating profit. These charges are reflected in the following income
statement categories and segments (in millions).

<Table>
<Caption>
                                                                           RAILCAR
                                                                          LEASING &
                                     CONSTRUCTION   INLAND   INDUSTRIAL   MANAGEMENT   CORPORATE
                            RAIL       PRODUCTS     BARGE     PRODUCTS     SERVICES     & OTHER    TOTAL
                           -------   ------------   ------   ----------   ----------   ---------   ------
<S>                        <C>       <C>            <C>      <C>          <C>          <C>         <C>
Cost of revenues.........  $ 46.1       $ 0.8        $ --       $ --        $  --       $  9.9     $ 56.8
Selling, engineering &
  administrative.........     4.2         0.1          --         --           --          3.2        7.5
                           ------       -----        ----       ----        -----       ------     ------
Charged to operating
  profit.................    50.3         0.9          --         --           --         13.1       64.3
Operating profit (loss)
  before charges.........   (15.5)       46.5         9.8        3.9         30.2        (27.0)      47.9
                           ------       -----        ----       ----        -----       ------     ------
Operating profit (loss)
  reported...............  $(65.8)      $45.6        $9.8       $3.9        $30.2       $(40.1)    $(16.4)
                           ======       =====        ====       ====        =====       ======     ======
</Table>

     Unusual charges reported in other expenses amounted to $2.1 million
primarily for the write down of equity investments in nine months ended December
31, 2001.

     During fiscal year 2001, we recorded pre-tax charges of approximately
$173.3 million, $110.9 million net of tax or $2.96 per share, primarily related
to the restructuring of our railcar operations, investment and asset write
downs, litigation reserves and other charges. Of these charges, $140.9 million
were charged to operating profit. These charges are reflected in the following
income statement categories and segments (in millions):

<Table>
<Caption>
                                                                           RAILCAR
                                                                          LEASING &
                                     CONSTRUCTION   INLAND   INDUSTRIAL   MANAGEMENT   CORPORATE
                            RAIL       PRODUCTS     BARGE     PRODUCTS     SERVICES     & OTHER    TOTAL
                           -------   ------------   ------   ----------   ----------   ---------   ------
<S>                        <C>       <C>            <C>      <C>          <C>          <C>         <C>
Cost of revenues.........  $ 73.7       $13.7       $ 4.4       $0.7        $  --       $  32.8    $125.3
Selling, engineering &
  administrative.........     6.7          --          --         --           --           8.9      15.6
                           ------       -----       -----       ----        -----       -------    ------
Charged to operating
  profit.................    80.4        13.7         4.4        0.7           --          41.7     140.9
Operating profit (loss)
  before charges.........    40.3        42.8        16.1        6.1         41.6         (72.1)     74.8
                           ------       -----       -----       ----        -----       -------    ------
Operating profit (loss)
  reported...............  $(40.1)      $29.1       $11.7       $5.4        $41.6       $(113.8)   $(66.1)
                           ======       =====       =====       ====        =====       =======    ======
</Table>

     Unusual charges reported in other expenses amounted to $32.4 million
primarily for the write down of equity investments in fiscal year 2001.

NINE MONTHS ENDED DECEMBER 31, 2001 COMPARED WITH THE YEAR ENDED MARCH 31, 2001
- -- RESULTS OF OPERATIONS

     We changed our year-end in 2001 from March 31 to December 31 and, as a
result, our most recent Statement of Operations is for the nine months ended
December 31, 2001. Compared to the prior twelve month period, revenues and
operating profit declined due to the shorter time period of three months and the
significant downturn in the railcar market. Results of operations were also
affected by the acquisition of Thrall on October 26, 2001, which added $47.3
million in revenue since the acquisition date with corresponding increases in
other costs of our operations of $52.9 million. Interest expense also increased
slightly as a result of increased debt incurred to acquire Thrall. Results of
operations were also affected by the unusual pre-tax charges discussed above
which were $66.4 million in the nine months ended December 31, 2001 compared to
$173.3 million in the fiscal year 2001. Our management discussion and analysis
which follows is based on a comparison of the nine months ended December 31,
2001 to the comparable nine month period in 2000.

                                        14
<PAGE>

NINE MONTHS ENDED DECEMBER 31, 2001 COMPARED WITH NINE MONTHS ENDED DECEMBER 31,
2000 -- RESULTS OF OPERATIONS

     Revenues decreased $137.8 million to $1,347.8 million for the nine months
ended December 31, 2001 compared to $1,485.6 million for the nine months ended
December 31, 2000, a decrease of 9.3%. The decline in revenues was primarily due
to the reduction in railcar shipments and prices offset by increased revenues of
$47.3 million due to the Thrall acquisition.

     The following table reconciles the revenue amounts discussed under each
segment with the consolidated total revenues shown in the Selected Financial
Data (in millions).

<Table>
<Caption>
                                NINE MONTHS ENDED DECEMBER 31, 2001     NINE MONTHS ENDED DECEMBER 31, 2000
                               -------------------------------------   -------------------------------------
                                             REVENUES                                REVENUES
                               -------------------------------------   -------------------------------------
                                OUTSIDE    INTERSEGMENT      TOTAL      OUTSIDE    INTERSEGMENT      TOTAL
                               ---------   -------------   ---------   ---------   -------------   ---------
<S>                            <C>         <C>             <C>         <C>         <C>             <C>
Rail Group...................  $  521.3       $ 142.8      $  664.1    $  639.3       $ 166.9      $  806.2
Construction Products
  Group......................     427.2           5.0         432.2       432.4           9.6         442.0
Inland Barge Group...........     148.2            --         148.2       144.5            --         144.5
Industrial Products Group....     106.7           2.3         109.0       127.1           4.5         131.6
Railcar Leasing and
  Management Services
  Group......................      94.0            --          94.0       108.6            --         108.6
All Other....................      50.4          28.1          78.5        33.7          30.0          63.7
Eliminations & Corporate
  Items......................        --        (178.2)       (178.2)         --        (211.0)       (211.0)
                               --------       -------      --------    --------       -------      --------
Consolidated Total...........  $1,347.8       $    --      $1,347.8    $1,485.6       $    --      $1,485.6
                               ========       =======      ========    ========       =======      ========
</Table>

     Operating loss increased $8.5 million to $16.4 million for the nine months
ended December 31, 2001 compared to $7.9 million for the same period in 2000.
The increase was caused by a $29.3 million decrease in operating profits because
of lower revenues, higher cost of revenues and the additional Thrall costs of
$52.9 million offset by lower selling, engineering and administrative expenses.
Additionally, special charges for the nine months ended December 31, 2001 were
$20.8 million lower than the amount recorded for the same period in 2000.

     Selling, engineering and administrative expenses decreased $32.4 million to
$129.7 million for the nine months ended December 31, 2001 compared to $162.1
million for the period in 2000, a decrease of 20.0%. The decrease was a result
of lower head counts, cost reduction efforts and a lesser amount of special
charges.

     Interest expense, net of interest income, increased $3.4 million to $19.2
million for the nine months ended December 31, 2001 compared to $15.8 million
for the same period in 2000, an increase of 21.5%. The increase was primarily
attributable to lower interest income.

     Other, net decreased $25.6 million to $4.9 million for the nine months
ended December 31, 2001 from $30.5 million for the same period in 2000, a 83.9%
decrease. This decrease was due to the write down of equity investments during
the nine months ended December 31, 2000.

     The current year effective tax rate of 14.3% is due to lower foreign tax
rates and valuation allowances.

     Net loss for the nine months ended December 31, 2001 was $34.7 million, or
$0.90 per diluted share as compared to a net loss of $34.7 million, or $0.92 per
diluted share, the same period in 2000.

TRINITY RAIL GROUP

<Table>
<Caption>
                                          NINE MONTHS
                                             ENDED
                                         DECEMBER 31,
                                        ---------------
                                         2001     2000
                                        ------   ------
                                         (IN MILLIONS)
<S>                                     <C>      <C>
Revenues..............................  $664.1   $806.2
Operating profit (loss) including
  unusual charges.....................  $(65.8)  $  3.4
Operating profit (loss) before unusual
  charges.............................  $(15.5)  $ 36.6
Operating profit (loss) margin before
  unusual charges.....................    (2.3)%   4.5%
</Table>

     Revenues declined 17.6% for the nine months ended December 31, 2001
compared to the same period in 2000. This decline is due to the current downturn
in the North American railcar industry

                                        15
<PAGE>

offset by increased revenues of $47.3 million due to the Thrall acquisition.
Railcar units shipped dropped 22% compared to the prior year to approximately
7,800 cars. Operating profit margins were impacted by the inefficiencies of
lower production levels, costs associated with more frequent changeovers to
different car types and sizes, price pressures in the current competitive
environment, and additional costs from Thrall. With the current railcar market,
shipments are expected to decline further to 5,000 to 7,000 in fiscal year 2002
resulting in a very competitive market.

     In the nine months ended December 31, 2001 railcar sales to Trinity
Industries Leasing Company included in the Rail Group results were $139.2
million compared to $162.8 million in the same period in 2000 with profit of
$6.6 million compared to $12.2 million for the same period in 2000. Sales to
Trinity Industries Leasing Company and related profits are eliminated in
consolidation.

CONSTRUCTION PRODUCTS GROUP

<Table>
<Caption>
                                          NINE MONTHS
                                             ENDED
                                         DECEMBER 31,
                                        ---------------
                                         2001     2000
                                        ------   ------
                                         (IN MILLIONS)
<S>                                     <C>      <C>
Revenues..............................  $432.2   $442.0
Operating profit including unusual
  charges.............................  $ 45.6   $ 25.8
Operating profit before unusual
  charges.............................  $ 46.5   $ 39.5
Operating profit margin before unusual
  charges.............................   10.8%     8.9%
</Table>

     Revenues declined 2.2% for the nine months ended December 31, 2001 compared
to the same period in 2000. The decrease in revenues was primarily attributable
to exiting the flange and valve business offset by increased revenue and profits
related to improved weather conditions in the concrete and aggregate and bridge
business. Operating profit margins increased as a result of cost reduction
associated with the consolidation of plants and elimination of unprofitable
products.

INLAND BARGE GROUP

<Table>
<Caption>
                                          NINE MONTHS
                                             ENDED
                                         DECEMBER 31,
                                        ---------------
                                         2001     2000
                                        ------   ------
                                         (IN MILLIONS)
<S>                                     <C>      <C>
Revenues..............................  $148.2   $144.5
Operating profit including unusual
  charges.............................  $  9.8   $  9.9
Operating profit before unusual
  charges.............................  $  9.8   $ 14.3
Operating profit margin before unusual
  charges.............................    6.6%     9.9%
</Table>

     Revenues increased 2.6% for the nine months ended December 31, 2001
compared to the same period in 2000. The increase in revenues was attributable
to increased deliveries of tank barges offset by lower volumes in hopper barge
sales. The decrease in Inland Barge operating profit margin is mainly due to
competitive price pressures for both hopper barges and tank barges.

INDUSTRIAL PRODUCTS GROUP

<Table>
<Caption>
                                          NINE MONTHS
                                             ENDED
                                         DECEMBER 31,
                                        ---------------
                                         2001     2000
                                        ------   ------
                                         (IN MILLIONS)
<S>                                     <C>      <C>
Revenues..............................  $109.0   $131.6
Operating profit including unusual
  charges.............................  $  3.9   $  6.5
Operating profit before unusual
  charges.............................  $  3.9   $  7.2
Operating profit margin before unusual
  charges.............................    3.6%     5.5%
</Table>

     Revenues declined 17.2% for the nine months ended December 31, 2001
compared to the same period in 2000. The decline in revenues is primarily
attributable to reduced demand from gas distributors and pricing pressures in
the Mexico liquified petroleum gas market.

     Sales of propane cylinders in Mexico have been negatively affected by a
temporary halt in purchasing by Mexican propane distributors related to price
controls and other matters. When these issues will be resolved, and the impact
on Trinity's consolidated profits, cannot be determined.

RAILCAR LEASING AND MANAGEMENT SERVICES GROUP

<Table>
<Caption>
                                          NINE MONTHS
                                             ENDED
                                         DECEMBER 31,
                                        ---------------
                                         2001     2000
                                        ------   ------
                                         (IN MILLIONS)
<S>                                     <C>      <C>
Revenues..............................  $ 94.0   $108.6
Operating profit......................  $ 30.2   $ 34.2
Operating profit margin...............   32.1%    31.5%
</Table>

     Revenues declined 13.4% for the nine months ended December 31, 2001
compared to the same period in 2000. The decrease in revenues was due to a
decline in quantity of railcars sold offset by increases in lease revenues from
net additions to the lease fleet and an increase in the fleet managed under
management agreements. Included in the results of this group are revenues from
the sale of railcars from the lease fleet of $20.9 million in the nine months
ended December 31, 2001 and $48.3 million in the same period in 2000, and
operating profits of $2.6 million in the nine months ended December 31, 2001 and
$8.8 million in the same period in 2000.

                                        16
<PAGE>

ALL OTHER

     Revenues in All Other increased from $63.7 million in the nine months ended
December 31, 2000 to $78.5 million in the nine months ended December 31, 2001,
due primarily to recording wind tower revenues for the entire period compared to
the prior period start-up year. This increase is partially offset by
discontinuing the operations of TEMCO during the same period in 2000. TEMCO
produced concrete mixers, concrete batch plants and component parts for concrete
related industries.

     Operating loss was $21.1 for the nine months ended December 31, 2001, and
$44.4 in the same period in 2000. Restructuring charges included in the nine
months ended December 31, 2000 were $20.9 million primarily related to exiting
the TEMCO business referred to above and environmental liabilities.
Restructuring charges for the nine months ended December 31, 2001 were $13.1
million primarily related to exiting our internet related business and to our
wind tower business which has been affected by the Enron bankruptcy. Excluding
restructuring charges, a larger operating loss was recorded in the same period
in 2000 due primarily to operating losses associated with TEMCO recorded in such
period.

FISCAL YEAR 2001 COMPARED WITH FISCAL YEAR 2000 -- RESULTS OF OPERATIONS

     Revenues decreased $836.3 million to $1,904.3 million in fiscal 2001
compared to $2,740.6 million in fiscal 2000, a decrease of 30.5%. The decline
was due to the reduction in railcar shipments and prices, a $13.4 million
decline in liquid petroleum gas container sales and our decision to exit the
flange and valve business.

     The following table reconciles the revenue amounts disclosed under each
segment with the consolidated total revenue shown in the Selected Financial Data
(in millions).

<Table>
<Caption>
                                   YEAR ENDED MARCH 31, 2001            YEAR ENDED MARCH 31, 2000
                                            REVENUES                             REVENUES
                               ----------------------------------   ----------------------------------
                               OUTSIDE    INTERSEGMENT    TOTAL     OUTSIDE    INTERSEGMENT    TOTAL
                               --------   ------------   --------   --------   ------------   --------
<S>                            <C>        <C>            <C>        <C>        <C>            <C>
Rail Group...................  $  818.0      $281.7      $1,099.7   $1,632.0     $  66.3      $1,698.3
Construction Products
  Group......................     549.0        11.1         560.1      581.4        10.1         591.5
Inland Barge Group...........     202.9         0.1         203.0      210.1          --         210.1
Industrial Products Group....     160.3         9.8         170.1      179.2         8.1         187.3
Railcar Leasing and
  Management Services
  Group......................     128.7          --         128.7      131.5          --         131.5
All Other....................      45.4        45.8          91.2        6.4        54.4          60.8
Eliminations & Corporate
  Items......................        --      (348.5)       (348.5)        --      (138.9)       (138.9)
                               --------      ------      --------   --------     -------      --------
Consolidated Total...........  $1,904.3      $   --      $1,904.3   $2,740.6     $    --      $2,740.6
                               ========      ======      ========   ========     =======      ========
</Table>

     Operating profit decreased to a loss of $66.1 million in fiscal year 2001
compared to an operating profit of $279.0 million for fiscal year 2000. The
decrease was caused by a decrease in operating profits because of lower revenues
and higher cost of revenues and selling, engineering and administrative
expenses. Additionally, we incurred special operating charges of $140.9 million
for fiscal year 2001 primarily due to restructuring and plant closers.

     Selling, engineering and administrative expenses increased $30.3 to $213.7
million in fiscal year 2001 compared to $183.4 million in fiscal year 2000, an
increase of 16.5%. This increase is primarily a result of international
expansion and expenses associated with start-up operations and development
activities plus $15.6 million in special charges.

     Interest expense, net of interest income, increased $3.6 million to $22.0
million in fiscal year 2001 compared to $18.4 million for fiscal year 2000, an
increase of 19.6%. This increase was primarily due to a higher level of
short-term debt outstanding during fiscal year 2001 offset by higher interest
income.

     Other income, net changed from income of $2.3 million in fiscal year 2000
to a loss of

                                        17
<PAGE>

$28.2 million in fiscal year 2001 primarily due to the unusual charges from the
write down of equity investments noted above.

     The current year benefit for income taxes is primarily related to the
deferred tax deductions attributable for the unusual charges. We believe that
this asset is fully realizable given current tax carry back availability and
existing deferred tax liabilities.

     Net loss in fiscal year 2001 was $74.4 million, or $1.98 loss per share as
compared to net income of $165.5 million, or $4.15 per diluted share, in fiscal
year 2000.

TRINITY RAIL GROUP

<Table>
<Caption>
                                       2001       2000
                                     --------   --------
                                        (IN MILLIONS)
<S>                                  <C>        <C>
Revenues...........................  $1,099.7   $1,698.3
Operating profit (loss) including
  unusual charges..................  $  (35.2)  $  174.6
Operating profit before unusual
  charges..........................  $   40.3   $  174.6
Operating profit margin before
  unusual charges..................      3.7%      10.3%
</Table>

     Revenues declined 35.2% in fiscal year 2001 compared to fiscal year 2000.
This decline is due to the current downturn in the North American railcar
industry. Railcar units shipped dropped 37% compared to the prior year to
approximately 14,000 cars. Operating profit margins were negatively impacted by
the inefficiencies of lower production levels, costs associated with more
frequent changeovers to different car types and sizes, and price pressures in
the current competitive environment.

     Fiscal year 2001 railcar sales to Trinity Industries Leasing were $262.5
million compared to $67.5 million in the prior year with profit of $17.7 million
compared to $6.6 million in fiscal year 2000. Sales to Trinity Industries
Leasing and the related profit are eliminated in consolidation.

CONSTRUCTION PRODUCTS GROUP

<Table>
<Caption>
                                         2001     2000
                                        ------   ------
                                         (IN MILLIONS)
<S>                                     <C>      <C>
Revenues..............................  $560.1   $591.5
Operating profit including unusual
  charges.............................  $ 29.1   $ 62.1
Operating profit before unusual
  charges.............................  $ 42.8   $ 62.1
Operating profit margin before unusual
  charges.............................    7.6%    10.5%
</Table>

     Revenue declined 5.3% in fiscal year 2001 compared to fiscal year 2000. An
increase in revenues of beam and girders for highway bridges were offset by a
decline in both highway safety products and concrete and aggregate. The decline
in concrete and aggregate was due to the significant increase in adverse weather
conditions experienced in fiscal year 2001 in the Texas market compared to
fiscal year 2000. Operating profit and operating profit margins declined due to
the inefficiencies of lower volumes caused by the poor weather and softer
pricing in selected markets.

INLAND BARGE GROUP

<Table>
<Caption>
                                         2001     2000
                                        ------   ------
                                         (IN MILLIONS)
<S>                                     <C>      <C>
Revenues..............................  $203.0   $210.1
Operating profit including unusual
  charges.............................  $ 11.7   $ 25.7
Operating profit before unusual
  charges.............................  $ 16.1   $ 25.7
Operating profit margin before unusual
  charges.............................    7.9%    12.2%
</Table>

     Revenues declined 3.4% for fiscal year 2001 compared to fiscal year 2000.
The decrease in Inland Barge revenues and operating profit is mainly due to
competitive price pressures for both hopper barges and tank barges. These
factors are primarily a result of depressed freight rates, which negatively
impacted the Inland Barge group customers and reduced grain exports.

INDUSTRIAL PRODUCTS GROUP

<Table>
<Caption>
                                         2001     2000
                                        ------   ------
                                         (IN MILLIONS)
<S>                                     <C>      <C>
Revenues..............................  $170.1   $187.3
Operating profit including unusual
  charges.............................  $  5.4   $ 13.0
Operating profit before unusual
  charges.............................  $  6.1   $ 13.0
Operating profit margin before unusual
  charges.............................    3.6%     6.9%
</Table>

     Revenue declined 9.2% in fiscal 2001 compared to fiscal 2000. The decline
in revenues is primarily attributable to reduced demand in the liquid petroleum
gas market and competitive pricing pressures. Operating profits declined
primarily due to pricing pressures in the container head products market and the
Mexico liquid petroleum gas market.

     Sales of propane cylinders in Mexico have been negatively affected by a
temporary halt in purchasing by Mexican propane distributors related to price
controls and other matters.

                                        18
<PAGE>

RAILCAR LEASING AND MANAGEMENT SERVICES GROUP

<Table>
<Caption>
                                         2001     2000
                                        ------   ------
                                         (IN MILLIONS)
<S>                                     <C>      <C>
Revenues..............................  $128.7   $131.5
Operating profit......................  $ 42.0   $ 51.3
Operating profit margin...............   32.3%    39.0%
</Table>

     Operating profit declined in fiscal year 2001 compared to fiscal year 2000
due to lower profits on car sales, higher operating expenses related to leasing
and management fleet expansion and higher lease expenses from leverage lease
transactions.

     Included in the results of this group are revenues from the sale of
railcars from the lease fleet of $50.1 million in fiscal year 2001 and $57.9
million in fiscal year 2000, and operating profits of $9.0 million in fiscal
year 2001 and $14.7 million in fiscal year 2000.

ALL OTHER

     Revenues in All Other increased from $60.8 million in fiscal year 2000 to
$91.2 million in fiscal year 2001 due primarily to start-up businesses, TEMCO
and wind towers. TEMCO produced concrete mixers, concrete batch plants and
component parts for concrete related industries. This business was closed and
certain assets were sold in the fourth quarter of fiscal year 2001.

     Operating loss increased to $59.1 million in fiscal year 2001 from $8.2
million in fiscal year 2000. Operating loss for fiscal year 2001 includes
restructuring charges of $20.9 million primarily related to exiting the TEMCO
business as referred to above and environmental liabilities. This remaining
operating decline was due primarily to operating losses recorded by TEMCO in
fiscal year 2001.

LIQUIDITY AND CAPITAL RESOURCES

     Net cash provided by operating activities for the nine months ended
December 31, 2001 increased to $200.1 million compared to $56.0 million for the
same period in 2000. The increase was due to working capital changes, primarily
reduced accounts receivable and inventory balances. Capital expenditures for the
nine months ended December 31, 2001 were $133.3 million, of which $86.9 million
were for additions to the lease portfolio. This compares to $229.3 million of
capital expenditures for the same period last year, of which $152.5 million was
for additions to the lease portfolio. Proceeds from the sale of property, plant
and equipment were $188.2 million for the nine months ended December 31, 2001
composed primarily of the sale of cars from the lease fleet, compared to $55.8
million for the same period in 2000.

     During the nine months ended December 31, 2001, the Company completed a
committed revolving bank facility for $450 million. Amounts borrowed under the
facility bear interest at LIBOR plus 0.95% or other alternative rates at the
Company's option (3.09% at December 31, 2001) and can be converted to a one-year
term in June 2002. The agreement requires maintenance of ratios related to
interest coverage, leverage, and minimum net worth and restricts the amount of
dividend payments. Accounts receivable and inventory are pledged as collateral
for this facility. At December 31, 2001, $95.4 million was available under the
facility. Proceeds from the facility were used to repay outstanding short-term
debt as of March 31, 2001.

     We expect to finance future operating requirements with net cash flow from
operations, long-term and short-term debt, and privately placed equity.
Continued worsening of the railcar market, declines in other businesses, the
need to invest in additions to the railcar lease fleet or other factors could
result in exceeding certain ratios in our debt covenants in the second half of
the year. The debt covenant ratios that could be exceeded are the ratios of debt
to EBITDA and EBITDA to interest expense. Based on discussion with our lead
banks, we expect to renegotiate or replace existing debt agreements including
changes to debt covenants and, if necessary, to take other actions designed to
prevent exceeding debt covenant limitations.

     On February 15, 2002, Trinity Industries Leasing sold $170,000,000 of
2002-1 Pass Through Certificates with interest payments at 7.755%, commencing on
August 15, 2002 and due semiannually thereafter. Equipment notes issued by
Trinity Industries Leasing for the benefit of the holders of the Pass Through
Certificates are collateralized by interest in certain railcars owned by Trinity
Industries Leasing and the leases pursuant to which such railcars are leased to
customers. The equipment notes, including the obligations to make payments of
principal and interest thereon are direct obliga-

                                        19
<PAGE>

tions of Trinity Industries Leasing and are fully and unconditionally guaranteed
by Trinity as guarantor.

     On March 6, 2002, we privately placed a total of 1.5 million unregistered
shares of our common stock for net proceeds of $31.5 million. We are obligated
to register these shares.

SALE/LEASEBACK TRANSACTION

     During the nine months ended December 31, 2001, we completed an off balance
sheet financing arrangement for $199.0 million in railcars. We sold the railcars
to an independent trust. The trust financed the purchase of the railcars with
$151.3 million in debt and $47.7 million in equity provided by large independent
financial institutions. The equity investor in the trust has the risk of
ownership of the assets in the trust except for the $6.5 million of cash
collateral discussed herein. Trinity has made no guarantees with respect to
amounts at risk. An independent trustee for the trust has the authority for the
appointment of the railcar fleet manager. The debt is repayable by the trust
over 19 years.

     Trinity, through a newly formed, wholly owned, qualified subsidiary, leased
the cars from the trust and subleased the railcars to independent third party
customers. Future operating lease obligations of our subsidiary under the lease
agreement are as follows (in millions): 2002 -- $17.0; 2003 -- $16.8;
2004 -- $17.1; 2005 -- $16.3; 2006 -- $15.8; and $225.5 thereafter. Future
minimum rental revenues from subleased railcars as of December 31, 2001 are as
follows (in millions): 2002 -- $19.5; 2003 -- $18.2; 2004 -- $16.8;
2005 -- $14.1; 2006 -- $12.8 and $76.9 thereafter.

     Under the terms of the operating lease agreement, Trinity has the option to
purchase the railcars from the trust at the end of sixteen years at a
predetermined, fixed price. Trinity also has an option to purchase the railcars
at the end of the lease agreement at the then fair market value of the railcars.
At the expiration of the operating lease agreement, Trinity has no further
obligation or ownership interest in the assets of the trust.

     Included in our accompanying consolidated balance sheet are cash and
railcars totaling $28.4 million which are pledged as collateral for the duration
of the lease obligations to the trust and an additional $6.5 million of cash
which is pledged as collateral for the equity investor's investment. Trinity,
under the terms of a servicing and remarketing agreement, will endeavor,
consistent with customary commercial practice as would be used by a prudent
person, to maintain railcars under lease for the benefit of the trust. Trinity
also receives management fees under the terms of the agreement. Certain ratios
must be maintained in order for excess cash flow, as defined, from the leases to
third parties, to be available to Trinity.

     The sale of the railcars by Trinity to the trust was accounted for as a
sale/leaseback transaction. No revenue or profit was recorded at the time of the
transaction and all profit was deferred and is being amortized over the term of
the operating lease. Neither the assets of the trust, amounts due by the trust
under the terms of debt to the financial institutions, or equity of the trust
are reflected on the consolidated balance sheet of Trinity.

                                        20
<PAGE>

CONTRACTUAL OBLIGATION AND COMMERCIAL COMMITMENTS.

     As of December 31, 2001, we had the following contractual obligations (in
millions):

<Table>
<Caption>
                                                                   PAYMENTS DUE BY PERIOD
                                                            -------------------------------------
                                                            1 YEAR      2-3       4-5     AFTER 5
CONTRACTUAL OBLIGATIONS                           TOTAL     OR LESS    YEARS     YEARS     YEARS
- -----------------------                           ------    -------    ------    -----    -------
<S>                                               <C>       <C>        <C>       <C>      <C>
Long-term debt..................................  $476.3     $11.5     $291.0    $50.5    $123.3
Operating leases................................    50.7      10.1       17.4     13.2      10.0
                                                  ------     -----     ------    -----    ------
Total...........................................  $527.0     $21.6     $308.4    $63.7    $133.3
                                                  ======     =====     ======    =====    ======
</Table>

     As of December 31, 2001, we had the following other commercial commitments
(in millions):

<Table>
<Caption>
                                                            AMOUNT OF COMMITMENT EXPIRATION PER PERIOD
                                               TOTAL       --------------------------------------------
                                              AMOUNTS      1 YEAR        2-3         4-5       AFTER 5
OTHER COMMERCIAL COMMITMENTS                 COMMITTED     OR LESS      YEARS       YEARS       YEARS
- ----------------------------                 ---------     -------     -------     -------     --------
<S>                                          <C>           <C>         <C>         <C>         <C>
Letters of Credit..........................   $ 81.2        $16.4       $ 0.2       $ 0.6       $ 64.0
Operating leases under sale/leaseback
  transaction..............................    308.5         17.0        33.9        32.1        225.5
                                              ------        -----       -----       -----       ------
                                              $389.7        $33.4       $34.1       $32.7       $289.5
                                              ======        =====       =====       =====       ======
</Table>

INFLATION

     Changes in price levels of products and services did not significantly
affect our operations during the nine months ended December 31, 2001 or in
fiscal years 2001 and 2000.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     Our earnings are affected by changes in interest rates due to the impact
those changes have on our variable rate debt obligations, which represented
approximately 96% of our total debt as of December 31, 2001. We have hedged a
portion of this exposure with interest rate swaps leaving approximately 49% of
our total debt exposed to fluctuations in interest rates. If interest rates
average one percentage point more in fiscal year 2002 than they did during the
nine months ended December 31, 2001, our interest expense would increase by
approximately $2.3 million. In comparison, at March 31, 2001, we estimated that
if interest rates averaged one percentage point more in fiscal year 2002 than
they did in fiscal year 2001, interest expense would have increased by
approximately $4.9 million. The impact of an increase in interest rates was
determined based on the impact of the hypothetical change in interest rates and
scheduled principal payments on our variable-rate debt obligations as of
December 31, 2001 and March 31, 2001.

     In addition, we are subject to market risk related to our net investments
in our foreign subsidiaries. The net investment in foreign subsidiaries as of
December 31, 2001 is $209.8 million. However, the impact of such market risk
exposures as a result of foreign exchange rate fluctuations has not been
material to us.

                                        21
<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

                           TRINITY INDUSTRIES, INC.,

                         INDEX TO FINANCIAL STATEMENTS

<Table>
<Caption>
                                                              PAGE
                                                              ----
<S>                                                           <C>
Report of Independent Auditors..............................   23

Consolidated Statement of Operations for the nine months
  ended December 31, 2001 and 2000 (unaudited) and for the
  years ended March 31, 2001 and 2000.......................   24

Consolidated Balance Sheet as of December 31, 2001 and March
  31, 2001..................................................   25

Consolidated Statement of Cash Flows for the nine months
  ended December 31, 2001 and 2000 (unaudited) and for the
  years ended March 31, 2001 and 2000.......................   26

Consolidated Statement of Stockholders' Equity for the nine
  months ended December 31, 2001 and for the years ended
  March 31, 2001 and 2000...................................   27

Notes to Consolidated Financial Statements..................   28
</Table>

                                        22
<PAGE>

                         REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Stockholders
  Trinity Industries, Inc.

     We have audited the accompanying consolidated balance sheets of Trinity
Industries, Inc. as of December 31, 2001 and March 31, 2001, and the related
consolidated statement of operations, cash flows and stockholders' equity for
the nine months ended December 31, 2001 and for each of the two years in the
period ended March 31, 2001. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States. These standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Trinity
Industries, Inc. at December 31, 2001 and March 31, 2001, and the consolidated
results of its operations and its cash flows for the nine months ended December
31, 2001 and for each of the two years in the period ended March 31, 2001, in
conformity with accounting principles generally accepted in the United States.

                                                               ERNST & YOUNG LLP
Dallas, Texas
March 13, 2002

                                        23
<PAGE>

TRINITY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS

<Table>
<Caption>
                                                      NINE MONTHS ENDED
                                                        DECEMBER 31,          YEAR ENDED MARCH 31,
                                                   -----------------------    --------------------
                                                     2001         2000          2001        2000
                                                   --------    -----------    --------    --------
                                                               (UNAUDITED)
                                                         (IN MILLIONS EXCEPT PER SHARE DATA)
<S>                                                <C>         <C>            <C>         <C>
Revenues.........................................  $1,347.8     $1,485.6      $1,904.3    $2,740.6
Operating costs:
  Cost of revenues...............................   1,234.5      1,331.4       1,756.7     2,278.2
  Selling, engineering and administrative
     expenses....................................     129.7        162.1         213.7       183.4
                                                   --------     --------      --------    --------
                                                    1,364.2      1,493.5       1,970.4     2,461.6
                                                   --------     --------      --------    --------
Operating profit (loss)..........................     (16.4)        (7.9)        (66.1)      279.0
Other (income) expense:
  Interest income................................      (2.5)        (5.5)         (6.9)       (2.0)
  Interest expense...............................      21.7         21.3          28.9        20.4
  Other, net.....................................       4.9         30.5          28.2        (2.3)
                                                   --------     --------      --------    --------
                                                       24.1         46.3          50.2        16.1
                                                   --------     --------      --------    --------
Income (loss) before income taxes................     (40.5)       (54.2)       (116.3)      262.9
Provision (benefit) for income taxes:
  Current........................................       3.3         17.8           3.8        84.4
  Deferred.......................................      (9.1)       (37.3)        (45.7)       13.0
                                                   --------     --------      --------    --------
                                                       (5.8)       (19.5)        (41.9)       97.4
                                                   --------     --------      --------    --------
Net income (loss)................................  $  (34.7)    $  (34.7)     $  (74.4)   $  165.5
                                                   ========     ========      ========    ========
Net income (loss) per common share:
  Basic..........................................  $  (0.90)    $  (0.92)     $  (1.98)   $   4.17
                                                   ========     ========      ========    ========
  Diluted........................................  $  (0.90)    $  (0.92)     $  (1.98)   $   4.15
                                                   ========     ========      ========    ========
Weighted average number of shares outstanding:
  Basic..........................................      38.7         37.6          37.5        39.7
  Diluted........................................      38.7         37.6          37.5        39.9
</Table>

See accompanying notes to consolidated financial statements.
                                        24
<PAGE>

TRINITY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET

<Table>
<Caption>
                                                              DECEMBER 31,    MARCH 31,
                                                                  2001          2001
                                                              ------------    ---------
                                                                    (IN MILLIONS)
<S>                                                           <C>             <C>
ASSETS
Cash and cash equivalents...................................    $   22.2      $   13.5
Receivables (net of allowance for doubtful accounts of $9.5
  at December 31, 2001 and $4.8 at March 31, 2001)..........       204.3         245.7
Inventories:
  Raw materials and supplies................................       159.5         235.5
  Work in process...........................................        42.4          43.5
  Finished goods............................................        73.3          73.5
                                                                --------      --------
                                                                   275.2         352.5

Property, plant and equipment, at cost......................     1,434.9       1,534.1
Less accumulated depreciation...............................      (555.8)       (541.7)
                                                                --------      --------
                                                                   879.1         992.4

Goodwill....................................................       415.7          77.3
Other assets................................................       155.5         144.5
                                                                --------      --------
                                                                $1,952.0      $1,825.9
                                                                ========      ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable...............................................    $     --      $   33.8
Accounts payable and accrued liabilities....................       424.9         364.2
Long-term debt..............................................       476.3         504.0
Deferred income taxes.......................................          --           7.1
Other liabilities...........................................        41.4          37.8
                                                                --------      --------
                                                                   942.6         946.9
Stockholders' equity:
  Common stock -- shares issued and outstanding at December
     31, 2001 -- 51.0; at March 31, 2001 -- 43.8............        51.0          43.8
  Capital in excess of par value............................       464.7         291.8
  Retained earnings.........................................       703.4         759.4
  Accumulated other comprehensive loss......................       (26.0)        (21.1)
  Treasury stock (6.6 shares at December 31, 2001 and 7.0
     shares at March 31, 2001)..............................      (183.7)       (194.9)
                                                                --------      --------
                                                                 1,009.4         879.0
                                                                --------      --------
                                                                $1,952.0      $1,825.9
                                                                ========      ========
</Table>

See accompanying notes to consolidated financial statements.
                                        25
<PAGE>

TRINITY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT CASH FLOWS

<Table>
<Caption>
                                                             NINE MONTHS
                                                                ENDED              YEAR ENDED
                                                            DECEMBER 31,            MARCH 31,
                                                        ---------------------   -----------------
                                                         2001        2000        2001      2000
                                                        -------   -----------   -------   -------
                                                                  (UNAUDITED)
                                                                      (IN MILLIONS)
<S>                                                     <C>       <C>           <C>       <C>
Operating activities:
  Net income (loss)...................................  $ (34.7)    $ (34.7)    $ (74.4)  $ 165.5
  Adjustments to reconcile net income (loss) to net
     cash provided (required) by operating activities:
       Depreciation and amortization..................     66.2        69.8        89.1      80.3
       Deferred income taxes..........................     (9.1)      (37.3)      (45.7)     13.0
       Gain on sale of property, plant, equipment and
          other assets................................     (1.1)       (9.8)      (11.2)    (10.5)
       Unusual charges................................     66.4       117.5       173.3        --
       Other..........................................      2.5         1.9         1.0       2.4
       Changes in assets and liabilities, net of
          effects from acquisitions and unusual
          charges:
            Decrease in receivables...................     78.9       122.9        92.3      17.4
            (Increase) decrease in inventories........    112.8       (59.6)      (24.3)     43.0
            (Increase) decrease in other assets.......     (5.2)      (53.7)      (33.3)      2.8
            Decrease in accounts payable and accrued
               liabilities............................    (80.3)      (55.1)      (75.1)    (60.4)
            Increase (decrease) in other
               liabilities............................      3.7        (5.9)       (0.8)     14.7
                                                        -------     -------     -------   -------
               Total adjustments......................    234.8        90.7       165.3     102.7
                                                        -------     -------     -------   -------
Net cash provided by operating activities.............    200.1        56.0        90.9     268.2
Investing activities:
  Proceeds from sale of property, plant, equipment and
     other assets.....................................    188.2        55.8        62.8      77.7
  Capital expenditures................................   (133.3)     (229.3)     (350.2)   (167.2)
  Payment for purchase of acquisitions, net of cash
     acquired.........................................   (165.0)      (13.7)      (13.5)    (25.6)
                                                        -------     -------     -------   -------
  Net cash required by investing activities...........   (110.1)     (187.2)     (300.9)   (115.1)
Financing activities:
  Issuance of common stock............................       --          --          --       2.3
  Net borrowings (repayments) of short-term debt......    (35.8)      235.5       323.7     (10.9)
  Payments to retire long-term debt...................    (25.5)      (51.4)      (55.5)    (27.5)
  Stock repurchases...................................       --       (34.6)      (34.6)    (84.9)
  Dividends paid......................................    (20.0)      (20.4)      (27.0)    (28.7)
                                                        -------     -------     -------   -------
  Net cash provided (required) by financing
     activities.......................................    (81.3)      129.1       206.6    (149.7)
                                                        -------     -------     -------   -------
Net increase (decrease) in cash and equivalents.......      8.7        (2.1)       (3.4)      3.4
Cash and equivalents at beginning of period...........     13.5        16.9        16.9      13.5
                                                        -------     -------     -------   -------
Cash and equivalents at end of period.................  $  22.2     $  14.8     $  13.5   $  16.9
                                                        =======     =======     =======   =======
</Table>

Interest paid for the nine months ended December 31, 2001 and 2000 and years
ended March 31, 2001 and 2000 was $22.3, $18.3, $29.0, and $20.7, respectively.

See accompanying notes to consolidated financial statements.

                                        26
<PAGE>

TRINITY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
<Table>
<Caption>
                                    COMMON       COMMON      CAPITAL
                                    SHARES        STOCK     IN EXCESS
                                 (100,000,000   $1.00 PAR    OF PAR     RETAINED
                                 AUTHORIZED)      VALUE       VALUE     EARNINGS
                                 ------------   ---------   ---------   --------
                                  (IN MILLIONS EXCEPT SHARE AND PER SHARE DATA)
<S>                              <C>            <C>         <C>         <C>
Balance at March 31, 1999......   43,705,636      $43.7      $292.6      $722.9
  Net income...................           --         --          --       165.5
  Currency translation
    adjustments................           --         --          --          --
  Comprehensive income.........
  Cash dividends ($0.72 per
    share).....................           --         --          --       (27.8)
  Stock repurchases............           --         --          --          --
  Other........................       90,715        0.1         2.5          --
                                  ----------      -----      ------      ------
Balance at March 31, 2000......   43,796,351       43.8       295.1       860.6
  Net loss.....................           --         --          --       (74.4)
  Currency translation
    adjustments................           --         --          --          --
  Comprehensive loss...........
  Cash dividends ($0.72 per
    share).....................           --         --          --       (26.8)
  Stock repurchases............           --         --          --          --
  Other........................           --         --        (3.3)         --
                                  ----------      -----      ------      ------
Balance at March 31, 2001......   43,796,351       43.8       291.8       759.4
  Net loss.....................           --         --          --       (34.7)
  Currency translation
    adjustments................           --         --          --          --
  Unrealized loss on derivative
    financial instruments......           --         --          --          --
  Comprehensive loss...........
  Cash dividends ($0.54 per
    share).....................           --         --          --       (21.3)
  Stock issued for mergers and
    acquisitions...............    7,150,000        7.2       175.8          --
  Other........................           --         --        (2.9)         --
                                  ----------      -----      ------      ------
Balance at December 31, 2001...   50,946,351      $51.0      $464.7      $703.4
                                  ==========      =====      ======      ======

<Caption>
                                  ACCUMULATED
                                     OTHER                    TREASURY       TOTAL
                                 COMPREHENSIVE    TREASURY    STOCK AT   STOCKHOLDERS'
                                     LOSS          SHARES       COST        EQUITY
                                 -------------   ----------   --------   -------------
                                     (IN MILLIONS EXCEPT SHARE AND PER SHARE DATA)
<S>                              <C>             <C>          <C>        <C>
Balance at March 31, 1999......     $(20.6)      (2,363,932)  $ (79.5)     $  959.1
  Net income...................         --               --        --         165.5
  Currency translation
    adjustments................        0.8               --        --           0.8
                                                                           --------
  Comprehensive income.........                                               166.3
  Cash dividends ($0.72 per
    share).....................         --               --        --         (27.8)
  Stock repurchases............         --       (2,941,839)    (84.9)        (84.9)
  Other........................         --         (149,972)     (0.2)          2.4
                                    ------       ----------   -------      --------
Balance at March 31, 2000......      (19.8)      (5,455,743)   (164.6)      1,015.1
  Net loss.....................         --               --        --         (74.4)
  Currency translation
    adjustments................       (1.3)              --        --          (1.3)
                                                                           --------
  Comprehensive loss...........                                               (75.7)
  Cash dividends ($0.72 per
    share).....................         --               --        --         (26.8)
  Stock repurchases............         --       (1,618,900)    (34.6)        (34.6)
  Other........................         --          121,257       4.3           1.0
                                    ------       ----------   -------      --------
Balance at March 31, 2001......      (21.1)      (6,953,386)   (194.9)        879.0
  Net loss.....................         --               --        --         (34.7)
  Currency translation
    adjustments................       (0.4)              --        --          (0.4)
  Unrealized loss on derivative
    financial instruments......       (4.5)              --        --          (4.5)
                                                                           --------
  Comprehensive loss...........                                               (39.6)
  Cash dividends ($0.54 per
    share).....................         --               --        --         (21.3)
  Stock issued for mergers and
    acquisitions...............         --           34,000       1.3         184.3
  Other........................         --          310,864       9.9           7.0
                                    ------       ----------   -------      --------
Balance at December 31, 2001...     $(26.0)      (6,608,522)  $(183.7)     $1,009.4
                                    ======       ==========   =======      ========
</Table>

See accompanying notes to consolidated financial statements.
                                        27
<PAGE>

TRINITY INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

     The financial statements of Trinity Industries, Inc. and its consolidated
subsidiaries ("Trinity" or the "Company") include the accounts of all majority
owned subsidiaries. The equity method of accounting is used for companies in
which the Company has significant influence and less than 50% ownership. All
significant intercompany accounts and transactions have been eliminated.

CHANGE IN YEAR END

     In September 2001 the Company changed its year end from March 31 to
December 31. Unless stated otherwise, all references to "fiscal year 2000" shall
mean the full fiscal year ended March 31, 2000 and "fiscal year 2001" shall mean
the full fiscal year ended March 31, 2001.

REVENUE RECOGNITION

     The Company generally recognizes revenue when products are shipped or
services are provided. Revenues for contracts providing for a large number of
units and few deliveries are recorded as the individual units are produced,
inspected and accepted by the customer. Revenue from rentals and operating
leases are recorded monthly as the fees accrue.

INCOME TAXES

     The liability method is used to account for income taxes. Deferred income
taxes are provided for the temporary effects of differences in the recognition
of revenues and expenses for financial statement and income tax reporting
purposes. Valuation allowances reduce deferred tax assets to an amount that will
more likely than not be realized.

NET INCOME (LOSS) PER SHARE

     For fiscal year 2000 diluted net income per common share is based on the
weighted average shares outstanding plus the assumed exercise of dilutive stock
options less the number of treasury shares assumed to be purchased from the
proceeds using the average market price of Trinity's common stock. Basic net
income per common share is based on the weighted average number of common shares
outstanding for the period. The numerator for both basic net income (loss) per
common share and diluted net income per common share is net income (loss). The
difference between the denominator in the basic calculation and the denominator
in the diluted calculation is attributable to the effect of employee stock
options. Diluted loss per common share for the nine months ended December 31,
2001 and for fiscal 2001 is based only on the weighted average number of common
shares outstanding during the period, as the inclusion of stock options would
have been antidilutive. The amounts of antidilutive options for the nine months
ended December 31, 2001 and 2000 and for fiscal years 2001 and 2000 were
173,422, 66,739, 58,019 and 222,745, respectively.

FINANCIAL INSTRUMENTS

     The Company considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents.

     Financial instruments which potentially subject the Company to
concentration of credit risk are primarily cash investments and receivables. The
Company places its cash investments in investment grade, short-term debt
instruments and limits the amount of credit exposure to any one commercial
issuer. Concentrations of credit risk with respect to receivables are limited
due to control procedures to monitor the credit worthiness of customers, the
large number of customers in the Company's customer base, and their dispersion
across different industries and geographic areas. The Company maintains an
allowance for losses based upon the expected collectibility of all receivables.

     Effective April 1, 2001, the Company adopted SFAS 133, Accounting for
Derivative Instruments and Hedging Activities. In accordance with SFAS 133, the
Company formally documents all hedging instruments and assesses on an ongoing
basis whether hedging transactions are highly effective. It is the Company's
policy not to speculate in hedging activities. All hedging instruments
outstanding at December 31, 2001 have been designated as cash flow hedges and
are considered highly effective. The adoption of SFAS 133 did not have a
material impact on the Company's financial statements.
                                        28
<PAGE>

     Interest rate swap agreements are utilized to reduce the impact of changes
in interest rates on certain debt. During the nine months ended December 31,
2001, the Company entered into eight interest rate swap agreements with a total
notional amount of $225.0 million which expire in 2002 and 2003. The Company
pays an average fixed rate of 4.30% and receives a floating rate based on the
three-month LIBOR rates. As of December 31, 2001, the fair value of these swaps
was recorded as a liability on the Company's books of $4.5 million with the
offset to other comprehensive income.

     Foreign operations give rise to risks from changes in foreign currency
exchange rates. Forward exchange contracts with established financial
institutions are utilized to hedge a portion of such risk. Realized and
unrealized gains and losses are deferred and recognized in earnings concurrent
with the hedged transaction. Although forward exchange contracts are entered
into to mitigate the impact of currency fluctuations, certain exposure remains
that may affect operating results. As of December 31, 2001, the fair value of
the forward exchange contracts is not material.

INVENTORIES

     Inventories are valued at the lower of cost or market, with cost determined
principally on the specific identification method. Market is replacement cost or
net realizable value.

PROPERTY, PLANT AND EQUIPMENT

     Depreciation and amortization are generally computed by the straight-line
method over the estimated useful lives of the assets, generally 2 to 30 years.
The costs of ordinary maintenance and repair are charged to expense while
renewals and major replacements are capitalized.

     The Company recognizes an impairment on its long-lived assets if the sum of
the expected future cash flows generated by an asset or group of assets is less
than the carrying amount of the respective asset(s). The Company measures an
impairment loss of its assets to be disposed of by the amount by which the
carrying amount of the asset exceeds the fair value of the asset.

INSURANCE

     The Company's insurance for workers' compensation is effectively
self-insured. A third party administrator is used to process claims. The Company
accrues the workers' compensation liability based upon on independent actuarial
study.

WARRANTIES

     The Company provides for the estimated cost of product warranties at the
time revenue is recognized.

FOREIGN CURRENCY TRANSLATION

     Operations outside the United States prepare financial statements in
currencies other than the United States Dollar; the income statement amounts are
translated at average exchange rates for the year, while the assets and
liabilities are translated at year-end exchange rates. Translation adjustments
are accumulated as a separate component of stockholders' equity and
comprehensive income.

COMPREHENSIVE INCOME (LOSS)

     Comprehensive income (loss) is defined as the change in equity of a
business enterprise during a period from transactions and other events and
circumstances from non-owner sources. Comprehensive income (loss) consists of
net income (loss), foreign currency translation adjustments and the effective
unrealized portions of changes in fair value of the Company's derivative
financial instruments.

STOCK-BASED COMPENSATION

     Compensation expense for stock-based employee compensation is measured
using the method prescribed by Accounting Principles Board (APB) Opinion No. 25,
Accounting for Stock Issued to Employees. If material, pro forma disclosures of
net earnings (loss) and earnings (loss) per common share will be made as if the
method prescribed by Statement of Financial Accounting Standards (SFAS) No. 123,
Accounting for stock Based Compensation, had been applied in measuring
compensation expense.

MANAGEMENT ESTIMATES

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial

                                        29
<PAGE>

statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

RECLASSIFICATIONS

     Certain reclassifications have been made to prior year statements to
conform to the current period presentation primarily related to segment
information.

PROSPECTIVE ACCOUNTING CHANGES

     In October 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets, which is effective for fiscal years
beginning after December 15, 2001. SFAS 144 addresses accounting and reporting
of long-lived assets, except goodwill, that are held and used or disposed of
through sale or other means. The Company, while currently evaluating the impact
of this statement on the consolidated financial statements, does not believe it
will have a significant impact.

NOTE 2. SEGMENT INFORMATION

     As of December 31, 2001, the Company modified its segment reporting to
align the reportable segments with current management responsibilities and
internal reporting.

     The new reporting format includes the following business segments: (1) the
Trinity Rail group, which manufactures and sells railcars and component parts;
(2) the Construction Products group which manufactures and sells highway
guardrail and safety products, concrete and aggregate, girders and beams used in
the construction of highway and railway bridges and weld fittings used in
pressure piping systems; (3) the Inland Barge group which manufactures and sells
barges and related products for inland waterway services; (4) the Industrial
Products group, which manufactures and sells container heads and pressure and
non-pressure containers for the storage and transportation of liquefied gases
and other liquid and dry products; and (5) the Trinity Railcar Leasing and
Management Services group, which provides services such as fleet management and
leasing. Finally, All Other includes the Company's captive insurance and
transportation companies, structural towers, and other peripheral businesses.

     Sales from Trinity Rail group to Trinity Railcar Leasing and Management
Services group are recorded in Trinity Rail group and eliminated in
consolidation. Sales of railcars from the lease fleet are included in the
Trinity Railcar Leasing and Management Services group segment. Sales among
groups are recorded at prices comparable to external customers.

     The financial information for these segments is shown in the tables below.
The Company operates principally in the continental United States, Mexico,
Romania, the United Kingdom, the Czech Republic, Brazil, Switzerland and
Slovakia. Intersegmental sales are at market prices.

NINE MONTHS ENDED DECEMBER 31, 2001

<Table>
<Caption>
                                         REVENUES                OPERATING
                            ----------------------------------    PROFIT                DEPRECIATION &     CAPITAL
                            OUTSIDE    INTERSEGMENT    TOTAL      (LOSS)      ASSETS     AMORTIZATION    EXPENDITURES
                            --------   ------------   --------   ---------   --------   --------------   ------------
                                                                  (IN MILLIONS)
<S>                         <C>        <C>            <C>        <C>         <C>        <C>              <C>
Rail Group................  $  521.3     $ 142.8      $  664.1    $(65.8)    $  868.7       $21.3           $ 22.9
Construction Products
  Group...................     427.2         5.0         432.2      45.6        250.0        18.7             11.9
Inland Barge Group........     148.2          --         148.2       9.8         86.6         2.7              1.8
Industrial Products
  Group...................     106.7         2.3         109.0       3.9        104.6         4.7              5.3
Railcar Leasing and
  Management Services
  Group...................      94.0          --          94.0      30.2        482.8        11.4             87.6
All Other.................      50.4        28.1          78.5     (21.1)        52.5         3.9              2.3
Eliminations & Corporate
  Items...................        --      (178.2)       (178.2)    (19.0)       106.8         3.5              1.5
                            --------     -------      --------    ------     --------       -----           ------
Consolidated Total........  $1,347.8     $    --      $1,347.8    $(16.4)    $1,952.0       $66.2           $133.3
                            ========     =======      ========    ======     ========       =====           ======
</Table>

                                        30
<PAGE>

YEAR ENDED MARCH 31, 2001

<Table>
<Caption>
                                         REVENUES                OPERATING
                            ----------------------------------    PROFIT                DEPRECIATION &     CAPITAL
                            OUTSIDE    INTERSEGMENT    TOTAL      (LOSS)      ASSETS     AMORTIZATION    EXPENDITURES
                            --------   ------------   --------   ---------   --------   --------------   ------------
                                                                  (IN MILLIONS)
<S>                         <C>        <C>            <C>        <C>         <C>        <C>              <C>
Rail Group................  $  818.0     $ 281.7      $1,099.7    $(35.2)    $  596.7       $24.4           $ 35.2
Construction Products
  Group...................     549.0        11.1         560.1      29.1        282.4        27.5             28.0
Inland Barge Group........     202.9         0.1         203.0      11.7         77.2         4.3              1.7
Industrial Products
  Group...................     160.3         9.8         170.1       5.4        155.6         5.2             12.4
Railcar Leasing and
  Management Services
  Group...................     128.7          --         128.7      42.0        553.1        14.0            259.8
All Other.................      45.4        45.8          91.2     (59.1)        63.2         7.0             10.7
Eliminations & Corporate
  Items...................        --      (348.5)       (348.5)    (60.0)        97.7         6.7              2.4
                            --------     -------      --------    ------     --------       -----           ------
Consolidated Total........  $1,904.3     $    --      $1,904.3    $(66.1)    $1,825.9       $89.1           $350.2
                            ========     =======      ========    ======     ========       =====           ======
</Table>

YEAR ENDED MARCH 31, 2000

<Table>
<Caption>
                                         REVENUES                OPERATING
                            ----------------------------------    PROFIT                DEPRECIATION &     CAPITAL
                            OUTSIDE    INTERSEGMENT    TOTAL      (LOSS)      ASSETS     AMORTIZATION    EXPENDITURES
                            --------   ------------   --------   ---------   --------   --------------   ------------
                                                                  (IN MILLIONS)
<S>                         <C>        <C>            <C>        <C>         <C>        <C>              <C>
Rail Group................  $1,632.0     $  66.3      $1,698.3    $174.6     $  739.5       $23.9           $ 38.1
Construction Products
  Group...................     581.4        10.1         591.5      62.1        314.7        25.9             27.8
Inland Barge Group........     210.1          --         210.1      25.7         63.6         5.2              1.5
Industrial Products
  Group...................     179.2         8.1         187.3      13.0        120.1         4.1             11.4
Railcar Leasing and
  Management Services
  Group...................     131.5          --         131.5      51.3        359.2         9.2             64.2
All Other.................       6.4        54.4          60.8      (8.2)        53.5         6.0              7.8
Eliminations & Corporate
  Items...................        --      (138.9)       (138.9)    (39.5)        87.9         6.0             16.4
                            --------     -------      --------    ------     --------       -----           ------
Consolidated Total........  $2,740.6     $    --      $2,740.6    $279.0     $1,738.5       $80.3           $167.2
                            ========     =======      ========    ======     ========       =====           ======
</Table>

     Total revenues from external customers attributed to foreign operations for
the nine months ended December 31, 2001 and for fiscal years 2001 and 2000 are
$102.2 million, $99.5 million, and $71.9 million, respectively. The Rail Group
includes revenues from one customer that accounted for 12.6 percent of
consolidated revenues in fiscal 2000. Long-lived assets located outside the
United States for the nine months ended December 31, 2001 and for fiscal 2001
and 2000 are $159.4 million, $179.2 million, an $136.6 million, respectively.

     Corporate assets are composed of cash and equivalents, notes receivable,
land held for investment, certain property, plant and equipment, and other
assets. Capital expenditures do not include business acquisitions.

NOTE 3. UNUSUAL CHARGES

     In December 2001, the Company recorded special pretax charges of $66.4
million ($50.4 million after tax), or $1.30 per share, related primarily to
restructuring the Company's Rail Group in connection with the Thrall merger in
North America and in Europe and other matters.

                                        31
<PAGE>

COSTS INCLUDED IN THE CHARGES ARE SUMMARIZED AS FOLLOWS:

<Table>
<Caption>
                                                               TOTAL       RESERVES AT
                                                              CHARGES   DECEMBER 31, 2001
                                                              -------   -----------------
                                                                     (IN MILLIONS)
<S>                                                           <C>       <C>
Property, plant & equipment -- write-downs to net realizable
  value and related plant closing costs.....................   $46.5          $ 9.9
Severance costs -- approximately 2,100 employees............     3.8            3.8
                                                               -----          -----
     Railcar restructuring charges..........................    50.3           13.7
Asset write-downs and exit costs related to wholly owned
  businesses................................................    15.5            0.2
Non railcar severance -- 11 employees.......................     0.6            0.6
                                                               -----          -----
     Total charges..........................................   $66.4          $14.5
                                                               =====          =====
</Table>

The reserves at December 31, 2001 represent future cash requirements.

Classification of the charges by segment and income statement line items are
shown below:

<Table>
<Caption>
                                                                      CONSTRUCTION    ALL
                                                            RAILCAR     PRODUCTS     OTHER   TOTAL
                                                            -------   ------------   -----   -----
                                                                        (IN MILLIONS)
<S>                                                         <C>       <C>            <C>     <C>
Cost of revenues..........................................   $46.1        $0.8       $ 9.9   $56.8
Selling, engineering & administrative.....................     4.2         0.1         3.2     7.5
                                                             -----        ----       -----   -----
Charged to operating profit...............................    50.3         0.9        13.1    64.3
Other (income) expense....................................      --          --          --     2.1
                                                             -----        ----       -----   -----
  Total charges...........................................   $50.3        $0.9       $13.1   $66.4
                                                             =====        ====       =====   =====
</Table>

     In fiscal year 2001, the Company recorded pretax charges of $173.3 million
($110.9 million after tax), or $2.96 per share, related primarily to
restructuring the Company's railcar operations, exiting the flange and valve
businesses, writing down certain inventory, curtailing international barge
operations, environmental liabilities associated with previously closed
facilities, litigation reserve for an adverse jury verdict, write-down of
certain equity investments and acquired assets, including a 20% investment in a
Russian transportation company obtained with the acquisition of Transcisco
Industries in the fall of 1996, and other charges.

                                        32
<PAGE>

Costs included in the fiscal year 2001 charges are summarized as follows:

<Table>
<Caption>
                                         RESERVES                                             RESERVES
                                TOTAL    MARCH 31,   ADDITIONAL                             DECEMBER 31,
                               CHARGES     2001       CHARGES     PAYMENTS   WRITE-OFFS         2001
                               -------   ---------   ----------   --------   ----------     ------------
                                                    (IN MILLIONS)
<S>                            <C>       <C>         <C>          <C>        <C>            <C>
Property, plant & equipment
  -- write-downs to net
  realizable value to be
  disposed of and related
  shut-down costs and other
  asset write-downs..........  $ 81.7      $24.1        $2.2       $ (2.1)     $(15.2)         $ 9.0
Inventory write-down.........    14.2        0.4         0.5           --        (0.9)            --
Environmental liabilities....    11.8       11.8         0.1         (0.8)         --           11.1
Severance costs..............     7.8        2.6          --         (0.7)       (0.8)(1)        1.1
Adverse jury verdict.........    14.8       14.8          --           --          --           14.8
Equity investment
  write-downs:
  Russian transportation
     company.................    17.0         --          --           --          --             --
  Other equity investments...    20.5         --          --           --          --             --
                               ------      -----        ----       ------      ------          -----
     Total equity investment
       write-downs...........    37.5         --          --           --          --             --
Other........................     5.5        3.7          --         (0.9)       (0.2)           2.6
                               ------      -----        ----       ------      ------          -----
                               $173.3      $57.4        $2.8       $ (4.5)     $(17.1)         $38.6
                               ======      =====        ====       ======      ======          =====
</Table>

- ---------------

(1) Reversal

Classification of the charges by segment are shown below:

<Table>
<Caption>
                                                                                      RAILCAR
                                                                                     LEASING &
                                                CONSTRUCTION   INLAND   INDUSTRIAL   MANAGEMENT   CORPORATE
                                      RAILCAR     PRODUCTS     BARGE     PRODUCTS     SERVICES     & OTHER    TOTAL
                                      -------   ------------   ------   ----------   ----------   ---------   ------
                                                                      (IN MILLIONS)
<S>                                   <C>       <C>            <C>      <C>          <C>          <C>         <C>
Cost of revenues....................   $73.7       $13.7        $4.4       $0.7          $--        $32.8     $125.3
Selling, engineering
  & administrative..................     6.7          --          --         --          --           8.9       15.6
                                       -----       -----        ----       ----          --         -----     ------
Charged to operating profit.........    80.4        13.7         4.4        0.7          --          41.7      140.9
Other (income) expense..............      --          --          --         --          --            --       32.4
                                       -----       -----        ----       ----          --         -----     ------
  Total charges.....................   $80.4       $13.7        $4.4       $0.7          $--        $41.7     $173.3
                                       =====       =====        ====       ====          ==         =====     ======
</Table>

     The Company estimated the fair market value of properties no longer in use
or held for sale based on the location and condition of the properties, the fair
market value of similar properties in the area, and the experience of the
Company in the selling of similar properties in the past.

NOTE 4.  ACQUISITIONS AND DIVESTITURES

     On October 26, 2001, Trinity completed a merger transaction with privately
owned Thrall Car Manufacturing Company (Thrall). The results of Thrall's
operations have been included in the consolidated financial statements since
that date. Thrall is a leading railcar manufacturer, with operations in both the
United States and Europe. This merger combines Trinity's strength in the tank
car segment, Thrall's strength in auto rack manufacturing, and the Company's
research and development expertise across the entire spectrum of railcars.
Trinity expects to reduce costs through improvements in supply chain
performance, greater plant efficiency, the development of dedicated production
lines, and more flexible production and delivery options. The aggregate purchase
price was $372.5 million including $165.5 million of cash, a working capital
adjustment per the merger agreement of $18.4 million, transaction fees of $5.2
million, and common stock valued at $183.4 million. In addition, Trinity under
certain circumstances has agreed to make additional payments, not to exceed $45
million over five years, based on a formula related to annual railcars industry
production levels.

                                        33
<PAGE>

The value of the 7.15 million common shares issued was determined based on the
average market price of Trinity's common shares over the period including two
days before and after the terms of the merger were agreed to and announced.

     The following table summarizes the estimated fair values of the assets
acquired and liabilities assumed at the date of acquisition (in millions).

<Table>
<Caption>
                                         OCTOBER 26, 2001
                                         ----------------
<S>                                      <C>
Current assets.........................       $ 86.2
Property, plant, and equipment.........         37.8
Intangible assets -- patents...........          2.9
Goodwill...............................        336.6
                                              ------
  Total assets acquired................        463.5
Current liabilities....................         91.0
                                              ------
Net assets acquired....................       $372.5
                                              ======
</Table>

     The $336.6 million of goodwill was assigned to the Rail group and that
amount is expected to be deductible for tax purposes.

     The following unaudited pro forma consolidated results of operations are
presented below as if the merger with Thrall had been made at the beginning of
the periods presented. The pro forma consolidated results of operations include
adjustments to give effect to interest expense on acquisition debt and certain
other adjustments, together with related income tax effects. The unaudited pro
forma information is not necessarily indicative of the results of operations
that would have occurred had the merger been made at the beginning of the
periods presented or the future results of the combined operations.

<Table>
<Caption>
                           NINE MONTHS ENDED   YEAR ENDED
                             DECEMBER 31,      MARCH 31,
                                 2001             2001
                           -----------------   ----------
<S>                        <C>                 <C>
Revenues.................      $1,544.1         $2,562.6
Net loss.................         (50.1)           (65.9)
Loss per share:
  Basic..................      $  (1.13)        $ ( 1.47)
  Diluted................      $  (1.13)        $ ( 1.47)
</Table>

     Results for the nine months ended December 31, 2001 include after-tax
charges of $50.4 million ($1.30 per share) related to restructuring the Rail
Group in connection with the Thrall merger and the down cycle in the railcar
industry and other matters. Results for the fiscal year ended March 31, 2001
included after-tax charges of $110.9 million ($2.96 per share) primarily related
to the restructuring of Trinity's railcar operations, investment and asset
write-downs, litigation reserves and other charges.

     On November 9, 2001, Trinity purchased 100% of the outstanding ownership
interests of Transport Capital LLC, a privately held asset management and
advisory services company serving the rail transportation industry owned by a
group of individuals. The aggregate purchase price was $2.1 million including
$1.3 million of cash and 34 thousand shares of common stock held in treasury
valued at $0.8 million. Goodwill amounted to $1.8 million, and none of that
amount is expected to be deductible for tax purposes. Goodwill was assigned to
Railcar Leasing and Management Services group.

     The Company made certain acquisitions during fiscal years 2001 and 2000
accounted for by the purchase method. The aggregate purchase price for these
acquisitions was $30.6 million and $87.4 million, respectively. Goodwill of
$14.5 million and $9.3 million was recorded on the 2001 and 2000 acquisitions,
respectively. The acquired operations have been included in the consolidated
financial statements from the effective dates of the acquisitions. Proforma
results would not have been materially different from actual results for any
year presented.

     During fiscal year 2001, the Company made the decision to discontinue the
operations of TEMCO, which produced concrete mixers, concrete batch plants and
component parts for concrete related industries. Certain assets associated with
this business were sold in March 2001.

NOTE 5.  PROPERTY, PLANT AND EQUIPMENT

<Table>
<Caption>
                                 DECEMBER 31,   MARCH 31,
                                     2001         2001
                                 ------------   ---------
                                      (IN MILLIONS)
<S>                              <C>            <C>
Land...........................    $   51.5     $   51.9
Buildings and improvements.....       286.4        280.5
Machinery......................       539.5        538.4
Equipment on lease.............       536.4        627.9
Construction in progress.......        21.1         35.4
                                   --------     --------
                                   $1,434.9     $1,534.1
                                   ========     ========
</Table>

     Equipment on lease consists primarily of railcars leased by third parties.
The Company enters into lease contracts with third parties with terms generally
ranging between one and fifteen years, wherein equipment manufactured by Trinity
is leased for a specified type of service over the term

                                        34
<PAGE>

of the contract. The Company enters primarily into operating leases. Future
minimum rental revenues on leases in each fiscal year are (in millions):
2002 -- $44.5; 2003 -- $37.0; 2004 -- $33.7; 2005 -- $30.5; 2006 -- $21.9; and
$160.9 thereafter. Equipment on lease with a net book value of $343.7 million is
pledged as collateral for long-term debt.

     The Company leases certain equipment under operating leases. Future minimum
rent expense on these leases in each fiscal year are (in millions):
2002 -- $10.1; 2003 -- $9.6; 2004 -- $7.8; 2005 -- $6.6; 2006 -- $6.6; and $10.0
thereafter.

NOTE 6.  GOODWILL

     The Company adopted SFAS No. 142, Goodwill and Other Intangible Assets,
effective April 1, 2001. Under SFAS No. 142, goodwill is no longer amortized but
reviewed for impairment annually or more frequently if certain indicators arise.
The Company has completed the impairment test required upon adoption of SFAS No.
142 and determined there is no impairment to its recorded goodwill balances.
Goodwill by segment is as follows (in millions):

<Table>
<Caption>
                                 DECEMBER 31,   MARCH 31,
                                     2001         2001
                                 ------------   ---------
<S>                              <C>            <C>
Rail...........................     $416.5        $79.9
Construction Products..........        5.2          5.2
Industrial Products............        1.6          1.6
Railcar Leasing and Management
  Services.....................        1.8           --
                                    ------        -----
                                     425.1         86.7
Accumulated amortization.......       (9.4)        (9.4)
                                    ------        -----
                                    $415.7        $77.3
                                    ======        =====
</Table>

     Had the Company been accounting for its goodwill under SFAS No. 142 for
fiscal 2001 and 2000, the Company's net income (loss) and earning (loss) per
share would have been as follows (in millions except per share amounts):

<Table>
<Caption>
                                           YEARS ENDED
                                            MARCH 31,
                                         ---------------
                                          2001     2000
                                         ------   ------
<S>                                      <C>      <C>
Reported net income (loss).............  $(74.4)  $165.5
Add back goodwill amortization, net of
  tax..................................     2.5      1.8
                                         ------   ------
Adjusted net income (loss).............  $(71.9)  $167.3
                                         ======   ======
Basic earnings (loss) per share:
Reported net income (loss).............  $(1.98)  $ 4.17
Goodwill amortization, net of tax......     .07      .05
                                         ------   ------
Adjusted net income (loss).............  $(1.91)  $ 4.22
                                         ======   ======
Diluted earnings (loss) per share:
Reported net income (loss).............  $(1.98)  $ 4.15
Goodwill amortization, net of tax......     .07      .05
                                         ------   ------
Adjusted net income (loss).............  $(1.91)  $ 4.20
                                         ======   ======
</Table>

NOTE 7.  DEPOSIT AGREEMENT

     The Company entered into a deposit agreement with Altos Hornos de Mexico,
SA de C.V. ("AHMSA") which provides for funds to be deposited with AHMSA which
are then used along with other funds from the Company to purchase steel from
AHMSA. As of December 31, 2001, total funds on deposit including interest due
amounted to approximately $45.8 million. Since May 1999 AHMSA has been operating
under a judicial declaration of suspension of payments, which under applicable
Mexican law, allows companies in Mexico to (1) seek a debt restructuring
agreement with their creditors in an orderly fashion; (2) continue their
operations; and (3) avoid declaration of bankruptcy and liquidation of assets.
Should AHMSA not be able to operate under the declaration of suspension of
payments because of its financial condition, AHMSA's creditors have no access to
the funds on deposit and all funds on deposit with AHMSA under Mexican law
should be returned to the Company. Trinity recovered $10.4 million of this
deposit through inventory purchases in the nine months ended December 31, 2001.
The timing of future collections of the deposit balance will depend on the rate
of steel purchases.

                                        35
<PAGE>

NOTE 8.  DEBT

<Table>
<Caption>
                                 DECEMBER 31,   MARCH 31,
                                     2001         2001
                                 ------------   ---------
                                      (IN MILLIONS)
<S>                              <C>            <C>
Notes payable..................     $   --       $ 33.8
                                    ======       ======
Revolving bank facility........     $288.0       $460.0
6.0-9.25 percent industrial
  development revenue bonds
  payable in varying amounts
  through 2005.................        1.0          1.3
3.0-8.0 percent promissory
  notes, generally payable
  annually through 2015........        4.0          4.2
6.96-9.44 percent equipment
  trust certificates to
  institutional investors
  generally payable in
  semi-annual installments of
  varying amounts through
  2003.........................       10.5         34.3
7.755 percent equipment trust
  certificates to institutional
  investors generally payable
  in semi-annual installments
  of varying amounts through
  2009.........................      170.0           --
11.3 percent notes payable
  monthly through 2003.........        2.8          4.2
                                    ------       ------
                                    $476.3       $504.0
                                    ======       ======
</Table>

     During the nine months ended December 31, 2001, the Company completed a
committed revolving bank facility for $450 million. Amounts borrowed under the
facility bear interest at LIBOR plus 0.95% or other alternative rates at the
Company's option (3.09% at December 31, 2001) and can be converted to a one-year
term in June 2002. The agreement requires maintenance of ratios related to
interest coverage, leverage, and minimum net worth and restricts the amount of
dividend payments. Accounts receivable and inventory are pledged as collateral
for this facility. At December 31, 2001, $95.4 million was available under the
facility. Proceeds from the facility were used to repay outstanding short-term
debt as of March 31, 2001. Such amounts have been classified as long-term in the
consolidated financial statements as of December 31, 2001 and March 31, 2001.
Debt covenant ratios related to interest coverage and leverage could be exceeded
in fiscal 2002. Based on discussions with its lead banks, the Company expects to
renegotiate or replace existing debt agreements including changes to debt
covenants and, if necessary, to take other actions designed to prevent exceeding
debt covenant limitations.

     On February 15, 2002, Trinity Industries Leasing Company ("TILC") sold
$170,000,000 of 2002-1 Pass Through Certificates with interest at 7.755%,
commencing on August 15, 2002 and due semiannually thereafter. Equipment notes
issued by TILC for the benefit of the holders of the Pass Through Certificate
are collateralized by interest in certain railcars owned by TILC and the leases
pursuant to which such railcars are leased to customers. The equipment notes,
including the obligations to make payments of principal and interest thereon are
direct obligations of TILC and are fully and unconditionally guaranteed by
Trinity Industries, Inc. as guarantor.

     The proceeds of $170 million from the issuance of the equipment notes were
used to repay outstanding indebtedness of Trinity as of December 31, 2001 and
therefore such amounts are shown as long-term debt in the accompanying
consolidated financial statements.

     The fair value of non-traded, fixed-rate outstanding debt, estimated using
discounted cash flow analysis, approximates its carrying value. Principal
payments due during the next five years are 2002 -- $11.5; 2003 -- $290.7; 2004
- -- $0.3; 2005 -- $40.2; 2006 -- $10.3; and $123.3 thereafter. As of December 31,
2001, the Company had $81.2 million in outstanding letters of credit.

NOTE 9.  SALE/LEASEBACK FINANCING

     During the nine months ended December 31, 2001, the Company completed an
off balance sheet financing arrangement for $199.0 million in railcars. Trinity
sold the railcars to an independent trust. The trust financed the purchase of
the railcars with $151.3 million in debt and $47.7 million in equity provided by
large independent financial institutions. The equity investor in the trust has
the risk of ownership of the assets in the trust except for the $6.5 million of
cash collateral discussed herein. Trinity has made no guarantees with respect to
amounts at risk. An independent trustee for the trust has the authority for the
appointment of the railcar fleet manager. The debt is repayable by the trust
over 19 years.

     Trinity, through a newly formed, wholly owned, qualified subsidiary, leased
the cars from the trust and subleased the railcars to independent third party
customers. Future operating lease obligations of the Company's subsidiary under
the lease agreement are as follows (in millions): 2002 -- $17.0; 2003 -- $16.8;
2004 -- $17.1; 2005 -- $16.3; 2006 -- $15.8; and $225.5 thereafter. Future
minimum rental revenues from subleased railcars as of December 31, 2001 are as
follows (in millions);

                                        36
<PAGE>

2002 -- $19.5; 2003 -- $18.2; 2004 -- $16.8; 2005 -- $14.1; 2006 -- $12.8 and
$76.9 thereafter.

     Under the terms of the operating lease agreement, Trinity has the option to
purchase the railcars from the trust at the end of sixteen years at a
predetermined, fixed price. Trinity also has an option to purchase the railcars
at the end of the lease agreement at the then fair market value of the railcars.
At the expiration of the operating lease agreement, Trinity has no further
obligation or ownership interest in the assets of the trust.

     Included in the Company's accompanying consolidated balance sheet are cash
and railcars totaling $28.4 million which are pledged as collateral for the
duration of the lease obligations to the trust and an additional $6.5 million of
cash which is pledged as collateral for the equity investor's investment.
Trinity, under the terms of a servicing and remarketing agreement, will
endeavor, consistent with customary commercial practice as would be used by a
prudent person, to maintain railcars under lease for the benefit of the trust.
Trinity also receives management fees under the terms of the agreement. Certain
ratios must be maintained in order for excess cash flow, as defined, from the
leases to third parties, to be available to Trinity.
     The sale of the railcars by Trinity to the trust was accounted for as a
sale/leaseback transaction. No revenue or profit was recorded at the time of the
transaction and all profit was deferred and is being amortized over the term of
the operating lease. Neither the assets of the trust, amounts due by the trust
under the terms of debt to the financial institutions, or equity of the trust
are reflected on the consolidated balance sheet of Trinity.
NOTE 10.  OTHER, NET

     Other (income) expense consists of the following items (in millions):

<Table>
<Caption>
                             NINE MONTHS     YEAR ENDED
                                ENDED         MARCH 31,
                             DECEMBER 31,   -------------
                                 2001       2001    2000
                             ------------   -----   -----
<S>                          <C>            <C>     <C>
Gain on sale of property,
  plant and equipment......     $(1.0)      $(8.8)  $(2.3)
Foreign exchange
  transactions.............       1.5        (0.6)    0.6
Investment write-downs.....       1.9        36.2      --
Loss on equity
  investments..............       1.8         2.4      --
Other......................       0.7        (1.0)   (0.6)
                                -----       -----   -----
  Other, net...............     $ 4.9       $28.2   $(2.3)
                                =====       =====   =====
</Table>

NOTE 11.  INCOME TAXES

     The components of the provision (benefit) for income taxes are:

<Table>
<Caption>
                            NINE MONTHS      YEAR ENDED
                               ENDED         MARCH 31,
                            DECEMBER 31,   --------------
                                2001        2001    2000
                            ------------   ------   -----
<S>                         <C>            <C>      <C>
Current:
  Federal.................     $ 4.6       $  2.5   $78.5
  State...................      (0.5)         1.1     5.2
  Foreign.................      (0.8)         0.2     0.7
                               -----       ------   -----
                                 3.3          3.8    84.4
Deferred..................      (9.1)       (45.7)   13.0
                               -----       ------   -----
Provision (benefit).......     $(5.8)      $(41.9)  $97.4
                               =====       ======   =====
</Table>

     Deferred income taxes represent the tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The components of
deferred tax liabilities and assets are:

<Table>
<Caption>
                                 DECEMBER 31,   MARCH 31,
                                     2001         2001
                                 ------------   ---------
<S>                              <C>            <C>
Deferred tax liabilities:
  Depreciation.................     $99.3         $97.4
  Deductions related to
    inventory of foreign
    operations.................      15.7            --
  Other foreign deferred
    liabilities................       2.6          11.4
                                    -----         -----
                                    117.6         108.8
                                    -----         -----
Deferred tax assets:
  Pensions and other
    benefits...................      42.9          43.1
  Accounts receivable,
    inventory, and other asset
    valuation accounts.........      62.4          48.0
  Foreign net operating loss
    carryforwards..............       8.2           6.3
  Other foreign deferred
    assets.....................       8.4            --
  Other........................       0.8           4.3
                                    -----         -----
  Total deferred tax assets....     122.7         101.7
  Valuation allowance..........      (3.1)           --
                                    -----         -----
  Deferred tax assets net of
    valuation allowance........     119.6         101.7
                                    -----         -----
Net deferred tax (assets)
  liabilities..................     $(2.0)        $ 7.1
                                    =====         =====
</Table>

     The Company has established a valuation allowance for net foreign operating
loss carry forwards due to uncertainty regarding the realizability of these
foreign losses. These net operating losses expire between 2006 and 2010.

     The provision (benefit) for income taxes results in effective tax rates
different from the statutory rates. The following is a reconciliation between
the

                                        37
<PAGE>

statutory U.S. federal income tax rate and the Company's effective income tax
rate:

<Table>
<Caption>
                               NINE MONTHS    YEAR ENDED
                                  ENDED        MARCH 31,
                               DECEMBER 31,   -----------
                                   2001       2001   2000
                               ------------   ----   ----
<S>                            <C>            <C>    <C>
Statutory rate...............      35.0%      35.0%  35.0%
State taxes..................       0.8        1.4    1.3
Valuation allowance..........      (7.6)        --     --
Foreign rate differential....      (5.0)        --     --
Unutilized prior year tax
  credits....................      (3.3)        --     --
Other (net)..................      (5.6)      (0.4)   0.8
                                   ----       ----   ----
Effective tax rate...........      14.3%      36.0%  37.1%
                                   ====       ====   ====
</Table>

     For the nine months ended December 31, 2001 and in fiscal 2001 and 2000,
income taxes of ($3.9), $11.7, and $85.2, respectively, were paid net of refunds
received. Income (loss) before income taxes for the nine months ended December
31, 2001 and for fiscal 2001 and 2000, was ($23.4), ($124.8) and $252.9,
respectively, for U.S. operations, and ($17.1), $8.5 and $10.0, respectively,
for foreign operations. The Company has not has provided U.S. deferred income
taxes on the undistributed earnings of its foreign subsidiaries based on the
determination that such earnings will be indefinitely reinvested. Undistributed
earnings of the Company's foreign subsidiaries were $19.7 as of December 31,
2001.

NOTE 12. EMPLOYEE RETIREMENT PLANS

     The Company sponsors defined benefit pension and defined contribution
profit sharing plans which provide income and death benefits for eligible
employees.

<Table>
<Caption>
                            NINE MONTHS       YEAR ENDED
                               ENDED           MARCH 31
                           DECEMBER 31,    -----------------
                               2001         2001      2000
                           -------------   -------   -------
                           (IN MILLIONS EXCEPT PERCENT DATA)
<S>                        <C>             <C>       <C>
ACTUARIAL ASSUMPTIONS
Obligation discount
  rate...................      7.50%        7.75%     8.25%
Compensation increase
  rate...................      4.75%        4.75%     4.75%
Long-term rate of return
  on plan assets.........         9%           9%        9%
EXPENSE COMPONENTS
Service cost.............     $  8.2       $ 10.1    $ 13.5
Interest.................       10.7         13.3      12.9
Expected return on
  assets.................      (11.4)       (15.5)    (14.3)
Amortization and
  deferral...............        0.1         (0.7)     (0.1)
Profit sharing...........        3.3          5.5       4.2
                              ------       ------    ------
Net expense..............     $ 10.9       $ 12.7    $ 16.2
                              ======       ======    ======
BENEFIT OBLIGATIONS
Beginning of year........     $188.6       $164.0    $163.2
Service cost.............        8.2         10.1      13.5
Interest.................       10.7         13.3      12.9
Benefits paid............       (6.2)        (5.4)     (5.0)
Actuarial (gain) loss....       (6.0)         6.6     (20.6)
                              ------       ------    ------
End of year..............     $195.3       $188.6    $164.0
                              ======       ======    ======
Under funded plans.......     $182.2       $179.6    $  6.1
                              ======       ======    ======
Over funded plans........     $ 13.1       $  9.0    $157.9
                              ======       ======    ======
PLANS' ASSETS
Beginning of year........     $168.8       $169.1    $160.0
Actual return on
  assets.................        6.3         (8.8)     11.4
Employer contributions...        7.5         13.9       2.7
Benefits paid............       (6.2)        (5.4)     (5.0)
                              ------       ------    ------
End of year..............     $176.4       $168.8    $169.1
                              ======       ======    ======
Under funded plans.......     $159.3       $158.5    $   --
                              ======       ======    ======
Over funded plans........     $ 17.1       $ 10.3    $169.1
                              ======       ======    ======
CONSOLIDATED BALANCE
  SHEET COMPONENTS
Funded status............     $ 19.0       $ 19.9    $ (5.1)
Unamortized transition
  obligation.............        0.9          1.1       1.4
Unrecognized prior
  service cost...........       (0.8)        (0.9)     (1.1)
Unrecognized gain
  (loss).................      (16.5)       (17.6)     14.4
                              ------       ------    ------
Net obligation...........     $  2.6       $  2.5    $  9.6
                              ======       ======    ======
Accrued..................     $ 12.4       $ 10.0    $ 14.5
Prepaid..................        9.8          7.5       4.9
                              ------       ------    ------
Net accrued..............     $  2.6       $  2.5    $  9.6
                              ======       ======    ======
</Table>

                                        38
<PAGE>

NOTE 13.  STOCK OPTION PLAN

     The Company's 1998 Stock Option and Incentive Plan provides for awarding
3,800,000 shares of common stock plus shares covered by forfeited, expired and
canceled options granted under prior plans with a maximum of 1,000,000 shares
being available for issuance as restricted stock or in satisfaction of
performance or other awards. At December 31, 2001, a total of 1,595,503 shares
were available for issuance. The plan provides for the granting of: nonqualified
and incentive stock options having maximum ten-year terms to purchase common
stock at its market value on the award date; stock appreciation rights based on
common stock fair market values with settlement in common stock or cash;
restricted stock; and performance awards with settlement in common stock or cash
on achievement of specific business objectives. Under previous plans,
nonqualified and incentive stock options and restricted shares were granted at
their fair market values. One grant provided for granting reload options for the
remaining term of the original grant at the common stock market value on the
date shares already owned by the optionee are surrendered in payment of the
option exercise.

     In connection with the Thrall acquisition, certain employees were granted a
total of 160,000 options to purchase common stock at its market price on the
date of the grant. These stock options, which were approved by the Board of
Directors of the Company, were not granted under the Company's Stock Option and
Incentive Plan.

<Table>
<Caption>
                                                       NINE MONTHS ENDED
                                                          DECEMBER 31,                   YEAR ENDED MARCH 31
                                                      --------------------   -------------------------------------------
                                                              2001                   2001                   2000
                                                      --------------------   --------------------   --------------------
                                                                  WEIGHTED               WEIGHTED               WEIGHTED
                                                                  AVERAGE                AVERAGE                AVERAGE
                                                                  EXERCISE               EXERCISE               EXERCISE
                                                       SHARES      PRICE      SHARES      PRICE      SHARES      PRICE
                                                      ---------   --------   ---------   --------   ---------   --------
<S>                                                   <C>         <C>        <C>         <C>        <C>         <C>
Outstanding beginning of year.......................  3,065,920    $29.26    2,526,836    $30.33    2,059,983    $29.81
Granted.............................................  1,043,252     20.23      865,200     22.96      636,306     30.06
Exercised...........................................    (93,285)    21.85     (186,248)    13.25     (147,309)    21.02
Cancelled...........................................    (95,065)    26.49     (139,868)    30.87      (22,144)    36.32
                                                      ---------              ---------              ---------
Outstanding end of year.............................  3,920,822     27.10    3,065,920     29.26    2,526,836     30.33
                                                      =========    ======    =========    ======    =========    ======
Exercisable.........................................  2,265,996    $29.44    1,589,616    $30.79    1,319,168    $28.32
                                                      =========    ======    =========    ======    =========    ======
</Table>

<Table>
<Caption>
                                                                                  DECEMBER 31, 2001
                                                            --------------------------------------------------------------
                                                                      OUTSTANDING OPTIONS
                                                            ---------------------------------------
                                                                             WEIGHTED AVERAGE         EXERCISABLE OPTIONS
                                                                        ---------------------------   --------------------
                                                                           REMAINING                              WEIGHTED
                                                                        CONTRACTUAL LIFE   EXERCISE               AVERAGE
EXERCISE PRICE RANGE                                         SHARES         (YEARS)         PRICE      SHARES      PRICE
- --------------------                                        ---------   ----------------   --------   ---------   --------
<S>                                                         <C>         <C>                <C>        <C>         <C>
$15.94 - $21.25...........................................  1,004,246         7.45          $18.89      270,597    $18.72
 22.28 -  23.91...........................................    966,659         6.38           23.17      515,762     23.33
 24.67 -  24.67...........................................    160,000         9.82           24.67      160,000     24.67
 25.11 -  32.25...........................................  1,072,299         5.59           27.86      732,986     27.74
 33.00 -  53.81...........................................    717,618         5.79           43.29      586,651     43.19
                                                            ---------         ----          ------    ---------    ------
$15.94 - $53.81...........................................  3,920,822         6.47          $27.10    2,265,996    $29.44
                                                            =========         ====          ======    =========    ======
</Table>

     The Company has elected to apply the accounting provisions of Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and
its interpretations and, accordingly, no compensation cost has been recorded for
stock options. The effect of computing compensation cost in accordance with
Statement of Financial Accounting Standards No. 123, "Accounting for Stock Based
Compensation," and the weighted average fair value of options granted during the
nine months ended December 31, 2001 and fiscal year 2001 and 2000 using the
Black-Scholes option

                                        39
<PAGE>

pricing method are shown in the accompanying table.

<Table>
<Caption>
                           NINE MONTHS      YEAR ENDED
                              ENDED          MARCH 31,
                           DECEMBER 31,   ---------------
                               2001        2001     2000
                           ------------   ------   ------
<S>                        <C>            <C>      <C>
Estimated fair value per
  share of options
  granted................     $ 5.99      $ 7.56   $ 9.10
Pro forma:
  Net income (loss) (in
    millions)............     $(39.7)     $(78.7)  $162.7
  Per diluted share......     $(1.03)     $(2.10)  $ 4.06
Black-Scholes
  assumptions:
  Expected option life
    (years)..............        6.8         6.8      5.7
  Risk-free interest
    rate.................        4.8%        4.5%     6.1%
  Dividend yield.........        3.7%        3.1%     3.1%
  Common stock
    volatility...........      0.354       0.328    0.328
</Table>

     The value of the restricted shares at the date of grant is amortized to
expense ratably over the restriction period.

<Table>
<Caption>
                        NINE MONTHS        YEAR ENDED
                           ENDED           MARCH 31,
                        DECEMBER 31,   ------------------
                            2001        2001       2000
                        ------------   -------   --------
<S>                     <C>            <C>       <C>
Shares awarded........     284,100          --     50,000
Shares cancelled......      (6,000)    (14,000)        --
Share restriction
  removed.............     (10,000)         --         --
Outstanding...........     385,600     117,500    131,500
Grant date fair value
  per share...........    $  23.04          --   $  27.94
</Table>

NOTE 14. STOCKHOLDERS' EQUITY

     The Company has adopted a Stockholder's Rights Plan to replace its existing
plan which expired April 27, 1999. On March 11, 1999, the Board of Directors of
the Company declared a dividend distribution of one right for each outstanding
share of the Company's common stock, $1.00 par value, to stockholders of record
at the close of business on April 27, 1999. Each right entitles the registered
holder to purchase from the Company one one-hundredth (1/100) of a share of
Series A Preferred Stock at a purchase price of $200.00 per one one-hundredth
(1/100) of a share, subject to adjustment. The rights are not exercisable or
detachable from the common stock until ten business days after a person or group
acquires beneficial ownership of twelve percent or more of the Company's common
stock or if a person or group commences a tender or exchange offer upon
consummation of which that person or group would beneficially own twelve percent
or more of the common stock. The Company will generally be entitled to redeem
the rights at $0.01 per right at any time until the first public announcement
that a twelve- percent position has been acquired. If any person or group
becomes a beneficial owner of twelve percent or more of the Company's common
stock, each right not owned by that person or related parties enables its holder
to purchase, at the right's purchase price, shares of the Company's common stock
having a calculated value of twice the purchase price of the right.

     In connection with the acquisition of Thrall, the Company adopted an
amendment to the Rights Plan which generally permits the former stockholders of
Thrall and its affiliates to beneficially own in excess of twelve percent of the
Company's common stock without triggering the Plan as described above provided
such persons hold the stock in compliance with a stockholders' agreement entered
into in connection with the acquisition.

     The Company has authorized and unissued 1.5 million shares of no par value
voting preferred stock.

NOTE 15. CONTINGENCIES

     In May of 2001, a judgement in the amount of $14.8 million was entered
against the Company in a lawsuit brought for an alleged breach of contract
involving the proposed production of a composite component for a refrigerated
railcar for the Company. The amount of the judgement was accrued by the Company
in fiscal 2001. The Company intends to appeal this judgement.

     The Company is subject to federal, state, local and foreign laws and
regulations relating to the environment and to work places. The Company believes
that it is currently in substantial compliance with such laws and the
regulations promulgated thereunder.

     The Company is involved in various proceedings relating to environmental
matters. The Company has provided reserves amounting to $11.6 million to cover
probable and estimable liabilities of the Company with respect to such
investigations and cleanup activities, taking into account currently available
information and the Company's contractual rights of indemnification. However,
estimates of future response costs are necessarily imprecise. Accordingly, there
can be no assurance that the Company will not become involved in future
litigation or other proceedings or, if the Company were found to be responsible
or liable in any

                                        40
<PAGE>

litigation or proceeding, that such costs would not be material to the Company.

     The Company is involved in various other claims and lawsuits incidental to
its business. In the opinion of management, their claims and suits in the
aggregate will not have a material adverse effect on the Company's consolidated
financial statements.

NOTE 16. SUBSEQUENT EVENT

     On March 6, 2002, Trinity privately placed a total of 1.5 million
unregistered shares of its common stock for net proceeds of $31.5 million.
Trinity is obligated to register these shares.

NOTE 17. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

<Table>
<Caption>
                              THREE MONTHS   THREE MONTHS    THREE MONTHS   NINE MONTHS
                                 ENDED           ENDED          ENDED          ENDED
                                JUNE 30,     SEPTEMBER 30,   DECEMBER 31,   DECEMBER 31,
                                  2001           2001            2001           2001
                              ------------   -------------   ------------   ------------
                                         (IN MILLIONS EXCEPT PER SHARE DATA)
<S>                           <C>            <C>             <C>            <C>            <C>
Nine months ended December
  31, 2001:
Revenues....................     $467.6         $372.9          $507.3        $1,347.8
Operating profit
  (loss)(1).................     $ 22.6           18.8           (57.8)          (16.4)
Net income (loss)(1)........     $  9.6            7.9           (52.2)          (34.7)
Net income (loss) per common
  share(1):
     Basic..................     $ 0.26           0.21           (1.23)          (0.90)
     Diluted................     $ 0.26           0.21           (1.23)          (0.90)
</Table>

<Table>
<Caption>
                              THREE MONTHS   THREE MONTHS    THREE MONTHS   NINE MONTHS    THREE MONTHS
                                 ENDED           ENDED          ENDED          ENDED          ENDED
                                JUNE 30,     SEPTEMBER 30,   DECEMBER 31,   DECEMBER 31,    MARCH 31,
                                  2000           2000            2000           2000           2001
                              ------------   -------------   ------------   ------------   ------------
<S>                           <C>            <C>             <C>            <C>            <C>
Year ended March 31, 2001:
  Revenues..................     $533.7         $550.7          $401.2        $1,485.6        $418.7
  Operating profit
     (loss)(2)..............     $ 37.5          (14.9)          (30.5)           (7.9)        (58.2)
  Net income (loss)(3)......     $ 20.9          (13.2)          (42.4)          (34.7)        (39.7)
  Net income (loss) per
     common share(3):
     Basic..................     $ 0.55          (0.35)          (1.14)          (0.92)        (1.08)
     Diluted................     $ 0.55          (0.35)          (1.14)          (0.92)        (1.08)
</Table>

- ---------------

(1) See notes to consolidated financial statements for a discussion of unusual
    charges for the three months ended December 31, 2001.

(2) Unusual charges charged to operating profit (loss) and recorded in the
    Company's second, third, and fourth quarters of fiscal 2001 were $48.9
    million, $36.2 million, and $55.8 million, respectively.

(3) After tax unusual charges recorded in the Company's second, third, and
    fourth quarters of fiscal 2001 were $33.2 million ($0.88 per share), $42.0
    million ($1.13 per share), and $35.7 million ($0.97 per share),
    respectively.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE.

     None
                                        41
<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY.

     Information regarding the directors of the Company is incorporated by
reference to the information set forth under the caption "Nominees" in the
Company's proxy statement for the Annual Meeting of Stockholders to be held on
May 13, 2002. Information regarding compliance with Section 16(a) of the
Securities and Exchange Act of 1934 is incorporated by reference to the
information set forth under the caption "Section 16(a) Beneficial Ownership
Reporting Compliance" in the Company's proxy statement for the Annual Meeting of
Stockholders to be held on May 13, 2002.

ITEM 11. EXECUTIVE COMPENSATION

     Information regarding compensation of executive officers and directors is
incorporated by reference to the information set forth under the captions
"Compensation for Directors" and "Executive Compensation" in the Company's proxy
statement for the Annual Meeting of Stockholders to be held on May 13, 2002.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     Information concerning security ownership of certain beneficial owners and
management is incorporated herein by reference from the Company's proxy
statement for the Annual Meeting of Stockholders to be held on May 13, 2002,
under the caption "Security Ownership of Certain Beneficial Owners and
Management."

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     Information regarding certain relationships and related transactions with
director nominees is incorporated by reference to the information set forth
under the captions "Compensation Committee Interlocks and Insider Participation"
and "Certain Relationships and Related Transactions" in the Company's proxy
statement for the Annual Meeting of Stockholders to be held on May 13, 2002.

                                        42
<PAGE>

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

     (a)  Financial Statements.

     See Item 8.

     (b)  Financial Statement Schedules.

     For the nine months ended December 31, 2001 and the two years ended March
31, 2001 and 2000

     II -- Allowance for Doubtful Accounts

     (c)  Reports on Form 8-K

     Trinity filed a Current Report on Form 8-K dated October 29, 2001, amended
by Form 8-K/A filed on December 28, 2001, reporting, under Item 2, the closing
of the transactions pursuant to the agreement and plan of merger with Thrall Car
Manufacturing Company. Pursuant to the Form 8-K/A:

          (i) under Item 7, financial statements were filed for Thrall Car
     Manufacturing Company as of December 31, 2000 and December 31, 1999, and
     pro forma financial statements were filed for the nine month period ended
     September 30, 2001 and for the nine month period ended September 30, 2000;

          (ii) under Item 5(a), Trinity reported it expected charges related to
     restructuring the railcar group in connection with the merger to be in the
     range of $50 to $65 million, or $0.75 to $0.97 per share; and

          (iii) under Item 5(b), Trinity reported the grant of a valid first and
     prior lien on all of Trinity's account's receivable and inventory to JP
     Morgan Chase Bank, as Collateral Agent, under the terms of its credit
     agreements.

     Trinity filed a Current Report on Form 8-K dated February 19, 2002,
reporting, under Item 5, the completion of a $170 million private placement of
secured debt securities. Pursuant to the Form 8-K:

          (i) under Item 7, a Pass Through Trust Agreement and Trust Indenture
     and Security Agreements were filed.

     Trinity filed a Current Report on Form 8-K dated March 6, 2002, reporting
the private placement of 1.5 million shares of its unregistered common stock for
gross proceeds of $31.5 million.

     Trinity filed a Current Report on Form 8-K dated March 12, 2002, reporting,
under Item 5, operating results for the three months and nine months ended
December 31, 2001. Pursuant to Form 8-K:

          (i) under Item 7, the news release dated February 27, 2002 was filed.

     (c)  Exhibits

     See Index to Exhibits

                                        43
<PAGE>

                                                                    EXHIBIT (23)

                        CONSENT OF INDEPENDENT AUDITORS

     We consent to the incorporation by reference in Post-Effective Amendment
No. 3 to the Registration Statement (Form S-8, No. 2-64813), Post-Effective
Amendment No. 1 to the Registration Statement (Form S-8, No. 33-10937),
Registration Statement (Form S-8, No. 33-35514), Registration Statement (Form
S-8, No. 33-73026), Registration Statement (Form S-8, No. 333-77735),
Registration Statement (Form S-8, No. 333-91067), of Trinity Industries, Inc.
and in the related Prospectuses of our reports dated March 13, 2001 with respect
to the consolidated financial statements and schedules of Trinity Industries,
Inc. included in this Annual Report (Form 10-K) for the nine months ended
December 31, 2001.

                                                               ERNST & YOUNG LLP
Dallas, Texas
March 19, 2001

                                        44
<PAGE>

                         REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Stockholders
  Trinity Industries, Inc.

     We have audited the consolidated financial statements of Trinity
Industries, Inc. as of December 31, 2001 and March 31, 2001, and for the nine
months ended December 31, 2001 and for each of the two years in the period ended
March 31, 2001, and have issued our report thereon dated March 13, 2002. Our
audits also included the financial statement schedules of Trinity Industries,
Inc. listed in Item 14(a). These schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion based on our
audits.

     In our opinion, the financial statement schedules referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.

                                                               ERNST & YOUNG LLP
Dallas, Texas
March 13, 2002

                                        45
<PAGE>

                                                                     SCHEDULE II

                            TRINITY INDUSTRIES, INC.

                        ALLOWANCE FOR DOUBTFUL ACCOUNTS
                      NINE MONTHS ENDED DECEMBER 31, 2001
                    AND YEARS ENDED MARCH 31, 2001 AND 2000
                                 (IN MILLIONS)

<Table>
<Caption>
                                                                    ADDITIONS
                                                       BALANCE AT   CHARGED TO   ACCOUNTS    BALANCE
                                                       BEGINNING    COSTS AND    CHARGED     AT END
                                                       OF PERIOD     EXPENSES      OFF      OF PERIOD
                                                       ----------   ----------   --------   ---------
<S>                                                    <C>          <C>          <C>        <C>
Nine Months Ended December 31, 2001..................     $4.8        $10.1        $5.4       $9.5
                                                          ====        =====        ====       ====
Year Ended March 31, 2001............................     $1.7        $ 5.1        $2.0       $4.8
                                                          ====        =====        ====       ====
Year Ended March 31, 2000............................     $1.9        $ 0.7        $0.9       $1.7
                                                          ====        =====        ====       ====
</Table>

                                        46
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this Annual Report to be
signed on its behalf by the undersigned, thereunto duly authorized.

<Table>
<S>                                                  <C>
TRINITY INDUSTRIES, INC.                             By /s/ JOHN L. ADAMS
Registrant
                                                     --------------------------------------------------
                                                        John L. Adams
                                                        Executive Vice President
                                                        March 19, 2002
</Table>

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons of the Company and in the
capacities and on the dates indicated:

<Table>
<S>                                                  <C>

Directors:                                           Directors (continued)
/s/ DAVID W. BIEGLER                                 /s/ DIANA NATALICIO
- -----------------------------------------            ---------------------------------------------------
David W. Biegler                                     Diana Natalicio
Director                                             Director
March 19, 2002                                       March 19, 2002
                                                     /s/ W. RAY WALLACE
- -----------------------------------------            ---------------------------------------------------
Craig J. Duchossois                                  W. Ray Wallace
Director                                             Director
                                                     March 19, 2002
/s/ RONALD J. GAFFORD
- -----------------------------------------            Principal Executive Officer:
Ronald J. Gafford
Director                                             /s/ TIMOTHY R. WALLACE
March 19, 2002                                       ---------------------------------------------------
                                                     Timothy R. Wallace
/s/ BARRY J. GALT                                    Chairman, President,
- -----------------------------------------            Chief Executive Officer and
Barry J. Galt                                        Director
Director                                             March 19, 2002
March 19, 2002
                                                     Principal Financial Officer:
/s/ CLIFFORD J. GRUM
- -----------------------------------------            /s/ JIM S. IVY
Clifford J. Grum                                     ---------------------------------------------------
Director                                             Jim S. Ivy
March 19, 2002                                       Vice President
                                                     March 19, 2002
/s/ JESS T. HAY
- -----------------------------------------            Principal Accounting Officer
Jess T. Hay
Director                                             /s/ CHARLES MICHEL
March 19, 2002                                       ---------------------------------------------------
                                                     Charles Michel
                                                     Controller
                                                     March 19, 2002
</Table>
<PAGE>

                            TRINITY INDUSTRIES, INC.

                               INDEX TO EXHIBITS
                                  (ITEM 14(A))

<Table>
<Caption>
NO.                                DESCRIPTION
- ---                                -----------
<C>        <S>
  (3.1)    Certificate of Incorporation of Trinity Industries, Inc., as
           amended.
  (3.2)    By-Laws of Trinity Industries, Inc.
  (4.1)    Certificate of Incorporation of Trinity Industries, Inc., as
           amended (filed as Exhibit 3.1 above).
  (4.2)    By-Laws of Trinity Industries, Inc. (filed as Exhibit 3.2
           above).
  (4.3)    Specimen Common Stock Certificate of Trinity Industries,
           Inc. (incorporated by reference to Exhibit 4.1 to our Annual
           Report on Form 10-K for the fiscal year ended March 31,
           1999).
  (4.4)    Rights Agreement dated March 11, 1999 (incorporated by
           reference to our Form 8-A filed April 2, 1999).
  (4.5)    Amendment No. 1 to the Rights Agreement dated as of August
           12, 2001, amending the Rights Agreement dated as of March
           11, 1999 by and between Trinity Industries, Inc. and the
           Bank of New York, as Rights Agent (incorporated by reference
           to Exhibit 2 to our Form 8-A/A filed August 22, 2001).
  (4.6)    Amendment No. 2 to the Rights Agreement dated as of October
           26, 2001, amending the Rights Agreement dated as of March
           11, 1999 by and between Trinity Industries, Inc. and the
           Bank of New York, as Rights Agent, as amended by Amendment
           No. 1 to the Rights Agreement, dated August 13, 2001
           (incorporated by reference to Exhibit 4 to our Form 8-A/A
           filed October 31, 2001).
  (4.7)    Registration Rights Agreement dated as of October 26, 2001
           by and between Trinity Industries, Inc. and Thrall Car
           Management, Inc. (filed as an exhibit to Exhibit 10.19
           below).
  (4.8)    Registration Rights Agreement dated as of March 6, 2002 by
           and between Trinity Industries, Inc. and Acqua Wellington
           Private Placement Fund, Ltd. (incorporated by reference to
           Exhibit 4.7 to our Form 8-K filed March 6, 2002).
  (4.9)    Registration Rights Agreement dated as of March 6, 2002 by
           and between Trinity Industries, Inc. and Acqua Wellington
           Opportunity I Limited (incorporated by reference to Exhibit
           4.8 to our Form 8-K filed March 6, 2002).
 (10.1)    Fixed Charges Coverage Agreement dated as of January 15,
           1980, between Trinity Industries, Inc. and Trinity
           Industries Leasing Company (incorporated by reference to
           Exhibit 10.1 to Registration Statement No. 2-70378 filed
           January 29, 1981).
 (10.2)    Tax Allocation Agreement dated as of January 22, 1980
           between Trinity Industries, Inc. and its subsidiaries
           (including Trinity Industries Leasing Company) (incorporated
           by reference to Exhibit 10.2 to Registration Statement No.
           2-70378 filed January 29, 1981).
 (10.3.1)  Form of Amended and Restated Executive Severance Agreement,
           dated November 7, 2000, entered into between Trinity
           Industries, Inc. and Chief Executive Officer, each of the
           four most highly paid executive officers other than the
           Chief Executive Officer who were serving as executive
           officers at the end of the last completed fiscal year, one
           other executive officer, and three executive officers of
           subsidiaries of Trinity Industries, Inc. (incorporated by
           reference to Exhibit 10.1 to our Quarterly Report on Form
           10-Q for the quarterly period ended December 31, 2000).*
 (10.3.2)  Form of Amended and Restated Executive Severance Agreement
           dated November 7, 2000, entered into between Trinity
           Industries, Inc. and six executive officers and thirteen
           subsidiary and divisional officers of Trinity Industries,
           Inc. (incorporated by reference to Exhibit 10.1 to our
           Quarterly Report on Form 10-Q for the quarterly period ended
           December 31, 2000).*
 (10.4)    Trinity Industries, Inc., Stock Option Plan with Stock
           Appreciation Rights (incorporated by reference to
           Registration Statement No. 2-64813 filed July 5, 1979, as
           amended by Post-Effective Amendment No. 1 dated July 1,
           1980, Post-Effective Amendment No. 2 dated August 31, 1984,
           and Post-Effective Amendment No. 3 dated July 13, 1990).*
</Table>
<PAGE>

<Table>
<Caption>
NO.                                DESCRIPTION
- ---                                -----------
<C>        <S>
 (10.5)    Directors' Retirement Plan adopted December 11, 1986, as
           amended by Amendment No. 1 dated September 10, 1998
           (incorporated by reference to Exhibit 10.5 to our Annual
           Report on Form 10-K for the fiscal year ended March 31,
           1999).*
 (10.6)    1989 Stock Option Plan with Stock Appreciation Rights
           (incorporated by reference to Registration Statement No.
           33-35514 filed June 20, 1990).*
 (10.7)    1993 Stock Option and Incentive Plan (incorporated by
           reference to Registration Statement No. 33-73026 filed
           December 15, 1993).*
 (10.8.1)  Supplemental Profit Sharing Plan for Employees of Trinity
           Industries, Inc. and Certain Affiliates as restated
           effective January 1, 2000 (incorporated by reference to
           Exhibit 10.8 to our Annual Report on Form 10-K for the
           fiscal year ended March 31, 2000).*
 (10.8.2)  Amendment dated March 8, 2001 to the Supplemental Profit
           Sharing Plan for Employees of Trinity Industries, Inc. and
           Certain Affiliates (incorporated by reference to Exhibit
           10.8.2 to our Annual Report on Form 10-K for the fiscal year
           ended March 31, 2001).*
 (10.9)    Supplemental Profit Sharing and Deferred Director Fee Trust
           dated March 31, 1999 (incorporated by reference to Exhibit
           10.10 to our Annual Report on Form 10-K for the fiscal year
           ended March 31, 1999).*
 (10.10)   Supplemental Retirement Plan dated April 1, 1995, as amended
           by Amendment No. 1 dated September 14, 1995 and Amendment
           No. 2 dated May 6, 1997 (incorporated by reference to
           Exhibit 10.11 to our Annual Report on Form 10-K for the
           fiscal year ended March 31, 1999).*
 (10.11)   Deferred Plan for Director Fees dated July 17, 1996, as
           amended by Amendment No. 1 dated September 10, 1998
           (incorporated by reference to Exhibit 10.12 to our Annual
           Report on Form 10-K for the fiscal year ended March 31,
           1999).*
(10.11.1)  Amendment No. 2 to Defined Plan for Director Fees, dated
           December 13, 2001.*
 (10.12)   Trinity Industries, Inc. 1998 Stock Option and Incentive
           Plan (incorporated by reference to Registration Statement
           No. 333-77735 filed May 4, 1999).*
(10.12.1)  Amendment No. 1 to the Trinity Industries, Inc. 1998 Stock
           Option and Incentive Plan.*
(10.12.2)  Amendment No. 2 to the Trinity Industries, Inc. 1998 Stock
           Option and Incentive Plan (incorporated by reference to
           10.12.2 to our Quarterly Report on Form 10-Q for the
           quarterly period ended June 30, 2001).*
 (10.13)   Form of Deferred Compensation Plan and Agreement as amended
           and restated entered into between Trinity Industries, Inc.
           and certain officers of Trinity Industries, Inc. or its
           subsidiaries.*
 (10.14)   Consulting agreement between the Company and W. R. Wallace
           effective January 1, 1999 (incorporated by reference to
           Exhibit 10.14 to our Annual Report on Form 10-K for the
           fiscal year ended March 31, 2000).*
 (10.15)   Trinity Industries, Inc. Short-Term Management Incentive
           Plan (incorporated by reference to Exhibit A to our proxy
           statement dated June 19, 2000).*
 (10.16)   Equipment Lease Agreement (TRL 1 2001-1A) dated as of May
           17, 2001 between TRLI-1A Railcar Statutory Trust, lessor,
           and Trinity Rail Leasing I L.P., lessee (incorporated by
           reference to Exhibit 10.16 to our Form 10-K for the fiscal
           year ended March 31, 2001).
(10.16.1)  Participation Agreement (TRL 1 2001-1A) dated as of May 17,
           2001 among Trinity Rail Leasing I L.P., lessee, et. al.
(10.16.2)  Equipment Lease Agreement (TRL 1 2001-1B) dated as of July
           12, 2001 between TRL 1 2001-1B Railcar Statutory Trust,
           lessor, and Trinity Rail Leasing I L.P., lessee.
(10.16.3)  Participation Agreement (TRL 1 2001-1B) dated as of May 17,
           2001 among Trinity Rail Leasing I L.P., lessee, et. al.
(10.16.4)  Equipment Lease Agreement (TRL 1 2001-1C) dated as of
           December 28, 2001 between TRL 1 2001-1C Railcar Statutory
           Trust, lessor, and Trinity Rail Leasing 1 L.P., lessee.
(10.16.5)  Participation Agreement (TRL 1 2001-1C) dated as of December
           28, 2001 among Trinity Rail Leasing I L.P., lessee, et. al.
</Table>
<PAGE>

<Table>
<Caption>
NO.                                DESCRIPTION
- ---                                -----------
<C>        <S>
 (10.17)   Credit Agreement dated as of June 8, 2001 among Trinity
           Industries, Inc, as Borrower, and The Chase Manhattan Bank,
           as Administrative Agent, et. al. (incorporated by reference
           to Exhibit 10.17 to our Form 10-K for the fiscal year ended
           March 31, 2001).
(10.17.1)  First Amendment to Credit Agreement dated October 15, 2001
           (incorporated by reference to Exhibit 10.17.1 to our
           Quarterly Report on Form 10-Q for the quarterly period ended
           September 30, 2001).
(10.17.2)  Second Amendment to Credit Agreement dated December 10,
           2001.
(10.17.3)  Third Amendment to Credit Agreement dated February 8, 2002.
 (10.18)   Term Credit Agreement dated October 15, 2001 among Trinity
           Industries, Inc., as borrower, and The Chase Manhattan Bank,
           as lender and as administrative agent, et. al. (incorporated
           by reference to Exhibit 10.18 to our Quarterly Report on
           Form 10-Q for the quarterly period ended September 30,
           2001).
(10.18.1)  First Amendment to Term Credit Agreement dated December 10,
           2001.
(10.18.2)  Second Amend to Term Credit Agreement dated February 8,
           2002.
 (10.19)   Agreement and Plan of Merger dated as of August 13, 2001 by
           and among Trinity Industries, Inc., TCMC Acquisition Corp.,
           Thrall Car Manufacturing Company and Thrall Car Management
           Company, Inc. together with the form of Stockholder's
           Agreement and Registration Rights Agreement attached thereto
           as exhibits (incorporated by reference to Exhibit 2.1 to our
           Form 8-K dated August 15, 2001).
(21)       Listing of subsidiaries of Trinity Industries, Inc.
(23)       Consent of Independent Auditors. (Contained on page 44 of
           this document)
</Table>

- ---------------

* Management contracts and compensatory plan arrangements.

NOTICE: A copy of Exhibits omitted from the reproduction will be furnished upon
written request to Neil Shoop, Treasurer, Trinity Industries, Inc., P.O. Box
568887, Dallas, Texas 75356-8887. We may impose a reasonable fee for our expense
in connection with providing the above-referenced Exhibits.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.1
<SEQUENCE>3
<FILENAME>d94851ex3-1.txt
<DESCRIPTION>CERTIFICATE OF INCORPORATION
<TEXT>
<PAGE>
                                                                     EXHIBIT 3.1

                                                                          PAGE 1

                                STATE OF DELAWARE

                        OFFICE OF THE SECRETARY OF STATE


                                   ----------


         I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
AMENDMENT OF "TRINITY INDUSTRIES, INC.", FILED IN THIS OFFICE ON THE EIGHTEENTH
DAY OF DECEMBER, A.D. 1987, AT 10 O'CLOCK A.M.



                                             /s/ EDWARD J. FREEL
                                             -----------------------------------
                                             Edward J. Freel, Secretary of State

                                     [SEAL]

2098029 8100                                 AUTHENTICATION: 0779754

001549195                                              DATE: 11-08-00


<PAGE>

                                                                         [STAMP]

                         CERTIFICATE TO FIRST AMENDMENT

                                       TO

                          CERTIFICATE OF INCORPORATION

                                       OF

                            TRINITY INDUSTRIES, INC.


         Pursuant to the provisions of Section 242 of the General Corporation
Law of Delaware, the undersigned hereby certify that the following amendment to
the Certificate of Incorporation of TRINITY INDUSTRIES, INC. (the "Company") has
been duly adopted in accordance with the provisions of Section 242, to-wit:

         Article XI is added to the Certificate of Incorporation of the Company
to read in its entirety as follows:

                                   ARTICLE XI

         No director of the corporation shall be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived an improper
personal benefit. Any repeal or modification of the foregoing provisions of this
Article XI by the stockholders of the corporation shall not adversely affect any
right or protection of a director of the corporation existing at the time of
such repeal or modification.

         IN WITNESS WHEREOF, the undersigned have executed this document as of
December 15th, 1987.

                                        TRINITY INDUSTRIES, INC.

                                        By: /s/ F. DEAN PHELPS, JR.
                                           -------------------------------------
                                           F. Dean Phelps, Jr.
                                           Vice President

ATTEST:

/s/ J. J. FRENCH, JR.
- -------------------------------
J. J. French, Jr.
Secretary

<PAGE>

                                                                          PAGE 1

                                STATE OF DELAWARE

                        OFFICE OF THE SECRETARY OF STATE

                                   ----------

         I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
AMENDMENT OF "TRINITY INDUSTRIES, INC.", FILED IN THIS OFFICE ON THE SIXTH DAY
OF AUGUST, A.D. 1993, AT 1:30 O'CLOCK P.M.




                                             /s/ EDWARD J. FREEL
                                             -----------------------------------
                                             Edward J. Freel, Secretary of State

                                     [SEAL]

2098029 8100                                 AUTHENTICATION: 0779755

001549195                                              DATE: 11-08-00


<PAGE>

                                                                         [STAMP]

                                SECOND AMENDMENT

                                       TO

                          CERTIFICATE OF INCORPORATION

                                       OF

                            TRINITY INDUSTRIES, INC.


         Pursuant to the provisions of Section 242 of the General Corporation
Law of Delaware, the undersigned hereby certify the following amendment to the
Certificate of Incorporation of TRINITY INDUSTRIES, INC. (the "Company") has
been duly adopted in accordance with the provisions of Sections 242, to-wit:

         Article IV of the Company's Certificate of Incorporation is amended to
increase the authorized number of shares of stock that the Company shall have
authority to issue from Forty One Million Five Hundred Thousand (41,500,000)
shares to One Hundred One Million Five Hundred Thousand (101,500,000) shares
and the authorized number of shares of Common Stock from Forty Million
(40,000,000) shares to One Hundred Million (100,000,000) shares by substituting
the following in lieu of the existing Article IV of the Certificate of
Incorporation so that Article IV as amended shall read in its entirety as
follows:

                                  "ARTICLE IV.

                            Authorized Capital Stock

                  The total number of shares of stock which the corporation
         shall have authority to issue is One Hundred and One Million Five
         Hundred Thousand (101,500,000) shares, of which One Million Five
         Hundred Thousand (1,500,000) shares shall be voting Preferred Stock
         without par value and One Hundred Million (100,000,000) shares shall be
         Common Stock with a par value of One Dollar ($1.00) per share.

                  The following is a statement of the designations and the
         powers, preferences and rights, and the qualifications, limitations or
         restrictions thereof in respect of the shares of Preferred Stock and
         Common Stock of the corporation and of the authority expressly granted
         hereby to the Board of Directors of the corporation to fix by
         resolution or resolutions any of such designations and powers,
         preferences and rights, and qualifications, limitations and
         restrictions thereof that may be desired but which shall not be fixed
         by this Certificate of Incorporation.



<PAGE>

                  A. Preferred Stock. The following is a statement of the
         designations and the powers, preferences and rights, and the
         qualifications, limitations or restrictions thereof in respect of the
         shares of Preferred Stock.

                           1. Voting Rights of Preferred Stock. In addition to
         such voting rights as may from time to time be required by the laws of
         Delaware, the holders of Preferred Stock shall vote at such times as
         holders of Common Stock may vote and in a like manner, one vote for
         each share of stock held, and all shares of the corporation shall be
         voted as a single class, except where specifically required by law to
         vote separately.

                           2. Provisions Regarding Issuance. The Preferred Stock
         may be issued from time to time in one or more series and in such
         amounts and for such consideration as may be determined by the Board of
         Directors. The designations, powers, preferences, and relative
         participating, optional, conversion and other special rights, and the
         qualifications, limitations or restrictions thereof, of the Preferred
         Stock, and as between the series of the Preferred Stock, shall be as
         are fixed herein and, to the extent not fixed herein, shall be such,
         not inconsistent with the provisions of this Article IV, as may be
         fixed by the Board of Directors, authority so to do being hereby
         expressly granted, and stated in a resolution or resolutions adopted by
         the Board of Directors providing for the issue of such series (herein
         called "Directors' Resolution"). The Directors' Resolution as to any
         series shall (a) designate the series, (b) fix the dividend rate of
         such series, the payment dates for dividends on shares of such series
         and, if the Board of Directors deems it advisable to cause dividends to
         be cumulative, the date or dates, or the method of determining the date
         or dates, from which dividends on shares of such series shall be
         cumulative, (c) fix the amount or amounts payable on shares of such
         series upon voluntary liquidation, dissolution or winding up, (d) state
         the price or prices at which, and the terms and conditions on which,
         the shares of such series may be redeemed at the option of the
         corporation; and such Directors' Resolution may, in a manner not
         inconsistent with the provisions of this Article IV, (i) limit the
         number of shares of such series which may be issued, (ii) provide for a
         sinking fund for the purchase or redemption of shares of such series
         and determine the terms and conditions governing the operation of any
         such fund, (iii) impose conditions or restrictions upon the creation of
         indebtedness or upon



                                      -2-
<PAGE>

         the issue of any additional stock (including additional shares of such
         series or of any other series or of any other class) ranking on a
         parity with or prior to the shares of such series as to dividends or
         distribution of assets on liquidation, dissolution or winding up, (iv)
         impose conditions or restrictions upon the payment of dividends upon,
         or the making of other distributions to, or the redemption or
         acquisition of, shares of such series, or shares of junior stock
         theretofore issued, or any shares of any class of stock thereafter to
         be issued, or any shares of Preferred Stock theretofore issued ranking
         inferior to such series (as to dividends or distribution of assets on
         liquidation, dissolution or winding up) to the extent that the terms of
         such shares theretofore issued do not expressly prohibit the imposition
         of such conditions or restrictions, or any shares of Preferred Stock
         theretofore issued ranking prior to or on a parity with such series (as
         to dividends or distribution of assets on liquidation, dissolution or
         winding up) to the extent that the terms of such shares theretofore
         issued expressly permit the imposition of such conditions or
         restrictions, (v) grant rights of conversion or exchange of shares of
         such series into or for shares of junior stock, and (vi) grant such
         other special rights as shall not be inconsistent with the provisions
         of this Article IV. The term "junior stock," as used in this Article
         IV, shall mean shares of capital stock of the corporation ranking
         junior to Preferred Stock as to dividends and distribution of assets on
         liquidation, dissolution or winding up.

                           3. General Provisions. Subject to such further
         conditions or restrictions as may be imposed in any Directors'
         Resolution, so long as any shares of the Preferred Stock are
         outstanding, in no event shall any dividends whatsoever, whether in
         cash, stock or otherwise, be paid or declared, or any distribution be
         made, on any junior stock, nor shall any shares of junior stock (other
         than junior stock acquired in exchange for or out of the proceeds of
         the issue of other junior stock or out of contributions to the capital
         of the corporation) be purchased, redeemed, retired or otherwise
         acquired for a valuable consideration by the corporation:

                           (1) unless all dividends on the Preferred Stock for
                  all past dividend periods shall have been paid or declared and
                  a sum sufficient for the payment thereof set apart, and the
                  full dividend thereon for the then current dividend period
                  shall have been paid or declared, and



                                      -3-
<PAGE>

                           (2) unless, as to each series of Preferred Stock for
                  which a sinking fund shall have been provided in the
                  Directors' Resolution providing for the issuance of such
                  series, the corporation shall have set aside the sum or sums
                  required to be set aside by such Directors' Resolution, to be
                  applied in the manner specified therein.

                  Subject to such conditions or restrictions as may be imposed
         in any Directors' Resolution, the corporation at the option of the
         Board of Directors may redeem in whole or in part the Preferred Stock
         of such series which by its terms is redeemable, at the time or times
         and on the terms and conditions fixed by the Directors' Resolution as
         to such series in accordance with the terms applicable to such
         Preferred Stock.

                  Any moneys set aside by the corporation and unclaimed at the
         end of six years from the date fixed for redemption shall revert to the
         general funds of the corporation.

                  So long as any shares of the Preferred Stock are outstanding,
         the corporation shall not amend, alter or repeal any of the provisions
         of this Article IV so as to affect adversely the rights, powers or
         preferences of the Preferred Stock or of the holders thereof, nor shall
         any consent or vote otherwise effective under said Article be effective
         with respect to the rights, powers or preferences of such Preferred
         Stock or be binding upon the holders of such Preferred Stock, without
         the consent of the holders of at least two-thirds (2/3) of the number
         of all outstanding shares of the Preferred Stock (and such further
         consent of that proportion of the holders of the shares of any one or
         more particular series, if any, as may be required by the Directors'
         Resolution or Resolutions providing for the issuance of such one or
         more particular series), given in person or by proxy, by vote at a
         meeting called for that purpose.

                  So long as shares of a particular series of Preferred Stock
         are outstanding, the corporation shall not amend, alter or repeal any
         provision of the Directors' Resolution providing for the issuance of
         such series so as to affect adversely the rights, powers or preferences
         of the shares of such series or of the holders thereof, without the
         consent of the holders of at lease two-thirds (2/3) of the number of
         outstanding shares of said series, given in person or by proxy, by vote
         at a meeting called for that purpose.



                                      -4-

<PAGE>

                  In the event of any liquidation, dissolution or winding up of
         the corporation, then, before any distribution or payment shall be made
         to the holder of any junior stock, the holders of the Preferred Stock
         of each series shall be entitled to be paid, in the event of a
         voluntary or involuntary liquidation, dissolution or winding up, such
         preferential amounts as may be fixed for such series in the Directors'
         Resolution providing for the issuance thereof. After such payment shall
         have been made in full to the holders of the Preferred Stock, the
         remaining assets and funds of the corporation shall be distributed
         among the holders of junior stock according to their respective rights.
         In the event that the assets of the corporation available for
         distribution to holders of Preferred Stock shall not be sufficient to
         make the payments herein required to be made in full, such assets shall
         be distributed to the holders of the respective shares of Preferred
         Stock in accordance with such priorities, if any, as between the
         various series of Preferred Stock as may be specified in any Directors'
         Resolution.

                  Preferred Stock redeemed or otherwise retired by the
         corporation assumes the status of authorized but unissued Preferred
         Stock and may thereafter, subject to the provisions of any Directors'
         Resolution providing for the issue of any particular series of
         Preferred Stock, be reissued in the same manner as authorized but
         unissued Preferred Stock.

                  B. Common Stock.

                           1. Dividends. Subject to the prior rights and
         preferences of the Preferred Stock, and subject to the provisions and
         on the conditions set forth in the foregoing paragraph A of this
         Article IV, or in any Directors' Resolution providing for the issue of
         a series of Preferred Stock, such dividends (payable in cash, stock or
         otherwise) as may be determined by the Board of Directors may be
         declared and paid on the Common Stock from time to time out of any
         funds legally available therefor.

                           2. Voting. Except as otherwise required by law, each
         share of Common Stock shall have one vote, in person or by proxy, for
         each share thereof held, and all shares of the corporation, including
         shares of Preferred Stock shall be voted as a single class except where
         specifically required by law to vote separately.



                                      -5-
<PAGE>

                           3. Distribution. After payment shall have been made
         in full to the holders of the Preferred Stock in the event of any
         liquidation, dissolution or winding up of the affairs of the
         corporation, the remaining assets and funds of the corporation shall be
         distributed among the holders of the Common Stock according to their
         respective shares.

                  C. Pre-emptive Rights. No holder of any stock of the
         corporation shall be entitled as a matter of right to purchase or
         subscribe for any part of any stock of the corporation, authorized by
         this Article IV, or of any additional stock of any class to be issued
         by reason of any increase of the authorized stock of the corporation,
         or of any bonds, certificates of indebtedness, debentures or other
         securities convertible into stock of the corporation, but any stock
         authorized by this Article IV or any such additional authorized issue
         of new stock or of securities convertible into stock may be issued and
         disposed of by the Board of Directors to such persons, firms,
         corporations or associations for such consideration and upon such terms
         and in such manner as the Board of Directors may in their discretion
         determine without offering any thereof on the same terms or on any
         terms to the stockholders then of record or to any class of
         stockholders.

                  D. Miscellaneous. The corporation shall be entitled to treat
         the person in whose name any share, right or option is registered as
         the owner thereof for all purposes and shall not he bound to recognize
         any equitable or other claim to or interest in such share, right or
         option on the part of any other person, whether or not the corporation
         shall have notice thereof, save as may be expressly provided by the
         laws of the State of Delaware.

                  A Director shall be fully protected in relying in good faith
         upon the books of account of the corporation or statements prepared by
         any of its officials as to the value and amount of the assets,
         liabilities and/or net profits of the corporation, or any other facts
         pertinent to the existence and amount of surplus or other funds from
         which dividends might properly be declared and paid.

                  Without action by the stockholders, the shares of stock may be
         issued by the corporation from time to time for such consideration (not
         less than the par value thereof if such stock has a par value) as may
         be fixed from time to time by the Board of Directors, and any and



                                      -6-
<PAGE>

                          CERTIFICATE OF INCORPORATION

                                       OF

                            TRINITY INDUSTRIES, INC.


                                   ARTICLE I.

                                      Name

         The name of the corporation is Trinity Industries, Inc.

                                   ARTICLE II.

                           Registered Office and Agent

         The address of its registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County
of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.

                                  ARTICLE III.

                                     Purpose

         The purposes for which the corporation is organized are as follows:

         1. To design and manufacture products of every description fabricated
in the various grades of ferrous and non-ferrous metals and their alloys, and to
buy, sell and otherwise deal therein.

         2. To construct, build, manufacture, maintain, overhaul, repair and
erect structures of every kind and description manufactured of various grades of
ferrous and non-ferrous metals and their alloys, and to contract for the
construction and erection of such structures.



<PAGE>

         3. To manufacture, buy, sell, procure, distribute, market, exchange,
import, export and in any other manner deal in or deal with (as principal, agent
or otherwise) steel pressure vessels, refinery equipment, oil field supplies,
poles and other products fabricated of various grades of ferrous and non-ferrous
metals and their alloys, as well as materials, parts, instruments, devices and
any other equipment, tools, parts, components and supplies.

         4. To acquire by purchase, lease or otherwise erect, maintain, operate,
lease, mortgage and otherwise deal in and deal with buildings, warehouses,
storehouses, manufacturing plants, factories, machine shops and any other
structures and equipment necessary, useful or desirable for the conduct of the
business of the corporation.

         5. To manufacture, purchase or otherwise acquire and to hold, own,
mortgage or otherwise lien, pledge, lease, sell, assign, exchange, transfer or
in any manner dispose of, and to invest, deal and trade in and with goods, wares
and merchandise and personal property of any and every class or description
within or without the State of Delaware.

         6. To acquire the good will, rights and property and to undertake the
whole or any part of the assets and liabilities of any person, firm, association
or corporation; to pay for the same in cash, the stock of the corporation, bonds
or otherwise; to hold or in any manner to dispose of the whole or any part of
the property so purchased; to conduct in any lawful manner the whole



                                      -2-
<PAGE>

or any part of any business so acquired, and to exercise all the powers
necessary or convenient in and about the conduct and management of such
business.

         7. To purchase or otherwise acquire, apply for, register, hold, use,
sell or in any manner dispose of, and to grant licenses or other rights in, and
in any manner deal with, patents, inventions, improvements, processes, formulas,
trademarks, trade names, rights and licenses secured under letters patent,
copyrights or otherwise.

         8. To enter into, make and perform contracts of every kind for any
lawful purpose, with any person, firm, association or corporation, town, city,
county, body politic, state, territory, government or colony or dependency
thereof.

         9. To render general and special services and advice, and to do all
things as may be necessary or convenient in carrying out any or all of the
foregoing purposes.

         10. To engage in any lawful act or activity for which corporations may
be organized under the General Corporation Law of Delaware.

         11. The objects and purposes specified herein shall be regarded as
independent objects and purposes and, except where otherwise expressed, shall in
no way be limited nor restricted by reference to or inference from the terms of
any other clause or paragraph of this Certificate of Incorporation.

         12. The foregoing shall be construed both as objects and powers, and
the enumeration thereof shall not be held to limit or



                                      -3-
<PAGE>

restrict in any manner the general powers conferred on the corporation by the
laws of the State of Delaware.

                                   ARTICLE IV.

                            Authorized Capital Stock

         The total number of shares of stock which the corporation shall have
authority to issue is Forty-One Million Five Hundred Thousand (41,500,000)
shares, of which One Million Five Hundred Thousand (1,500,000) shares shall be
voting Preferred Stock without par value and Forty Million (40,000,000) shares
shall be Common Stock with a par value of One Dollar ($1.00) per share.

         The following is a statement of the designations and the powers,
preferences and rights, and the qualifications, limitations or restrictions
thereof in respect of the shares of Preferred Stock and Common Stock of the
corporation and of the authority expressly granted hereby to the Board of
Directors of the corporation to fix by resolution or resolutions any of such
destinations and powers, preferences and rights, and qualifications, limitations
and restrictions thereof that may be desired but which shall not be fixed by
this Certificate of Incorporation.

         A. Preferred Stock. The following is a statement of the designations
and the powers, preferences and rights, and the qualifications, limitations or
restrictions thereof in respect of the shares of Preferred Stock.



                                      -4-
<PAGE>

                  1. Voting Rights of Preferred Stock. In addition to such
voting rights as may from time to time be required by the laws of Delaware, the
holders of Preferred Stock shall vote at such times as holders of Common Stock
may vote and in a like manner, one vote for each share of stock held, and all
shares of the corporation shall be voted as a single class, except where
specifically required by law to vote separately.

                  2. Provisions Regarding Issuance. The Preferred Stock may be
issued from time to time in one or more series and in such amounts and for such
consideration as may be determined by the Board of Directors. The designations,
powers, preferences, and relative participating, optional, conversion and other
special rights, and the qualifications, limitations or restrictions thereof, of
the Preferred Stock, and as between the series of the Preferred Stock, shall be
as are fixed herein and, to the extent not fixed herein, shall be such, not
inconsistent with the provisions of this Article IV, as may be fixed by the
Board of Directors, authority so to do being hereby expressly granted, and
stated in a resolution or resolutions adopted by the Board of Directors
providing for the issue of such series (herein called "Directors' Resolution").
The Directors' Resolution as to any series shall (a) designate the series, (b)
fix the dividend rate of such series, the payment dates for dividends on shares
of such series and, if the Board of Directors deems it advisable to cause
dividends to be cumulative, the date or dates, or the method of determining the
date or dates, from which dividends on shares of such series shall be
cumulative, (c) fix the amount or amounts



                                      -5-
<PAGE>

payable on shares of such series upon voluntary liquidation, dissolution or
winding up, (d) state the price or prices at which, and the terms and conditions
on which, the shares of such series may be redeemed at the option of the
corporation; and such Directors' Resolution may, in a manner not inconsistent
with the provisions of this Article IV, (i) limit the number of shares of such
series which may be issued, (ii) provide for a sinking fund for the purchase or
redemption of shares of such series and determine the terms and conditions
governing the operation of any such fund, (iii) impose conditions or
restrictions upon the creation of indebtedness or upon the issue of any
additional stock (including additional shares of such series or of any other
series or of any other class) ranking on a parity with or prior to the shares of
such series as to dividends or distribution of assets on liquidation,
dissolution or winding up, (iv) impose conditions or restrictions upon the
payment of dividends upon, or the making of other distributions to, or the
redemption or acquisition of, shares of such series, or shares of junior stock
theretofore issued, or any shares of any class of stock thereafter to be issued,
or any shares of Preferred Stock theretofore issued ranking inferior to such
series (as to dividends or distribution of assets on liquidation, dissolution or
winding up) to the extent that the terms of such shares theretofore issued do
not expressly prohibit the imposition of such conditions or restrictions, or any
shares of Preferred Stock theretofore issued ranking prior to or on a parity
with such series (as to dividends or distribution of



                                      -6-
<PAGE>

assets on liquidation, dissolution or winding up) to the extent that the terms
of such shares theretofore issued expressly permit the imposition of such
conditions or restrictions, (v) grant rights of conversion or exchange of shares
of such series into or for shares of junior stock, and (vi) grant such other
special rights as shall not be inconsistent with the provisions of this Article
IV. The term "junior stock," as used in this Article IV, shall mean shares of
capital stock of the corporation ranking junior to Preferred Stock as to
dividends and distribution of assets on liquidation, dissolution or winding up.

                  3. General Provisions. Subject to such further conditions or
restrictions as may be imposed in any Directors' Resolution, so long as any
shares of the Preferred Stock are outstanding, in no event shall any dividends
whatsoever, whether in cash, stock or otherwise, be paid or declared, or any
distribution be made, on any junior stock, nor shall any shares of junior stock
(other than junior stock acquired in exchange for or out of the proceeds of the
issue of other junior stock or out of contributions to the capital of the
corporation) be purchased, redeemed, retired or otherwise acquired for a
valuable consideration by the corporation:

                           (1) unless all dividends on the Preferred Stock for
                  all past dividend periods shall have been paid or declared and
                  a sum sufficient for the payment thereof set apart, and the
                  full dividend thereon for the then current dividend period
                  shall have been paid or declared, and



                                      -7-
<PAGE>

                           (2) unless, as to each series of Preferred Stock for
                  which a sinking fund shall have been provided in the
                  Directors' Resolution providing for the issuance of such
                  series, the corporation shall have set aside the sum or sums
                  required to be set aside by such Directors' Resolution, to be
                  applied in the manner specified therein.

                  Subject to such conditions or restrictions as may be imposed
in any Directors' Resolution, the corporation at the option of the Board of
Directors may redeem in whole or in part the Preferred Stock of such series
which by its terms is redeemable, at the time or times and on the terms and
conditions fixed by the Directors' Resolution as to such series in accordance
with the terms applicable to such Preferred Stock.

                  Any moneys set aside by the corporation and unclaimed at the
end of six years from the date fixed for redemption shall revert to the general
funds of the corporation.

                  So long as any shares of the Preferred Stock are outstanding,
the corporation shall not amend, alter or repeal any of the provisions of this
Article IV so as to affect adversely the rights, powers or preferences of the
Preferred Stock or of the holders thereof, nor shall any consent or vote
otherwise effective under said Article be effective with respect to the rights,
powers or preferences of such Preferred Stock or be binding upon the holders of
such Preferred Stock, without the consent of the holders of at least two-thirds
(2/3) of the number of all outstanding shares of the Preferred Stock (and such
further consent of that proportion of the holders of the shares of any one



                                      -8-
<PAGE>

or more particular series, if any, as may be required by the Directors'
Resolution or Resolutions providing for the issuance of such one or more
particular series), given in person or by proxy, by vote at a meeting called for
that purpose.

                  So long as shares of a particular series of Preferred Stock
are outstanding, the corporation shall not amend, alter or repeal any provision
of the Directors' Resolution providing for the issuance of such series so as to
affect adversely the rights, powers or preferences of the shares of such series
or of the holders thereof, without the consent of the holders of at least
two-thirds (2/3) of the number of outstanding shares of said series, given in
person or by proxy, by vote at a meeting called for that purpose.

                  In the event of any liquidation, dissolution or winding up of
the corporation, then, before any distribution or payment shall be made to the
holder of any junior stock, the holders of the Preferred Stock of each series
shall be entitled to be paid, in the event of a voluntary or involuntary
liquidation, dissolution or winding up, such preferential amounts as may be
fixed for such series in the Directors' Resolution providing for the issuance
thereof. After such payment shall have been made in full to the holders of the
Preferred Stock, the remaining assets and funds of the corporation shall be
distributed among the holders of junior stock according to their respective
rights. In the event that the assets of the corporation available for
distribution to holders of Preferred Stock shall not be sufficient



                                      -9-
<PAGE>

to make the payments herein required to be made in full, such assets shall be
distributed to the holders of the respective shares of Preferred Stock in
accordance with such priorities, if any, as between the various series of
Preferred Stock as may be specified in any Directors' Resolution.

                  Preferred Stock redeemed or otherwise retired by the
corporation assumes the status of authorized but unissued Preferred Stock and
may thereafter, subject to the provisions of any Directors' Resolution providing
for the issue of any particular series of Preferred Stock, be reissued in the
same manner as authorized but unissued Preferred Stock.

         B. Common Stock.

                  1. Dividends. Subject to the prior rights and preferences of
the Preferred Stock, and subject to the provisions and on the conditions set
forth in the foregoing paragraph A of this Article IV, or in any Directors'
Resolution providing for the issue of a series of Preferred Stock, such
dividends (payable in cash, stock or otherwise) as may be determined by the
Board of Directors may be declared and paid on the Common Stock from time to
time out of any funds legally available therefor.

                  2. Voting. Except as otherwise required by law, each share of
Common Stock shall have one vote, in person or by proxy, for each share thereof
held, and all shares of the corporation, including shares of Preferred Stock
shall be voted as a single class except where specifically required by law to
vote separately.



                                      -10-
<PAGE>

                  3. Distribution. After payment shall have been made in full to
the holders of the Preferred Stock in the event of any liquidation, dissolution
or winding up of the affairs of the corporation, the remaining assets and funds
of the corporation shall be distributed among the holders of the Common Stock
according to their respective shares.

         C. Pre-emptive Rights. No holder of any stock of the corporation shall
be entitled as a matter of right to purchase or subscribe for any part of any
stock of the corporation, authorized by this Article IV, or of any additional
stock of any class to be issued by reason of any increase of the authorized
stock of the corporation, or of any bonds, certificates of indebtedness,
debentures or other securities convertible into stock of the corporation, but
any stock authorized by this Article IV or any such additional authorized issue
of new stock or of securities convertible into stock may be issued and disposed
of by the Board of Directors to such persons, firms, corporations or
associations for such consideration and upon such terms and in such manner as
the Board of Directors may in their discretion determine without offering any
thereof on the same terms or on any terms to the stockholders then of record or
to any class of stockholders.

         D. Miscellaneous. The corporation shall be entitled to treat the person
in whose name any share, right or option is registered as the owner thereof for
all purposes and shall not be bound to recognize any equitable or other claim to
or interest in such share, right or option on the part of any other person,



                                      -11-
<PAGE>

whether or not the corporation shall have notice thereof, save as may be
expressly provided by the laws of the State of Delaware.

         A Director shall be fully protected in relying in good faith upon the
books of account of the corporation or statements prepared by any of its
officials as to the value and amount of the assets, liabilities and/or net
profits of the corporation, or any other facts pertinent to the existence and
amount of surplus or other funds from which dividends might properly be declared
and paid.

         Without action by the stockholders, the shares of stock may be issued
by the corporation from time to time for such consideration (not less than the
par value thereof if such stock has a par value) as may be fixed from time to
time by the Board of Directors, and any and all such shares so issued, the full
consideration for which has been paid or delivered, shall be deemed fully paid
stock and not liable to any further call or assessment thereon, and the holder
of such shares shall not be liable for any further call or assessment thereon,
or for any other payment thereof.

                                   ARTICLE V.

                               Sole Incorporator

         The name and mailing address of the sole incorporator is:

                           J. J. French, Jr.
                           3600 RepublicBank Dallas Tower
                           Dallas, Texas 75201-3989



                                      -12-
<PAGE>

                                   ARTICLE VI.

                                    Directors

         The number of Directors constituting the initial Board of Directors is
seven (7); however, hereafter the Bylaws of the corporation shall fix the number
at not less than five (5), nor more than twelve (12). The name and mailing
address of each initial Director who is to serve as a Director until the first
annual meeting of the stockholders or until a successor is elected and qualified
are as follows:

<Table>
<Caption>
          Name                                    Address
          ----                                    -------
<S>                                     <C>

W. Ray Wallace                          P.O. Box 10587
                                        Dallas, Texas 75207

Alfred J. Gamble                        P.O. Box 310
                                        Montgomery, Alabama 36195-2201

Dean P. Guerin                          2001 Bryan Tower, 23rd floor
                                        Dallas, Texas 75201

Jess T. Hay                             2001 Bryan Tower, Suite 3600
                                        Dallas, Texas 75201

Edmund M. Hoffman                       1999 Bryan Street, Suite 3300
                                        Dallas, Texas 75201

Ray J. Pulley                           P.O. Box 576
                                        Brownsboro, Texas 75756

Thomas A. Rose, Jr.                     403 South Akard
                                        Dallas, Texas 75202
</Table>

                                  ARTICLE VII.

                                    Duration

         The corporation is to have perpetual existence.



                                      -13-
<PAGE>

                                  ARTICLE VIII.

                        Powers of the Board of Directors

         In furtherance and not in limitation of the powers conferred by the
laws of the State of Delaware, the Board of Directors of the corporation is
expressly authorized:

         1. To make, alter, amend and repeal the Bylaws;

         2. To set apart out of any of the funds of the corporation available
for dividends a reserve or reserves for any proper purpose and to alter or
abolish any such reserve;

         3. To authorize and cause to be executed mortgages and liens upon the
property and franchises of the corporation; and

         4. To designate, by resolution passed by a majority of the whole Board,
three or more directors to constitute an Executive Committee, which committee,
unless its authority shall be otherwise expressly limited by such resolution,
shall have and may exercise all of the authority of the Board of Directors in
the business and affairs of the corporation except where action of the Board of
Directors is specified by statute or other applicable law; provided, the
designation of such committee and the delegation thereto of authority shall not
operate to relieve the Board of Directors, or any member thereof, of any
responsibility imposed upon it or him by law.

         To the extent that any of the foregoing powers conflict with any
applicable statute of the State of Delaware now or hereafter in effect, such
statute, to the extent of such conflict, shall be controlling.



                                      -14-
<PAGE>

                                   ARTICLE IX.

                                   Amendments

         The corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner now
or hereafter prescribed by law, and all rights conferred upon officers,
directors, and stockholders herein are granted subject to this reservation.

                                   ARTICLE X.

                    Compromise or Arrangement with Creditors

         Whenever a compromise or arrangement is proposed between the
corporation and its creditors or any class of them and/or between the
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of the corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for the corporation under the
provisions of section 291 of Title 8 of the Delaware Code or on the application
of trustees in dissolution or of any receiver or receivers appointed for the
corporation under the provisions of section 279 of Title 8 of the Delaware Code
order a meeting of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of the corporation, as the case may be, to
be summoned in such manner as the said court directs. If a majority in number
representing three-fourths in value of the creditors or class of creditors,
and/or of the stockholders or



                                      -15-
<PAGE>

class of stockholders of the corporation, as the case may be, agree to any
compromise or arrangement and to any reorganization of this corporation as
consequence of such compromise or arrangement, the said compromise or
arrangement and the said reorganization shall, if sanctioned by the court to
which the said application has been made, be binding on all the creditors or
class of creditors, and/or on all the stockholders or class of stockholders, of
the corporation, as the case may be, and also on the corporation.

         THE UNDERSIGNED, being the sole incorporator hereinbefore named, for
the purpose of forming a corporation pursuant to the General Corporation Law of
the State of Delaware, does make this Certificate, hereby declaring and
certifying that this is my act and deed and the facts herein stated are true,
and accordingly I have hereunto set my hand this 1st day of August, 1986.


                                                /s/ J. J. FRENCH, JR.
                                                --------------------------------
                                                J. J. French, Jr.





                                      -16-
<PAGE>

THE STATE OF TEXAS      )
                        )
COUNTY OF DALLAS        )

         BEFORE ME, the undersigned authority, on this day personally appeared
J. J. French, Jr., known to me to be the person whose name is subscribed to the
foregoing instrument, and being by me first duly sworn, declared to me that the
statements therein contained are true and correct and that he executed the same
as his act and deed for purposes and consideration therein expressed.

         GIVEN UNDER MY HAND AND SEAL OF OFFICE this the 1st day of August,
1986.


                                                         /s/ KELLY SMITH
                                                --------------------------------
                                                     Notary Public in and for
                                                        The State of Texas

[SEAL]

My Commission Expires:

        1-24-89                                            KELLY SMITH
- ---------------------------                     --------------------------------
                                                      Printed Name of Notary


                                      -17-
<PAGE>
     all such shares so issued, the full consideration for which has been paid
     or delivered, shall be deemed fully paid stock and not liable to any
     further call or assessment thereon, and the holder of such shares shall not
     be liable for any further call or assessment thereon, or for any other
     payment thereof."

     IN WITNESS WHEREOF, the undersigned have executed this document as of
August 5, 1993.

                                       TRINITY INDUSTRIES, INC.



                                       By: /s/ F. DEAN PHELPS, JR.
                                           ------------------------------------
                                               F. Dean Phelps, Jr.
                                               Vice President


ATTEST:


/s/ J. J. FRENCH, JR.
- ---------------------------------------
J. J. French, Jr., Secretary





                                      -7-
<PAGE>
                                                                          PAGE 1



                               STATE OF DELAWARE

                        OFFICE OF THE SECRETARY OF STATE

                        --------------------------------



     I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
INCORPORATION OF "TRINITY INDUSTRIES, INC.", FILED IN THIS OFFICE ON THE FOURTH
DAY OF AUGUST, A.D. 1986, AT 3 O'CLOCK P.M.











                                                     /S/ EDWARD J. FREEL
                                     [SEAL]  -----------------------------------
                                             Edward J. Freel, Secretary of State


2098029 8100                                           AUTHENTICATION:   0779753

001549195                                                        DATE:  11-08-00

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.2
<SEQUENCE>4
<FILENAME>d94851ex3-2.txt
<DESCRIPTION>BY-LAWS
<TEXT>
<PAGE>

                                                                     EXHIBIT 3.2

                                           As Amended Effective December 1, 2001


                                     BYLAWS

                                       OF

                            TRINITY INDUSTRIES, INC.


                                   ARTICLE I.

                                     Offices

         Section 1. The registered office shall be located in the City of
Wilmington, County of New Castle, State of Delaware.

         Section 2. The corporation may also have offices at such other places
within or without the State of Delaware as the Board of Directors may from time
to time determine, or as the business of the corporation may require.

                                   ARTICLE II.

                            Meetings of Stockholders

         Section 1. Meetings of the stockholders for any purpose shall be held
at such time and place, either within or without the State of Delaware, as shall
be designated from time to time by the Board of Directors and stated in the
notice of the meeting or in a duly executed waiver of notice thereof.

         Section 2. The annual meeting of stockholders shall be held on such
date and at such time as shall be designated from time to time by the Board of
Directors and stated in the notice of the meeting. At such meeting, the
stockholders entitled to vote thereat shall elect by a plurality vote a Board of
Directors. Nominations for election to the Board of Directors shall be made at
such meeting only by or at the direction of the Board of Directors, by a
nominating committee or person



<PAGE>


appointed by the Board of Directors, or by a stockholder of the corporation
entitled to vote for the election of directors at the meeting who complies with
the notice procedures set forth in this Section 2. Such nominations, other than
those made by or at the direction of the Board of Directors, shall be made
pursuant to timely notice in writing to the Secretary of the corporation. To be
timely, a stockholder's notice shall be delivered to, or mailed and received at,
the principal executive offices of the corporation not less than sixty days nor
more than ninety days prior to the anniversary date of the immediately preceding
annual meeting of stockholders; provided, however, that in the event that the
annual meeting is called for a date that is not within thirty days before or
after such anniversary date, notice by the stockholder in order to be timely
must be so received not later than the close of business on the later of (i) the
sixtieth day prior to such annual meeting or (ii) the tenth day following the
day on which public announcement of the date of such meeting is first made. For
purposes of these Bylaws, "public announcement" shall mean disclosure in a press
release reported by the Dow Jones News Service, Associated Press or a comparable
national news service or in a document publicly filed by the Corporation with
the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of
the Exchange Act. Such stockholder's notice to the Secretary shall set forth (a)
as to each person whom the stockholder proposes to nominate for election or
re-election as a director, (i) the name, age, business address and residence
address of the person, (ii) the principal occupation or employment of the
person, (iii) the class and number of shares of capital stock of the corporation
which are beneficially owned by the person, and (iv) any other information
relating to the person that is required to be disclosed in solicitations for
proxies for election of directors pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended; and (b) as to the stockholder
giving the notice, (i) the name and record address of the stockholder, (ii) the
class and number of shares of capital stock of the corporation which are


                                       2
<PAGE>


beneficially owned by the stockholder, (iii) a description of all arrangements
or understandings between such stockholder and each proposed nominee and any
other person or persons (including their names) pursuant to which the
nomination(s) are to be made by such stockholder, (iv) a representation that
such stockholder intends to appear in person or by proxy at the meeting to
nominate the persons named in its notice and (v) any other information relating
to such stockholder that would be required to be disclosed in a proxy statement
or other filings required to be made in connection with solicitations of proxies
for election of directors pursuant to Section 14 of the Exchange Act and the
rules and regulations promulgated thereunder. The corporation may require any
proposed nominee to furnish such other information as may reasonably be required
by the corporation to determine the eligibility of such proposed nominee to
serve as director of the corporation. No person shall be eligible for election
as a director of the corporation unless nominated in accordance with the
procedures set forth herein.

         The Chairman of the meeting shall, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with the
foregoing procedure, and if he should so determine, he shall so declare to the
meeting and the defective nomination shall be disregarded.

         At each annual meeting of the stockholders, only such business shall be
conducted as shall have properly been brought before the meeting. To be properly
before the meeting, the business to be conducted must be specified in the notice
of meeting (or any supplement thereto) given by or at the direction of the Board
of Directors, otherwise properly brought before the meeting by or at the
direction of the Board of Directors, or otherwise properly brought before the
meeting by a stockholder entitled to vote at the meeting. In addition to any
other applicable requirements, for business to be properly brought before the
meeting by a stockholder, the stockholder must have


                                       3
<PAGE>


given timely notice thereof in writing to the Secretary of the corporation. To
be timely, a stockholder's notice shall be delivered to, or mailed and received
at, the principal executive offices of the corporation not less than sixty days
nor more than ninety days prior to the anniversary date of the immediately
preceding annual meeting of stockholders; provided, however, that in the event
that the annual meeting is called for a date that is not within thirty days
before or after such anniversary date, notice by the stockholder in order to be
timely must be so received not later than the close of business on the later of
(i) the sixtieth day prior to such annual meeting or (ii) the tenth day
following the day on which public announcement of the date of such meeting is
first made. A stockholder's notice to the Secretary of the corporation shall set
forth as to each matter that the stockholder proposes to bring before the annual
meeting, (i) a brief description of the business desired to be brought before
the annual meeting and the reasons for conducting such business at the annual
meeting, (ii) the name and record address of the stockholder proposing such
business, (iii) the class and number of shares of the corporation which are
beneficially owned by the stockholder, (iv) a description of all arrangements or
understandings between such stockholder and any other person or persons
(including their names) in connection with the proposal of such business by such
stockholder and any material interest of such stockholder in such business and
(v) a representation that such stockholder intends to appear in person or by
proxy at the annual meeting to bring such business before the meeting.
Notwithstanding the foregoing provisions of this Section 2, a stockholder
seeking to have a proposal included in the corporation's proxy statement shall
comply with the requirements of Regulation 14A under the Securities Exchange Act
of 1934, as amended (including, but not limited to, Rule 14a-8 or its successor
provision).

         Notwithstanding anything in these Bylaws to the contrary, no business
shall be conducted at the annual meeting except in accordance with the
procedures set forth in this Section 2; provided,


                                       4
<PAGE>

however, that nothing in this Section 2 shall be deemed to preclude discussion
by any stockholder of any business properly brought before the annual meeting in
accordance with the procedures set forth in this Section 2.

         The Chairman of the meeting shall, if the facts warrant, determine and
declare to the meeting that the business sought to be so conducted was not
properly brought before the meeting in accordance with the provisions of this
Section 2, and if he should so determine, he shall so declare to the meeting and
any such business not properly brought before the meeting shall not be
transacted.

         Section 3. Special meetings of the stockholders may be called by the
chief executive officer or a majority of the Board of Directors.

         Section 4. Written or printed notice stating the place, day and hour of
the meeting and, in the case of a special meeting, the purpose or purposes for
which the meeting is called, shall be given not less than ten (10) nor more than
sixty (60) days before the date of the meeting, either personally or by mail, by
or at the direction of the President, the Secretary, or the officer or person
calling the meeting, to each stockholder of record entitled to vote at such
meeting.

         Section 5. Business transacted at any special meeting shall be confined
to the purposes stated in the notice thereof.

         Section 6. The holders of a majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at meetings of
stockholders except as otherwise provided by any applicable statute. If,
however, a quorum shall not be present or represented at any meeting of the
stockholders, the presiding officer at the meeting or the stockholders present
in person or represented by proxy, shall have the power to adjourn the meeting
from time to time, without notice other than announcement at the meeting, until
a quorum shall be present or represented. At such


                                       5
<PAGE>

adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified. In addition, the presiding officer at any meeting of
stockholders shall have the power to adjourn the meeting at the request of the
Board of Directors if the Board of Directors determines that adjournment is
necessary or appropriate to enable stockholders to consider fully information
which the Board of Directors determines has not been made sufficiently or timely
available to stockholders or to otherwise exercise effectively their voting
rights.

         Section 7. Except as provided in Section 2 hereof with respect to the
election of the Board of Directors, at a meeting at which a quorum is present,
the vote of the holders of a majority of the shares present in person or
represented by proxy at the meeting and entitled to vote shall be the act of the
stockholders' meeting, unless the vote of a greater number is required by law or
the Certificate of Incorporation.

         Section 8. Each outstanding share, regardless of class, shall be
entitled to one vote on each matter submitted to a vote at a meeting of
stockholders, except to the extent that the voting rights of the shares of any
class are limited or denied by the Certificate of Incorporation.

         Section 9. At any meeting of the stockholders, every stockholder having
the right to vote may vote either in person, or by proxy appointed by an
instrument in writing as to a particular meeting and any adjournment or
adjournments thereof subscribed by such stockholder or by his duly authorized
attorney-in-fact. A proxy shall be revocable unless expressly provided therein
to be irrevocable and unless otherwise provided by law.

         Section 10. The officer or agent having charge of the stock transfer
books shall make, at least ten (10) days before each meeting of stockholders, a
complete list of the stockholders entitled to vote at such meeting or any
adjournment thereof, arranged in alphabetical order, with the address


                                       6
<PAGE>

of and number of shares held by each, which list, for a period of ten (10) days
prior to such meeting, shall be kept on file at the registered office of the
corporation, and shall be subject to inspection by any stockholder at any time
during usual business hours. Such list shall also be produced and kept open at
the time and place of the meeting, and shall be subject to the inspection of any
stockholder during the whole time of the meeting. The original stock transfer
books shall be prima facie evidence as to who are the stockholders entitled to
examine such list or transfer book or to vote at any such meeting of
stockholders.

         Section 11. Notwithstanding any inconsistent provision which may be
contained in these Bylaws, in order that the corporation may determine the
stockholders entitled to consent to corporate action in writing without a
meeting, the Board of Directors may fix a record date, which record date shall
not precede the date on which the resolution fixing the record date is adopted
by the Board of Directors, and which date shall not be more than ten days after
the date upon which the resolution fixing the record date is adopted by the
Board of Directors. Any stockholder of record seeking to have the stockholders
authorize or take corporate action by written consent shall, by written notice
to the Secretary, request the Board of Directors to fix a record date. The Board
of Directors shall promptly, but in all events within ten days after the date on
which such a request is received, adopt a resolution fixing the record date. If
no record date has been fixed by the Board of Directors within ten days of the
date upon which such a request is received, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board of Directors is required by
applicable law, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
corporation by delivery to its registered office in the State of Delaware, its
principal place of business, or any officer or agent of the corporation having
custody of the book in which


                                       7
<PAGE>

proceedings of stockholders' meeting are recorded, to the attention of the
Secretary of the corporation. Delivery shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been fixed by
the Board of Directors and prior action by the Board of Directors is required by
applicable law, the record date for determining stockholders entitled to consent
to corporate action in writing without a meeting shall be at the close of
business on the date on which the Board of Directors adopts the resolution
taking such prior action.

                                  ARTICLE III.

                                    Directors

         Section 1. The number of directors of the corporation shall be ten
(10). The directors shall be elected at the annual meeting of the stockholders,
except as provided in Section 2 of this Article, and each director elected shall
hold office until his successor is elected and qualified; provided, any director
may be removed at any time, with or without cause, by the holders of a majority
of the shares entitled to vote, represented in person or by proxy, at any duly
constituted meeting of stockholders called for the purpose of removing any such
director or directors. Directors need not be residents of the State of Delaware
or stockholders of the corporation.

         Section 2. Any vacancy occurring in the Board of Directors may be
filled by the affirmative vote of a majority of the remaining directors though
less than a quorum of the Board of Directors. A director elected to fill a
vacancy shall be elected for the unexpired term of his predecessor in office.
Any newly created directorship(s) resulting from an increase in the authorized
number of directors elected by all stockholders entitled to vote as a single
class shall be filled by the affirmative vote of a majority of the remaining
directors, even though less than a quorum of the proposed Board of Directors.

         Section 3. The business and affairs of the corporation shall be managed
by its Board of


                                       8
<PAGE>

Directors which may exercise all such powers of the corporation and do all such
lawful acts and things as are not by statute, the Certificate of Incorporation,
or these Bylaws directed or required to be exercised and done by the
stockholders.

         Section 4. Meetings of the Board of Directors, regular or special, may
be held either within or without the State of Delaware.

         Section 5. The first meeting of each newly elected Board of Directors
shall be held at such time and place as shall be fixed by the vote of the
stockholders at the annual meeting, and no notice of such meeting shall be
necessary to the newly elected directors in order legally to constitute the
meeting, provided a quorum shall be present. In the event of the failure of the
stockholders to fix the time and place of such first meeting of the newly
elected Board of Directors, or in the event such meeting is not held at the time
and place so fixed by the stockholders, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the Board of Directors, or as shall be specified in a
written waiver signed by all of the directors.

         Section 6. Regular meetings of the Board of Directors may be held at
such time and at such place as shall from time to time be determined by the
Board. Special meetings of the Board of Directors may be called by the Secretary
on the written request of two directors.

         Section 7. Written notice of regular meetings of the Board of Directors
shall not be required. Special meetings of the Board of Directors may be called
upon twenty-four (24) hours' notice to each director, or such shorter period of
time as the person calling the meeting deems appropriate in the circumstances,
either personally or by mail, telephone or telegram. Neither the business to be
transacted at, nor the purposes of, any special meeting of the Board of
Directors need be specified in the notice or waiver of notice of such special
meeting.

                                       9
<PAGE>

         Section 8. A majority of the directors shall constitute a quorum for
the transaction of business, and the act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors, unless a greater number is required by the Certificate of
Incorporation. If a quorum shall not be present at any meeting of the Board of
Directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present.

         Section 9. The Board of Directors, by resolution adopted by a majority
of the whole Board, may designate three or more directors to constitute an
executive committee, which committee, unless its authority shall be otherwise
expressly limited by such resolution, shall have and may exercise all of the
authority of the Board of Directors in the business and affairs of the
corporation except where action of the Board of Directors is specified by
statute. Vacancies in the membership of the committee shall be filled by the
Board of Directors at a regular or special meeting of the Board of Directors.
The executive committee shall keep regular minutes of its proceedings and report
the same to the Board when required. The designation of such committee and the
delegation thereto of authority shall not operate to relieve the Board of
Directors, or any member thereof, of any responsibility imposed upon it or him
by law.

                                   ARTICLE IV.

                                     Notices

         Section 1. Except as otherwise provided in these Bylaws, notices to
directors and stockholders shall be in writing, and delivered personally or
mailed to the directors or stockholders at their addresses appearing on the
books of the corporation. If mailed, such notice shall be deemed to be given
when deposited in the United States mail with postage thereon prepaid. Notice to
directors may also be given by telegram.

                                       10
<PAGE>

         Section 2. Whenever any notice is required to be given to any
stockholder or director under the provisions of the statutes, the Certificate of
Incorporation or these Bylaws, a waiver thereof in writing, signed by the person
or persons entitled to such notice, whether before or after the time stated
therein, shall be equivalent to the giving of such notice.

         Section 3. Attendance of a director at a meeting shall constitute a
waiver of notice of such meeting, except where a director attends a meeting for
the express purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.

                                   ARTICLE V.

                                    Officers

         Section 1. The executive officers of the corporation shall consist of a
President, one or more Vice Presidents, a Secretary and a Treasurer and may
include a Chairman of the Board, one or more Senior Vice Presidents and one or
more Executive Vice Presidents, each of whom shall be elected by the Board of
Directors.

         Section 2. The Board of Directors, at its first meeting after each
annual meeting of stockholders, shall choose a President, one or more Vice
Presidents, a Secretary and a Treasurer, none of whom need be a member of the
Board, and may appoint one of their number Chairman of the Board.

         Section 3. Such other officers and assistant officers and agents as may
be deemed necessary may be appointed by the chief executive officer of the
corporation, including a Chairman, a President, and one or more Vice Presidents
of the respective Divisions. The President or the Vice Presidents of the
Division who, in the order of their seniority, unless otherwise determined by
the chief executive officer of the corporation, shall perform the duties of the
Chairman or President, as the case may be, of the Division in the absence or
disability of the Chairman or President, as the


                                       11
<PAGE>

case may be, of that Division. Each President or Vice President, as the case may
be, of a Division shall perform such other duties and have such other powers as
the chief executive officer of the corporation or the Chairman or President, as
the case may be, of that Division shall prescribe. Division officers shall hold
office until their respective successors shall have been chosen and shall have
qualified. Any Division officer appointed by the chief executive officer may be
removed by the chief executive officer whenever, in his judgment, the best
interests of the corporation will be served thereby. Any vacancy occurring in
any office of a Division by death, resignation, removal or otherwise shall be
filled by the chief executive officer of the corporation.

         Section 4. The salaries of all executive officers of the corporation
shall be fixed by the Board of Directors or by a committee of one or more
directors, the members of which shall be selected by the Board of Directors and
which, unless its authority shall be otherwise limited by resolution of the
Board of Directors, shall have the power to fix the salaries of all executive
officers of the corporation.

         Section 5. The executive officers of the corporation shall hold office
until their respective successors shall have been chosen and shall have
qualified. Any officer or agent or member of the executive committee elected or
appointed by the Board of Directors may be removed by the Board of Directors
whenever, in its judgment, the best interests of the corporation will be served
thereby, but such removal shall be without prejudice to the contract rights, if
any, of the person so removed. Any vacancy occurring in any executive office of
the corporation by death, resignation, removal or otherwise shall be filled by
the Board of Directors.

         Section 6. The Board of Directors may designate whether the Chairman of
the Board, if such an officer shall have been appointed, or the President, shall
be the chief executive officer of the corporation. The officer so designated as
the chief executive officer shall preside at all meetings


                                       12
<PAGE>

of the stockholders and the Board of Directors, and shall have such other powers
and duties as usually pertain to such office or as may be delegated by the Board
of Directors. The President shall have such powers and duties as usually pertain
to such office, except as the same may be modified by the Board of Directors.
Unless the Board of Directors shall otherwise delegate such duties, the chief
executive officer shall have general and active management of the business of
the corporation and shall see that all orders and resolutions of the Board of
Directors are carried into effect.

         Section 7. The chief executive officer or his designee shall have the
authority to execute bonds, mortgages and other contracts requiring a seal,
under the seal of the corporation, except where required or permitted by law to
be otherwise signed and executed, and except where the signing and execution
thereof shall be expressly delegated by the Board of Directors to some other
officer or agent of the corporation.

         Section 8. The Vice Presidents, in the order of their seniority, unless
otherwise determined by the Board of Directors, shall, in the absence or
disability of the President, perform the duties and exercise the powers of the
President. The Vice Presidents shall also have the authority to execute bonds,
mortgages and other contracts requiring a seal, under the seal of the
corporation, except where required or permitted by law to be otherwise signed
and executed, and except where the signing and execution thereof shall be
expressly delegated by the Board of Directors to some other officer or agent of
the corporation. The Vice Presidents shall perform such other duties and have
such other powers as the Board of Directors or the chief executive officer of
the corporation shall prescribe.

         Section 9. The Secretary shall attend all meetings of the Board of
Directors and all meetings of the stockholders and shall record all the
proceedings of the meetings of the stockholders and of the Board of Directors in
a book to be kept for that purpose and shall perform


                                       13
<PAGE>

like duties for the standing committees, when requested. He shall give, or cause
to be given, notice of all meetings of the stockholders and special meetings of
the Board of Directors and shall perform such other duties as may be prescribed
by the Board of Directors or the President, under whose supervision he shall be.
He shall keep in safe custody the seal of the corporation, and, when authorized
by the Board of Directors or directed by the President or any Vice President,
affix the same to any instrument requiring it and, when so affixed, it shall be
attested by his signature or by the signature of the Treasurer or any Assistant
Secretary.

         Section 10. The Assistant Secretaries, in the order of their seniority,
unless otherwise determined by the Board of Directors, shall, in the absence or
disability of the Secretary, perform the duties and exercise the powers of the
Secretary. They shall perform such other duties and have such other powers as
the Board of Directors may from time to time prescribe.

         Section 11. The Treasurer shall be the financial officer of the
corporation. He shall have the custody of the corporate funds and securities and
shall deposit all monies and other valuable effects in the name and to the
credit of the corporation in such depositaries as may be designated from time to
time by the Board of Directors. He shall disburse the funds of the corporation
as may be ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors at
its regular meetings, or when the Board of Directors so requires, an account of
all his transactions as Treasurer. He shall also perform such other duties as
may be assigned to him by the Board of Directors.

         Section 12. If required by the Board of Directors, the Treasurer shall
give the corporation a bond in such sum and with such surety or sureties as
shall be satisfactory to the Board of Directors for the faithful performance of
the duties of his office and for the restoration to the corporation, in case of
his death, resignation, retirement or removal from office, of all books, papers,
vouchers,


                                       14
<PAGE>

money and other property of whatever kind in his possession or under his control
belonging to the corporation.

         Section 13. The Assistant Treasurers, in the order of their seniority,
unless otherwise determined by the Board of Directors, shall, in the absence or
disability of the Treasurer, perform the duties and exercise the powers of the
Treasurer. They shall perform such other duties and have such other powers as
the Board of Directors may from time to time prescribe.

                                   ARTICLE VI.

                    Indemnification of Directors and Officers

         Section 1. The corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was or has agreed to become a director, officer
or Division officer of the corporation, or is or was serving or has agreed to
serve at the request of the corporation as a director, officer or Division
officer of another corporation, partnership, joint venture, trust or other
enterprise, or by reason of any action alleged to have been taken or omitted in
such capacity, against costs, charges, expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him or on his behalf in connection with such action, suit or proceeding and
any appeal therefrom, if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the


                                       15
<PAGE>

best interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.

         Section 2. The corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was or has agreed to
become a director, officer or Division officer of the corporation, or is or was
serving or has agreed to serve at the request of the corporation as a director,
officer or Division officer of another corporation, partnership, joint venture,
trust or other enterprise, or by reason of any action alleged to have been taken
or omitted in such capacity, against costs, charges and expenses (including
attorneys' fees) actually and reasonably incurred by him or on his behalf in
connection with the defense or settlement of such action or suit and any appeal
therefrom, if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery of Delaware or the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of such liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such costs, charges and expenses which the Court of Chancery or
such other court shall deem proper.

         Section 3. Notwithstanding the other provisions of this Article, to the
extent that a director, officer or Division officer of the corporation has been
successful on the merits or otherwise, including, without limitation, the
dismissal of an action without prejudice, in defense of any action, suit or
proceeding referred to in Sections 1 and 2 of this Article, or in defense of any
claim, issue or matter therein, he shall be indemnified against all costs,
charges and expenses (including attorneys'


                                       16
<PAGE>

fees) actually and reasonably incurred by him or on his behalf in connection
therewith.

         Section 4. Any indemnification under Sections 1 and 2 of this Article
(unless ordered by a court) shall be paid by the corporation unless a
determination is made (1) by the Board of Directors by a majority vote of a
quorum consisting of directors who were not parties to such action, suit or
proceeding, or (2) if such a quorum is not obtainable, or, even if obtainable a
quorum of disinterested directors so directs, by independent legal counsel in a
written opinion, or (3) by the stockholders, that indemnification of the
director, officer, employee or agent is not proper in the circumstances because
he has not met the applicable standard of conduct set forth in Sections 1 and 2
of this Article.

         Section 5. Costs, charges and expenses (including attorneys' fees)
incurred by a person referred to in Sections 1 and 2 of this Article in
defending a civil or criminal action, suit or proceeding shall be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding; provided, however, that the payment of such costs, charges and
expenses incurred by a director, officer or Division officer in his capacity as
a director, officer or Division officer (and not in any other capacity in which
service was or is rendered by such person while a director, officer or Division
officer) in advance of the final disposition of such action, suit or proceeding
shall be made only upon receipt of an undertaking by or on behalf of the
director, officer or Division officer to repay all amounts so advanced in the
event that it shall ultimately be determined that such director, officer or
Division officer is not entitled to be indemnified by the corporation as
authorized in this Article. The Board of Directors may, in the manner set forth
above, and upon approval of such director, officer or Division officer of the
corporation, authorize the corporation's counsel to represent such person, in
any action, suit or proceeding, whether or not the corporation is a party to
such action, suit or proceeding.

                                       17
<PAGE>

         Section 6. Any indemnification under Sections 1, 2 and 3, or advance of
costs, charges and expenses under Section 5 of this Article, shall be made
promptly, and in any event within 60 days, upon the written request of the
director, officer or Division officer. The right to indemnification or advances
as granted by this Article shall be enforceable by the director, officer or
Division officer in any court of competent jurisdiction, if the corporation
denies such request, in whole or in part, or if no disposition thereof is made
within 60 days. Such persons' costs and expenses incurred in connection with
successfully establishing his right to indemnification, in whole or in part, in
any such action shall also be indemnified by the corporation. It shall be a
defense to any such action (other than an action brought to enforce a claim for
the advance of costs, charges and expenses under Section 5 of this Article where
the required undertaking, if any, has been received by the corporation) that the
claimant has not met the standard of conduct set forth in Sections 1 or 2 of
this Article, but the burden of proving such defense shall be on the
corporation. Neither the failure of the corporation (including its Board of
Directors, its independent legal counsel, and its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he has met the applicable
standard of conduct set forth in Sections 1 or 2 of this Article, nor the fact
that there has been an actual determination by the corporation (including its
Board of Directors, its independent legal counsel, and its stockholders) that
the claimant has not met such applicable standard of conduct, shall be a defense
to the action or create a presumption that the claimant has not met the
applicable standard of conduct.

         Section 7. The indemnification and advancement of costs, charges and
expenses provided by this Article shall not be deemed exclusive of any other
rights to which a person seeking indemnification or advancement of costs,
charges and expenses may be entitled under any law


                                       18
<PAGE>

(common or statutory), agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding office or while employed by or acting
as agent for the corporation, and shall continue as to a person who has ceased
to be a director, officer or Division officer as to actions taken while he was
such a director, officer or Division officer, and shall inure to the benefit of
the estate, heirs, executors and administrators of such person. All rights to
indemnification under this Article shall be deemed to be a contract between the
corporation and each director, officer or Division officer of the corporation
who serves or served in such capacity at any time while this Article is in
effect. Any repeal or modification of this Article or any repeal or modification
of relevant provisions of the Delaware General Corporation Law or any other
applicable laws shall not in any way diminish any rights to indemnification of
such director, officer or Division officer or the obligations of the corporation
arising hereunder.

         Section 8. In addition to the specific indemnification provided for
herein, the corporation shall indemnify each person who is or was or has agreed
to become a director, officer or Division officer of the corporation, or is or
was serving or has agreed to serve at the request of the corporation as a
director, officer or Division officer of another corporation, partnership, joint
venture, trust or other enterprise, to the fullest extent authorized or
permitted (i) by the General Corporation Law of Delaware, or any other
applicable law, or by any amendment thereof or other statutory provisions in
effect on the date hereof, or (ii) by the corporation's Certificate of
Incorporation as in effect on the date hereof. The corporation shall also
advance expenses to any of the foregoing individuals to the fullest extent
authorized or permitted (i) by the General Corporation Law of Delaware, or any
other applicable law, or by any amendment thereof or other statutory provision
in effect on the date hereof, or (ii) by the corporation's Certificate of
Incorporation as in effect on the date hereof.

                                       19
<PAGE>

         Section 9. Notwithstanding the foregoing, the corporation shall have
the power to purchase and maintain insurance on behalf of any person who is or
was or has agreed to become a director, officer or Division officer of the
corporation, or is or was serving at the request of the corporation as a
director, officer or Division officer of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him or on his behalf in any such capacity, or arising out of his
status as such, whether or not the corporation would have the power to indemnify
him against such liability under the provisions of this Article.

         Section 10. If this Article or any portion hereof shall be invalidated
on any ground by any court of competent jurisdiction, then the corporation shall
nevertheless indemnify each director, officer or Division officer of the
corporation as to costs, charges and expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement with respect to any action, suit
or proceeding, whether civil, criminal, administrative or investigative,
including an action by or in the right of the corporation, to the full extent
permitted by any applicable portion of this Article that shall not have been
invalidated and to the full extent permitted by applicable law.

                                  ARTICLE VII.

                             Certificates for Shares

         Section 1. The corporation shall deliver certificates representing all
shares to which stockholders are entitled; and such certificates shall be signed
by the President or a Vice President, and the Secretary or an Assistant
Secretary of the corporation, and may be sealed with the seal of the corporation
or a facsimile thereof. No certificate shall be issued for any share until the
consideration therefor has been fully paid. Each certificate representing shares
shall state upon the face thereof that the corporation is organized under the
laws of the State of Delaware, the name of


                                       20
<PAGE>

the person to whom issued, the number and class and the designation of the
series, if any, which such certificate represents, and the par value of each
share represented by such certificate or a statement that the shares are without
par value.

         Section 2. The signatures of the President or Vice President, and the
Secretary or Assistant Secretary, upon a certificate may be facsimiles if the
certificate is countersigned by a transfer agent, or registered by a registrar,
other than the corporation itself or an employee of the corporation. In case any
officer who has signed or whose facsimile signature has been placed upon such
certificate shall have ceased to be such officer before such certificate is
issued, it may be issued by the corporation with the same effect as if he were
such officer at the date of the issuance.

         Section 3. The Board of Directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost or destroyed,
upon the making of an affidavit of that fact by the person claiming the
certificate of stock to be lost or destroyed. When authorizing such issue of a
new certificate or certificates, the Board of Directors may, in its discretion
and as a condition precedent to the issuance thereof, require the owner of such
lost or destroyed certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require and/or to give the
corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the corporation with respect to the certificate alleged
to have been lost or destroyed.

         Section 4. Upon surrender to the corporation or the transfer agent of
the corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignment or authority to transfer, it shall be
the duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate, and record the transaction upon its books.

                                       21
<PAGE>

         Section 5. For the purpose of determining stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment thereof,
or entitled to receive payment of any dividend, or in order to make a
determination of stockholders for any other proper purpose, the Board of
Directors may provide that the stock transfer books shall be closed for a stated
period but not to exceed, in any case, sixty (60) days. If the stock transfer
books shall be closed for the purpose of determining stockholders entitled to
notice of or to vote at a meeting of stockholders, such books shall be closed
for at least ten (10) days immediately preceding such meeting. In lieu of
closing the stock transfer books, the Board of Directors may fix in advance a
date as the record date for any such determination of stockholders, such date in
any case to be not more than sixty (60) days, and, in case of a meeting of
stockholders, not less than ten (10) days prior to the date on which the
particular action requiring such determination of stockholders is to be taken.
If the stock transfer books are not closed and no record date is fixed for the
determination of stockholders entitled to notice of or to vote at a meeting of
stockholders or any adjournment thereof, or stockholders entitled to receive
payment of a dividend, or in order to make a determination of stockholders for
any other proper purpose, the close of business on the day next preceding the
day on which notice of the meeting of stockholders is given shall be the record
date with respect to such meeting, and the close of business on the day on which
the Board of Directors adopts a resolution declaring a dividend or with respect
to any other proper purpose, as the case may be, shall be the record date for
the determination of stockholders with respect thereto. When a determination of
stockholders entitled to vote at any meeting of stockholders has been made as
provided in this section, such determination shall apply to any adjournment
thereof, except where the determination has been made through the closing of
stock transfer books and the stated period of closing has expired.

                                       22
<PAGE>

         Section 6. The corporation shall be entitled to recognize the exclusive
rights of a person registered on its books as the owner of shares to receive
dividends, and to vote as such owner, and shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part of
any other person, whether or not it shall have express or other notice thereof,
except as otherwise provided by the laws of the State of Delaware.

                                  ARTICLE VIII.

                               General Provisions

         Section 1. The Board of Directors may declare and the corporation may
pay dividends on its outstanding shares in cash, property, or its own shares
pursuant to law and subject to the provisions of its Certificate of
Incorporation.

         Section 2. The Board of Directors may by resolution create a reserve or
reserves out of earned surplus for any purpose or purposes, and may abolish any
such reserve in the same manner.

         Section 3. The Board of Directors must, when requested by the holders
of at least one-third of the outstanding shares of the corporation, present
written reports of the business and financial affairs of the corporation.

         Section 4. All checks or demands for money and notes of the corporation
shall be signed by such officer or officers or such other person or persons as
the Board of Directors may from time to time designate as provided in these
Bylaws.

         Section 5. The fiscal year of the corporation shall be fixed by
resolution of the Board of Directors.

         Section 6. The corporate seal shall have inscribed thereon the name of
the corporation and may be used by causing it or a facsimile thereof to be
impressed or affixed or in any other manner reproduced.

                                       23
<PAGE>


                                   ARTICLE IX.

                                   Amendments

         These Bylaws may be altered, amended or repealed at any regular or
special meeting of, or by the unanimous written consent of, the Board of
Directors.

                                       24

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.11.1
<SEQUENCE>5
<FILENAME>d94851ex10-11_1.txt
<DESCRIPTION>AMENDMENT NO. 2 TO DEFINED PLAN FOR DIRECTOR FEES
<TEXT>
<PAGE>
                                                                 EXHIBIT 10.11.1

                             AMENDMENT NO. 2 TO THE
                            TRINITY INDUSTRIES, INC.
                         DEFERRED PLAN FOR DIRECTOR FEES

         Pursuant to the provisions of Article VII thereof, the Trinity
Industries, Inc. Deferred Plan for Director Fees (the "Plan") is hereby amended
effective as of December 13, 2001 in the following respect only:

         FIRST: Section (e) of Article 1 of the Plan is hereby amended by
restatement in its entirety to read as follows:

         (e) "Annual Period" means the calendar year.

         SECOND: The third paragraph of the first paragraph of Article II of the
Plan is amended by restatement in its entirety to read as follows:

                  Sums credited to the Account will accrue an interest
                  equivalent from the date they are credited at a rate equal to
                  the annual LIBOR rate plus 6 points, as of the first business
                  day following each Adjustment Date.

         IN WITNESS WHEREOF, this Amendment has been executed this 13th day of
December, 2001.

                                              TRINITY INDUSTRIES, INC.



                                              By  /s/ ILLEGIBLE
                                                -------------------------------
                                                 Title:


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.12.1
<SEQUENCE>6
<FILENAME>d94851ex10-12_1.txt
<DESCRIPTION>AMENDMENT NO. 1 TO 1998 STOCK OPTION PLAN
<TEXT>
<PAGE>
                                                                 EXHIBIT 10.12.1

                               AMENDMENT NO.1 TO
                      1998 STOCK OPTION AND INCENTIVE PLAN

         The Trinity Industries, Inc. 1998 Stock Option and Incentive Plan, as
amended from time to time (the "Plan"), is hereby amended by this Amendment No.
1, effective as of December 9, 1999.

         Any term which is not defined below shall have the meaning set forth
for such term in the Plan.

         1. Section 11 of the Plan is hereby amended and restated as follows:

                  Non-transferability of Stock Options. A stock option shall not
         be transferable otherwise than by will or the laws of descent and
         distribution, and a stock option may be exercised, during the lifetime
         of the Optionee, only by the Optionee; provided, however, a
         Non-qualified Stock Option may be transferred to one or more members of
         the immediate family of the Optionee, to a trust for the benefit of one
         or more members of the immediate family of the Optionee, to a
         partnership, the sole partners of which are the Optionee and members of
         the immediate family of the Optionee, or a foundation in which the
         Optionee controls the management of the assets. Upon any transfer, a
         stock option will remain subject to all the provisions of this Plan and
         the option agreement, including the provisions regarding termination of
         rights with respect to the stock option upon termination of the
         Optionee's employment, and the transferee shall have all of the rights
         of and be subject to all of the obligations and limitations applicable
         to the Optionee with respect to the stock option, except that the
         transferee may further transfer the stock option only to a person or
         entity that the Optionee is permitted to transfer the stock option. Any
         attempted assignment, transfer, pledge, hypothecation, or other
         disposition of a stock option contrary to the provisions hereof, or the
         levy of any execution, attachment, or similar process upon a stock
         option shall be null and void and without effect.

         IN WITNESS WHEREOF, the Company has caused this Amendment to be
executed by a duly authorized officer of the Company as of the day and year
first above written.


                                               TRINITY INDUSTRIES, INC.


                                               BY: /s/ ILLEGIBLE
                                                  -----------------------------

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.13
<SEQUENCE>7
<FILENAME>d94851ex10-13.txt
<DESCRIPTION>FORM OF DEFERRED COMPENSATION PLAN AND AGREEMENT
<TEXT>
<PAGE>
                                                                   EXHIBIT 10.13


                              AMENDED AND RESTATED
                    DEFERRED COMPENSATION PLAN AND AGREEMENT
                             AS OF DECEMBER 12, 2001

THIS PLAN AND AGREEMENT made and entered into as of the 12th day of December
2001, between TRINITY INDUSTRIES, INC., a Delaware Corporation with its
principle office at 2525 Stemmons Freeway, Dallas, Texas 75207 (hereinafter
called the "Company") and _______________, an individual (hereinafter called
"Officer");

                                   WITNESSETH:

          WHEREAS, Officer is in the employ of the Company and serves in a
capacity which will develop and expand the business of the Company; and

          WHEREAS, in recognition of Officer's valued services as an employee
and officer of the Company, and as an inducement to Officer to continue to serve
the Company in the future, the Company desires to provide certain benefits for
Officer and his designated beneficiary through a plan of deferred compensation,
as hereinafter set forth; and

          WHEREAS, Officer is willing to remain in the employ of the Company and
to have the Company defer a portion of his annual compensation in order to
provide such benefits, as hereinafter set forth.

          NOW, THEREFORE, in consideration of the premises and the terms,
conditions and covenants hereinafter set forth, The Company and Officer hereby
agree as follows:

          1. Deferred Compensation Account. The Company shall establish an
account on the books of the Company in the name of Officer to which will be
accrued deferred compensation in an amount equal to ten percent (10%) of
Officer's combined annual base salary and incentive compensation, payable in the
manner and subject to the conditions hereinafter set forth. Base salary is
defined as that amount specifically approved by the Company as base salary and
excludes other payments such as car allowance, insurance reimbursements, etc.
Incentive compensation shall mean all amounts earned under a specific plan for a
given year whether payable currently or over a period of future years. Credits
to such account will accrue annually, at the rate of ten per cent (10%) of
Officers combined annual base salary and incentive compensation, commencing with
the Officer's hire date, _______________ and, subject to the annual review of
this Plan by the Human Resources Committee of the Board of Directors of the
Company, continuing in like matter for each of the Company's fiscal years
thereafter for so long as Officer shall continue his active, full-time
employment with the Company.

          2. Administration of Account. The Company shall have the right to
segregate from the other general assets of the Company the sums which accrue
monthly hereunder as deferred compensation. Officer's deferred compensation
account shall be credited with interest at the prime rate as published by Chase
Bank of Texas, N.A. or its successor until January 1, 2002, at which time
Officer's deferred compensation account shall be credited with interest at the
LIBOR rate plus 6 points as published by the Wall Street Journal. Neither
Officer or his designated

<PAGE>

beneficiary shall at any time have any interest in accrued sums which are so
segregated and/or invested and reinvested, and such funds, as they are from time
to time constituted, shall at all times remain assets of the Company subject to
the claims of the general creditors of the Company.

         3. Payment of Deferred Compensation. Subject to the conditions
hereinafter set forth, the deferred compensation accrued hereunder and shown to
Officer's credit on the books of the Company shall be payable upon the
termination of the active, full-time employment of Officer for any reason
whatsoever, and shall be paid in such form as Officer may elect from the
following two alternatives:

                  (i)      Payment may be made in annual periodic payments for
                           specified number of years, not fewer than 1 nor in
                           excess of 20, with the first payment to be made one
                           (1) year and one (1) day from the date in which
                           Officer's termination occurs and subsequent payments
                           to be made on the same date of each succeeding year,
                           where the payment made during each year shall be in
                           an amount equal to a fraction of the amount shown to
                           Officer's credit on the books of the Company as of
                           the last day of the month preceding the month in
                           which the payment is made, and where such fraction
                           for each payment shall be one (1) divided by the
                           number of payments remaining (including the current
                           payment). Notwithstanding the preceding, at any time
                           prior to receipt of all remaining installments under
                           this paragraph, Officer (of Officer's beneficiary in
                           the event of Officer's death) may elect a lump sum
                           payment in an amount equal to the total amount
                           remaining shown to Officer's credit on the books of
                           the Company as of the last day of the month preceding
                           the month in which the election is made, minus a
                           forfeiture amount equal to 10% of such total amount.

                  (ii)     Complete payment may be made in a lump sum paid on
                           the first day of the month following the date of
                           Officer's termination of employment.

Officer's election pursuant to this paragraph must be made as of the effective
date of this Amendment and Restatement and, except as provided below, shall be
irrevocable. In the absence of an election, payment shall be made in the form of
annual periodic payments over a period of 20 years. Officer may change his or
her distribution election once during any calendar year with the new election to
be effective only in the event that the date of Officer's termination of
employment with the Company is at least 12 months after the date of the new
election. All payments shall be paid to Officer if living, or if not living, to
his designated beneficiary or, upon failure to make such designation or if the
designated beneficiary shall predecease Officer, to Officer's estate.

Notwithstanding the foregoing, in the event that Officer's termination of
employment with the Company occurs on or within two years after a "Change in
Control" of the Company, the amount to the credit of Officer will be distributed
to Officer either in a lump sum or in annual installments not exceeding five (5)
years, whichever is elected by Officer as of the effective date of this
Agreement. In the absence of an election, payment shall be made in a lump sum
within



                                       2

<PAGE>


five days of termination following a "Change in Control." Officer may change
this election at any time with the new election to be effective only in the
event that the termination of employment with the Company is at least 12 months
after the date of the new election. If installment payments are elected, the
method of distribution shall be similar to the method described for installment
payments under the preceding paragraph.

         For purposes hereof, a "Change in Control" of the Company shall be
         deemed to have occurred if the event set forth in any one of the
         following paragraphs shall have occurred:

                  (I)      any Person is or becomes the Beneficial Owner,
                           directly or indirectly, of securities of the Company
                           (not including in the securities beneficially owned
                           by such Person any securities acquired directly from
                           the Company or its affiliates) representing 30% or
                           more of the combined voting power of the Company's
                           then outstanding securities, excluding any Person who
                           becomes such a Beneficial Owner in connection with a
                           transaction described in clause (i) of paragraph
                           (III) below; or

                  (II)     the following individuals cease for any reason to
                           constitute a majority of the number of directors then
                           serving: individuals who, on the date of the
                           Agreement, constitute the Board of Directors of the
                           Company and any new director (other than a director
                           whose initial assumption of office is in connection
                           with an actual or threatened election contest,
                           including but not limited to a consent solicitation,
                           relating to the election of directors of the Company)
                           whose appointment or election by the Board of
                           Directors of the Company or nomination for election
                           by the Company's stockholders was approved or
                           recommended by a vote of at least two-thirds (2/3) of
                           the directors then still in office who either were
                           directors on the date of the Agreement, or whose
                           appointment, election or nomination for election was
                           previously so approved or recommended; or

                  (III)    there is consummated a merger or consolidation of the
                           Company or any direct or indirect subsidiary of the
                           Company with any other corporation, other than (i) a
                           merger or consolidation which would result in the
                           voting securities of the Company outstanding
                           immediately prior to such merger or consolidation
                           continuing to represent (either by remaining
                           outstanding or by being converted into voting
                           securities of the surviving entity or any parent
                           thereof) at least 60% of the combined voting power of
                           the securities of the Company or such surviving
                           entity or any parent thereof outstanding immediately
                           after such merger or consolidation, or (ii) a merger
                           or consolidation effected to implement a
                           recapitalization of the Company (or similar
                           transaction) in which no Person is or becomes the
                           Beneficial Owner, directly or indirectly, of
                           securities of the Company (not including in the
                           securities Beneficially Owned by such person any
                           securities acquired directly from the Company or its
                           Affiliates other than in connection with the
                           acquisition by the Company or its affiliates of a



                                       3

<PAGE>



                           business) representing 30% or more of the combined
                           voting power of the Company's then outstanding
                           securities; or

                  (IV)     the stockholders of the Company approve a plan of
                           complete liquidation or dissolution of the Company or
                           there is consummated an agreement for the sale or
                           disposition by the Company of all or substantially
                           all of the Company's assets, other than a sale or
                           disposition by the Company of all or substantially
                           all of the Company's assets to an entity, at least
                           60% of the combined voting power of the voting
                           securities of which are owned by stockholders of the
                           Company in substantially the same proportions as
                           their ownership of the Company immediately prior to
                           such date.

         For purposes hereof:

         "Affiliate" shall have the meaning set forth in Rule 12b-2 promulgated
         under Section 12 of the Exchange Act.

         "Beneficial Owner" shall have the meaning set forth in Rule 13d-3 under
         the Exchange Act.

         "Exchange Act" shall mean the Securities Exchange Act of 1934, as
         amended from time to time.

         "Person" shall have the meaning given in Section 3(a)(9) of the
         Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof,
         except that such term shall not include (i) the Company or any of its
         subsidiaries, (ii) a trustee or other fiduciary holding securities
         under an employee benefit plan of the Company or any of its Affiliates,
         (iii) an underwriter temporarily holding securities pursuant to an
         offering of such securities, or (iv) a corporation owned, directly or
         indirectly, by the stockholders of the Company in substantially the
         same proportions as their ownership of stock of the Company.

         4. Conditions. The payment of deferred compensation to Officer, as
hereinabove provided, shall be subject to the following conditions, the breach
of either of which shall cause the forfeiture of all rights in and to any and
all amounts of deferred compensation remaining unpaid upon the date of any such
breach:

                  a. Commencing with the date of termination of the active,
         full-time employment of Officer and continuing until all payments
         hereunder have been made in full, Officer shall not, directly or
         indirectly, become or serve as an officer, employee, owner or partner
         of any business which competes in a material manner with the Company,
         without prior written consent of the Company.

                  b. Commencing with the date of termination of the active,
         full-time employment of Officer and continuing until all payments
         hereunder have been made in full, Officer shall be available for
         consultation in respect of matters pertaining to the business and
         financial affairs of the Company, upon the request of the Company and
         at



                                       4

<PAGE>



         such reasonable and convenient times and places and for such
         compensation therefor as may be mutually agreed upon.

Notwithstanding the foregoing, the conditions set forth in a. and b. above shall
be of no force and effect from and after the occurrence of a Change in Control
(as defined above).

          5. Death. In the event of Officer's death prior to the receipt of any
or all of the installments of deferred compensation, such installments as are
then unpaid shall be paid to the beneficiary or beneficiaries designated in
writing and filed with the Secretary, of the Company by Officer during his
lifetime or, upon failure to make such designation or if such designee or
designees shall have predeceased Officer, then to Officer's estate. Officer
shall have the right to change the beneficiary designation from time to time by
instrument in writing delivered to the Secretary of the Company.

         6. Nonassignability. Officer during his lifetime, and his designated
beneficiary or beneficiaries, after his death, shall not be entitled to commute,
encumber, sell or otherwise dispose of his or their rights to receive the
deferred compensation provided for herein, and the right thereto shall be
nonassignable and nontransferable and shall not be subject to execution,
attachment or similar process.

          7. Participation in Other Plans. Nothing herein contained shall in any
manner modify, impair or effect the existing or future rights or interests of
Officer to receive any employee benefits to which he is or would otherwise be
entitled, or as a participant in the present or any future incentive bonus plan,
stock option plan or pension or profit sharing plan of the Company.

         8. Benefit. This Agreement shall be binding upon and inure to the
benefit of any successor of the Company, including any person, firm, corporation
or other entity which, by merger, consolidation, purchase or otherwise, acquires
all or substantially all of the assets or business of the Company.

         9. Amendment or Termination. This Agreement may be amended or
terminated in whole or in part by mutual written agreement of the parties
hereto.

         10. Election. Officer hereby elects, pursuant to paragraph 3 hereof, to
receive payment hereunder after termination not following a "Change in Control"
as follows:

                  [ ]  in annual installments (choose from 1 to 20) over a
                       period of __________ years, or

                  [ ]  in a lump sum

Officer hereby elects, pursuant to paragraph 3 hereof, to receive payment
hereunder after termination within two years following a "Change in Control" as
follows:



                                       5


<PAGE>



                  [ ]  in annual installments (choose from 1-5) over a period of
                       _________ years, or

                  [ ]  in a lump sum


          IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the day and year first hereinabove written.

                                                   TRINITY INDUSTRIES, INC.

                                                   By:
                                                      --------------------------


                                                   -----------------------------
                                                   Officer



                                       6

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.16.1
<SEQUENCE>8
<FILENAME>d94851ex10-16_1.txt
<DESCRIPTION>PARTICIPATION AGREEMENT (TRL 1 2001-1A)
<TEXT>
<PAGE>
                                                                 EXHIBIT 10.16.1

                     PARTICIPATION AGREEMENT (TRLI 2001-1A)

                            Dated as of May 17, 2001

                                      among

                          TRINITY RAIL LEASING I L.P.,
                                   as Lessee,

                         TRINITY RAIL MANAGEMENT, INC.,

                       TRINITY INDUSTRIES LEASING COMPANY,
                                   as Manager,

                      TRLI 2001-1A RAILCAR STATUTORY TRUST,
             BY STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
                              NATIONAL ASSOCIATION,
                                as Owner Trustee,

                             TRIMARAN LEASING, L.P.,
                              as Owner Participant

                                       and

                       LASALLE BANK NATIONAL ASSOCIATION,
                  as Indenture Trustee and Pass Through Trustee






                   Tank Cars, Covered Hopper Cars and Box Cars



                                          Participation Agreement (TRLI 2001-1A)
<PAGE>

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                 Page
                                                                                                 ----
<S>                   <C>                                                                        <C>
SECTION 1.            DEFINITIONS; INTERPRETATION OF THIS
                      AGREEMENT.....................................................................4

SECTION 2.            SALE AND PURCHASE; PARTICIPATION IN
                      EQUIPMENT COST; CLOSING; TRANSACTION COSTS....................................4
     Section 2.1      Sale and Purchase of Equipment................................................4
     Section 2.2      Participation in Equipment Cost...............................................4
     Section 2.3      Closing Date; Procedure for Participation.....................................5
     Section 2.4      Owner Participant's Instructions to the Owner Trustee; Satisfaction of
                      Conditions....................................................................6
     Section 2.5      Expenses......................................................................7
     Section 2.6      Calculation of Adjustments to Basic Rent, Stipulated Loss Value
                      and Termination Value; Confirmation and Verification.........................10
     Section 2.7      Postponement of Closing Date.................................................13

SECTION 3.            REPRESENTATIONS AND WARRANTIES...............................................15
     Section 3.1      Representations and Warranties of the Trust Company..........................15
     Section 3.2      Representations and Warranties of the Lessee.................................18
     Section 3.3      Representations and Warranties of the Indenture Trustee......................24
     Section 3.4      Representations, Warranties and Covenants Regarding Beneficial
                      Interest, Equipment Note and Pass Through Certificates.......................25
     Section 3.5      Representations and Warranties of the Owner Participant......................27
     Section 3.6      Representations and Warranties of TILC.......................................29
     Section 3.7      Representations and Warranties of TRMI.......................................34
     Section 3.8      Representations and Warranties of the Pass Through Trustee...................36
     Section 3.9      Opinion Acknowledgment.......................................................38

SECTION 4.            CLOSING CONDITIONS...........................................................38
     Section 4.1      Conditions Precedent to Investment by Each Participant.......................38
     Section 4.2      Additional Conditions Precedent to Investment by the Loan
                      Participant..................................................................46
     Section 4.3      Additional Conditions Precedent to Investment by the Owner
                      Participant..................................................................47
     Section 4.4      Conditions Precedent to the Obligation of TILC and the Lessee................48

SECTION 5.            FINANCIAL AND OTHER REPORTS OF THE LESSEE....................................49

SECTION 6.            CERTAIN COVENANTS OF THE PARTICIPANTS, THE
                      TRUSTEES AND THE LESSEE......................................................51
</Table>



                                          Participation Agreement (TRLI 2001-1A)
                                        i
<PAGE>

<Table>
<Caption>
                                                                                                 Page
                                                                                                 ----
<S>                   <C>                                                                        <C>
     Section 6.1      Restrictions on Transfer of Beneficial Interest..............................51
     Section 6.2      Lessor's Liens Attributable to the Owner Participant.........................55
     Section 6.3      Lessor's Liens Attributable to Trust Company.................................55
     Section 6.4      Liens Created by the Indenture Trustee and the Loan Participant..............55
     Section 6.5      Covenants of Owner Trustee, Owner Participant and Indenture
                      Trustee......................................................................56
     Section 6.6      Amendments to Operative Agreements That Are Not Lessee
                      Agreements...................................................................57
     Section 6.7      Certain Representations, Warranties and Covenants............................57
     Section 6.8      Covenants of the Manager.....................................................57
     Section 6.9      Lessee's Purchase in Certain Circumstances...................................57
     Section 6.10     Owner Participant as Affiliate of Lessee.....................................59
     Section 6.11     Records; U.S. Income Tax Information.........................................60

SECTION 7.            LESSEE'S INDEMNITIES.........................................................60
     Section 7.1      General Tax Indemnity........................................................60
     Section 7.2      General Indemnification......................................................70
     Section 7.3      Indemnification by TILC......................................................76
     Section 7.4      Indemnification by TRMI......................................................81

SECTION 8.            LESSEE'S RIGHT OF QUIET ENJOYMENT............................................86

SECTION 9.            SUCCESSOR INDENTURE TRUSTEE..................................................86

SECTION 10.           MISCELLANEOUS................................................................86
     Section 10.1     Consents.....................................................................86
     Section 10.2     Refinancing..................................................................86
     Section 10.3     Amendments and Waivers.......................................................89
     Section 10.4     Notices......................................................................89
     Section 10.5     Survival.....................................................................92
     Section 10.6     No Guarantee of Residual Value or Debt.......................................92
     Section 10.7     Successors and Assigns.......................................................92
     Section 10.8     Business Day.................................................................92
     SECTION 10.9     GOVERNING LAW................................................................92
     Section 10.10    Severability.................................................................93
     Section 10.11    Counterparts.................................................................93
     Section 10.12    Headings and Table of Content................................................93
     Section 10.13    Limitations of Liability.....................................................93
     Section 10.14    Maintenance of Non-Recourse Debt.............................................94
     Section 10.15    Ownership of and Rights in Units.............................................95
     Section 10.16    No Petition..................................................................95
     Section 10.17    Consent To Jurisdiction......................................................96
     SECTION 10.18    WAIVER OF JURY TRIAL.........................................................96
</Table>



                                          Participation Agreement (TRLI 2001-1A)
                                       ii
<PAGE>

                             EXHIBITS AND SCHEDULES

<Table>
<S>                     <C>
Exhibit A-1       -     Form of Certificate of Insurance Broker Confirming Insurance
                        Coverage (Primary Liability)
Exhibit A-2       -     Form of Certificate of Insurance Broker Confirming Insurance
                        Coverage (Excess Liability)
Exhibit B-1       -     Insurance Requirements as to Public Liability Insurance
Exhibit B-2       -     Insurance Requirements as to Physical Damage Insurance
Exhibit C         -     Form of Transfer Agreement
Exhibit D         -     Form of Notice of Assignment of Sublease
Exhibit E-1       -     Form of Skadden, Arps, Slate, Meagher & Flom (Illinois) Opinion
Exhibit E-2       -     Form of Trinity Rail Leasing I L.P., Trinity Industries Leasing
                        Company and Trinity Rail Management, Inc. Opinion
Exhibit E-3       -     Form of Bingham Dana LLP Opinion
Exhibit E-4       -     Form of Winston & Strawn Opinion
Exhibit E-5       -     Form of Philip Morris Capital Corporation Legal Department
                        Opinion
Exhibit E-6       -     Form of Opinion of in-house counsel for the Indenture Trustee
Exhibit E-7       -     Form of Alvord & Alvord Opinion
Exhibit E-8       -     Form of McCarthy Tetrault Opinion
Exhibit E-9       -     Form of Andrews & Kurth L.L.P. Opinion
Exhibit E-10      -     Form of Opinion of in-house counsel for the Pass Through
                        Trustee
Exhibit E-11      -     Form of Morris, James, Hitchens & Williams Opinion
Exhibit F         -     Form of Officer's Solvency Certificate
Schedule 1        -     Description of Equipment, Designation of Basic Groups,
                        Designation of Functional Groups and Equipment Cost
Schedule 1-A      -     Description of Pledged Equipment
Schedule 1-B      -     List of Existing Subleases and Existing Pledged Equipment
                        Leases
Schedule 2        -     Commitment Percentage and Payment Information for
                        Participants
Schedule 3-A      -     Schedule of Basic Rent Payments
Schedule 3-B      -     Basic Rent Allocation Schedule
Schedule 4-A      -     Schedule of Stipulated Loss Value and Termination Value
Schedule 4-B      -     Termination Amount Schedule
Schedule 5        -     Terms of Equipment Note
Schedule 6        -     Purchase Information
Schedule 3.2(m)   -     Written Information Provided by Trinity Rail Leasing I L.P.,
                        Trinity Industries Leasing Company and Trinity Rail
                        Management, Inc.
</Table>


                                          Participation Agreement (TRLI 2001-1A)
                                       iii
<PAGE>

                     PARTICIPATION AGREEMENT (TRLI 2001-1A)


         This PARTICIPATION AGREEMENT (TRLI 2001-1A), dated as of May 17, 2001
(this "Agreement"), is by and among (i) Trinity Rail Leasing I L.P., a Texas
limited partnership (together with its permitted successors and assigns, the
"Lessee"), (ii) Trinity Rail Management, Inc., a Delaware corporation ("TRMI"),
(iii) Trinity Industries Leasing Company, a Delaware corporation ("TILC"), (iv)
TRLI 2001-1A Railcar Statutory Trust, a Connecticut statutory trust, by State
Street Bank and Trust Company of Connecticut, National Association, a national
banking association, ("Trust Company"), not in its individual capacity except as
expressly provided herein but solely as trustee (together with its permitted
successors and assigns, the "Owner Trustee") under the Trust Agreement (such
term and other defined terms used herein shall have the meanings assigned
thereto in Section 1 below), (v) Trimaran Leasing, L.P., a Delaware limited
partnership (together with its permitted successors and assigns, the "Owner
Participant") and (vi) LaSalle Bank National Association, a national banking
association, not in its individual capacity except as expressly provided herein
but solely as pass through trustee under the Pass Through Trust Agreement (in
such capacity, together with its permitted successors and assigns, the "Pass
Through Trustee" or the "Loan Participant"), and as trustee under the Indenture
(in such capacity, together with its permitted successors and assigns, the
"Indenture Trustee"). The Owner Participant and the Loan Participant are
sometimes hereinafter referred to collectively as the "Participants."

                                   WITNESSETH:

         WHEREAS, on or prior to the date hereof, the Owner Participant and the
Trust Company have entered into the Trust Agreement pursuant to which the Owner
Trustee has agreed, among other things, to hold the Trust Estate for the benefit
of the Owner Participant thereunder on the terms specified in the Trust
Agreement, subject, however, to the Lien created under the Indenture and,
subject to the terms and conditions hereof, to purchase on the Closing Date the
Equipment described in Schedule 1 hereto from the Lessee and concurrently
therewith to lease such Equipment to the Lessee;

         WHEREAS, on or prior to the date hereof and pursuant to the Pass
Through Trust Agreement a grantor trust was created to facilitate the financing
contemplated hereby;

         WHEREAS, on the Closing Date, the Owner Trustee and the Indenture
Trustee will enter into the Indenture, pursuant to which the Owner Trustee will
agree, among other things, to borrow from the Loan Participant the loan in
connection with the financing of the Total Equipment Cost and to issue to the
Loan Participant the Equipment Note as evidence of such loan;



                                          Participation Agreement (TRLI 2001-1A)
<PAGE>

          WHEREAS, TILC will, on the Closing Date, pursuant to the Transfer and
Assignment Agreement (i) sell to the Partnership all of TILC's right, title and
interest in and to the Equipment described on Schedule 1 hereto and (ii) assign
and transfer to the Partnership all of TILC's right, title and interest in and
to any Existing Equipment Subleases;

         WHEREAS, TILC will, on the Closing Date, pursuant to the Pledged
Equipment Transfer and Assignment Agreement (i) sell to the Partnership all of
TILC's right, title and interest in and to the Pledged Equipment and (ii) assign
and transfer to the Partnership all of TILC's right, title and interest in and
to any Existing Pledged Equipment Leases;

         WHEREAS, pursuant to the terms of the Trust Agreement, the Owner
Participant has authorized and directed the Owner Trustee to, and the Owner
Trustee will, among other things and subject to the terms and conditions of the
Operative Agreements, (i) purchase the Equipment described in Schedule 1 hereto
from the Lessee and accept delivery from the Lessee of the Bill of Sale
evidencing the purchase and transfer of title of each Unit to the Owner Trustee,
(ii) own the Equipment described in Schedule 1 hereto as provided in the
Operative Agreements, (iii) accept pursuant to the Assignment the assignment and
transfer from the Lessee of all Lessee's right, title and interest in and to the
Existing Equipment Subleases and (iv) execute and deliver the Lease, pursuant to
which, subject to the terms and conditions set forth therein, the Owner Trustee
agrees to lease to the Lessee, and the Lessee agrees to lease from the Owner
Trustee, each Unit to be delivered on the Closing Date, such lease to be
evidenced by the execution and delivery of the Lease Supplement covering such
Units, and to assign the Existing Equipment Subleases to the Lessee, such
assignment to be evidenced by the execution and delivery of the Assignment
covering such Existing Equipment Subleases;

         WHEREAS, concurrently with the execution and delivery of this
Agreement, the Lessee, TILC, TRMI, the Owner Trustee, the Indenture Trustee and
the Collateral Agent have entered into the Collateral Agency Agreement, pursuant
to which the Lessee will agree, among other things, to grant to the Collateral
Agent for the security and the benefit of the Owner Trustee a security interest
in the Collateral to secure the performance by the Lessee of its obligations
under the Lease;

         WHEREAS, pursuant to the terms of the Trust Agreement, the Owner
Participant has authorized and directed the Owner Trustee to, and the Owner
Trustee will, among other things and subject to the terms and conditions of the
Operative Agreements, grant to the Indenture Trustee for the security and the
benefit of the holder of the Equipment Note a security interest in the Indenture
Estate;



                                          Participation Agreement (TRLI 2001-1A)
                                       2
<PAGE>

         WHEREAS, concurrently with the execution and delivery of this
Agreement, Lessee, Trinity and the Owner Participant (or an Affiliate of the
Owner Participant) will enter into the Tax Indemnity Agreement;

         WHEREAS, the proceeds from the sale of the Equipment Note to the Loan
Participant will be applied, together with the equity contribution made by the
Owner Participant pursuant to this Agreement, to effect the purchase of the
Equipment described on Schedule 1 hereto by the Owner Trustee from the Lessee as
contemplated hereby;

         WHEREAS, prior to the Closing Date, the Partners made capital
contributions to the Lessee in accordance with the Partnership Agreement and on
the Closing Date the proceeds of such capital contributions will be applied (i)
to effect the purchase of the Pledged Equipment by the Lessee from TILC as
contemplated hereby and (ii) to fund certain reserve accounts of the Lessee as
contemplated hereby and by the Collateral Agency Agreement and the Indemnity
Agreement;

         WHEREAS, concurrently with the execution and delivery of this
Agreement, the Lessee and TILC have entered into the Management Agreement,
pursuant to which TILC will provide management services with respect to the
Equipment and the Pledged Equipment;

         WHEREAS, concurrently with the execution and delivery of this
Agreement, the Lessee and TILC have entered into the Insurance Agreement,
pursuant to which TILC will provide services to the Lessee in connection with
obtaining, managing and maintaining insurance with respect to the Equipment and
the Pledged Equipment required under the Operative Agreements;

         WHEREAS, concurrently with the execution and delivery of this
Agreement, the Lessee, the General Partner, the Limited Partner and TRMI have
entered into the Administrative Services Agreement, pursuant to which TRMI will
provide certain administrative services with respect to the Partnership, the
General Partner and the Limited Partner; and

         WHEREAS, concurrently with the execution and delivery of this
Agreement, Trinity Industries, Inc. has issued the Trinity Guaranty in favor of
the beneficiaries named therein, pursuant to which Trinity Industries, Inc. will
guarantee performance of the obligations of TILC and TRMI under the Operative
Agreements to which TILC or TRMI is a party, respectively.

         NOW, THEREFORE, in consideration of the mutual agreements herein
contained and other good and valuable consideration, receipt of which is
acknowledged, the parties hereto agree as follows:



                                          Participation Agreement (TRLI 2001-1A)
                                       3
<PAGE>

SECTION 1.        DEFINITIONS; INTERPRETATION OF THIS AGREEMENT.

         Unless otherwise defined herein or unless the context shall otherwise
require, capitalized terms used in this Agreement shall have the meanings
assigned to such terms in Appendix A to the Equipment Lease Agreement (TRLI
2001-1A), dated as of May 17, 2001, between the Owner Trustee and the Lessee.
Unless otherwise indicated, all references herein to Sections, Schedules and
Exhibits refer to Sections, Schedules and Exhibits of this Agreement.

SECTION 2.        SALE AND PURCHASE; PARTICIPATION IN EQUIPMENT COST; CLOSING;
                  TRANSACTION COSTS.

         Section 2.1 Sale and Purchase of Equipment. Subject to the terms and
conditions hereof and on the basis of the representations and warranties set
forth herein, the Lessee agrees to sell to the Owner Trustee, and the Owner
Trustee agrees to purchase from the Lessee, on the Closing Date and immediately
following consummation of the transactions described in the third and fourth
recital clauses above, the Equipment described in Schedule 1, and, in connection
therewith, the Owner Trustee agrees to pay to the Lessee the cost for each Unit
as specified in Schedule 1. On the Closing Date, the Lessee shall deliver each
Unit described on Schedule 1 to the Owner Trustee, and the Owner Trustee shall
accept such delivery.

         Section 2.2 Participation in Equipment Cost.

                  (a) Equity Participation. On the Closing Date, subject to the
terms and conditions hereof and on the basis of the representations and
warranties set forth herein, the Owner Participant agrees to participate in the
payment of the Total Equipment Cost for the Units delivered on the Closing Date
by making an equity investment in the beneficial ownership of such Units in the
amount equal to the product of the Total Equipment Cost for such Units delivered
on the Closing Date and the percentage set forth opposite the Owner
Participant's name in Schedule 2 (the "Owner Participant's Commitment"). The
aggregate amount of the Owner Participant's Commitment plus the aggregate amount
of Transaction Costs payable by the Owner Participant shall not exceed the sum
of (x) the Owner Participant's Commitment and (y) 3% of the Total Equipment
Cost. The Owner Participant's Commitment shall be paid to the Indenture Trustee
to be held (but not as part of the Indenture Estate) and applied on behalf of
the Owner Trustee toward payment of the Total Equipment Cost as provided in
Section 2.3.

                  (b) Debt Participation. On the Closing Date, subject to the
terms and conditions hereof and on the basis of the representations and
warranties set forth



                                          Participation Agreement (TRLI 2001-1A)
                                       4
<PAGE>

herein, the Loan Participant agrees to participate in the payment of the Total
Equipment Cost for the Units delivered on the Closing Date by making a secured
loan, not from its own funds but solely from funds available to it for such
purposes under the Pass Through Trust Agreement, to be evidenced by the
Equipment Note, to the Owner Trustee in the amount equal to the product of the
Total Equipment Cost for the Units delivered on the Closing Date and the
percentage set forth opposite the Loan Participant's name in Schedule 2 (the
"Loan Participant's Commitment"). The Equipment Note shall bear interest at the
Debt Rate.

         Section 2.3 Closing Date; Procedure for Participation.

                  (a) Notice of Closing Date. Not later than three Business
Days' prior to the Closing Date (or such lesser notice as may be agreed upon by
the Lessee, the Owner Participant and the Loan Participant), the Lessee shall
give the Owner Participant, the Indenture Trustee, the Owner Trustee and the
Loan Participant a notice (a "Notice of Delivery") by facsimile or other form of
telecommunication or telephone (to be promptly confirmed in writing) of the
Closing Date, which Notice of Delivery shall specify in reasonable detail the
number and type of Units to be delivered on such date, the Total Equipment Cost
of such Units, and the respective amounts of the Owner Participant's Commitment
and the Loan Participant's Commitment required to be paid with respect to the
Units. Prior to 11:00 a.m., Chicago time, on the Closing Date, subject to the
satisfaction (or waiver) of the respective conditions specified in Section 4,
the Owner Participant shall make the amount of the Owner Participant's
Commitment required to be paid on the Closing Date available to the Indenture
Trustee, and immediately prior to the delivery and acceptance of the Units as
specified in Section 2.3(b), the Loan Participant shall make the amount of the
Loan Participant's Commitment for the Total Equipment Cost required to be paid
on the Closing Date available to the Indenture Trustee, in either case, by
transferring or delivering such amounts, in funds immediately available on the
Closing Date, to the Indenture Trustee, either directly to, or for deposit in,
the Indenture Trustee's account at LaSalle Bank National Association, ABA No.
071000505, Att.: Kristine Schossow, Corporate Trust Services Division, Trust
TRLI 2001-1A, Account 608775300. The making available by the Owner Participant
of the amount of the Owner Participant's Commitment for the Total Equipment Cost
shall be deemed a waiver of the Notice of Delivery by the Owner Participant and
the Owner Trustee. The making available by the Loan Participant of the amount of
the Loan Participant's Commitment for the Total Equipment Cost shall be deemed a
waiver of the Notice of Delivery by the Loan Participant and the Indenture
Trustee.

                  (b) Closing. The closing of the transactions contemplated
hereby (the "Closing") shall take place on or before 2:00 p.m., Chicago time, on
the Closing Date at the offices of Skadden, Arps, Slate, Meagher & Flom
(Illinois), or at such



                                          Participation Agreement (TRLI 2001-1A)
                                       5
<PAGE>

other place or time as the parties hereto shall agree. Upon receipt by the
Indenture Trustee on the Closing Date of the full amount of the Owner
Participant's Commitment and the Loan Participant's Commitment in respect of the
Units delivered on the Closing Date, TILC shall pursuant to the Transfer and
Assignment Agreement deliver the Units described on Schedule 1 hereto to the
Lessee by delivery of the TILC Bill of Sale and shall make an assignment of the
Existing Equipment Subleases to the Lessee by delivery of the TILC Assignment,
and immediately thereafter, (i) the Indenture Trustee, on behalf of the Owner
Trustee, shall, subject to the conditions set forth in Sections 4.1, 4.2 and 4.3
having been fulfilled to the satisfaction of the Participants or waived by the
Participants, pay to the Lessee from the funds then held by it, in immediately
available funds, an amount equal to the Total Equipment Cost for the Units
delivered on the Closing Date, (ii) the Lessee shall pay to TILC pursuant to the
Transfer and Assignment Agreement an amount equal to the Total Equipment Cost
for the Units delivered on the Closing Date, (iii) the Lessee shall deliver the
Units described on Schedule 1 hereto by delivery of the Bill of Sale, (iv) the
Owner Trustee shall, pursuant to the Lease, lease and deliver the Units listed
on Schedule 1 hereto to the Lessee, and the Lessee, pursuant to the Lease, shall
accept delivery of the Units described on Schedule 1 hereto under the Lease,
such lease, delivery and acceptance of such Units under the Lease shall be
conclusively evidenced by the execution and delivery by the Lessee and the Owner
Trustee of the Lease Supplement covering the Equipment so delivered as described
in Schedule 1 and (v) the Owner Trustee shall execute and deliver the Equipment
Note relating to such Lease Supplement to the Loan Participant. Concurrently
with the transactions described immediately above, TILC shall pursuant to the
Pledged Equipment Transfer and Assignment Agreement sell the Pledged Units
described on Schedule 1-A hereto to the Lessee by delivery of the Pledged
Equipment Bill of Sale and shall make an assignment of the Existing Pledged
Equipment Leases to the Lessee by delivery of the TILC Pledged Equipment
Assignment. Each of the Lessee, the Owner Participant, the Owner Trustee, TILC,
the Loan Participant and the Indenture Trustee hereby agrees to take all actions
required to be taken by it in connection with the Closing as contemplated by
this Section 2.3(b).

         Section 2.4 Owner Participant's Instructions to the Owner Trustee;
Satisfaction of Conditions.

                  (a) The Owner Participant agrees that the making available to
the Indenture Trustee of the amount of the Owner Participant's Commitment for
the Units delivered on the Closing Date in accordance with the terms of this
Section 2 shall constitute, without further act, authorization and direction by
the Owner Participant to the Owner Trustee, subject, on the Closing Date, to the
conditions set forth in Sections 4.1 and 4.3 having been fulfilled to the
satisfaction of the Owner Participant or waived by the Owner Participant, to
take the actions specified in Section 2.04 of the Trust Agreement with respect
to the Units on the Closing Date.



                                          Participation Agreement (TRLI 2001-1A)
                                       6
<PAGE>

                  (b) The Owner Participant agrees that the authorization by the
Owner Participant or its counsel to the Indenture Trustee to release to the
Lessee the Owner Participant's Commitment with respect to the Units delivered on
the Closing Date shall constitute, without further act, notice and confirmation
that all conditions to closing set forth in Sections 4.1 and 4.3 were either met
to the satisfaction of the Owner Participant or, if not so met, were waived by
the Owner Participant.

                  (c) The Loan Participant agrees that the authorization by the
Loan Participant or its counsel to the Indenture Trustee to release to the
Lessee the Loan Participant's Commitment with respect to the Units delivered on
the Closing Date shall constitute, without further act, notice and confirmation
that all conditions to closing set forth in Sections 4.1 and 4.2 were either met
to the satisfaction of the Loan Participant or, if not so met, were waived by
the Loan Participant.

         Section 2.5 Expenses.

                  (a) If the Owner Participant shall have made its investment
provided for in Section 2.2 and the transactions contemplated by this Agreement
are consummated, either the Owner Participant will promptly pay, or the Owner
Trustee will promptly pay, with funds the Owner Participant hereby agrees to pay
(which, together with the Owner Participant's Commitment, shall not exceed the
amount set forth in the second sentence of Section 2.2(a)) to the Owner Trustee,
the following (collectively referred to as the "Transaction Costs") if evidenced
by an invoice delivered to the Owner Participant within four (4) months after
the Closing Date and approved by the Lessee and the Owner Participant (such
approval not to be unreasonably withheld or delayed):

                           (i) the cost of reproducing, printing and filing the
Operative Agreements, the Equipment Note, the Pass Through Documents and all
amendments and supplements to the foregoing, including all costs and fees in
connection with the initial filing and recording of the Lease, the Indenture and
any other document required to be filed or recorded pursuant to the provisions
hereof or of any other Operative Agreement and the fees and expenses of the
Rating Agency in connection with the rating of the Pass Through Certificates;

                           (ii) the reasonable out-of-pocket expenses of the
Owner Participant and the reasonable fees of Winston & Strawn, special counsel
for the Owner Participant, plus disbursements, for their services rendered in
connection with the negotiation, execution and delivery of this Agreement and
the other Operative Agreements;



                                          Participation Agreement (TRLI 2001-1A)
                                       7
<PAGE>

                           (iii) the initial fees and reasonable out-of-pocket
expenses of the Collateral Agent and the reasonable fees and expenses of Andrews
& Kurth L.L.P., special counsel for the Collateral Agent, for their services
rendered in connection with the negotiation, execution and delivery of the
Operative Agreements;

                           (iv) the reasonable fees and expenses of Skadden,
Arps, Slate, Meagher & Flom (Illinois), special counsel for TILC, the Lessee and
TRMI, for their services rendered in connection with the preparation of
documentation, negotiation, execution and delivery of this Agreement and the
other Operative Agreements;

                           (v) the reasonable fees and expenses of Vinson &
Elkins L.L.P., special counsel for the Initial Purchasers, for their services
rendered in connection with the preparation of documentation, negotiation,
execution and delivery of the Pass Through Documents, this Agreement and the
other Operative Agreements;

                           (vi) the reasonable fees and expenses of (x) Alvord &
Alvord, special STB counsel and (y) McCarthy Tetrault, special Canadian rail
counsel;

                           (vii) the reasonable fees and expenses of Bingham
Dana LLP, special counsel for the Owner Trustee, for their services rendered in
connection with the negotiation, execution and delivery of this Agreement and
the other Operative Agreements;

                           (viii) the reasonable fees and expenses of Schwartz,
Cooper, Greenberger & Krauss, special counsel for the Indenture Trustee and the
Pass Through Trustee, for their services rendered in connection with the
negotiation, execution and delivery of the Pass Through Documents, this
Agreement and the other Operative Agreements;

                           (ix) the reasonable fees and expenses payable to the
Arrangers for their services rendered as advisor to the Lessee;

                           (x) the initial fees and reasonable out-of-pocket
expenses of the Owner Trustee;

                           (xi) the initial fees and reasonable out-of-pocket
expenses of the Indenture Trustee;



                                          Participation Agreement (TRLI 2001-1A)
                                       8
<PAGE>

                           (xii) the initial fees and reasonable out-of-pocket
expenses of the Pass Through Trustee;

                           (xiii) the reasonable fees of Rail Solutions, Inc.
(which fees shall in no event exceed $22,000 in the aggregate in respect of the
amounts payable hereunder), plus disbursements, for their services rendered in
connection with delivering the Appraisal required by Section 4.3(a) and for
other consulting services;

                           (xiv) [intentionally omitted];

                           (xv) the costs incurred in connection with any
adjustment pursuant to Section 2.6(a); and

                           (xvi) all costs and fees in connection with the
qualification of the Pass Through Certificates under federal or state securities
laws or Blue Sky laws in accordance with the provisions of the Certificate
Purchase Agreement.

                  Except as expressly provided above, Transaction Costs shall
not include internal costs and expenses such as salaries and overhead of
whatsoever kind or nature of, or costs incurred by, parties to this Agreement
pursuant to arrangements with third parties for services (other than those
expressly referred to above).

                  (b) Upon the consummation of the transactions contemplated by
this Agreement, the Lessee agrees to be responsible for, and will pay when due
as Supplemental Rent: (i) the reasonable expenses (including reasonable legal
fees and expenses) of the Owner Trustee, the Indenture Trustee and the
Participants incurred subsequent to the delivery of the Equipment on the Closing
Date, in connection with any supplements, amendments, modifications,
alterations, waivers or consents (whether or not consummated) of any of the
Operative Agreements which are either (1) requested by the Lessee or (2)
required by any applicable law or regulation (other than laws or regulations
solely relating to the business of the Lessor, the Indenture Trustee, the Trust
Company, the Pass Through Trustee, the Initial Purchasers, the Collateral Agent
or any Participant) or (3) entered into in connection with, or as a result of, a
Lease Default or (4) required pursuant to the terms of the Operative Agreements
(including such reasonable expenses incurred in connection with any adjustment
pursuant to Section 2.6), (ii) the ongoing fees of the Owner Trustee under the
Trust Agreement; (iii) the ongoing fees of the Indenture Trustee under the
Operative Agreements, (iv) the ongoing fees of the Collateral Agent under the
Collateral Agency Agreement and (v) the ongoing fees of the Pass Through Trustee
under the Pass Through Trust Agreement; provided that following the occurrence
of the "Closing Date" under the Other Participation Agreement, the fees referred
to in



                                          Participation Agreement (TRLI 2001-1A)
                                       9
<PAGE>

clauses (iv) and (v) immediately above shall be allocated between the
transactions contemplated hereby and the transactions contemplated by the Other
Participation Agreement on a pro rata basis based on the aggregate commitments
of the Participants hereunder as compared with the aggregate commitments of the
participants under the Other Participation Agreement.

                  (c) If the transactions contemplated hereby are not
consummated as a result of a default by the Owner Participant in its obligations
to consummate the transactions contemplated hereby, the Owner Participant shall
pay those Transaction Costs referred to in Sections 2.5(a)(ii) and (xiii) above
and the Lessee shall pay the remainder. If the transactions contemplated hereby
are not consummated due to any other reason, the Lessee shall pay all
Transaction Costs.

                  (d) Notwithstanding the foregoing provisions of this Section
2.5, the Lessee shall have no liability for (i) any costs or expenses relating
to any voluntary transfer of the Owner Participant's interest in the Equipment
pursuant to Section 6.1 other than during the continuance of a Lease Event of
Default and no such costs or expenses shall constitute Transaction Costs, (ii)
any costs or expenses relating to any voluntary transfer of any Loan
Participant's interest in the Equipment Note and (iii) any costs or expenses
relating to any voluntary transfer of any Certificateholder's interest in the
Pass Through Certificates, and in each case no such costs or expenses shall
constitute Transaction Costs.

                  (e) To the extent Transaction Costs exceed 3% of the Total
Equipment Cost, Lessee shall pay the Transaction Costs specified in Sections
2.5(a) (iv) and (ix) above up to an amount equal to the amount of such excess.

         Section 2.6 Calculation of Adjustments to Basic Rent, Stipulated Loss
Value and Termination Value; Confirmation and Verification.

                  (a) Calculation of Adjustments. In the event that (A) the
Closing Date is other than May 17, 2001, (B) the actual interest rate on the
Equipment Note is different from the Debt Rate or the amortization of the
Equipment Note is different from that set forth on Schedule 5, (C) a refinancing
contemplated by Section 10.2 occurs, (D) the actual aggregate Equipment Cost or
composition of the Units is different from that set forth on Schedule 1, (E) the
actual aggregate amount of Transaction Costs paid pursuant to Section 2.5(a) is
other than an amount equal to 3% of the Total Equipment Cost, (F) there is any
change in, or cost relating to a revision in, the structure of the transaction
contemplated hereby as required by the Rating Agency, or (G) there is any change
in the Code or in the regulations promulgated thereunder or other official
administrative pronouncement, which change is proposed, enacted or effective
after the execution of this Agreement and prior to the Closing Date (provided
that the Owner Participant or the Lessee, as the



                                          Participation Agreement (TRLI 2001-1A)
                                       10
<PAGE>

case may be, shall have provided notice to the other prior to the Closing Date),
and which change alters or eliminates any tax assumption used in calculating
Basic Rent, Stipulated Loss Values, Stipulated Loss Amounts, Termination Values,
Termination Amounts, Early Purchase Price, then, in each such case, the Owner
Participant shall recalculate the payments or amounts, as the case may be, of
Basic Rent, Stipulated Loss Values, Stipulated Loss Amounts, Termination Values,
Termination Amounts and Early Purchase Price, (i) to preserve the Net Economic
Return that the Owner Participant would have realized had such event not
occurred, and (ii) to minimize to the greatest extent possible, consistent with
the foregoing clause (i), the present value (discounted monthly at an interest
rate per annum equal to the Debt Rate) of the sum of the payments of Basic Rent
to the Early Purchase Date and the Early Purchase Price; provided, however, that
in no event shall the Early Purchase Price be less than the expected fair market
value of the Equipment on the Early Purchase Date and the Basic Term Expiration
Date, respectively, as determined by the Appraisal. Any such recalculation
performed due to the occurrence of any one or more of the events described in
clause (A), (B), (D), (E), (F) or (G) above shall be made prior to the Closing
Date. In performing any such recalculation and in determining the Owner
Participant's Net Economic Return, the Owner Participant shall utilize the same
methods and assumptions originally used in making the computations of Basic
Rent, Stipulated Loss Values, Stipulated Loss Amounts, Termination Values,
Termination Amounts, Early Purchase Price initially set forth in Schedules 3-A,
3-B, 4-A, 4-B and 6 (other than those assumptions changed as a result of any of
the events described in clauses (A) through (G) of the preceding sentence
necessitating such recalculation; it being agreed that such recalculation shall
reflect solely any changes of assumptions or facts resulting directly from the
event or events necessitating such recalculation). Such adjustments shall comply
(to the extent the original structure complied) with Section 467 of the Code and
the requirements of Sections 4.02(5), 4.07(1) and (2) of Revenue Procedure
2001-28 calculated, except in the case of a refinancing pursuant to Section
10.2, without taking into account any change after the Closing Date in or to
Section 467 of the Code (and any regulations thereunder).

                  (b) Confirmation and Verification. Upon completion of any
recalculation described in Section 2.6(a), a duly authorized officer of the
Owner Participant shall provide a certificate to the Lessee either (x) stating
that the amounts of Basic Rent, Stipulated Loss Values, Stipulated Loss Amounts,
Termination Values, Termination Amounts and Early Purchase Price as are then set
forth in Schedules 3-A, 3-B, 4-A, 4-B and 6 do not require change, or (y)
setting forth such adjustments to the amounts of Basic Rent, Stipulated Loss
Values, Stipulated Loss Amounts, Termination Values, Termination Amounts or
Early Purchase Price as have been calculated by the Owner Participant in
accordance with Section 2.6(a). Such certificate shall describe in reasonable
detail the basis for any such adjustments, and any such adjustment and
corresponding adjustments to the Stipulated Loss Values, Termination Values and
Early Purchase Price will be computed on a basis



                                          Participation Agreement (TRLI 2001-1A)
                                       11
<PAGE>

consistent with that used by the Owner Participant in the original calculation
of Basic Rent. Any such adjustment shall be deemed approved upon notice of such
approval by the Lessee to the Owner Participant or on the thirty-first (31st)
day following delivery of such certificate by the Owner Participant to the
Lessee unless the Lessee, prior to such day, requests verification pursuant to
the following sentence, and shall become effective, in the case of adjustments
made pursuant to clause (A), (B), (D), (E), (F) or (G) of the first sentence of
Section 2.6(a), as of the earlier of (i) the first Rent Payment Date and (ii)
the date the Lessee approves or has been deemed to have approved such
adjustment, and, in the case of an adjustment made pursuant to clause (C) of the
first sentence of Section 2.6(a), as of the date of the refinancing. If the
Lessee shall so request, the recalculation of any such adjustments described in
this Section 2.6 shall be verified by a nationally recognized firm of
independent accountants selected by the Owner Participant and reasonably
acceptable to the Lessee, and any such recalculation of such adjustment as so
verified shall be binding on the Lessee and the Owner Participant. Such
accounting firm shall be requested to make its determination within 30 days. The
Owner Participant shall provide to a representative of such accounting firm, on
a confidential basis, such information as it may reasonably require, including
the original assumptions used by the Owner Participant and the methods used by
the Owner Participant in the original calculation of, and any recalculation of,
Basic Rent, Stipulated Loss Values, Stipulated Loss Amounts, Termination Values,
Termination Amounts and Early Purchase Price and such other information as is
necessary to determine whether the computation is accurate and in conformity
with the provisions of this Agreement, provided that in no event shall the Owner
Participant have any obligation to provide the Lessee with any such information;
and provided, further, that the Owner Participant shall have no obligation to
disclose to the Lessee, such accounting firm or any other Person, or to permit
the Lessee, such accounting firm or any other Person, to examine any federal,
state or local income tax returns of the Owner Participant, or books or
accounting records related thereto, for any taxable year. Subject to the
immediately following sentence, the costs of such verification shall be borne by
the Lessee. If such accounting firm's verification shall result in a decrease in
the net present value (expressed as a percentage of Total Equipment Cost,
discounted monthly at a rate per annum equal to the Debt Rate) of the sum of the
Basic Rent to the Early Purchase Date and the Early Purchase Price, calculated
as of the Closing Date, as compared to the net present value of the sum of the
Basic Rent to the Early Purchase Date and the Early Purchase Price, proposed by
the Owner Participant, by more than the greater of (i) ten basis points or (ii)
5% of the proposed adjustment, then the Owner Participant agrees to reimburse
the Lessee for any amounts paid for such verification. Any revised adjustment
resulting from such verification shall become effective on the next Rent Payment
Date after such verification has been concluded (except that, in the case of an
adjustment pursuant to clause (C) of the first sentence of Section 2.6(c), such
adjustment shall be effective as of the date of the refinancing), and shall



                                          Participation Agreement (TRLI 2001-1A)
                                       12
<PAGE>

take into account any underpayment or overpayment, together with interest
thereon at the Debt Rate, resulting from an earlier effectiveness of the
original adjustment.

                  (c) Compliance. Notwithstanding the foregoing, any adjustment
made to the payments of Basic Rent, Stipulated Loss Amounts, Termination Amounts
or Early Purchase Price, pursuant to the foregoing, shall comply with the
following requirements: (i) each installment of Basic Rent, as so adjusted,
under any circumstances and in any event, will be in an amount at least
sufficient for the Owner Trustee to pay in full as of the due date of such
installment any payment of principal of and interest on the Equipment Note
required to be paid on the due date of such installment of Basic Rent in
accordance with the Scheduled Amortization, and (ii) Stipulated Loss Amount,
Termination Amount and Early Purchase Price, as so adjusted, under any
circumstances and in any event, will be an amount which, together with any other
amounts required to be paid by the Lessee under the Lease in connection with an
Event of Loss or a termination of the Lease, as the case may be, will be at
least sufficient to pay in full, as of the date of payment thereof, the
aggregate unpaid principal of and all unpaid interest on the Equipment Note in
accordance with the Scheduled Amortization accrued to the date on which
Stipulated Loss Amount, Termination Amount or Early Purchase Price, as the case
may be, is paid in accordance with the terms of the Lease.

                  (d) Invoices. All invoices in respect of Transaction Costs to
the extent not delivered on the Closing Date shall be directed to the Owner
Participant at the address set forth in Section 10.4, with a copy to the Lessee.

         Section 2.7 Postponement of Closing Date.

                  (a) If for any reason whatsoever the Closing is not
consummated on the Closing Date provided for pursuant to Section 2.3 (the
"Scheduled Closing Date"), the Closing shall be deemed postponed to the next
Business Day or to such other Business Day on or prior to August 31, 2001 as the
Lessee shall specify by facsimile or telephonic (confirmed in writing) notice to
the Owner Participant, the Indenture Trustee, the Owner Trustee, the Pass
Through Trustee and the Initial Purchasers, in which case the Participants will
keep their funds available, provided that the notice of postponement shall be
received by each party no later than 4:30 p.m., Chicago time, on the originally
scheduled Closing Date, and the term "Closing Date" as used in this Agreement
shall mean the postponed "Closing Date."

                  (b) If the closing fails to occur on the Scheduled Closing
Date, the Indenture Trustee shall promptly return to each Participant that makes
funds available to it in accordance with this Section 2 such funds, together
with interest or income earned thereon.



                                          Participation Agreement (TRLI 2001-1A)
                                       13
<PAGE>

                  (c) If the Closing fails to occur on the Scheduled Closing
Date and funds are not returned to each Participant that made funds available by
the Indenture Trustee as provided by Section 2.7(b) above, the Indenture Trustee
shall, if so instructed by the Lessee in the facsimile or telephonic (confirmed
in writing) notice from the Lessee (which notice shall specify the Specified
Investments to be purchased), use reasonable best efforts to invest, at the risk
of the Lessee (except as provided below with respect to the Indenture Trustee's
gross negligence or willful misconduct), the funds received by the Indenture
Trustee from the Participants in Specified Investments in accordance with the
Lessee's instructions. Any such Specified Investments purchased by the Indenture
Trustee upon instructions from the Lessee shall be held in trust by the
Indenture Trustee (but not as part of the Indenture Estate under the Indenture)
for the benefit of the Participants that provided such funds. In order to obtain
funds for the payment of the Equipment Cost for the Units on the Closing Date or
to return funds to the Participants pursuant to Section 2.7(b), the Indenture
Trustee is authorized to sell any Specified Investments purchased as aforesaid.
The Indenture Trustee shall not be liable for failure to invest such funds or
for any losses incurred on such investments except for losses resulting from its
own willful misconduct or gross negligence.

                  (d) If the Closing fails to occur on the Scheduled Closing
Date, unless the Indenture Trustee returns all funds to the Participants by 2:00
p.m., Chicago time, on the Scheduled Closing Date, the Lessee shall reimburse
each Participant that has made funds available pursuant to this Section 2 for
the loss of the use of its funds an amount equal to the excess, if any, of (x)
interest on such funds at the Debt Rate for the period from and including the
Scheduled Closing Date to but excluding the actual Closing Date or, if earlier,
the day on which such Participant's funds are returned if such return is made by
2:00 p.m., Chicago time (or to but excluding the next following Business Day if
such return is not made by such time); provided that with respect to the Owner
Participant such period shall in any case be at least one day, unless the Owner
Participant shall have received, prior to 12:00 noon (Chicago time) on the
Business Day preceding the Scheduled Closing Date, a notice of postponement of
the Scheduled Closing Date pursuant to Section 2.7(a), over (y) any amount paid
to such Participant in respect of interest or income earned by the Indenture
Trustee on such funds pursuant to Section 2.7(c) above.

                  (e) If the Closing fails to occur on the Scheduled Closing
Date, the Lessee shall, on the Closing Date or on the date funds are required to
be returned to the Participants pursuant to Section 2.7(b) above, reimburse the
Indenture Trustee, for the benefit of the Participants that provided funds which
are invested by the Indenture Trustee pursuant to this Section 2.7 for any
losses incurred on such investments (except with respect to any Participant, if
the Closing failed to occur as a result of default by such Participant, or with
respect to the Owner Participant, as result of default of the Owner Trustee
(acting pursuant to instructions from the



                                          Participation Agreement (TRLI 2001-1A)
                                       14
<PAGE>

Owner Participant)). All income and profits on the investment of such funds
shall be for the respective accounts of such Participants, and the Indenture
Trustee shall not be liable for failure to invest such funds or for any losses
incurred on such investments, except for its willful misconduct or gross
negligence.

                  (f) Notwithstanding the provisions of Section 2.7(a), the
Participants shall not be under any obligation to make their respective
commitments available beyond 2:00 p.m. (Chicago time) on August 31, 2001.

SECTION 3.        REPRESENTATIONS AND WARRANTIES.

         Section 3.1 Representations and Warranties of the Trust Company. Trust
Company, in its individual capacity (except with respect to clauses (c), (k) and
(m) (to the extent applicable to Trust Company in its capacity as Owner Trustee)
below) and as Owner Trustee with respect to clauses (c), (f) and (k) (to the
extent applicable to Trust Company in its capacity as Owner Trustee) below,
represents and warrants to each of the Owner Participant, the Indenture Trustee,
the Pass Through Trustee, TILC, TRMI and the Lessee, notwithstanding the
provisions of Section 10.13 or any similar provision in any other Operative
Agreement, that, as of the date hereof:

                  (a) Trust Company (i) is a national banking association duly
incorporated, validly existing and in good standing under the laws of the United
States of America, (ii) has the full corporate power, authority and legal right
under the laws of the State of Connecticut and the United States pertaining to
its banking, trust and fiduciary powers to carry on its business as now
conducted and execute, deliver and perform its obligations hereunder and under
the Trust Agreement and (iii) assuming due authorization, execution and delivery
of the Trust Agreement by the Owner Participant, has full power and authority,
as Owner Trustee and/or, to the extent expressly provided herein or therein, in
its individual capacity, to execute, deliver and perform its obligations under
each of the Owner Trustee Agreements;

                  (b) (i) Trust Company has duly authorized, executed and
delivered the Trust Agreement, (ii) assuming the due authorization, execution
and delivery of the Trust Agreement by the Owner Participant, Trust Company in
its trustee capacity and, to the extent expressly provided therein, in its
individual capacity, has, or on or prior to the Closing Date will have, duly
authorized, executed and delivered each of the other Owner Trustee Agreements
and, as of the Closing Date, the Equipment Note, the Lease Supplement and the
Indenture Supplement to be delivered on the Closing Date, (iii) assuming the due
authorization, execution and delivery of the Trust Agreement by the Owner
Participant, the Trust is a Connecticut statutory trust duly organized and
validly existing in good standing under the laws of the State of Connecticut and
(iv) the Trust Agreement constitutes a legal, valid and binding obligation of
Trust Company enforceable against it in accordance with the terms



                                          Participation Agreement (TRLI 2001-1A)
                                       15
<PAGE>

thereof except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of creditors
generally and by general principles of equity;

                  (c) assuming the due authorization, execution and delivery of
the Trust Agreement by the Owner Participant, each of the Owner Trustee
Agreements (other than the Trust Agreement) to which it is a party constitutes,
or when entered into will constitute, a legal, valid and binding obligation of
the Owner Trustee, enforceable against it in accordance with the terms thereof,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the rights of
creditors generally and by general principles of equity;

                  (d) neither the execution and delivery by Trust Company or
Owner Trustee, as the case may be, of the Owner Trustee Agreements or the
Equipment Note to be delivered on the Closing Date, nor the consummation by
Trust Company or Owner Trustee, as the case may be, of any of the transactions
contemplated hereby or thereby, nor the compliance by Trust Company or Owner
Trustee, as the case may be, with any of the terms and provisions hereof and
thereof, (i) requires or will require any approval of its stockholders, or
approval or consent of any trustees or holders of any indebtedness or
obligations of it in its individual capacity, or (ii) violates or will violate
its articles of association or bylaws, or contravenes or will contravene any
provision of, or constitutes or will constitute a default under, or results or
will result in any breach of, any indenture, mortgage, chattel mortgage, deed of
trust, conditional sale contract, bank loan or credit agreement, license or
other agreement or instrument to which Trust Company is a party or by which it
or any of its properties may be bound or affected, or contravenes or will
contravene any law, governmental rule or regulation of the United States of
America or the State of Connecticut governing the banking, trust or fiduciary
powers of Trust Company, or any judgment or order applicable to or binding on
it;

                  (e) there are no Taxes payable by Trust Company or the Owner
Trustee, imposed by the State of Connecticut or any political subdivision
thereof in connection with the execution and delivery by Trust Company of the
Trust Agreement, and, as Trust Company or Owner Trustee, as the case may be, of
this Agreement, the other Owner Trustee Agreements (other than the Trust
Agreement) or the Equipment Note to be delivered on the Closing Date solely
because Trust Company is a national banking association with its principal place
of business in Connecticut and performs certain of its duties as Owner Trustee
in the State of Connecticut; and there are no Taxes payable by Trust Company or
the Owner Trustee, as the case may be, imposed by the State of Connecticut or
any political subdivision thereof in connection with the acquisition of its
interest in the Equipment (other than franchise or other taxes based on or
measured by any fees or



                                          Participation Agreement (TRLI 2001-1A)
                                       16
<PAGE>

compensation received by Trust Company or the Owner Trustee for services
rendered in connection with the transactions contemplated hereby) solely because
Trust Company is a national banking association with its principal place of
business in Connecticut and performs certain of its duties as Owner Trustee in
the State of Connecticut;

                  (f) there are no pending or, to its knowledge, threatened
actions or proceedings against Trust Company or the Owner Trustee, before any
court or administrative agency which individually or in the aggregate, if
determined adversely to it, would materially adversely affect the ability of
Trust Company or the Owner Trustee, as the case may be, to perform its
obligations under the Trust Agreement, the other Owner Trustee Agreements or the
Equipment Note to be delivered on the Closing Date;

                  (g) both its chief executive office, and the place where its
records concerning the Equipment and all its interest in, to and under all
documents relating to the Trust Estate, are located in Hartford, Connecticut,
and Trust Company agrees to give the Owner Participant, the Indenture Trustee
and the Lessee written notice within 30 days following any relocation of said
chief executive office or said place from its present location;

                  (h) no consent, approval, order or authorization of, giving of
notice to, or registration with, or taking of any other action in respect of,
any Connecticut state or local governmental authority or agency or any United
States federal governmental authority or agency regulating the banking or trust
powers of Trust Company is required for the execution and delivery of, or the
carrying out by, Trust Company or the Owner Trustee, as the case may be, of any
of the transactions contemplated hereby or by the Trust Agreement or of any of
the transactions contemplated by any of the other Owner Trustee Agreements,
other than any such consent, approval, order, authorization, registration,
notice or action as has been duly obtained, given or taken;

                  (i) on the Closing Date, the Owner Trustee's right, title and
interest in and to the Equipment delivered on the Closing Date shall be free and
clear of any Lessor's Lien attributable to Trust Company;

                  (j) proceeds received by the Owner Trustee from the Owner
Participant pursuant to the Trust Agreement will be administered by it in
accordance with Article III of the Trust Agreement;

                  (k) the Owner Trustee shall receive from the Lessee such title
as was conveyed to it by the Lessee, subject to the rights of the Owner Trustee
and the Lessee under the Lease and the Lien created pursuant to the Indenture
and the



                                          Participation Agreement (TRLI 2001-1A)
                                       17
<PAGE>

Indenture Supplement in respect of the Equipment delivered on the Closing Date,
and there will be no Lessor's Liens attributable to the Owner Trustee on the
Equipment or any interest therein or on the Trust Estate;

                  (l) to its knowledge, no Indenture Default has occurred and is
continuing; and

                  (m) the Owner Trustee is not engaged in the business of
extending credit for the purposes of purchasing or carrying margin stock, and no
proceeds of the Equipment Note or the Owner Participant's Commitment as
contemplated by this Agreement and the other Operative Agreements will be used
by the Owner Trustee for a purpose which violates, or would be inconsistent
with, Section 7 of the Securities Exchange Act of 1934, as amended, or
Regulations T, U and X of the Federal Reserve System. Terms for which meanings
are provided in Regulations T, U and X of the Federal Reserve System or any
regulations substituted therefor, as from time to time in effect, are used in
this Section 3.1(m) with such meanings.

         Section 3.2 Representations and Warranties of the Lessee. The Lessee
represents and warrants to the Owner Trustee, the Indenture Trustee and the
Participants, as of the date hereof:

                  (a) as to organization, powers and partnership organizational
documents:

                           (i) the Lessee is a limited partnership duly
organized, validly existing, and in good standing under the laws of the State of
Texas, is duly licensed or qualified and in good standing in each jurisdiction
in which the failure to so qualify would have a material adverse effect on its
ability to carry on its business as now conducted or to enter into and perform
its obligations under the Lessee Agreements, is a special purpose limited
partnership organized to enter into the transactions contemplated by this
Agreement, the other Operative Agreements to which it is a party and the Pass
Through Documents to which it is a party, has the limited partnership power and
authority to sell the Equipment described on Schedule 1 hereto to the Owner
Trustee, to pledge the Pledged Equipment to the Collateral Agent, to assign the
Existing Equipment Subleases and the Existing Pledged Equipment Leases as
contemplated by this Agreement and to carry on its business as now conducted,
has the requisite limited partnership power and authority to execute, deliver
and perform its obligations under the Lessee Agreements and has conducted no
business or operations prior to the date hereof (other than those associated
with its organization and capitalization or as contemplated by the Operative
Agreements),

                           (ii) the General Partner is a limited liability
company duly formed, validly existing and in good standing under the laws of the
State of Delaware



                                          Participation Agreement (TRLI 2001-1A)
                                       18
<PAGE>

and has the power and authority to execute, deliver and perform its obligations
under the Partnership Agreement and each other organizational document of the
Partnership to which the General Partner is a party,

                           (iii) the Limited Partner is a limited liability
company duly formed, validly existing and in good standing under the laws of the
State of Delaware and has the power and authority to execute, deliver and
perform its obligations under the Partnership Agreement and each other
organizational document of the Partnership to which the Limited Partner is a
party,

                           (iv) the General Partner and the Limited Partner are
the only partners of the Partnership;

                           (v) the execution, delivery and performance by each
Partner of the Partnership Agreement and each other organizational document of
the Partnership to which such Partner is a party (A) have been duly authorized
by all requisite limited liability company or member action of such Partner and
(B) did not and do not (x) violate (i) any provision of law, statute, rule or
regulation, or of the certificate of formation or limited liability company
agreement or other constitutive documents of such Partner, (ii) any order of any
governmental authority or (iii) any provision of any indenture, agreement or
other instrument to which such Partner is a party or by which it or any of its
property is or may be bound, (y) conflict with, result in a breach of or
constitute (alone or with notice, or lapse of time or both) a default under any
such indenture, agreement or other instrument or (z) result in the creation or
imposition of any Lien upon any property or assets of such Partner,

                           (vi) each of the Partnership Agreement and each other
organizational document of the Partnership has been duly executed and delivered
by each party thereto and constitutes a legal, valid and binding obligation of
each such party enforceable against such party in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of creditors
generally and by general principles of equity;

                  (b) each of the Lessee Agreements and the Pass Through
Documents to which the Lessee is a party have been duly authorized by all
necessary limited partnership action of the Lessee and, if required, limited
liability company action of each Partner, this Agreement has been duly executed
and delivered (and in the case of the other Lessee Agreements, such other Lessee
Agreements will on the Closing Date have been duly executed and delivered) by
the General Partner in its capacity as the general partner of the Lessee, and
constitutes (and in the case of the other Lessee Agreements, such other Lessee
Agreements will on the Closing Date constitute) the legal, valid and binding
obligations of the Lessee (assuming the due



                                          Participation Agreement (TRLI 2001-1A)
                                       19
<PAGE>

authorization, execution and delivery by each other party thereto), enforceable
against the Lessee in accordance with their respective terms except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally and by
general principles of equity;

                  (c) the execution, delivery and performance by the Lessee of
each Lessee Agreement and each Pass Through Document to which Lessee is a party
and compliance by the Lessee with all of the provisions thereof do not and will
not contravene any law or regulation, or any order of any court or governmental
authority or agency applicable to or binding on the Lessee or any of its
properties, or contravene the provisions of, or constitute a default by the
Lessee under, or result in the creation of any Lien (except for Permitted Liens)
upon the property of the Lessee under its organizational documents or any
indenture, mortgage, contract or other agreement or instrument to which the
Lessee is a party or by which the Lessee or any of its properties may be bound
or affected;

                  (d) there are no proceedings pending or, to the knowledge of
the Lessee, threatened against the Lessee or any Partner in any court or before
any governmental authority or arbitration board or tribunal. The Lessee and each
Partner are not subject to any order of any court or governmental authority or
arbitration board or tribunal;

                  (e) the unaudited balance sheet of the Lessee as at the
Closing Date fairly presents, in conformity with generally accepted accounting
principles applied on a pro forma basis, the pro forma financial position of the
Lessee as of such date;

                  (f) no consent, approval or authorization of, or filing,
registration or qualification with, or the giving of notice to, any trustee or
any holder of indebtedness of the Lessee or any governmental authority on the
part of the Lessee is required in the United States or Canada in connection with
the execution and delivery by the Lessee of the Lessee Agreements or in order
for the Lessee to perform its obligations thereunder in accordance with the
terms thereof, other than (i) notices required to be filed with the STB and the
Registrar General of Canada as described in Section 3.2(g), which notices shall
have been filed on the Closing Date, (ii) as may be required under existing
laws, ordinances, governmental rules and regulations to be obtained, given,
accomplished or renewed at any time after the Closing Date in connection with
the operation and maintenance of the Equipment, the Pledged Equipment and the
Subleases and the Pledged Equipment Leases in accordance with the Operative
Agreements which are routine in nature and are not normally applied for prior to
the time they are required, and which the Lessee has no reason to believe will
not be timely obtained, (iii) as may be required under the Operative Agreements
in connection with any refinancing of the Equipment Notes, (iv) as may be
required



                                          Participation Agreement (TRLI 2001-1A)
                                       20
<PAGE>

under the Operative Agreements in consequence of any transfer of the Beneficial
Interest or any transfer of ownership of the Equipment or the Pledged Equipment
and (v) filing and recording to perfect the Liens under the Indenture and the
Collateral Agency Agreement as required thereunder;

                  (g) the Lease, the Lease Supplement, the Indenture and the
Indenture Supplement (each in respect of the Units delivered on the Closing
Date), the Collateral Agency Agreement (or a memorandum with respect to any or
all of such documents), the Pledged Equipment Bill of Sale, the TILC Bill of
Sale, the Bill of Sale, the TILC Assignment, the TILC Pledged Equipment
Assignment and the Assignment will on or before the Closing Date be duly filed
with the STB pursuant to 49 U.S.C. Section 11301 and deposited with the
Registrar General of Canada pursuant to Section 105 of the Canada Transportation
Act, and such filing with the STB pursuant to 49 U.S.C. Section 11301 and such
deposit with the Registrar General of Canada will under the laws of the United
States and Canada perfect the Owner Trustee's, the Indenture Trustee's and the
Collateral Agent's rights in such Operative Agreements and in the Units
described on Schedule 1 hereto and the Pledged Units and no other filing,
recording or deposit with, or giving of notice to any other U.S. federal, state
or local government or Canadian national or provincial government or agency
thereof, or any other action, is necessary in order to protect the rights of the
Owner Trustee, the Indenture Trustee and the Collateral Agent in such Operative
Agreements or in such Units in the United States, any state thereof or the
District of Columbia or Canada or any province thereof;

                  (h) the Equipment described on Schedule 1 hereto is covered by
the insurance required by Section 12 of the Lease and the Pledged Equipment is
covered by the insurance required by Section 6.4 of the Collateral Agency
Agreement, and all premiums due prior to the Closing Date in respect of such
insurance shall have been paid in full and such insurance is in full force and
effect;

                  (i) no Lease Default has occurred and is continuing and, to
the knowledge of the Lessee, no Event of Loss, Pledged Unit Event of Loss or
event which, with the giving of notice, the passage of time or both, would
constitute an Event of Loss or a Pledged Unit Event of Loss, has occurred;

                  (j) neither the Lessee nor any Partner is an "investment
company" or an "affiliated person" of an "investment company" within the meaning
of the Investment Company Act of 1940, as amended;

                  (k) the acquisition by the Owner Participant of the Beneficial
Interest for its own account will not constitute a prohibited transaction within
the meaning of Section 4975(c)(1)(A) through (D) of the Code or Section
406(a)(1)(A) through (D) of ERISA. The representation made by the Lessee in the
preceding



                                          Participation Agreement (TRLI 2001-1A)
                                       21
<PAGE>

clause is made in reliance upon and subject to the accuracy of the
representation of the Owner Participant in Section 3.5(h) and the accuracy of
the representation of the Initial Purchasers set forth in Section 4(e) of the
Certificate Purchase Agreement;

                  (l) on the Closing Date, (i) the Lessee shall have and shall
pursuant to the Bill of Sale relating to the Equipment described on Schedule 1
hereto convey to the Owner Trustee, all legal and beneficial title to such
Equipment free and clear of all Liens (other than Permitted Liens of the type
described in clause (iii) below with respect to the Existing Equipment Subleases
and in clauses (iii), (iv) and (v) of the definition thereof), and such
conveyance will not be void or voidable under any applicable law; (ii) TILC
shall have and shall pursuant to the Pledged Equipment Bill of Sale relating to
the Pledged Equipment convey to the Partnership, all legal and beneficial title
to such Pledged Equipment free and clear of all Liens (other than Permitted
Liens of the type described in clause (iii) below with respect to Existing
Pledged Equipment Leases and clauses (iii), (iv) and (v) of the definition
thereof), and such conveyance will not be void or voidable under any applicable
law; (iii) the Lessee shall have, and the Assignment to be delivered on the
Closing Date shall assign to the Owner Trustee, all legal and beneficial title
to the Existing Equipment Subleases, and the Lessee shall have all legal and
beneficial title to the Existing Pledged Equipment Leases, free and clear of all
Liens (other than in each case Permitted Liens of the type described in clauses
(iii), (iv) and (v) of the definition thereof), and such assignment will not be
void or voidable under any applicable law; and (iv) all of the Units delivered
on the Closing Date are subject to Sublease by Sublessees under the Existing
Equipment Subleases and all of the Pledged Units delivered on the Closing Date
under the Existing Pledged Equipment Leases are subject to lease by Pledged
Equipment Lessees on rental and other terms which are no different, taken as a
whole, from those for similar railcars in the rest of the TILC Fleet;

                  (m) the written information provided by the Lessee or on
behalf of the Lessee to the Owner Participant and/or the Loan Participant in
each document set forth on Schedule 3.2(m) hereto does not contain any untrue
statement of a material fact and does not omit a material fact necessary to make
the statements contained therein, in light of the circumstances under which they
were made, not misleading. The assumptions and related financial information
relating to the proposed business and operations of the Lessee and the
Partnership Fleet which are contained in the information on Schedule 3.2(m) have
been prepared in good faith based upon information that the Lessee deems fair
and reasonable, and there are no statements or conclusions therein which are
based on or include information known to the Lessee to be misleading in any
material respect or which fail to take into account material information known
to the Lessee regarding the matters stated therein. Certain information
contained in the information on Schedule 3.2(m) (e.g. statistical information
relating to renewal and remarketing of railcars, potential increases in



                                          Participation Agreement (TRLI 2001-1A)
                                       22
<PAGE>

absolute or nominal railcar lease rates, anticipated utilization, and
maintenance costs) is based on the historical experience of TILC. Subject to the
foregoing, there can be no assurance that past experience will be indicative of
future performance with respect to these or other operating and marketing
factors set forth in the information on Schedule 3.2(m);

                  (n) the Lessee and the Partners are not engaged in the
business of extending credit for the purposes of purchasing or carrying margin
stock, and no proceeds of the Equipment Note or the Owner Participant's
Commitment as contemplated by this Agreement and the other Operative Agreements
will be used by the Lessee or any Partner for a purpose which violates, or would
be inconsistent with, Section 7 of the Securities Exchange Act of 1934, as
amended, or Regulations T, U and X of the Federal Reserve System. Terms for
which meanings are provided in Regulations T, U and X of the Federal Reserve
System or any regulations substituted therefor, as from time to time in effect,
are used in this Section 3.2(n) with such meanings;

                  (o) the Lessee is not in violation of any term of any of its
organizational documents or any other agreement or instrument to which it is a
party or by which it may be bound. The Lessee is in compliance with all laws,
ordinances, governmental rules and regulations to which it is subject and the
Lessee has obtained all required licenses, permits, franchises and other
governmental authorizations material to the conduct of its business;

                  (p) on the Closing Date, all sales, use or transfer taxes, if
any, due and payable upon the purchase of the Equipment described on Schedule 1
hereto by the Lessee from TILC and by the Owner Trustee from the Lessee and upon
the lease thereof by the Owner Trustee to the Lessee and, if applicable, upon
the assignment of the Existing Equipment Subleases from TILC to the Lessee and
by the Lessee to the Owner Trustee and upon the purchase of the Pledged
Equipment by the Lessee from TILC and, if applicable, upon the assignment of the
Existing Pledged Equipment Leases from TILC to the Lessee, will have been paid
or such transactions will then be exempt from any such taxes, and the Lessee
will cause any required forms or reports in connection with such taxes to be
filed in accordance with applicable laws and regulations. No taxes, fees or
other charges in connection with the execution and delivery of the Operative
Agreements or the issuance and sale of the Equipment Note to be delivered on the
Closing Date are payable;

                  (q) no broker's or finder's or placement fee or commission
will be payable with respect to the transactions contemplated by the Operative
Agreements as a result of any action by the Lessee, except for the fees of the
Arrangers, which shall be included in Transaction Costs as provided in this
Agreement, and the Lessee agrees that it will hold the Participants, the
Indenture Trustee, the Pass Through



                                          Participation Agreement (TRLI 2001-1A)
                                       23
<PAGE>

Trustee and the Owner Trustee harmless from any claim, demand or liability for
broker's or finder's or placement fees or commission alleged to have been
incurred as a result of any action by the Lessee in connection with this
transaction;

                  (r) (i) each Unit delivered on the Closing Date, taken as a
whole, and each major component thereof, complies in all material respects with
all applicable laws and regulations, conforms with the specifications for such
Unit contained in the Appraisal referred to in Section 4.3(a) hereof (to the
extent a copy of such Appraisal or a relevant excerpt therefrom has been
delivered to the Lessee) and is substantially complete such that it is ready and
available to operate in commercial service and otherwise perform the function
for which it was designed; and the railcar identification marks shown on
Schedule 1 are the marks presently used on the Units of Equipment set forth on
Schedule 1 and (ii) each Pledged Unit, taken as a whole, and each major
component thereof, complies in all material respects with all applicable laws
and regulations, conforms with the specifications for such Pledged Unit
contained in the Appraisal referred to in Section 4.3(a) hereof (to the extent a
copy of such Appraisal or a relevant excerpt therefrom has been delivered to the
Lessee) and is substantially complete such that it is ready and available to
operate in commercial service and otherwise perform the function for which it
was designed; and the railcar identification marks shown on Schedule 1-A are the
marks presently used on the Pledged Units; and

                  (s) neither the Lessee nor any Partner is subject to
regulation as a "holding company," an "affiliate" of a "holding company," or a
"subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended.

         Section 3.3 Representations and Warranties of the Indenture Trustee.
The Indenture Trustee represents and warrants to the Owner Participant, the
Owner Trustee, the Pass Through Trustee, TILC, TRMI and the Lessee that, as of
the date hereof:

                  (a) the Indenture Trustee is a national banking association
duly incorporated, validly existing and in good standing under the laws of the
United States and has the full corporate power, authority and legal right under
the laws of the State of Illinois and the United States pertaining to its
banking, trust and fiduciary powers to execute, deliver and perform its
obligations under each of the Indenture Trustee Agreements;

                  (b) the execution, delivery and performance by the Indenture
Trustee of each of the Indenture Trustee Agreements have been duly authorized by
the Indenture Trustee and will not violate any applicable federal or Illinois
law governing its banking or trust powers or its charter documents or bylaws or
the



                                          Participation Agreement (TRLI 2001-1A)
                                       24
<PAGE>

provisions of any indenture, mortgage, contract or other agreement to which it
is a party or by which it or any of its properties may be bound or affected;

                  (c) this Agreement has been duly executed and delivered and
constitutes, and each of the other Indenture Trustee Agreements, when executed
and delivered, will constitute (assuming the due authorization, execution and
delivery by each other party thereto) the legal, valid and binding obligation of
the Indenture Trustee, enforceable against the Indenture Trustee in accordance
with its terms except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general principles of equity;

                  (d) there are no proceedings pending or, to the knowledge of
the Indenture Trustee, threatened, and to the knowledge of the Indenture Trustee
there is no existing basis for any such proceedings, against or affecting the
Indenture Trustee in or before any court or before any governmental authority or
arbitration board or tribunal which, individually or in the aggregate, if
adversely determined, might impair the ability of the Indenture Trustee to
perform its obligations under the Indenture Trustee Agreements;

                  (e) no authorization or approval or other action by, and no
notice to or filing with, any stockholder, trustee or holder of indebtedness or
any federal or Illinois state governmental authority or regulatory body
governing the Indenture Trustee in its trust capacity, is required for the due
execution, delivery and performance by the Indenture Trustee of the Indenture
Trustee Agreements, except as have been previously obtained, given or taken;

                  (f) the Indenture Trustee is not in default under any of the
Indenture Trustee Agreements; and

                  (g) neither the Indenture Trustee, nor any Person authorized
to act on behalf of the Indenture Trustee, has directly or indirectly offered
any interest in the Trust Estate or the Equipment Note or any security similar
to either thereof related to this transaction for sale to, or solicited offers
to buy any of the same from, or otherwise approached or negotiated with respect
to any of the same with, any Person other than the Pass Through Trustee and the
Initial Purchasers.

         Section 3.4 Representations, Warranties and Covenants Regarding
Beneficial Interest, Equipment Note and Pass Through Certificates.

                  (a) Owner Trustee and Trust Company. Each of the Owner Trustee
and the Trust Company represents and warrants to the Lessee, the Indenture
Trustee, the Pass Through Trustee, TILC, TRMI and the Owner Participant that, as
of



                                          Participation Agreement (TRLI 2001-1A)
                                       25
<PAGE>

the date hereof and as of the Closing Date, except as expressly provided in the
Operative Agreements, neither the Owner Trustee, nor the Trust Company nor any
Person authorized or employed by the Owner Trustee or the Trust Company as agent
or otherwise has directly or indirectly offered or sold any interest in the
Beneficial Interest, the Equipment Note, the Pass Through Certificates or any
part thereof, or in any similar security or lease, the offering of which for the
purposes of the Securities Act would be deemed to be part of the same offering
as the offering of the Beneficial Interest, the Equipment Note, the Pass Through
Certificates or any part thereof or solicited any offer to acquire any of the
same in violation of the registration requirements of Section 5 of the
Securities Act.

                  (b) Lessee. The Lessee represents and warrants to the Owner
Trustee, the Indenture Trustee, the Owner Participant and the Pass Through
Trustee that, as of the date hereof and as of the Closing Date, neither the
Lessee nor any Person authorized or employed by the Lessee as agent or otherwise
has directly or indirectly offered or sold any interest in the Beneficial
Interest, the Equipment Note, the Pass Through Certificates or any part thereof,
the offering of which for the purposes of the Securities Act would be deemed to
be part of the same offering as the offering of the Beneficial Interest, the
Equipment Note, the Pass Through Certificates or any part thereof or solicited
any offer to acquire any of the same in violation of the registration
requirements of Section 5 of the Securities Act.

                  (c) TRMI. TRMI represents and warrants to the Owner Trustee,
the Indenture Trustee, the Owner Participant and the Pass Through Trustee that,
as of the date hereof and as of the Closing Date, neither TRMI nor any Person
authorized or employed by TRMI as agent or otherwise has directly or indirectly
offered or sold any interest in the Beneficial Interest, the Equipment Note, the
Pass Through Certificates or any part thereof, the offering of which for the
purposes of the Securities Act would be deemed to be part of the same offering
as the offering of the Beneficial Interest, the Equipment Note, the Pass Through
Certificates or any part thereof or solicited any offer to acquire any of the
same in violation of the registration requirements of Section 5 of the
Securities Act.

                  (d) TILC. TILC represents and warrants to the Owner Trustee,
the Indenture Trustee, the Owner Participant and the Pass Through Trustee that,
as of the date hereof and as of the Closing Date, neither TILC nor any Person
authorized or employed by TILC as agent or otherwise has directly or indirectly
offered or sold any interest in the Beneficial Interest, the Equipment Note, the
Pass Through Certificates or any part thereof, the offering of which for the
purposes of the Securities Act would be deemed to be part of the same offering
as the offering of the Beneficial Interest, the Equipment Note, the Pass Through
Certificates or any part thereof or solicited any offer to acquire any of the
same in violation of the registration requirements of Section 5 of the
Securities Act.



                                          Participation Agreement (TRLI 2001-1A)
                                       26
<PAGE>

                  (e) Owner Participant. The Owner Participant represents and
warrants to the Owner Trustee, the Indenture Trustee, TILC, TRMI, the Lessee and
the Pass Through Trustee that, as of the date hereof and as of the Closing Date,
neither the Owner Participant nor any Person authorized or employed by the Owner
Participant as agent or otherwise has directly or indirectly offered or sold any
interest in the Beneficial Interest, the Equipment Note, the Pass Through
Certificates or any part thereof, or in any similar security or lease, the
offering of which for the purposes of the Securities Act would be deemed to be
part of the same offering as the offering of the Beneficial Interest, the
Equipment Note, the Pass Through Certificates or any part thereof or solicited
any offer to acquire any of the same in violation of the registration
requirements of Section 5 of the Securities Act.

                  (f) Pass Through Trustee. The Pass Through Trustee represents
and warrants to the Owner Trustee, the Indenture Trustee, TILC, TRMI, the Lessee
and the Owner Participant that, as of the date hereof and as of the Closing
Date, neither the Pass Through Trustee nor any Person authorized or employed by
the Pass Through Trustee as agent or otherwise has directly or indirectly
offered or sold any interest in the Beneficial Interest, the Equipment Note, the
Pass Through Certificates or any part thereof, the offering of which for the
purposes of the Securities Act would be deemed to be part of the same offering
as the offering of the Beneficial Interest, the Equipment Note, the Pass Through
Certificates or any part thereof or solicited any offer to acquire any of the
same in violation of the registration requirements of Section 5 of the
Securities Act.

                  (g) Future Actions. Each of the Owner Trustee, the Trust
Company, the Owner Participant, the Lessee, TILC, TRMI, the Indenture Trustee
and the Pass Through Trustee agrees, as to its own actions only, severally but
not jointly, that neither the Owner Trustee, the Trust Company, the Owner
Participant, the Lessee, TILC, TRMI, the Indenture Trustee nor the Pass Through
Trustee nor anyone acting on behalf of the Owner Trustee, the Trust Company, the
Owner Participant, the Lessee, TILC, TRMI, the Indenture Trustee or the Pass
Through Trustee will offer the Beneficial Interest, the Equipment Note, the Pass
Through Certificates or any part thereof or any similar interest for issue or
sale to any prospective purchaser, or solicit any offer to acquire any of the
Beneficial Interest, the Equipment Note, the Pass Through Certificates or any
part thereof so as to cause Section 5 of the Securities Act to apply to the
issuance and sale of the Beneficial Interest, the Equipment Note, the Pass
Through Certificates or any part thereof.

         Section 3.5 Representations and Warranties of the Owner Participant.
The Owner Participant represents and warrants to the Owner Trustee, the
Indenture Trustee, the Pass Through Trustee, TILC, TRMI and the Lessee that, as
of the date hereof:



                                          Participation Agreement (TRLI 2001-1A)
                                       27
<PAGE>

                  (a) the Owner Participant is a limited partnership duly
formed, validly existing and in good standing under the laws of the State of
Delaware and has full limited partnership power and authority to carry on its
business as now conducted;

                  (b) the Owner Participant has the requisite limited
partnership power and authority to execute, deliver and perform its obligations
under the Owner Participant Agreements, and the execution, delivery and
performance by it thereof do not and will not contravene any law or regulation,
or any order of any court or governmental authority or agency applicable to or
binding on the Owner Participant or any of its properties, or contravene the
provisions of, or constitute a default under, or result in the creation of any
Lien (other than such as are created by the Operative Agreements) upon the
Equipment under, its Certificate of Limited Partnership, limited partnership
agreement or any indenture, mortgage, contract or other agreement or instrument
to which the Owner Participant is a party or by which it or any of its
properties may be bound or affected;

                  (c) the Owner Participant Agreements have been duly authorized
by all necessary actions on the part of the Owner Participant and its general
partner, do not require any approval not already obtained of the partners of the
Owner Participant or any approval or consent not already obtained of any trustee
or holders of indebtedness or obligations of the Owner Participant, have been,
or on or before the Closing Date will be, duly executed and delivered by the
general partner of the Owner Participant in its capacity as general partner of
the Owner Participant and (assuming the due authorization, execution and
delivery by each other party thereto) constitute, or will constitute, the legal,
valid and binding obligations of the Owner Participant, enforceable against the
Owner Participant in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting the rights of creditors generally and by general
principles of equity;

                  (d) no authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery or performance by the Owner Participant
of the Trust Agreement, the Tax Indemnity Agreement or this Agreement;

                  (e) the Trust Estate is free and clear of any Lessor's Lien
attributable to the Owner Participant;

                  (f) there are no pending or, to the Owner Participant's
knowledge, threatened actions or proceedings against the Owner Participant
before any court or administrative agency which would materially adversely
affect the Owner



                                          Participation Agreement (TRLI 2001-1A)
                                       28
<PAGE>

Participant's ability to perform its obligations under the Trust Agreement, the
Tax Indemnity Agreement or this Agreement;

                  (g) as of the Closing Date, the Owner Participant is
purchasing the Beneficial Interest to be acquired by it for its own account with
no present intention of distributing such Beneficial Interest or any part
thereof in any manner which would violate the Securities Act, but without
prejudice, however, to the right of the Owner Participant at all times to sell
or otherwise dispose of all or any part of such Beneficial Interest in
compliance with the Securities Act and any state securities or "blue sky" laws;
provided, however, that subject to the provisions of Section 6.1, the
disposition of the Beneficial Interest shall at all times be within the Owner
Participant's control. The Owner Participant acknowledges that its Beneficial
Interest has not been registered under the Securities Act, and that neither the
Owner Participant, the Owner Trustee, Trust Company, the Lessee, TRMI nor TILC
contemplates filing, or is legally required to file, any such registration
statement. Notwithstanding the foregoing, the Owner Participant makes no
representation that the Beneficial Interest is a "security" within the meaning
of such term under the Securities Act;

                  (h) with respect to the source of the amount to be invested by
the Owner Participant pursuant to Section 2.2, no part of such amount
constitutes assets of any employee benefit plan subject to Title I of ERISA or
Section 4975 of the Code; and

                  (i) no broker's or finder's or placement fee or commission
will be payable with respect to the transactions contemplated by the Operative
Agreements as a result of any action by the Owner Participant, and the Owner
Participant agrees that it will hold TILC, TRMI, the Lessee, the Indenture
Trustee, the Loan Participant and the Owner Trustee harmless from any claim,
demand or liability for broker's or finder's or placement fees or commission
alleged to have been incurred as a result of any action by the Owner Participant
in connection with this transaction.

         Section 3.6 Representations and Warranties of TILC. TILC represents and
warrants to each of the Owner Trustee, the Indenture Trustee and the
Participants, as of the date hereof:

                  (a) TILC is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Delaware, is duly licensed
or qualified and in good standing in each jurisdiction in which the failure to
so qualify would have a material adverse effect on its ability to carry on its
business as now conducted or to execute, deliver and perform its obligations
under the TILC Agreements, has the power and authority to carry on its business
as now conducted, and has the



                                          Participation Agreement (TRLI 2001-1A)
                                       29
<PAGE>

requisite power and authority to execute, deliver and perform its obligations
under the TILC Agreements;

                  (b) the TILC Agreements have been duly authorized by all
necessary corporate action, executed and delivered by TILC, and (assuming the
due authorization, execution and delivery by each other party thereto)
constitute the legal, valid and binding obligations of TILC, enforceable against
TILC in accordance with their respective terms except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and by general principles of equity;

                  (c) the execution, delivery and performance by TILC of each
TILC Agreement and compliance by TILC with all of the provisions thereof do not
and will not contravene (i) any law or regulation, or any order of any court or
governmental authority or agency applicable to or binding on TILC or any of its
properties, or (ii) the provisions of, or constitute a default by TILC under,
its certificate of incorporation or bylaws or (iii) any indenture, mortgage,
contract or other agreement or instrument to which TILC is a party or by which
TILC or any of its properties may be bound or affected except, with respect to
clause (iii), where such contravention would not materially adversely affect
TILC's ability to perform its obligations under the TILC Agreements or
materially adversely affect its financial condition or business;

                  (d) there are no proceedings pending or, to the knowledge of
TILC, threatened against TILC in any court or before any governmental authority
or arbitration board or tribunal which, if adversely determined, would
materially adversely affect TILC's ability to perform its obligations under the
TILC Agreements or materially adversely affect its financial condition or
business;

                  (e) TILC is not in violation of any term of any charter
instrument or bylaw or any other material agreement or instrument to which it is
a party or by which it may be bound except where such violation would not
materially adversely affect TILC's ability to perform its obligations under the
TILC Agreements or materially adversely affect its financial condition or
business. TILC is in compliance with all laws, ordinances, governmental rules
and regulations to which it is subject, the failure to comply with which would
have a material and adverse effect on its operations or condition, financial or
otherwise, or would impair the ability of TILC to perform its obligations under
the TILC Agreements, and has obtained all required licenses, permits, franchises
and other governmental authorizations material to the conduct of its business;

                  (f) no consent, approval or authorization of, or filing,
registration or qualification with, or the giving of notice to, any trustee or
any holder of



                                          Participation Agreement (TRLI 2001-1A)
                                       30
<PAGE>

indebtedness of TILC or any governmental authority on the part of TILC is
required in the United States in connection with the execution and delivery by
TILC of the TILC Agreements, or is required to be obtained in order for TILC to
perform its obligations thereunder in accordance with the terms thereof, other
than (i) as may be required under existing laws, ordinances, governmental rules
and regulations to be obtained, given, accomplished or renewed at any time after
the Closing Date in connection with the performance of its obligations under the
TILC Agreements and which are routine in nature and are not normally applied for
prior to the time they are required, and which TILC has no reason to believe
will not be timely obtained or (ii) as may be required under the Operative
Agreements in consequence of any transfer of ownership of the Equipment or the
Pledged Equipment occurring after the Closing Date;

                  (g) to the best knowledge of TILC, no casualty event or other
event that may constitute an Event of Loss under the Lease or a Pledged Unit
Event of Loss under the Collateral Agency Agreement has occurred as of the date
of this Agreement with respect to any Unit or Pledged Unit delivered on the
Closing Date;

                  (h) (i) TILC shall have, and the TILC Bill of Sale to be
delivered on the Closing Date shall convey to the Lessee, all legal and
beneficial title to the Units which are being delivered on the Closing Date,
free and clear of all Liens (other than Permitted Liens of the type described in
clause (ii) below with respect to the Existing Equipment Subleases, and in
clauses (iii), (iv) and (v) of the definition thereof), and such conveyance will
not be void or voidable under any applicable law; (ii) TILC shall have, and the
TILC Assignment to be delivered on the Closing Date shall assign to the Lessee,
all legal and beneficial title to the Existing Equipment Subleases, free and
clear of all Liens (other than Subleases of the Existing Equipment Subleases by
the Sublessees as expressly permitted by the Existing Equipment Subleases and
other than Permitted Liens of the type described in clauses (iii), (iv) and (v)
of the definition thereof), and such assignment will not be void or voidable
under any applicable law; (iii) all of the Units being delivered on the Closing
Date other than an immaterial amount shall be subject to Sublease by the
Sublessees under the Existing Equipment Subleases on rental and other terms
which are no different, taken as a whole, from those for similar railcars in the
rest of the TILC Fleet; (iv) TILC shall have, and the TILC Pledged Equipment
Bill of Sale to be delivered on the Closing Date shall convey to the Lessee, all
legal and beneficial title to the Pledged Units which are being delivered on the
Closing Date, free and clear of all Liens (other than Permitted Liens of the
type described in clause (v) below with respect to the Existing Pledged
Equipment Leases, and in clauses (iii), (iv) and (v) of the definition thereof),
and such conveyance will not be void or voidable under any applicable law; (v)
TILC shall have, and the TILC Pledged Equipment Assignment to be delivered on
the Closing Date shall assign to the Lessee, all legal and beneficial title to
the Existing Pledged Equipment Leases, free and clear of all Liens (other than



                                          Participation Agreement (TRLI 2001-1A)
                                       31
<PAGE>

leases of the Existing Pledged Equipment Leases by the Pledged Equipment Lessees
as expressly permitted by the Existing Pledged Equipment Leases and other than
Permitted Liens of the type described in clauses (iii), (iv) and (v) of the
definition thereof), and such assignment will not be void or voidable under any
applicable law; and (vi) all of the Pledged Units other than an immaterial
amount shall be subject to lease by the Pledged Equipment Lessees under the
Existing Pledged Equipment Leases on rental and other terms which are no
different, taken as a whole, from those for similar railcars in the rest of the
TILC Fleet;

                  (i) (a) all sales, use or transfer taxes, if any, due and
payable upon the sale of the Equipment and assignment of Existing Equipment
Subleases by TILC to the Lessee will have been paid or such transactions will
then be exempt from any such taxes and TILC will cause any required forms or
reports in connection with such taxes to be filed in accordance with applicable
laws and regulations; and (b) all sales, use or transfer taxes, if any, due and
payable upon the sale of the Pledged Equipment and assignment of Existing
Pledged Equipment Leases by TILC to the Lessee will have been paid or such
transactions will then be exempt from any such taxes and TILC will cause any
required forms or reports in connection with such taxes to be filed in
accordance with applicable laws and regulations;

                  (j) all Units delivered on the Closing Date and all Pledged
Units are substantially similar in terms of objectively identifiable
characteristics that are relevant for purposes of the services to be performed
by TILC under the Management Agreement to the equipment in the TILC Fleet;

                  (k) in selecting the Units to be sold on the Closing Date to
the Lessee pursuant to the TILC Bill of Sale and in selecting the Pledged Units
to be sold to the Lessee pursuant to the TILC Pledged Equipment Bill of Sale,
TILC has not discriminated against the Lessee in a negative fashion when such
Units and Pledged Units are compared with the other equipment in the TILC Fleet;

                  (l) the written information provided by TILC or on behalf of
TILC to the Owner Participant and/or the Loan Participant in each document set
forth on Schedule 3.2(m) hereto does not contain any untrue statement of a
material fact and does not omit a material fact necessary to make the statements
contained therein, in light of the circumstances under which they were made, not
misleading. The assumptions and related financial information relating to the
proposed business and operations of TILC and the Partnership Fleet which are
contained in the information on Schedule 3.2(m) have been prepared in good faith
based upon information that TILC deems fair and reasonable, and there are no
statements or conclusions therein which are based on or include information
known to TILC to be misleading in any material respect or which fail to take
into account material information known to TILC regarding the matters stated
therein. Certain information contained in the



                                          Participation Agreement (TRLI 2001-1A)
                                       32
<PAGE>

information on Schedule 3.2(m) (e.g. statistical information relating to renewal
and remarketing of railcars, potential increases in absolute or nominal railcar
lease rates, anticipated utilization, and maintenance costs) is based on the
historical experience of TILC. Subject to the foregoing, there can be no
assurance that past experience will be indicative of future performance with
respect to these or other operating and marketing factors set forth in the
information on Schedule 3.2(m);

                  (m) the representations and warranties of the Lessee contained
in Section 3.2(h), clause (iv) of Section 3.2(l), the first sentence of Section
3.2(p) and in Section 3.2(r) (to the extent a copy of such Appraisal or a
relevant excerpt therefrom has been delivered to TILC) are true and correct as
of the date hereof;

                  (n) TILC is not in default under any Existing Equipment
Subleases or Existing Pledged Equipment Leases, and, to the best of the TILC's
knowledge, there are (i) no defaults by any Sublessee or Pledged Equipment
Lessee thereunder existing as of the date hereof under the Existing Equipment
Subleases or Existing Pledged Equipment Leases, except such defaults as are not
material, (ii) no claims or liabilities arising as a result of the operation or
use of any Unit described on Schedule 1 hereto prior to the date hereof as to
which the Lessor, as owner of the Units delivered on the Closing Date, would be
liable and (iii) no claims or liabilities arising as a result of the operation
or use of any Pledged Unit prior to the date hereof as to which the Lessee, as
owner of the Pledged Units, would be liable;

                  (o) (i) as of the Closing Date, TILC shall have provided, or
caused to be provided, in either case in accordance with the terms of the
relevant Existing Equipment Sublease, a notice relating to each Existing
Equipment Sublease (which notice shall be substantially in the form attached
hereto as Exhibit D) to the related Sublessee under such Existing Equipment
Sublease and (ii) as of the Closing Date, TILC shall have provided, or caused to
be provided, in either case in accordance with the terms of the relevant
Existing Pledged Equipment Lease, a notice relating to each Existing Pledged
Equipment Lease (which notice shall be substantially in the form attached hereto
as Exhibit D) to the related Pledged Equipment Lessee under such Existing
Pledged Equipment Lease;

                  (p) (i) the balance sheet of TILC as of March 31, 2000, and
the related statements of operations, stockholders' equity and cash flows for
the period then ended, and (ii) the balance sheet of TILC as of December 31,
2000 and the related statements of income and cash flows of TILC for the nine
month period beginning on April 1, 2000 and ending on December 31, 2000, have
been prepared in accordance with generally accepted accounting principles
(except as may be stated in the notes thereto and except, with respect to
interim financial statements, for year-end audit adjustments), consistently
applied, and fairly set forth, in all material



                                          Participation Agreement (TRLI 2001-1A)
                                       33
<PAGE>

respects, the financial condition of TILC as of such dates and the results of
their operations and cash flows for such periods; and

                  (q) TILC is not engaged in the business of extending credit
for the purposes of purchasing or carrying margin stock, and no proceeds of the
Equipment Note or the Owner Participant's Commitment as contemplated by this
Agreement and the other Operative Agreements will be used by TILC for a purpose
which violates, or would be inconsistent with, Section 7 of the Securities
Exchange Act of 1934, as amended, or Regulations T, U and X of the Federal
Reserve System. Terms for which meanings are provided in Regulations T, U and X
of the Federal Reserve System or any regulations substituted therefor, as from
time to time in effect, are used in this Section 3.6(q) with such meanings.

         Section 3.7 Representations and Warranties of TRMI. TRMI represents and
warrants to the Indenture Trustee, the Owner Trustee and the Participants, as of
the date hereof:

                  (a) TRMI is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Delaware, is duly licensed
or qualified and in good standing in each jurisdiction in which the failure to
so qualify would have a material adverse effect on its ability to carry on its
business as now conducted or to execute, deliver and perform its obligations
under the TRMI Agreements, has the power and authority to carry on its business
as now conducted, and has the requisite power and authority to execute, deliver
and perform its obligations under the TRMI Agreements;

                  (b) the TRMI Agreements have been duly authorized by all
necessary corporate action, executed and delivered by TRMI, and (assuming the
due authorization, execution and delivery by each other party thereto)
constitute the legal, valid and binding obligations of TRMI, enforceable against
TRMI in accordance with their respective terms except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and by general principles of equity;

                  (c) the execution, delivery and performance by TRMI of each
TRMI Agreement and compliance by TRMI with all of the provisions thereof do not
and will not contravene (i) any law or regulation, or any order of any court or
governmental authority or agency applicable to or binding on TRMI or any of its
properties, or (ii) the provisions of, or constitute a default by TRMI under,
its certificate of incorporation or bylaws or (iii) any indenture, mortgage,
contract or other agreement or instrument to which TRMI is a party or by which
TRMI or any of its properties may be bound or affected except, with respect to
clause (iii) above, where such contravention would not materially adversely
affect TRMI's ability to



                                          Participation Agreement (TRLI 2001-1A)
                                       34
<PAGE>

perform its obligations under the TRMI Agreements or materially adversely affect
its financial condition or business;

                  (d) there are no proceedings pending or, to the knowledge of
TRMI, threatened against TRMI in any court or before any governmental authority
or arbitration board or tribunal which, if adversely determined, would
materially adversely affect TRMI's ability to perform its obligations under the
TRMI Agreements or materially adversely affect its financial condition or
business;

                  (e) TRMI is not in violation of any term of any charter
instrument or bylaw or any other material agreement or instrument to which it is
a party or by which it may be bound except where such violation would not
materially adversely affect TRMI's ability to perform its obligations under the
TRMI Agreements or materially adversely affect its financial condition or
business. TRMI is in compliance with all laws, ordinances, governmental rules
and regulations to which it is subject, the failure to comply with which would
have a material and adverse effect on its operations or condition, financial or
otherwise, or would impair the ability of TRMI to perform its obligations under
the TRMI Agreements, and has obtained all licenses, permits, franchises and
other governmental authorizations material to the conduct of its business;

                  (f) no consent, approval or authorization of, or filing,
registration or qualification with, or the giving of notice to, any trustee or
any holder of indebtedness of TRMI or any governmental authority on the part of
TRMI is required in the United States in connection with the execution and
delivery by TRMI of the TRMI Agreements, or is required to be obtained in order
for TRMI to perform its obligations thereunder in accordance with the terms
thereof, other than those which (i) are routine in nature and are not normally
applied for prior to the time they are required, and which TRMI has no reason to
believe will not be timely obtained or (ii) the failure to obtain would not have
a material and adverse effect on its operations or condition, financial or
otherwise, or would impair the ability of TRMI to perform its obligations under
the TRMI Agreements;

                  (g) the written information provided by TRMI or on behalf of
TRMI to the Owner Participant and/or the Loan Participant in each document set
forth on Schedule 3.2(m) hereto as of the date such information was provided to
the Owner Participant and/or the Loan Participant, as the case may be, did not
contain any untrue statement of a material fact and did not omit a material fact
necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading. No representation or
warranty is given with respect to any forecasts or projections included therein
or omitted therefrom;



                                          Participation Agreement (TRLI 2001-1A)
                                       35
<PAGE>

                  (h) the representations and warranties of the Lessee contained
in Sections 3.2(a), (b), (c), (d), (e), (f), (g), (i), (j), (k), clauses (i),
(ii) and (iii) of (l), (m), (n), (o), (p) other than the first sentence thereof,
(q) and (s) are true and correct as of the date hereof (except with respect to
representations and warranties made as of an earlier date, in which case such
representations and warranties shall be true as of such earlier date); and

                  (i) (x) the balance sheet of TRMI as of March 31, 2000, and
the related statements of operations, stockholders' equity and cash flows for
the period then ended, and (y) the balance sheet of TRMI as of December 31, 2000
and the related statements of income and cash flows of TRMI for the nine month
period beginning on April 1, 2000 and ending on December 31, 2000, have been
prepared in accordance with generally accepted accounting principles (except as
may be stated in the notes thereto and except, with respect to interim financial
statements, for year-end audit adjustments), consistently applied, and fairly
set forth, in all material respects, the financial condition of TRMI as of such
dates and the results of their operations and cash flows for the periods then
ended.

         Section 3.8 Representations and Warranties of the Pass Through Trustee.
The Pass Through Trustee represents and warrants to the Owner Trustee, the
Indenture Trustee, the Owner Participant, TILC, TRMI and the Lessee that, as of
the date hereof:

                  (a) the Pass Through Trustee is a national banking association
duly organized and validly existing in good standing under the laws of the
United States of America and has the full corporate power, authority and legal
right under the laws of the United States of America and the State of Illinois
pertaining to its banking, trust and fiduciary powers to execute, deliver and
perform its obligations under the Pass Through Trustee Agreements and the Pass
Through Documents to which it is a party;

                  (b) this Agreement has been, and on the Closing Date, each of
the other Pass Through Trustee Agreements will have been, duly authorized,
executed and delivered by the Pass Through Trustee; this Agreement constitutes,
and on the Closing Date, each of the other Pass Through Trustee Agreements will
constitute, the legal, valid and binding obligations of the Pass Through
Trustee, enforceable against the Pass Through Trustee in accordance with their
respective terms except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general principles of equity;

                  (c) the execution, delivery and performance by the Pass
Through Trustee of each of the Pass Through Trustee Agreements, the purchase by
the Pass



                                          Participation Agreement (TRLI 2001-1A)
                                       36
<PAGE>

Through Trustee of the Equipment Note pursuant to this Agreement, and the
issuance of the Pass Through Certificates pursuant to the Pass Through Trust
Agreement, do not contravene any law, rule or regulation of any federal or
Illinois governmental authority or agency regulating the Pass Through Trustee's
banking, trust or fiduciary powers or any judgment or order applicable to or
binding on the Pass Through Trustee and do not contravene or result in any
breach of, or constitute a default under, the Pass Through Trustee's articles of
association or bylaws or any agreement or instrument to which the Pass Through
Trustee is a party or by which it or any of its properties may be bound or
affected;

                  (d) neither the execution and delivery by the Pass Through
Trustee of each of the Pass Through Trustee Agreements nor the consummation by
the Pass Through Trustee of any of the transactions contemplated thereby,
requires the consent or approval of, the giving of notice to, or the
registration with, or the taking of any other action with respect to, any
federal or Illinois governmental authority or agency regulating the Pass Through
Trustee's banking, trust or fiduciary powers;

                  (e) there are no pending or, to its knowledge, threatened
actions or proceedings against the Pass Through Trustee before any court or
administrative agency which individually or in the aggregate, if determined
adversely to it, would materially adversely affect the ability of the Pass
Through Trustee to perform its obligations under any of the Pass Through Trustee
Agreements;

                  (f) the Pass Through Trustee is not in default under any Pass
Through Trustee Agreement;

                  (g) the Pass Through Trustee does not directly or indirectly
control, and is not directly or indirectly controlled by or under common control
with, the Owner Participant, the Owner Trustee, the Initial Purchasers, TILC,
TRMI or the Lessee;

                  (h) the Pass Through Trustee is purchasing the Equipment Note
for the purposes contemplated by the Operative Agreements and not with a view to
the transfer or distribution of any Equipment Note to any other Person, except
as contemplated by the Operative Agreements; and

                  (i) except for the issue and sale of the Pass Through
Certificates contemplated hereby and by the other Pass Through Trustee
Agreements, the Pass Through Trustee has not directly or indirectly offered any
Equipment Note or Pass Through Certificate or any interest in or to the Trust
Estate, the Trust Agreement or any similar interest for sale to, or solicited
any offer to acquire any of the same from, anyone other than the Owner Trustee
and the Owner Participant, and the Pass Through Trustee has not authorized
anyone to act on its behalf to offer directly or



                                          Participation Agreement (TRLI 2001-1A)
                                       37
<PAGE>

indirectly any Equipment Note, any Pass Through Certificate or any interest in
and to the Trust Estate, the Trust Agreement or any similar interest related to
this transaction for sale to, or to solicit any offer to acquire any of the same
from, any Person other than the Owner Trustee and the Owner Participant.

         Section 3.9 Opinion Acknowledgment. Each of the parties hereto, with
respect to such party, expressly consents to the rendering by its counsel of the
opinion referred to in Section 4.1(e) and acknowledges that such opinion shall
be deemed to be rendered at the request and upon the instructions of such party.

SECTION 4.        CLOSING CONDITIONS.

         Section 4.1 Conditions Precedent to Investment by Each Participant. The
obligation of each Participant to make the investment specified with respect to
such Participant in Section 2 on the Closing Date shall be subject to the
satisfaction or waiver of the following conditions precedent (except that the
obligations of any Person shall not be subject to such Person's own performance
or compliance):

                  (a) Execution of Operative Agreements. On or before the
Closing Date, this Agreement, the Trust Agreement, the Lease, the Lease
Supplement in respect of the Units delivered on the Closing Date, the Indenture,
the Indenture Supplement in respect of the Units delivered on the Closing Date,
the Equipment Note, the Pass Through Documents, the Management Agreement, the
Insurance Agreement, the Transfer and Assignment Agreement, the Pledged
Equipment Transfer and Assignment Agreement, the TILC Bill of Sale, the Pledged
Equipment Bill of Sale, the TILC Pledged Equipment Assignment, the TILC
Assignment, the Bill of Sale, the Assignment, the Collateral Agency Agreement,
the Administrative Services Agreement, the OP Guaranty, the Control Agreement
and the Trinity Guaranty shall each be satisfactory in form and substance to
such Participant, shall have been duly executed and delivered by the parties
thereto (except that the execution and delivery of the documents referred to
above (other than this Agreement) by a party hereto or thereto shall not be a
condition precedent to such party's obligations hereunder), shall each be in
full force and effect, and executed counterparts of each shall have been
delivered to such Participant or its counsel on or before the Closing Date; and
no event shall have occurred and be continuing that constitutes a Lease Default
or an Indenture Default.

                  (b) Recordation and Filing. On or before the Closing Date
(except as expressly stated below), the Lessee shall have caused the Lease, the
Lease Supplement, the Indenture and the Indenture Supplement (each in respect of
Units delivered on the Closing Date), the Collateral Agency Agreement in respect
of the Pledged Units delivered on the Closing Date, the Pledged Equipment Bill
of Sale, the TILC Bill of Sale, the Bill of Sale, the TILC Assignment, the TILC
Pledged



                                          Participation Agreement (TRLI 2001-1A)
                                       38
<PAGE>

Equipment Assignment and the Assignment to be duly filed, recorded and deposited
in memorandum form with the STB in conformity with 49 U.S.C. Section 11301 and
with the Registrar General of Canada pursuant to Section 105 of the Canada
Transportation Act, and all necessary actions shall have been taken to cause
publication of notice of such deposit in The Canada Gazette in accordance with
said Section 105 and all appropriate Uniform Commercial Code financing
statements to be filed where necessary or reasonably advisable within 10 days
after the Closing Date, and the Lessee shall furnish the Indenture Trustee, the
Owner Trustee, the Collateral Agent and each Participant proof thereof. Without
limiting the representations and warranties set forth in any Operative
Agreement, by such recording or filing of the Lease (or a financing statement or
similar notice thereof), the Owner Trustee and the Lessee are not acknowledging
or implying that the Lease constitutes a "security agreement" or creates a
"security interest" within the meaning of the Uniform Commercial Code in any
applicable jurisdiction.

                  (c) Representations and Warranties of the Lessee. On the
Closing Date, the representations and warranties of the Lessee contained in
Section 3.2 and Section 3.4(b) hereof shall be true and correct in all material
respects as of the Closing Date as though then made on and as of such date,
except to the extent that such representations and warranties relate solely to
an earlier date (in which case such representations and warranties were true and
correct on and as of such earlier date), and each of the Owner Trustee, the
Indenture Trustee and the Participants shall have received an Officer's
Certificate to such effect dated such date from the General Partner of the
Lessee certifying to the foregoing matters, and the Lessee shall have performed
and complied with all agreements and conditions herein contained which are
required to be performed or complied with by the Lessee on or before said date.

                  (d) Representations and Warranties of the Owner Trustee. On
the Closing Date, the representations and warranties of the Trust Company and
the Owner Trustee contained in Section 3.1 and Section 3.4(a) shall be true and
correct in all material respects as of the Closing Date as though then made on
and as of such date except to the extent that such representations and
warranties relate solely to an earlier date (in which case such representations
and warranties were true and correct on and as of such earlier date), and each
of the Lessee, the Indenture Trustee, TILC, TRMI and the Participants shall have
received an Officer's Certificate to such effect dated such date from the Trust
Company (in respect of the Trust Company) and the Owner Trustee (in respect of
the Owner Trustee), and the Trust Company and the Owner Trustee shall have
performed and complied with all agreements and conditions herein contained which
are required to be performed or complied with by the Trust Company and the Owner
Trustee, respectively, on or before said date.

                  (e) Opinions of Counsel. On the Closing Date, the Owner
Trustee, the Indenture Trustee and each Participant shall have received the
favorable



                                          Participation Agreement (TRLI 2001-1A)
                                       39
<PAGE>

written opinion of each of (i) Skadden, Arps, Slate, Meagher & Flom (Illinois),
special counsel for the Lessee, TILC, Trinity and TRMI, substantially in the
form of Exhibit E-1, (ii) counsel for the Lessee, TILC, Trinity and TRMI (which
counsel shall be the General Counsel of Trinity), substantially in the form of
Exhibit E-2, (iii) Bingham Dana LLP, counsel to the Owner Trustee, substantially
in the form of Exhibit E-3, (iv) Winston & Strawn, special counsel to the Owner
Participant, substantially in the form of Exhibit E-4, (v) Philip Morris Capital
Corporation Legal Department, counsel to the Owner Participant, substantially in
the form of Exhibit E-5, (vi) Robert A. Wolz, Assistant Counsel to the
Indenture Trustee, substantially in the form of Exhibit E-6, (vii) Alvord &
Alvord, special STB counsel, substantially in the form of Exhibit E-7, (viii)
McCarthy Tetrault, special Canadian counsel, substantially in the form of
Exhibit E-8, (ix) Andrews & Kurth L.L.P., special counsel for the Collateral
Agent, substantially in the form of Exhibit E-9, (x) Robert A. Wolz, Assistant
Counsel to the Pass Through Trustee, substantially in the form of Exhibit E-10
and (xi) Morris, James, Hitchens & Williams, counsel for the Marks Company
Trust, substantially in the form of Exhibit E-11.

                  (f) Title. On the Closing Date, after giving effect to the
transactions contemplated hereby, (i) the Owner Trustee shall have all legal and
beneficial title to each Unit to be delivered on the Closing Date, free and
clear of all Liens (other than Permitted Liens of the type described in clause
(ii) below with respect to the Existing Equipment Subleases, and in clauses
(iii), (iv) and (v) of the definition thereof), (ii) the Owner Trustee shall
have received all right, title and interest of the Lessee in and to the Existing
Equipment Subleases, free and clear of all Liens (other than Subleases of the
Existing Equipment Subleases by the Sublessees as expressly permitted by the
Existing Equipment Subleases and other than Permitted Liens of the type
described in clauses (iii), (iv) and (v) of the definition thereof) and (iii)
each Sublessee under an Existing Equipment Sublease shall have been notified of
the assignment thereof to the Owner Trustee. In addition, (i) the Lessee shall
have all legal and beneficial title to each Pledged Unit to be delivered on the
Closing Date, free and clear of all Liens (other than Permitted Liens of the
type described in clause (ii) below with respect to the Existing Pledged
Equipment Leases, and in clauses (iii), (iv) and (v) of the definition thereof),
(ii) the Lessee shall have received all right, title and interest of TILC in and
to the Existing Pledged Equipment Leases, free and clear of all Liens (other
than Subleases of the Existing Pledged Equipment Leases by the Pledged Equipment
Lessees as expressly permitted by the Existing Pledged Equipment Leases and
other than Permitted Liens of the type described in clauses (iii), (iv) and (v)
of the definition thereof) and (iii) each Pledged Equipment Lessee under an
Existing Pledged Equipment Lease shall have been notified of the assignment
thereof to the Lessee.

                  (g) Bills of Sale; Assignments. On the Closing Date, each of
the following documents shall each have been duly executed and delivered: (i)
the TILC


                                          Participation Agreement (TRLI 2001-1A)
                                       40
<PAGE>

Bill of Sale and the Bill of Sale, in each case in form and substance reasonably
satisfactory to the Lessee, the Owner Trustee, the Indenture Trustee and the
Pass Through Trustee, dated such date and covering the Units to be delivered on
such date, transferring to the Owner Trustee and the Lessee, respectively, legal
and beneficial title to such Units free and clear of all Liens (other than
Permitted Liens of the type described in clause (ii) below with respect to the
Existing Equipment Subleases, and in clauses (iii), (iv) and (v) of the
definition thereof) and warranting to the Owner Trustee that at the time of
delivery of each such Unit, TILC and the Lessee, as the case may be, had legal
and beneficial title thereto and good and lawful right to sell the same, and
title thereto was free and clear of all Liens (other than Permitted Liens of the
type described in clause (ii) below with respect to the Existing Equipment
Subleases, and in clauses (iii), (iv) and (v) of the definition thereof and,
with respect to the TILC Bill of Sale, warranting that TILC shall be responsible
for discharging any Permitted Lien of the type described in subclause (iii) or
(iv) of the definition thereof which has attached as of the Closing Date), (ii)
the TILC Assignment and the Assignment, in each case in form and substance
reasonably satisfactory to the Lessee, the Owner Trustee, the Indenture Trustee
and the Pass Through Trustee, dated such date covering the Existing Equipment
Subleases, assigning to the Owner Trustee and Lessee respectively, all right,
title and interest of TILC and the Lessee, respectively, to the Existing
Equipment Subleases, free and clear of all Liens (other than Permitted Liens)
and warranting to the Lessee that, at the time of such assignment, TILC and the
Lessee, respectively, had legal and beneficial title to the Existing Equipment
Subleases and good and lawful right to sell the same, and title thereto was free
and clear of all Liens (other than Permitted Liens); (iii) the TILC Pledged
Equipment Bill of Sale in form and substance reasonably satisfactory to the
Lessee, the Owner Trustee, the Indenture Trustee and the Pass Through Trustee,
dated such date and covering the Pledged Units to be delivered on such date,
transferring to the Lessee legal and beneficial title to such Pledged Units free
and clear of all Liens (other than Permitted Liens of the type described in
clause (iv) below with respect to the Existing Pledged Equipment Leases, and in
clauses (iii), (iv) and (v) of the definition thereof) and warranting to the
Lessee that at the time of delivery of each such Pledged Unit, TILC had legal
and beneficial title thereto and good and lawful right to sell the same, and
title thereto was free and clear of all Liens (other than Permitted Liens of the
type described in clause (iv) below with respect to the Existing Pledged
Equipment Leases, and in clauses (iii), (iv) and (v) of the definition thereof
and warranting that TILC shall be responsible for discharging any Permitted Lien
of the type described in subclause (iii) or (iv) of the definition thereof which
has attached as of the Closing Date), and (iv) the TILC Pledged Equipment
Assignment in form and substance reasonably satisfactory to the Lessee, the
Owner Trustee, the Indenture Trustee and the Pass Through Trustee, dated such
date covering the Existing Pledged Equipment Leases, assigning to the Lessee all
right, title and interest of TILC to the Existing Pledged Equipment Leases, free
and clear of all Liens (other than Permitted Liens) and



                                          Participation Agreement (TRLI 2001-1A)
                                       41
<PAGE>

warranting to the Lessee that, at the time of such assignment, TILC had legal
and beneficial title to the Existing Pledged Equipment Leases and good and
lawful right to sell the same, and title thereto was free and clear of all Liens
(other than Permitted Liens);

                  (h) Insurance Certificate. On or before the Closing Date, the
Indenture Trustee and each Participant shall have received (x) each certificate
relating to insurance that is required pursuant to Section 12 of the Lease and
Section 6.4 of the Collateral Agency Agreement and (y) certificates from a
nationally recognized insurance broker substantially in the forms attached
hereto as Exhibits A-1 and A-2 with respect to the public liability insurance
required by Section 12.1(b) of the Lease and Section 6.4 of the Collateral
Agency Agreement.

                  (i) Corporate, Partnership, Limited Liability Company and
Other Organizational Documents. Each of the Participants shall have received
such documents and evidence with respect to Trinity, TILC, TRMI, the Lessee, the
General Partner, the Limited Partner, the Owner Participant, the Pass Through
Trustee, the Owner Trustee and the Indenture Trustee as the Participants may
reasonably request in order to establish the consummation of the transactions
contemplated by this Agreement and the taking of all corporate, limited
partnership and other proceedings in connection therewith.

                  (j) No Threatened Proceedings. No action or proceeding shall
have been instituted nor shall governmental action be threatened before any
court or governmental agency, nor shall any order, judgment or decree have been
issued or proposed to be issued by any court or governmental agency at the time
of the Closing Date, to set aside, restrain, enjoin or prevent the completion
and consummation of this Agreement or the transactions contemplated hereby.

                  (k) Representations and Warranties of the Owner Participant.
On the Closing Date, the representations and warranties of the Owner Participant
contained in Section 3.4(e) and Section 3.5 hereof shall be true and correct in
all material respects as of the Closing Date as though then made on and as of
such date, except to the extent that such representations and warranties relate
solely to an earlier date (in which case such representations and warranties
were true and correct on and as of such earlier date), and each of the Lessee,
TILC, TRMI, the Indenture Trustee and the Pass Through Trustee shall have
received an Officer's Certificate to such effect dated such date from the Owner
Participant, and the Owner Participant shall have performed and complied with
all agreements and conditions herein contained which are required to be
performed or complied with by the Owner Participant on or before said date.



                                          Participation Agreement (TRLI 2001-1A)
                                       42
<PAGE>

                  (l) Notice of Delivery. The Indenture Trustee and the
Participants shall have received the Notice of Delivery described in Section
2.3(a).

                  (m) Representations and Warranties of the Indenture Trustee.
On the Closing Date, the representations and warranties of the Indenture Trustee
contained in Section 3.3 hereof shall be true and correct in all material
respects as of the Closing Date as though then made on and as of such date,
except to the extent that such representations and warranties relate solely to
an earlier date (in which case such representations and warranties were true and
correct on and as of such earlier date), and each of the Lessee, TILC, TRMI, the
Owner Trustee and the Participants shall have received an Officer's Certificate
to such effect dated such date from the Indenture Trustee, and the Indenture
Trustee shall have performed and complied with all agreements and conditions
herein contained which are required to be performed or complied with by the
Indenture Trustee on or before said date.

                  (n) No Illegality. No change shall have occurred after the
execution and delivery of this Agreement in applicable law or regulations
thereunder or interpretations thereof by regulatory authorities that, in the
opinion of such Participant or its counsel, would make it illegal for such
Participant to enter into any transaction contemplated by the Operative
Agreements.

                  (o) Participants' Investments. (i) The Owner Participant shall
have made available the Owner Participant's Commitment in the amount specified
in, and otherwise in accordance with, Sections 2.2(a) and 2.3 and (ii) the Loan
Participant shall have made available the Loan Participant's Commitment in the
amount specified in, and otherwise in accordance with, Sections 2.2(b) and 2.3.

                  (p) Consents. All approvals and consents of any trustees or
holders of any indebtedness or obligations of the Lessee, Trinity, TILC and
TRMI, if any, required to have been obtained in connection with the transactions
contemplated by this Agreement and the other Operative Agreements shall have
been duly obtained and be in full force and effect.

                  (q) Governmental Actions. All actions, if any, required to
have been taken on or prior to the Closing Date in connection with the
transactions contemplated by this Agreement and the other Operative Agreements
on the Closing Date shall have been taken by any governmental or political
agency, subdivision or instrumentality of the United States, and all orders,
permits, waivers, exemptions, authorizations and approvals of such entities
required to be in effect on the Closing Date in connection with the transactions
contemplated by this Agreement and the other Operative Agreements on the Closing
Date shall have been issued, and all such orders, permits, waivers, exemptions,
authorizations and approvals shall be in full force and effect, on the Closing
Date.



                                          Participation Agreement (TRLI 2001-1A)
                                       43
<PAGE>

                  (r) Tax Indemnity Agreement. On or before the Closing Date,
the Tax Indemnity Agreement shall be satisfactory in form and substance to the
Owner Participant, shall have been duly executed and delivered by the Lessee and
the Guarantor and, assuming due authorization, execution and delivery by the
Owner Participant or one of its Affiliates, shall be in full force and effect.

                  (s) Appointment of Representative. The Owner Trustee shall
have authorized its representative, who shall be an individual designated by the
Lessee and acceptable to the Owner Trustee, to accept the Units being delivered
on the Closing Date from the Lessee and to deliver such Units to the Lessee. The
Lessee shall have authorized its representative (who shall be the same
individual designated by the Lessee under this Section 6.1(s)) to accept
delivery of such Units from the Owner Trustee as Lessor pursuant to the Lease.

                  (t) Solvency of the Lessee. The Lessee shall have furnished to
the Participants an Officer's Solvency Certificate (substantially in the form
attached hereto as Exhibit F) as to the solvency of the Lessee as of the Closing
Date stating, among other things, that on the Closing Date (i) the Collection
Account has a balance of $541,755, (ii) the Lessee has funded the Liquidity
Reserve Account with $6,750,000 in cash, (iii) the Lessee has delivered the
deposit of $625,000 to an account designated by the Depositary (as defined in
the Pass Through Trust Agreement) (or an Affiliate of the Depositary) as
collateral for the Lessee's obligations under that certain Indemnity Agreement
dated as of the date hereof between the Lessee and the Depositary, (iv) the
Lessee has funded the Special Second Closing Account with $320,000 in cash, (v)
the Lessee has funded the Excess Cash Account with $5,000,000 in cash and (vi)
the Lessee has funded the Pledged Equipment Proceeds Account with $4,232,000 in
cash.

                  (u) Schedule of Subleases, Pledged Equipment Leases, Units and
Pledged Units. The Participants and the Collateral Agent shall have received a
schedule, certified by the Lessee and TILC, listing the Existing Equipment
Subleases under the Lease, the Sublessee under each thereof and the Units
covered thereby. The Participants and the Collateral Agent shall have also
received a schedule, certified by the Lessee and TILC, listing the Existing
Pledged Equipment Leases, the Pledged Equipment Lessee under each thereof and
the Pledged Units covered thereby.

                  (v) Projected Coverage Ratio. The Manager shall have furnished
to the Participants and the Collateral Agent that portion of the report provided
for in Section 7.1 of the Management Agreement setting forth the Projected
Coverage Ratio for the six-month period immediately succeeding the Closing Date.


                                          Participation Agreement (TRLI 2001-1A)
                                       44
<PAGE>

                  (w) Representations and Warranties of TILC. On the Closing
Date, the representations and warranties of TILC contained in Section 3.4(d) and
Section 3.6 hereof shall be true and correct in all material respects as of the
Closing Date as though then made on and as of such date, except to the extent
that such representations and warranties relate solely to an earlier date (in
which case such representations and warranties were true and correct on and as
of such earlier date), and each of the Owner Trustee, the Indenture Trustee and
the Participants shall have received an Officer's Certificate to such effect
dated such date from TILC, and TILC shall have performed and complied with all
agreements and conditions herein contained which are required to be performed or
complied with by TILC on or before said date.

                  (x) Representations and Warranties of TRMI. On the Closing
Date, the representations and warranties of TRMI contained in Section 3.4(c) and
Section 3.7 hereof shall be true and correct in all material respects as of the
Closing Date as though then made on and as of such date, except to the extent
that such representations and warranties relate solely to an earlier date (in
which case such representations and warranties were true and correct on and as
of such earlier date), and each of the Owner Trustee, the Indenture Trustee and
the Participants shall have received an Officer's Certificate to such effect
dated such date from TRMI, and TRMI shall have performed and complied with all
agreements and conditions herein contained which are required to be performed or
complied with by TRMI on or before said date.

                  (y) Representations and Warranties of the Pass Through
Trustee. On the Closing Date, the representations and warranties of the Pass
Through Trustee contained in Sections 3.4(f) and Section 3.8 hereof shall be
true and correct in all material respects as of the Closing Date as though then
made on and as of such date, except to the extent that such representations and
warranties relate solely to an earlier date (in which case such representations
and warranties were true and correct on and as of such earlier date), and each
of the Lessee, TILC, TRMI, the Indenture Trustee, the Owner Trustee and the
Owner Participant shall have received an Officer's Certificate to such effect
dated such date from the Pass Through Trustee, and the Pass Through Trustee
shall have performed and complied with all agreements and conditions herein
contained which are required to be performed or complied with by the Pass
Through Trustee on or before said date.

                  (z) Representations and Warranties of Trinity. On the Closing
Date, the representations and warranties of Trinity contained in the Trinity
Guaranty shall be true and correct in all material respects as of the Closing
Date as though then made on and as of such date, except to the extent that such
representations and warranties relate solely to an earlier date (in which case
such representations and warranties were true and correct on and as of such
earlier date), and each of the



                                          Participation Agreement (TRLI 2001-1A)
                                       45
<PAGE>

Owner Trustee, the Indenture Trustee and the Participants shall have received an
Officer's Certificate to such effect dated such date from Trinity, and Trinity
shall have performed and complied with all agreements and conditions herein
contained which are required to be performed or complied with by Trinity on or
before said date.

                  (aa) Accountant's Letter. The Participants shall have received
an accountant's letter from PriceWaterhouseCoopers L.L.P. in form and substance
reasonably satisfactory to each of them.

                  (bb) Certificate Rating. On the Closing Date, the Certificates
shall be rated "AA" by Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc.

                  (cc) Sublessee and Pledged Equipment Lessee Consents. The
Lessee shall have obtained the consent to assignment from Sublessees under
Existing Equipment Subleases and Pledged Equipment Lessees under Existing
Pledged Equipment Leases, such consents to be in form and substance reasonably
satisfactory to the Participants if not in the form attached hereto as Exhibit
D, with respect to a percentage of Existing Equipment Subleases relating to the
Equipment and Existing Pledged Equipment Leases relating to the Pledged
Equipment acceptable to each Participant.

                  (dd) Execution and Delivery of Other Agreements. The documents
related to the Marks Company, the 2001-1 SUBI Certificate related to the Marks
Company, the Other Participation Agreement and the Other Trust Agreement shall
have been executed and delivered by the respective parties thereto.

         Section 4.2 Additional Conditions Precedent to Investment by the Loan
Participant. The obligation of the Loan Participant to fund the Loan
Participant's Commitment and purchase and pay for the Equipment Note to be
purchased by it pursuant to Sections 2.2(b) and 2.3 on the Closing Date shall be
subject to the satisfaction or waiver of the following additional conditions
precedent:

                  (a) Equipment Note. The Equipment Note to be delivered on the
Closing Date shall have been duly authorized, executed and delivered to the Loan
Participant by a duly authorized officer of the Owner Trustee and duly
authenticated by the Indenture Trustee.

                  (b) Sale of Pass Through Certificates. The Pass Through
Certificates shall have been sold to the Initial Purchasers pursuant to the
Certificate Purchase Agreement.



                                          Participation Agreement (TRLI 2001-1A)
                                       46
<PAGE>

                  (c) Appraisal. The Pass Through Trustee and each Initial
Purchaser shall have received the verification of value, useful life and
estimated residual value prepared by the Appraiser in connection with the
Appraisal.

         Section 4.3 Additional Conditions Precedent to Investment by the Owner
Participant. The obligation of the Owner Participant to provide the funds
specified with respect to it in Sections 2.2(a) and 2.3 on the Closing Date with
respect to any Unit to be delivered on the Closing Date shall be subject to the
satisfaction or waiver of the following additional conditions precedent:

                  (a) Appraisal. On or before the Closing Date, the Owner
Participant shall have received an opinion (the "Appraisal") of Rail Solutions,
Inc. (the "Appraiser"), satisfactory in form and substance to the Owner
Participant (with a separate summary or other evidence of such Appraisal as it
relates to fair market value and useful life being provided to the Rating
Agency), concluding that: (i) the fair market value of each Unit being delivered
on the Closing Date is equal to the portion of the Total Equipment Cost with
respect to such Unit; (ii) at the expiration of the Basic Term and any Fixed
Rate Renewal Term, (A) without taking into account inflation or deflation from
and after the Closing Date or the existence of any purchase option, it is
reasonable to expect that each such Unit will have a fair market value of at
least 20% of the Total Equipment Cost with respect to such Unit and (B) the
remaining economic life of each such Unit will be at least equal to 20% of the
economic life of such Unit as estimated in the Appraisal; (iii) as of the Early
Purchase Date, the estimated fair market value of each such Unit being delivered
on the Closing Date, taking into account inflation or deflation from and after
the Closing Date, will not exceed the portion of the Early Purchase Price
attributable to such Unit; (iv) no Unit being delivered on the Closing Date is
Limited Use Property; (v) the Fixed Rate Renewal is greater than or equal to the
fair market rental value of each such Unit and the Lessee is not reasonably
expected to exercise any Fixed Rate Renewal option; and (vi) such other matters
as the Owner Participant may reasonably request; provided that the Lessee makes
no representation as to the fair market value, useful life, fair market rental
value or estimated residual value of the Equipment, and the Lessee shall not be
responsible for, or incur any liabilities as a result of, the contents of such
Appraisal or report to which it relates or, except to the extent provided in the
Tax Indemnity Agreement.

                  (b) Opinion with Respect to Certain Tax Aspects. On the
Closing Date, the Owner Participant shall have received the opinion of Winston &
Strawn, addressed to the Owner Participant, in form and substance satisfactory
to the Owner Participant, containing such counsel's favorable opinion with
respect to such tax matters as the Owner Participant may reasonably request.



                                          Participation Agreement (TRLI 2001-1A)
                                       47
<PAGE>

                  (c) Absence of Change in Tax Laws. No change or proposed
change shall have occurred after the execution and delivery of this Agreement in
relevant United States tax laws, regulations, or administrative or judicial
interpretation thereof which change would cause an adverse change to the tax
assumptions used to calculate Basic Rent, Stipulated Loss Values, Stipulated
Loss Amounts, Termination Values, Termination Amounts and Early Purchase Price,
unless the adjustment referred to in Section 2.6(a) is made to the Owner
Participant's satisfaction.

         Section 4.4 Conditions Precedent to the Obligation of TILC and the
Lessee. The obligation of TILC with respect to the sale of the Units and the
Pledged Units to the Lessee on the Closing Date, the obligation of the Lessee
with respect to the sale of such Units to the Owner Trustee and the obligation
of the Lessee to accept such Units under the Lease as of the Closing Date is
subject to the satisfaction or waiver of the following conditions precedent:

                  (a) Corporate Documents. On or before the Closing Date, the
Lessee shall have received such documents and evidence with respect to the
Participants, the Owner Trustee, the Pass Through Trustee and the Indenture
Trustee as the Lessee may reasonably request in order to establish the
authorization of the consummation of, or otherwise relating to the ability to
consummate, the transactions contemplated by this Agreement and the other
Operative Agreements, the taking of all corporate and other proceedings in
connection therewith and compliance with the conditions herein or therein set
forth.

                  (b) Operative Agreements. On or before the Closing Date, the
Operative Agreements shall have been duly authorized, executed and delivered by
the respective party or parties thereto (other than the Lessee, Trinity, TILC
and TRMI), and an executed counterpart of each thereof shall have been delivered
to the Lessee or its special counsel.

                  (c) Representations and Warranties. On the Closing Date, the
representations and warranties of each of the Owner Trustee, the Indenture
Trustee and the Participants contained in Section 3 hereof shall be true and
correct in all material respects as of the Closing Date as though made on and as
of such date, and the Lessee shall have received an Officer's Certificate to
such effect dated such date from each of the Owner Trustee as described in
Section 4.1(d), the Owner Participant as described in Section 4.1(k), the
Indenture Trustee as described in Section 4.1(m) and the Pass Through Trustee as
described in Section 4.1(y).

                  (d) Opinions of Counsel. On the Closing Date, the Lessee shall
have received the opinions of counsel referred to in Section 4.1(e) (other than
that set forth in clauses (i) and (ii) therein), addressed to the Lessee.



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<PAGE>

                  (e) No Threatened Proceedings. No action or proceeding shall
have been instituted nor shall governmental action be threatened before any
court or governmental agency, nor shall any order, judgment or decree have been
issued or proposed to be issued by any court or governmental agency at the time
of the Closing Date, to set aside, restrain, enjoin or prevent the completion
and consummation of this Agreement or the transactions contemplated hereby.

                  (f) No Illegality. No change shall have occurred after the
execution and delivery of this Agreement in applicable law or regulations
thereunder or interpretations thereof by regulatory authorities that, in the
opinion of the Lessee or its counsel, would make it illegal for the Lessee to
enter into any transaction contemplated by the Operative Agreements.

                  (g) Participants' Investments. (i) The Owner Participant shall
have made available the Owner Participant's Commitment in the amount specified
in, and otherwise in accordance with, Sections 2.2(a) and 2.3 and (ii) the Loan
Participant shall have made available the Loan Participant's Commitment in the
amount specified in, and otherwise in accordance with, Sections 2.2(b) and 2.3.

                  (h) Absence of Change in Tax Laws. No change shall have
occurred after the execution and delivery of this Agreement in relevant United
States tax laws or regulations, which change would cause an increase in the net
present value (expressed as a percentage of Total Equipment Cost) of the Basic
Rent (discounted monthly at a rate per annum equal to the Debt Rate) to exceed
100 basis points.

                  (i) No Adverse Accounting Treatment. The Lessee shall not have
been advised by its independent accountants that the Lessee or its affiliates
will not be afforded "off-balance sheet" accounting treatment with respect to
the Lease and the transactions contemplated by the Operative Agreements;
provided, that the Lessee shall not have deliberately caused the loss of
"off-balance sheet" accounting treatment to provoke non-satisfaction of such
condition precedent pursuant to this Section 4.4(i).

SECTION 5.        FINANCIAL AND OTHER REPORTS OF THE LESSEE.

         The Lessee agrees during the Lease Term and (if longer, in the event
that the Lessee has assumed all of the rights and obligations of the Lessor
under the Indenture in respect of the Equipment Notes) so long as any Equipment
Note remains outstanding, that it will furnish directly to each Participant the
following:



                                          Participation Agreement (TRLI 2001-1A)
                                       49
<PAGE>

                  (a) as soon as available and in any event within 60 days after
the end of each of the first three quarters of each fiscal year, a balance sheet
of the Lessee as at the end of such quarter, together with the related
consolidated statements of income and cash flows of the Lessee for the period
beginning on the first day of such fiscal year and ending on the last day of
such quarter, setting forth in each case (except for the balance sheet) in
comparative form the figures for the corresponding periods of the previous
fiscal year, all in reasonable detail and prepared in accordance with generally
accepted accounting principles;

                  (b) as soon as available and in any event within 120 days
after the last day of each fiscal year, a copy of the Lessee's audited annual
report covering the operations of the Lessee including a balance sheet, and
related statements of income and retained earnings and statement of cash flows
of the Lessee for such fiscal year, setting forth in each case in comparative
form the figures for the previous fiscal year, all in reasonable detail and
prepared in accordance with generally accepted accounting principles applied on
a consistent basis, which statements will have been certified by a firm of
independent public accountants of recognized national standing selected by the
Lessee;

                  (c) within the time period prescribed in paragraph (a) above,
a certificate, signed by the Treasurer or principal financial officer of the
General Partner, (i) to the effect that such officer is not aware (without any
obligation of due inquiry), as of the date of such certificate, of any Lease
Default, and if a Lease Default shall exist, specifying such Lease Default, the
nature and status thereof and what action Lessee is taking or plans to take with
respect thereto and (ii) setting forth the Historical Coverage Ratio and the
Projected Coverage Ratio as of the last Business Day of the immediately
preceding calendar quarter;

                  (d) within the time period prescribed in paragraph (b) above,
a certificate, signed by the Treasurer or principal financial officer of the
General Partner, (i) to the effect that the signer has reviewed the Operative
Agreements and activities and records of the Lessee during the immediately
preceding fiscal year and that, after due inquiry, such officer is not aware, as
of the date of such certificate, of any Lease Default, and if a Lease Default
shall exist, specifying such Lease Default, the nature and status thereof and
what action Lessee is taking or plans to take with respect thereto, (ii) setting
forth the Historical Coverage Ratio and the Projected Coverage Ratio as of the
last Business Day of the preceding fiscal year and (iii) setting forth in
summary terms the Lessee's compliance with Section 8.3 of the Lease as to new
Subleases entered into by the Lessee, and sub-Subleases entered into by any
Sublessee, during such fiscal year, including without limitation as to whether
such new Subleases are subject and subordinate to the terms of the Lease;



                                          Participation Agreement (TRLI 2001-1A)
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<PAGE>

                  (e) within the time periods presented in Section 7 of the
Management Agreement, each of the reports referred to therein delivered by the
Manager to the Lessee; and

                  (f) promptly after request therefor, such additional
information with respect to the financial condition or business of the Lessee as
the Owner Participant or the Indenture Trustee may from time to time reasonably
request.

SECTION 6.        CERTAIN COVENANTS OF THE PARTICIPANTS, THE TRUSTEES AND THE
                  LESSEE.

         Section 6.1 Restrictions on Transfer of Beneficial Interest. The Owner
Participant agrees that it shall not, directly or indirectly, sell, convey,
assign, pledge, mortgage or otherwise transfer all or any part of the Beneficial
Interest (collectively, for purposes of this Section 6.1, a "transfer") prior to
the expiration or earlier termination of the Lease Term without the Lessee's
prior written consent (which consent shall not be unreasonably withheld);
provided, however, no such consent shall be required in connection with any
indirect transfer of the Beneficial Interest resulting from (i) any direct or
indirect change of control of Philip Morris Capital Corporation or change of
control of any direct or indirect parent of Philip Morris Capital Corporation or
(ii) any transfer of substantially all of the assets of Philip Morris Capital
Corporation as an entirety; provided, further, that no such consent shall be
required if the following conditions are satisfied:

                  (a) the Person to whom such transfer is to be made (a
"Transferee") is (i) an institutional or corporate investor with tangible net
worth or, in the case of a bank or lending institution, combined capital and
surplus at the time of such transfer, of at least $75,000,000, determined in
accordance with generally accepted accounting principles, as of the date of such
transfer, or (ii) an Affiliate of an institutional or corporate investor that
satisfies the requirements set forth in clause (i) above if such investor
guarantees pursuant to a guaranty in form and substance satisfactory to the
Lessee the obligations of the Owner Participant under the Operative Agreements
assumed by such Affiliate as required herein or (iii) an Affiliate of the Owner
Participant; provided that in the event of a transfer pursuant to clause (iii)
which does not qualify under clauses (i) or (ii), the Owner Participant shall
remain liable for all of its obligations under this Agreement and the other
Operative Agreements;

                  (b) so long as no Lease Event of Default has occurred and is
continuing, neither the Transferee nor any of its Affiliates shall compete
(directly or indirectly) (other than as a passive investor or loan participant
in the financing of equipment or facilities used in railcar leasing) with the
Lessee or TILC (unless such non-competition requirement has been waived in
writing by the Lessee and TILC) in



                                          Participation Agreement (TRLI 2001-1A)
                                       51
<PAGE>

any respect material to the full service railcar leasing business of the Lessee
or TILC; provided, that no Transferee or Affiliate thereof shall be deemed to
(i) be engaged in railcar leasing or (ii) hold (directly or indirectly) any
material interest in any business that is competitive with Lessee's or TILC's
railcar leasing business, solely by reason of any sale, lease or other
disposition (or any actions in furtherance of any of the foregoing) of any of
such Person's interest in any equipment or facilities directly or indirectly
owned, leased or otherwise controlled pursuant to any such Person's passive
investment or loan participation in the financing of any such equipment or
facilities used in railcar leasing or any re-leasing or sale of any rail
equipment which is returned to or repossessed by or on behalf of such Person
from a lessee or borrower in connection with a lease financing or lender
transaction entered into by such Person as a passive lessor, investor or lender;

                  (c) each of the Indenture Trustee, the Owner Trustee and the
Lessee shall have received 10 days (or, if a Lease Event of Default shall have
occurred and is continuing and the proposed Transferee or any of its Affiliates
would not, but for the occurrence of such Lease Event of Default, have satisfied
the requirements set forth in Section 6.1(b) above or Section 6.1(l) below,
fifteen (15) Business Days) prior written notice of such transfer specifying the
name and address of any proposed Transferee and such additional information as
shall be necessary to determine whether the proposed transfer satisfies the
requirements of this Section 6.1;

                  (d) such Transferee enters into an agreement (i) in the form
attached hereto as Exhibit C or (ii) otherwise in form and substance
satisfactory to each of the Lessee and the Owner Trustee and not reasonably
objected to by the Indenture Trustee whereby such Transferee confirms that it
shall be deemed a party to this Agreement and each other Operative Agreement to
which the transferring Owner Participant is a party, and agrees to be bound by
all the terms of, and to undertake all of the obligations and liabilities of the
transferring Owner Participant contained in, this Agreement and such other
Operative Agreements and in which the Transferee shall make representations and
warranties comparable to those of the Owner Participant contained herein and
therein;

                  (e) an opinion of counsel of the Transferee (which counsel
shall be reasonably acceptable to the Lessee, the Owner Trustee and the
Indenture Trustee and which may be internal counsel of the Transferee),
confirming (i) the existence, corporate power and authority of, and due
authorization, execution and delivery of all relevant documentation by, the
Transferee (with appropriate reliance on certificates of corporate officers or
public officials as to matters of fact), (ii) that each agreement referred to in
Section 6.1(d) above is the legal, valid, and binding obligation of the
Transferee, enforceable against the Transferee in accordance with its terms
(subject to customary qualifications as to bankruptcy and equitable principles)
and (iii)



                                          Participation Agreement (TRLI 2001-1A)
                                       52
<PAGE>

compliance of the transfer with applicable requirements of federal securities
laws and securities laws of the Transferee's domicile, shall be provided, prior
to such transfer, to each of the Lessee, the Owner Trustee and the Indenture
Trustee, which opinion shall be in form and substance reasonably satisfactory to
the Lessee, the Owner Trustee and the Indenture Trustee;

                  (f) such transfer complies in all respects with and does not
violate any applicable provisions of the federal securities laws and the
securities law of any applicable state or any other applicable law;

                  (g) except as specifically consented to in writing by each of
the Lessee, the Owner Trustee, the Pass Through Trustee and the Indenture
Trustee, the terms of the Operative Agreements shall not be altered;

                  (h) after giving effect to such transfer, the Beneficial
Interest and the beneficial interest with respect to the Other Trust shall be
held by not more than two Persons in the aggregate; provided that for the
purpose of calculating the number of Persons under this Section 6.1(h), Persons
that are Affiliates of each other shall be considered to be one Person;

                  (i) all reasonable expenses of the parties hereto (including,
without limitation, reasonable legal fees and expenses of special counsel)
incurred in connection with each transfer of such Beneficial Interest shall be
paid by the transferring Owner Participant;

                  (j) such transfer either (i) does not involve the use of any
funds which constitute assets of an employee benefit plan subject to Title I of
ERISA or Section 4975 of the Code or (ii) if clause (i) is not applicable, will
not constitute a prohibited transaction under ERISA or the Code;

                  (k) as a result of and following such transfer, no Indenture
Default attributable to the Owner Participant or the Owner Trustee shall have
occurred and be continuing;

                  (l) unless a Lease Event of Default shall have occurred and is
continuing, the transfer does not involve the sale of the stock of any Owner
Participant, the sole asset of which is all or a portion of the Beneficial
Interest, to, or the merger of any such Owner Participant with or into, any
Person who is a competitor of the Lessee or TILC as described in Section 6.1(b),
provided that the Lessee may waive this requirement in writing;

                  (m) the Transferee (i) is a "United States Person" within the
meaning of Section 7701(a)(30) of the Code or (ii) is engaged in a United States



                                          Participation Agreement (TRLI 2001-1A)
                                       53
<PAGE>

trade or business for purposes of Subtitle A, Chapter 1, Subchapter N of the
Code and is acquiring such Beneficial Interest in connection with such trade or
business; and

                  (n) the Owner Participant shall deliver to the Lessee an
Officer's Certificate certifying as to compliance with the transfer requirements
contained herein; provided that no such Officer's Certificate is required in
case of a transfer of the Beneficial Interest to the Lessee (or Lessee's
designee) pursuant to Section 6.9.

         Upon any such transfer (i) except as the context otherwise requires,
such Transferee shall be deemed the "Owner Participant" for all purposes, and
shall enjoy the rights and privileges and perform the obligations of the Owner
Participant to the extent of the interest transferred hereunder and under each
other Operative Agreement to which the Owner Participant is a party, and, except
as the context otherwise requires, each reference in this Agreement and each
other Operative Agreement to the "Owner Participant" shall thereafter be deemed
to include such Transferee for all purposes to the extent of the interest
transferred, and (ii) the transferor, except to the extent provided in Section
6.1(i) hereof and except in the case of a transfer to a Transferee described in
the proviso to Section 6.1(a)(iii) hereof, shall be released from all
obligations hereunder and under each other Operative Agreement to which such
transferor is a party or by which such transferor is bound solely to the extent
such obligations are expressly assumed by a Transferee; and provided, further,
that in no event shall any such transfer or assignment waive or release the
transferor from any liability on account of any breach existing prior to such
transfer of any of its representations, warranties, covenants or obligations set
forth herein or in any of the other Operative Agreements or for any fraudulent
or willful misconduct. Subject to Section 6.1(l), the provisions of this Section
6.1 shall not be construed to restrict the Owner Participant from consolidating
with or merging into any other corporation or restricting another corporation
from merging into or consolidating with the Owner Participant. Notwithstanding
any transfer, the transferor Owner Participant shall be entitled to all benefits
accrued and all rights vested prior to such transfer, including, without
limitation, rights to indemnification under any of the Operative Agreements. No
transfer hereunder shall, by virtue of the Transferee engaging in a business or
activity not generally conducted by other institutional or corporate investors
in lease transactions, increase the Lessee's indemnification obligations under
Section 7.1 or 7.2. The Owner Participant hereby acknowledges and agrees (and
each Transferee by virtue of any transfer shall be deemed to have acknowledged
and agreed) to the terms of the Collateral Agency Agreement.

         The Lessee agrees to provide notice to the Rating Agency of any
proposed transfer by an Owner Participant no later than 5 days after Lessee's
receipt of notice of such proposed transfer from an Owner Participant.



                                          Participation Agreement (TRLI 2001-1A)
                                       54
<PAGE>

         Section 6.2 Lessor's Liens Attributable to the Owner Participant. The
Owner Participant hereby unconditionally agrees with and for the benefit of each
of the other parties to this Agreement that the Owner Participant shall not
directly or indirectly create, incur, assume or suffer to exist any Lessor's
Lien attributable to the Owner Participant on or against all or any portion of
the Indenture Estate or the Equipment, and the Owner Participant agrees that it
shall, at its own cost and expense, take such action as may be necessary to duly
discharge and satisfy in full any such Lessor's Lien; provided that the Owner
Participant may contest any such Lessor's Lien in good faith by appropriate
proceedings so long as such proceedings do not involve any material danger of
the sale, forfeiture or loss of the Equipment or any interest therein or
interference with the use, operation, or possession of the Equipment or any
portion thereof by the Lessee under the Lease or the rights of the Indenture
Trustee under the Indenture.

         Section 6.3 Lessor's Liens Attributable to Trust Company. Trust Company
hereby unconditionally agrees with and for the benefit of each of the other
parties to this Agreement that it shall not directly or indirectly create,
incur, assume or suffer to exist any Lessor's Lien attributable to it on or
against all or any portion of the Trust Estate or the Equipment, the Trust
Company agrees that it shall, at its own cost and expense, take such action as
may be necessary to duly discharge and satisfy in full any such Lessor's Lien;
provided that the Trust Company may contest any such Lessor's Lien in good faith
by appropriate proceedings so long as such proceedings do not involve any
material danger of the sale, forfeiture or loss of the Equipment or any interest
therein or interference with the use, operation, or possession of the Equipment
or any portion thereof by the Lessee under the Lease or the right of the
Indenture Trustee under the Indenture.

         Section 6.4 Liens Created by the Indenture Trustee and the Loan
Participant.

                  (a) The Indenture Trustee, in its individual capacity,
covenants and agrees with each of the Lessee, the Owner Trustee, the Owner
Participant and the Loan Participant that it shall not cause or permit to exist
any Lien on or against all or any portion of the Equipment, the Pledged
Equipment, the Trust Estate or the Indenture Estate arising as a result of (i)
claims against the Indenture Trustee in its individual capacity not related to
its interest in the Equipment, the Pledged Equipment and the Trust Estate, or to
the administration of the Indenture Estate pursuant to the Indenture, (ii) acts
of the Indenture Trustee in its individual capacity not contemplated by, or
failure of the Indenture Trustee to take any action it is expressly required to
perform by, any of the Operative Agreements, (iii) claims against the Indenture
Trustee attributable to the actions of the Indenture Trustee in its individual
capacity relating to Taxes or expenses that are not indemnified against by



                                          Participation Agreement (TRLI 2001-1A)
                                       55
<PAGE>

the Lessee pursuant to Section 7 or (iv) claims against the Indenture Trustee
arising out of the transfer by the Indenture Trustee of all or any portion of
its interest in the Equipment, the Pledged Equipment, the Indenture Estate or
the Operative Agreements, other than a transfer permitted by the Operative
Agreements and with respect to which the Indenture Trustee will, at its own cost
and expense (and without any right of reimbursement from any other party
hereto), promptly take such action as may be necessary duly to discharge any
such Lien.

                  (b) The Loan Participant covenants and agrees with each of the
Lessee, the Owner Trustee, the Owner Participant and the Indenture Trustee that
the Loan Participant shall not cause or permit to exist any Lien on or against
all or any portion of the Equipment, the Pledged Equipment, the Trust Estate or
the Indenture Estate arising as a result of (i) claims against the Loan
Participant not related to its interest in the Equipment, the Pledged Equipment
and the Trust Estate, (ii) acts of the Loan Participant not contemplated by, or
failure of the Loan Participant to take any action it is expressly required to
perform by, any of the Operative Agreements, (iii) claims against the Loan
Participant relating to Taxes or expenses that are not indemnified against by
the Lessee pursuant to Section 7, or (iv) claims against the Loan Participant
arising out of the transfer by the Loan Participant of all or any portion of its
interest in the Equipment, the Pledged Equipment, the Indenture Estate or the
Operative Agreements, other than a transfer permitted by the Operative
Agreements and with respect to which the Loan Participant will, at its own cost
and expense (and without any right of reimbursement from the Lessee), promptly
take such action as may be necessary duly to discharge any such Lien.

         Section 6.5 Covenants of Owner Trustee, Owner Participant and Indenture
Trustee. Each of the Owner Participant and Trust Company, in its individual and
trust capacities, hereby agrees, as to its own actions only and severally and
not jointly, with (a) the Loan Participant and the Indenture Trustee (so long as
the Equipment Notes remain outstanding), not to amend, supplement, or otherwise
modify any provision of the Trust Agreement in such a manner as to adversely
affect the rights of the Loan Participant or the Indenture Trustee without the
prior written consent of such party and (b) with the Lessee, not to terminate or
revoke the Trust Agreement or the trust created by the Trust Agreement prior to
the payment in full and discharge of the Equipment Notes and all other
indebtedness secured by the Indenture and the final discharge thereof. Each of
the Trust Company and the Indenture Trustee agrees, for the benefit of the
Lessee and the Owner Participant, to comply with the provisions of the Indenture
and not to amend, supplement, or otherwise modify any provision of the Indenture
except in the manner provided in Article IX thereof. Notwithstanding anything to
the contrary contained herein or in any of the other Operative Agreements, the
Indenture Trustee's obligation to take or refrain from taking any actions, or to
use its discretion (including, but not limited to, the giving or withholding of
consent or approval and the exercise of any rights or



                                          Participation Agreement (TRLI 2001-1A)
                                       56
<PAGE>

remedies under such Operative Agreement), and any liability therefor, shall, in
addition to any other limitations provided herein or in any of the other
Operative Agreements, be limited by the provisions of the Indenture.

         Section 6.6 Amendments to Operative Agreements That Are Not Lessee
Agreements. Unless a Lease Event of Default shall have occurred and be
continuing, the Owner Trustee, the Indenture Trustee and the Participants shall
not terminate the Operative Agreements to which the Lessee is not or will not be
a party, or amend, supplement, waive or modify in any manner such Operative
Agreements to which the Lessee is not or will not be a party, (i) except in
accordance with such Operative Agreements in effect on the date hereof (as
amended, modified or supplemented from time to time in accordance with the terms
hereof and of such Operative Agreements), or (ii) adverse to the Lessee or to
any of its rights or interests under any of the Operative Agreements, except
with the prior written consent of the Lessee. Without limiting the generality of
the foregoing, each of the Owner Participant and the Owner Trustee, the Pass
Through Trustee and the Indenture Trustee (as applicable) agrees that, in any
event, unless a Lease Event of Default shall have occurred and be continuing, it
will not amend Section 2.10 or Article IX of the Indenture or Article IX of the
Trust Agreement without the prior written consent of the Lessee.

         Section 6.7 Certain Representations, Warranties and Covenants. The
Lessee hereby confirms its representations, warranties and covenants in Article
6 of the Collateral Agency Agreement, which are hereby incorporated in this
Agreement by this reference as fully as if set forth herein in their entirety.

         Section 6.8 Covenants of the Manager. The Manager hereby confirms the
covenants in Article 7 of the Management Agreement, which are hereby
incorporated in this Agreement by this reference as fully as if set forth herein
in their entirety.

         Section 6.9 Lessee's Purchase in Certain Circumstances.

                  (a) If (A) the Owner Participant or any Affiliate thereof is
or acquires, is acquired by, merges or otherwise consolidates with any company
or Affiliate thereof who would not be an eligible "Transferee" by reason of
Section 6.1(b) (and, in the case of an Affiliate, such entity continues to be an
Affiliate of the Owner Participant after such acquisition, merger or
consolidation), or (B) the Lessee shall have requested a waiver pursuant to
Section 12.3(c) of the Lease and the Lessor and the Owner Participant shall have
refused to grant such waiver or shall have granted such waiver but shall have
refused to further waive the requirement that amounts be deposited in the
Special Insurance Reserves Account pursuant to the Collateral Agency Agreement
in connection with the granting of the initial waiver, or



                                          Participation Agreement (TRLI 2001-1A)
                                       57
<PAGE>

(C) the Lessee shall have elected to purchase, or arrange a purchase of, the
Beneficial Interest pursuant to Section 22.1 of the Lease, the Lessee may elect
either to:

                           (i) keep the Lease and the Equipment Notes in place
and require that the Owner Participant, and the Owner Participant agrees to,
transfer its Beneficial Interest in accordance with the terms of Section 6.1
(other than provisions of Sections 6.1(a), (b), (i), (l) and (n)) to the Lessee
or such other transferee as the Lessee may designate (such transfer to occur on
a Determination Date which is designated by the Lessee by written notice to the
Owner Participant not less than 60 days prior to such Determination Date) at a
purchase price (the "Beneficial Interest Purchase Price") equal to (1) the
Equity Portion of Termination Amount as of the date of such transfer, plus (2)
in the case of clause (B) above, the excess, if any, of the Fair Market Sales
Value of the Equipment calculated as of such date over the Termination Value as
of such date, plus (3) the Equity Portion of Basic Rent accrued and unpaid
therefor as of the date of such transfer (exclusive of any Basic Rent payable on
such date), plus (4) without duplication or limitation of any amount under
clauses (1) to (3) above, the sum of the Accumulated Equity Deficiency Amount
and Late Payment Interest related thereto, plus (5) without duplication or
limitation of any amount under clauses (1) to (4) above, that portion of
Supplemental Rent due and unpaid on such date that is payable to the Owner
Participant; provided, however, that, without regard to such Owner Participant's
obligations under the Operative Agreements relating to the period prior to such
transfer, any transfer of the Beneficial Interest pursuant to this Section 6.9
shall be without additional representations or warranties of or other
liabilities or obligations on such Owner Participant other than those expressly
set forth in the Owner Participant Agreements; provided, further, that in case
such Owner Participant holds less than 100% of the Beneficial Interest (after
excluding any Beneficial Interests held by the Lessee, TILC or any Affiliate of
either thereof), the purchase price for such Owner Participant's Beneficial
Interest shall be equal to (x) (i) the sum of the amounts calculated under
clauses (1), (2), (3) and (4) above multiplied by (ii) a fraction equal to the
portion such Owner Participant's Beneficial Interest bears to 100% of the
Beneficial Interests, plus (y) without duplication or limitation of any amount
under clause (x) above, that portion of Supplemental Rent due and unpaid on such
date that is payable to such Owner Participant; or

                           (ii) on a Determination Date which is designated by
the Lessee by written notice to the Owner Trustee and the Indenture Trustee not
less than 60 days prior to such Determination Date, purchase the Equipment for a
purchase price equal to (I) the Termination Amount calculated as of such
Determination Date, plus (II) in the case of clause (B) of the lead paragraph of
this Section 6.9(a), the excess, if any, of the Fair Market Sales Value of the
Equipment calculated as of such date over the Termination Value as of such
Determination Date, plus (III) without duplication or limitation, all other
amounts due and owing by the Lessee under the



                                          Participation Agreement (TRLI 2001-1A)
                                       58
<PAGE>

Operative Agreements with respect to the Equipment, including, without
limitation, all accrued and unpaid Basic Rent therefor as of such Determination
Date (exclusive of any Basic Rent payable on such date), Make-Whole Amount then
payable on the Equipment Notes pursuant to Section 2.10(c) of the Indenture with
respect to the Equipment and Late Payment Premium, if any, due and owing under
the Operative Agreements with respect to the Equipment so that, after receipt
and application of all such payments the Owner Participant shall be entitled
under the terms of the Collateral Agency Agreement to receive, and does receive,
in respect of all such Units, the sum of the Accumulated Equity Deficiency
Amount (without duplication of any amount provided under clauses (I) - (III)
above) and Late Payment Interest related thereto and any other amounts of
Supplemental Rent due and unpaid on such Determination Date that are payable to
the Owner Participant.

                  (b) If the Lessee elects to exercise the option to purchase
the Equipment (as opposed to such Owner Participant's Beneficial Interest) as
provided in Section 6.9(a), the Lessee shall, as the purchase price therefor pay
the purchase price, as specified in Section 6.9(a)(ii), with respect to the
Equipment, together with all other amounts due and owing by the Lessee under the
Operative Agreements.

                  (c) In connection with any purchase of the Equipment under
this Section 6.9, the Lessee will make the payments required by Section
6.9(a)(ii) in immediately available funds against delivery of a bill of sale
transferring and assigning to the Lessee all right, title and interest of the
Lessor in and to the Equipment on an "as-is" "where-is" basis and containing a
warranty with respect to the absence of any Lessor's Lien. In such event, the
costs of preparing the bill of sale or other transfer documents and all other
documentation relating to such purchase and the costs of any necessary filings
related thereto will be borne by the Lessee.

                  If the Lessee shall fail to fulfill its obligations under
Sections 6.9(b) and (c), all of the Lessee's obligations under the Lease and the
Operative Agreements, including, without limitation, the Lessee's obligation to
pay installments of Rent, with respect to the Equipment shall continue.

         Section 6.10 Owner Participant as Affiliate of Lessee. If at any time
the original or any successor Owner Participant shall be an Affiliate of the
Lessee, such Owner Participant and the Lessee agree that, notwithstanding
Section 9.5 of the Indenture, they will not vote its Beneficial Interest in any
respect if there is another Owner Participant not affiliated with the Lessee,
and, if there is no such Owner Participant, they will not vote its Beneficial
Interest to modify, amend or supplement any provision of the Lease or this
Agreement or give, or permit the Owner Trustee to give, any consent, waiver,
authorization or approval thereunder if any such action could reasonably be
expected to adversely affect in a material manner the Indenture



                                          Participation Agreement (TRLI 2001-1A)
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<PAGE>

Trustee or any holder of an Equipment Note unless such action shall have been
consented to by the Pass Through Trustee.

         Section 6.11 Records; U.S. Income Tax Information. Each of the Lessee,
TRMI and TILC covenants that it will maintain or cause to be maintained and
retain sufficient factual records (to the extent such records are maintained by
the Lessee, TRMI and TILC respectively, any sublessee, or any trustee for or
Affiliate of any thereof, in the ordinary course of their respective businesses)
to enable the Owner Participant to prepare required United States federal, state
and local tax returns. Upon request of the Owner Participant, the Lessee, TRMI
and TILC, respectively, shall deliver such records to the Owner Participant at
the expense of the Owner Participant. In addition, as soon as practicable, the
Lessee, TRMI and TILC, respectively, shall provide or cause to be provided (at
the expense of the Lessee) to the Owner Participant such information (in form
and substance reasonable satisfactory to the Owner Participant) as the Owner
Participant may reasonably request from and as shall be reasonably available to
the Lessee, TRMI and TILC, respectively, to enable the Owner Participant to
fulfill its tax return filing obligations, to respond to requests for
information, to verify information in connection with any income tax audit and
to participate effectively in any tax contest. Such information may include,
without limitation, information as to the location of and use of the Equipment
from time to time (to the extent such information is available on the basis of
the records regularly maintained by the Lessee, TRMI and TILC, respectively, any
sublessee, or any trustee for or Affiliate of any thereof, in the ordinary
course of their respective businesses).

SECTION 7.        LESSEE'S INDEMNITIES.

         Section 7.1 General Tax Indemnity.

                  (a) Tax Indemnitee Defined. For purposes of this Section 7.1,
"Tax Indemnitee" means the Pass Through Trustee, both in its individual capacity
and as trustee, the Owner Participant, its Affiliates (including, without
limitation, Philip Morris Capital Corporation, Grant Holdings, Inc., Trimaran
Leasing Investors, L.L.C. I, Trimaran Leasing Investors, L.L.C. II and Trimaran
Leasing, L.P.), the Owner Trustee, the Trust Company, the Indenture Trustee,
both in its individual capacity and as trustee, each of their successors or
assigns permitted under the terms of the Operative Agreements, any officer,
director, employee or agent of any of the foregoing, the Trust Estate and the
Indenture Estate; "Equity Tax Indemnitee" means the Owner Participant, its
Affiliates, the Owner Trustee, the Trust Company, and each of their respective
successors, assigns, officers, directors, employees and agents and the Trust
Estate; "Lender Tax Indemnitee" means each Tax Indemnitee which is not an Equity
Tax Indemnitee.



                                          Participation Agreement (TRLI 2001-1A)
                                       60
<PAGE>

                  (b) Taxes Indemnified. Except as provided below, all payments
by the Lessee to any Tax Indemnitee in connection with the transactions
contemplated by the Operative Agreements shall be free of withholdings of any
nature whatsoever (and at the time that any payment is made upon which any
withholding is required the Lessee shall pay an additional amount such that the
net amount actually received will, after such withholding and on an After-Tax
Basis, equal the full amount of the payment then due) and shall be free of
expense to each Tax Indemnitee for collection or other charges. The Lessee shall
defend, indemnify and save harmless each Tax Indemnitee from and against, and as
between the Lessee and each Tax Indemnitee the Lessee hereby assumes liability
with respect to, all fees (including, without limitation, license fees and
registration fees), taxes (including, without limitation, income, gross
receipts, franchise, sales, use, value added, property and stamp taxes),
assessments, levies, imposts, duties, charges or withholdings of any nature
whatsoever, together with any and all penalties, additions to tax, fines or
interest thereon ("Taxes") imposed against any of the Tax Indemnitees, any item
of Equipment or Pledged Equipment or the Lessee, upon, arising from or relating
to

                           (i) any item of the Equipment or the Pledged
Equipment,

                           (ii) the construction, manufacture, financing,
purchase, delivery, ownership, acceptance, rejection, possession, improvement,
use, operation, leasing, subleasing, condition, maintenance, repair,
refinancing, registration, sale, return, replacement, storage, abandonment or
other application or disposition of any item of the Equipment or the Pledged
Equipment,

                           (iii) the rental payments, receipts or earnings
arising from any item of the Equipment or the Pledged Equipment or payable
pursuant to the Operative Agreements, or

                           (iv) the Operative Agreements, the Equipment Note or
any Sublease or any Pledged Equipment Lease or otherwise with respect to or in
connection with the transactions contemplated thereby.

                  (c) Taxes Excluded. The indemnity provided in Section 7.1(b)
shall not include:

                           (i) as to any Equity Tax Indemnitee, any Income Tax
imposed by the United States federal government (but not excluding any Income
Tax required to make a payment on an After-Tax Basis);

                           (ii) as to any Equity Tax Indemnitee, any Income Tax
imposed by any state, local or foreign government or taxing authority or
subdivision



                                          Participation Agreement (TRLI 2001-1A)
                                       61
<PAGE>

thereof; provided, however, that this exclusion shall not apply to the extent
such Taxes (but not including Income Taxes imposed on net income) are
attributable to (I) the use or location of any item of the Equipment or the
activities of the Lessee or its Affiliates or any sublessee in the taxing
jurisdiction, (II) the presence or organization of the Lessee or any sublessee
in the taxing jurisdiction, (III) the status of the Lessee or any sublessee as a
foreign entity or as an entity owned by a foreign person or (IV) Lessee or
sublessee having made (or deemed to have made) payments to the Tax Indemnitee
from the relevant jurisdiction; provided, further, however, that the preceding
proviso shall not apply to any jurisdiction where the Owner Trust, the Owner
Trustee (other than in its individual capacity) or the Owner Participant has its
legal domicile or principal place of business (determined without regard to the
transactions contemplated by the Operative Agreement);

                           (iii) as to any Equity Tax Indemnitee, any Tax that
is imposed as a result of the sale, transfer or other disposition, by the Lessor
or the Owner Participant of any of its rights with respect to any item of
Equipment or the Owner Participant's interest in the Trust Estate unless such
sale, transfer or other disposition is a result of an Event of Default, results
from any substitution, repair or replacement of any item of Equipment under the
Lease, or results from any sale, transfer or disposition required under the
Lease (including but not limited to Section 10 of the Lease);

                           (iv) as to any Equity Tax Indemnitee, any Taxes to
the extent they exceed the Taxes that would have been imposed had an Equity Tax
Indemnitee not transferred, sold or disposed of its interest or rights in any
item of the Equipment to a non-U.S. Person;

                           (v) Taxes imposed on a Lender Tax Indemnitee with
respect to any period after the payment in full of the Equipment Notes; provided
that the exclusion set forth in this clause (v) shall not apply to Taxes to the
extent such Taxes relate to events occurring or matters arising prior to or
simultaneously with the applicable time of payment of the Equipment Notes or
relate to any payment made by the Lessee after such date;

                           (vi) as to any Tax Indemnitee, Taxes to the extent
caused by any misrepresentation or breach of warranty or covenant by such Tax
Indemnitee or a Related Party under any of the Operative Agreements or by the
gross negligence or willful misconduct of such Tax Indemnitee or a Related
Party;

                           (vii) as to any Lender Tax Indemnitee, Taxes which
become payable as a result of a sale, assignment, transfer or other disposition
(whether voluntary or involuntary) by such Lender Tax Indemnitee of all or any
portion of its interest in the Equipment or any part thereof, the Pledged
Equipment or



                                          Participation Agreement (TRLI 2001-1A)
                                       62
<PAGE>

any part thereof, the Trust Estate, the Indenture Estate or any of the Operative
Agreements or rights created thereunder, other than as a result of (A) the
substitution, modification or improvement of the Equipment or any part thereof
or the Pledged Equipment or any part thereof, (B) a modification to the
Operative Agreements, or (C) a disposition which occurs as the result of the
exercise of remedies upon a Lease Event of Default; provided, that,
notwithstanding the foregoing, the Lessee shall not be obligated to indemnify
any Lender Tax Indemnitee with respect to net income taxes imposed within the
United States as the result of a sale, assignment, transfer or other disposition
by such Lender Tax Indemnitee or any Taxes imposed as a result of the status of
the Lender Tax Indemnitee as other than a resident of the United States for tax
purposes;

                           (viii) as to any Lender Tax Indemnitee, Taxes imposed
as the result of such Lender Tax Indemnitee not being a resident of the United
States for tax purposes;

                           (ix) as to any Lender Tax Indemnitee, Income Taxes or
transfer taxes relating to any payments of principal, interest or Make Whole
Amount, if any, on the Equipment Notes or the Pass Through Certificates paid to
any such Tax Indemnitee that are imposed by (A) any other jurisdiction in which
such Indemnitee is subject to such Taxes as a result of it or an Affiliate being
organized in such jurisdiction or conducting activities in that jurisdiction
unrelated to the transactions contemplated by the Operative Agreements, (B) the
United States federal government or (C) any state or local government within the
United States;

                           (x) Taxes to the extent directly resulting from or
that would not have been imposed but for (x) in the case of Taxes imposed on or
with respect to any Equity Tax Indemnitee, the existence of any Lessor Liens
with respect to such Equity Tax Indemnitee, (y) in the case of Taxes imposed on
or with respect to any Lender Tax Indemnitee, the existence of any Liens
attributable to the Indenture Trustee or Liens attributable to the Pass Through
Trustee;

                           (xi) Taxes imposed on a Tax Indemnitee to the extent
that such Taxes would not have been imposed upon such Tax Indemnitee but for any
failure of such Tax Indemnitee or a Related Party to comply with (x) any
certification, information, documentation, reporting or other similar
requirements concerning the nationality, residence, identity or connection with
the jurisdiction imposing such Taxes, if such compliance is required under the
laws or regulations of such jurisdiction to obtain or establish relief or
exemption from or reduction in such Taxes and the Tax Indemnitee or such Related
Party was eligible to comply with such requirement or (y) any other
certification, information, documentation, reporting or other similar
requirements under the Tax laws or regulations of the jurisdiction imposing such
Taxes that would establish entitlement to otherwise applicable relief



                                          Participation Agreement (TRLI 2001-1A)
                                       63
<PAGE>

or exemption from such Taxes; provided, however, that the exclusion set forth in
this clause (xii) shall not apply (I) if such failure to comply was due to a
failure of the Lessee to provide reasonable assistance on request in complying
with such requirement, (II) if, in the case of Taxes imposed on the Owner
Participant, in the good faith judgment of the Owner Participant there is a risk
of adverse consequence to the Owner Participant or any Affiliate from such
compliance against which the Owner Participant is not satisfactorily
indemnified, (III) in the case of Taxes imposed on the Owner Participant, if any
such failure to comply on the part of the Owner Trustee was the result of the
Owner Trustee's gross negligence or failure to act in accordance with
instructions of the Owner Participant, or (IV) in the case of any Tax
Indemnitee, unless Lessee shall have given such Tax Indemnitee prior written
notice of such requirements;

                           (xii) Taxes that are imposed with respect to any
period after the earlier of (x) return of the Equipment to the Lessor in
accordance with, and at a time and place contemplated by the Lease (including
the payment of all amounts due at such time) and (y) the termination of the Term
pursuant to Section 6, 10, 11, 15 or 22 of the Lease and the discharge in full
of Lessee's payment obligation's thereunder unless the Equipment is thereafter
required to be returned, in which case, after such return; provided, however,
that the exclusion set forth in this clause (xii) shall not apply to Taxes to
the extent such Taxes relate to events occurring or matters arising prior to or
simultaneously with such return or termination;

                           (xiii) as to any Lender Tax Indemnitee, Taxes in the
nature of an intangible or similar tax upon or with respect to the value of the
interest of such Lender Tax Indemnitee in the Indenture Estate, in any Equipment
Note or Pass Through Certificate imposed as a result of such Lender Tax
Indemnitee or any Affiliate of such Lender Tax Indemnitee being organized in, or
conducting activities unrelated to the contemplated transactions in, the
jurisdiction imposing such Taxes;

                           (xiv) Taxes imposed on the Owner Trustee or the
Indenture Trustee that are on, based on or measured by any trustee fees for
services rendered by such Tax Indemnitee in its capacity as trustee under the
Operative Agreements;

                           (xv) Taxes imposed on any Tax Indemnitee, or any
other person who, together with such Tax Indemnitee, is treated as one employer
for employee benefit plan purposes, as a result of, or in connection with, any
"prohibited transaction," within the meaning of the provisions of the Code or
regulations thereunder or as set forth in Section 406 of ERISA or the
regulations implementing ERISA or Section 4975 of the Code or the regulations
thereunder;



                                          Participation Agreement (TRLI 2001-1A)
                                       64
<PAGE>

                           (xvi) Taxes for so long as (x) such Taxes are being
contested in accordance with the provisions of Section 7.1(e) hereof, (y) the
Lessee is in compliance with its obligations under Section 7.1(e), and (z) the
payment of such Taxes is not required pursuant to Section 7.1(e);

                           (xvii) Taxes as to which such Tax Indemnitee is
indemnified pursuant to the Tax Indemnity Agreement;

                           (xviii) any Taxes imposed on or with respect to any
Certificateholder; and

                           (xix) Taxes imposed as a result of the authorization
or giving of any future amendments, supplements, waivers or consents with
respect to any Operative Agreement other than (w) those which are legally
required, (x) in connection with the exercise of remedies pursuant to Section 15
of the Lease, (y) such as have been proposed by the Lessee or consented to by
the Lessee or (z) those that are required pursuant to the terms of the Operative
Agreements.

                  (d) Payments to Tax Indemnitee. The Lessee agrees to pay, on
demand, any and all Taxes indemnified under this Section 7.1 ("Indemnified
Taxes"), and to keep at all times all and every part of each item of the
Equipment and Pledged Equipment free and clear of all Indemnified Taxes which
might in any way affect the interest of any Tax Indemnitee therein or result in
a Lien upon any such item of the Equipment or Pledged Equipment; provided,
however, that the Lessee shall be under no obligation to pay any Tax so long as
either the Tax Indemnitee or the Lessee is contesting in good faith and by
appropriate legal proceedings such tax and the nonpayment thereof does not, in
the reasonable opinion of the Tax Indemnitee, materially adversely affect the
interest of any Tax Indemnitee hereunder or under the Indenture.

                  Subject to Section 7.1(e), if any Indemnified Taxes shall have
been charged or levied against any Tax Indemnitee directly and paid by such Tax
Indemnitee after such Tax Indemnitee shall have given written notice thereof to
the Lessee and the same shall have remained unpaid for a period of ten Business
Days thereafter, the Lessee shall reimburse such Tax Indemnitee payment.

                  (e) Contests. If a written claim is made by any taxing
authority against a Tax Indemnitee for any Taxes with respect to which the
Lessee may be required to indemnify against hereunder (a "Tax Claim"), such Tax
Indemnitee shall give the Lessee written notice of such Tax Claim promptly (but
in any event within twenty (20) days) after its receipt, and shall furnish
Lessee with copies of such Tax Claim and all other writings received from the
taxing authority to the extent relating to such claim (but failure to so notify
the Lessee shall relieve the Lessee of its



                                          Participation Agreement (TRLI 2001-1A)
                                       65
<PAGE>

obligations hereunder only to the extent it effectively precludes a contest of
the claim). The Tax Indemnitee shall not pay such Tax Claim until at least
thirty (30) days after providing the Lessee with such written notice, unless (a)
the Tax Indemnitee is required to do so by law or regulation and (b) in the
written notice described above, the Tax Indemnitee has notified the Lessee of
such requirement. If the Lessee shall so request within 30 days after receipt of
such notice, then such Tax Indemnitee shall in good faith at Lessee's expense
contest such Tax; provided, however, that to the extent the contest involves
only Taxes constituting property taxes, sales taxes, or use taxes and does not
involve any taxes or other issues relating to a Tax Indemnitee which are
unrelated to the transactions contemplated by the Operative Agreements and if no
Equity Insufficiency Circumstance exists, such contest shall be undertaken by
the Lessee at the Lessee's expense and at no-after-tax cost to the Lessor or the
Owner Participant, but if such contest would involve any other type of Tax or
any taxes or issues relating to a Tax Indemnitee which are unrelated to the
transactions contemplated by Operative Agreements or if an Equity Insufficiency
exists, then such Tax Indemnitee may, in its sole discretion, control such
contest (including selecting the forum for such contest, and determining whether
any such contest shall be conducted by (i) paying such Tax under protest or (ii)
resisting payment of such Tax or (iii) paying such Tax and seeking a refund
thereof; provided, further, however, that at such Tax Indemnitee's option, such
contest shall be conducted by the Lessee in the name of such Tax Indemnitee). In
no event shall such Tax Indemnitee be required or the Lessee be permitted to
contest any Tax for which the Lessee is obligated to indemnify pursuant to this
Section unless: (i) the Lessee shall have acknowledged in writing its liability
to such Tax Indemnitee for an indemnity payment pursuant to this Section as a
result of such claim if and to the extent such Tax Indemnitee or the Lessee, as
the case may be, shall not prevail in the contest of such claim; provided,
however, that the Lessee shall not be required to indemnify for such Taxes to
the extent the results of the contest clearly and unambiguously demonstrate that
the Tax is not an indemnified Tax; (ii) such Tax Indemnitee shall have received
the opinion of independent tax counsel selected by the Tax Indemnitee and
reasonably satisfactory to the Lessee furnished at the Lessee's sole expense, to
the effect that a reasonable basis exists for contesting such claim or, in the
event of an appeal of a court decision, that it is more likely than not that an
appellate court or an administrative agency with appellate jurisdiction, as the
case may be, will reverse or substantially modify the adverse determination;
(iii) the Lessee shall have agreed to pay such Tax Indemnitee on demand (and at
no after-tax costs to the Lessor and the Owner Participant) all reasonable costs
and expenses that such Tax Indemnitee may incur in connection with contesting
such claim (including, without limitation, all costs, expenses, reasonable legal
and accounting fees, disbursements, penalties, interest and additions to the
Tax); (iv) no Lease Default described in Section 14(a), 14(b), 14(g) or 14(h) of
the Lease or a Lease Event of Default shall have occurred and shall have been
continuing, unless the Lessee shall have posted a satisfactory bond or other
security with respect to the costs of such



                                          Participation Agreement (TRLI 2001-1A)
                                       66
<PAGE>

contest and the Taxes which may be required to be indemnified; (v) such Tax
Indemnitee shall have determined that the action to be taken will not result in
any substantial danger of sale, forfeiture or loss of, or the creation of any
Lien, or the Lessee shall have or otherwise made a provision to protect the
interest of such Tax Indemnitee (in a manner satisfactory to such Tax
Indemnitee), on the Equipment or any portion thereof or any interest therein;
(vi) the amount of such claims alone, or, if the subject matter thereof shall be
of a continuing or recurring nature, when aggregated with substantially
identical potential claims shall be (A) at least $5,000 in the event of a Lessee
controlled contest, or (B) $25,000 in the event of a Tax Indemnitee controlled
contest; and (vii) if such contest shall be conducted in a manner requiring the
payment of the claim, the Lessee shall have paid the amount required (and at no
after-tax costs to the Lessor and the Owner Participant). The Lessee shall
cooperate with the Tax Indemnitee with respect to any contest controlled and
conducted by the Tax Indemnitee and the Tax Indemnitee shall consult with the
Lessee regarding the conduct of such contest. The Tax Indemnitee shall cooperate
with respect to any contest controlled and conducted by the Lessee and the
Lessee shall consult with the Tax Indemnitee regarding the conduct of such
contest.

                  Notwithstanding anything to the contrary contained in this
Section 7.1, no Tax Indemnitee shall be required to contest any claim if the
subject matter thereof shall be of a continuing or recurring nature and shall
have previously been adversely decided to the Tax Indemnitee pursuant to the
contest provisions of this Section unless there shall have been a change in the
law (including, without limitation, amendments to statutes or regulations,
administrative rulings or court decisions) enacted, promulgated or effective
after such claim shall have been so previously decided, and such Tax Indemnitee
shall have received an opinion of independent tax counsel selected by the Tax
Indemnitee and reasonably satisfactory to the Lessee, furnished at the Lessee's
sole expense, to the effect that such change is favorable to the position which
such Tax Indemnitee or the Lessee, as the case may be, had asserted in such
previous contest and as a result of such change, there is a reasonable basis to
contest such claim.

                  Notwithstanding anything contained in this Section 7.1, a Tax
Indemnitee will not be required to contest the imposition of any Tax and shall
be permitted to settle or compromise any claim without the Lessee's consent if
such Tax Indemnitee (A) shall waive its right to indemnity under this Section
7.1 with respect to such Tax (and any directly related claim and any claim the
outcome of which is determined based upon the outcome of such claim) and (B)
shall pay to the Lessee any amount previously paid or advanced by the Lessee
pursuant to this Section 7.1 with respect to such Tax, plus interest at the rate
that would have been payable by the relevant taxing authority with respect to a
refund of such Tax.



                                          Participation Agreement (TRLI 2001-1A)
                                       67
<PAGE>

                  (f) Payments to Lessee. With respect to any payment or
indemnity hereunder, such payment or indemnity shall have included an amount
payable to the Tax Indemnitee sufficient to hold such Tax Indemnitee harmless on
an After- Tax Basis from all Taxes required to be paid by such Tax Indemnitee
with respect to such payment or indemnity under the laws of any federal, state
or local government or taxing authority in or of the United States, or under the
laws of any taxing authority or governmental subdivision in or of a foreign
country; provided that, if any Tax Indemnitee realizes and recognizes a
permanent tax benefit by reason of such payment or indemnity (whether such tax
benefit shall be by means of a foreign tax credit, investment tax credit,
depreciation or recovery deduction or otherwise), such Tax Indemnitee shall pay
to the Lessee an amount equal to the sum of such tax benefit plus any tax
benefit realized as the result of any payment made pursuant to this proviso,
when, as, if and to the extent realized; provided further that, (i) if at the
time such payment shall be due to the Lessee, a Lease Event of Default shall
have occurred and be continuing, such amount shall not be payable until such
Lease Event of Default shall have been cured, and (ii) the amount which such Tax
Indemnitee shall be required to pay to the Lessee shall not exceed the amounts
which the Lessee has theretofore paid such Tax Indemnitee hereunder with respect
to such indemnity or a substantially identical indemnity.

                  For purposes of this Section 7.1, in determining the order in
which the consolidated (for federal income tax purposes) group to which such Tax
Indemnitee belongs utilizes withholding or other foreign taxes as a credit
against such group's United States income taxes, such Tax Indemnitee (and such
group) shall be deemed to utilize (i) first, all foreign taxes other than those
described in clauses (ii) and (iii) below; provided, however, that such other
foreign taxes which are carried back to the taxable year for which a
determination is being made pursuant to such clause (i) shall be deemed utilized
after the foreign taxes described in clause (ii) below, (ii) then, on a pari
passu basis, the foreign taxes indemnified hereunder together with all other
foreign taxes (including fees, taxes and other charges hereunder) with respect
to which such Tax Indemnitee (or any member of such group) is entitled to obtain
indemnification pursuant to an indemnification provision contained in any lease,
loan agreement, financing document or participation agreement (including,
without limitation, this Agreement) pursuant to which there is an agreement that
foreign taxes shall be, or shall be deemed to be, utilized on a basis no less
favorable to the indemnitor than those contemplated in this paragraph, and (iii)
third, foreign taxes attributable to transactions entered into by such Tax
Indemnitee (or any member of such group) which did not provide for foreign taxes
to be utilized or deemed utilized on at least a pari passu basis.

                  (g) Reports. In the event any reports with respect to
Indemnified Taxes are required to be made, the Lessee will either prepare and
file such reports (and in the case of reports which are required to be filed on
the basis of individual



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<PAGE>

items of Equipment, such reports shall be prepared and filed in such manner as
to show, if required, the interest of each Tax Indemnitee in such items of
Equipment) or, if it shall not be permitted to file the same, it will notify
each Tax Indemnitee of such reporting requirements, prepare such reports in such
manner as shall be satisfactory to each Tax Indemnitee and deliver the same to
each Tax Indemnitee within a reasonable period prior to the date the same is to
be filed. The Lessee shall provide such information as the Owner Participant or
the Lessor may reasonably require from the Lessee to enable the Owner
Participant and the Lessor to fulfill their respective tax filing, tax audit,
and tax litigation obligations.

                  (h) Survival. In the event that, during the continuance of
this Agreement, any Indemnified Tax accrues or becomes payable or is levied or
assessed (or is attributable to the period of time during which the Lease is in
existence or prior to the return of Equipment in accordance with the provisions
of the Lease) which the Lessee is or will be obligated to pay or reimburse,
pursuant to this Section 7.1, such liability shall continue, notwithstanding the
expiration of the Lease, until all such Taxes are paid or reimbursed by the
Lessee.

                  (i) Affiliated Group. For purposes of applying this Section
7.1 with respect to any Tax, the term "Owner Participant" shall include each
member of the affiliated group of corporations with which Grant Holdings, Inc.
(and its successors and assigns) files consolidated or combined tax returns
relating to such Imposition.

                  (j) Income Tax. For purposes of this Section 7.1, the term
"Income Tax" means any Tax based on or measured by or with respect to gross or
net income (including without limitation, capital gains taxes, personal holding
company taxes, minimum taxes and tax preferences) or gross or net receipts and
Taxes which are capital, net worth, conduct of business, franchise or excess
profits taxes and interest, additions to tax, penalties, or other charges in
respect thereof (provided, however, that Taxes that are, or are in the nature
of, sales, use, rental, value-added, excise, ad valorem, or property (whether
tangible or intangible) taxes shall not constitute an Income Tax).

                  (k) Certain Withholding. If the Indenture Trustee fails to
withhold any Tax required to be withheld with respect to any payment to a Lender
Tax Indemnitee or any claim is otherwise asserted by a taxing authority against
any Equity Tax Indemnitee for or on account of any amount required to be
withheld from any payment to a Lender Tax Indemnitee or Certificateholder, the
Lessee will indemnify each Equity Tax Indemnitee (without regard to any
exclusions in Section 7.1(c) hereof) on an After-Tax Basis against any Taxes
required to be withheld and any interest, penalties, and additions to tax with
respect thereto, along with other costs (including attorneys' fees) incurred in
connection with such claim.



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<PAGE>

         Section 7.2 General Indemnification.

                  (a) Claims Defined. For the purposes of Sections 7.2, 7.3 and
7.4, "Claims" shall mean any and all costs, expenses, liabilities, obligations,
losses, damages, penalties, actions or suits or claims of whatsoever kind or
nature (whether or not on the basis of negligence, strict or absolute liability
or liability in tort) which may be imposed on, incurred by, suffered by, or
asserted against an Indemnified Person, any Unit or any Pledged Unit and, except
as otherwise expressly provided in Section 7.2, 7.3 and 7.4, shall include, but
not be limited to, all reasonable out-of-pocket costs, disbursements and
expenses (including legal fees and expenses) paid or incurred by an Indemnified
Person in connection therewith or related thereto.

                  (b) Indemnified Person Defined. For the purposes of Sections
7.2, 7.3 and 7.4, "Indemnified Person" means the Owner Participant, the Owner
Trustee, Trust Company, the Indenture Trustee, the Pass Through Trustee, each of
their Affiliates and each of their respective directors, officers, employees,
successors and permitted assigns, agents and servants, the Trust Estate and the
Indenture Estate (the respective directors, officers, employees, successors and
permitted assigns, agents and servants of the Owner Participant, the Owner
Trustee, Trust Company, the Indenture Trustee, the Pass Through Trustee and each
of their Affiliates, as applicable, together with the Owner Participant, the
Owner Trustee, Trust Company, the Indenture Trustee, the Pass Through Trustee
and each of their Affiliates, as the case may be, being referred to herein
collectively as the "Related Indemnitee Group" of the Owner Participant, the
Indenture Trustee, the Owner Trustee, the Pass Through Trustee and the Trust
Company, respectively).

                  (c) Claims Indemnified. Whether or not any Unit is accepted
under the Lease, or the Closing occurs, and subject to the exclusions stated in
Section 7.2(d) below, Lessee agrees to indemnify, protect, defend and hold
harmless each Indemnified Person on an After-Tax Basis against Claims directly
or indirectly resulting from or arising out of or alleged to result from or
arise out of (whether or not such Indemnified Person shall be indemnified as to
such Claim by any other Person but subject to Section 7.2(g)):

                           (i) this Agreement or any other Operative Agreement
or any of the transactions contemplated hereby and thereby or any Unit or
Pledged Unit or the ownership, lease, operation, possession, modification,
improvement, abandonment, use, non-use, maintenance, lease, Sublease,
substitution, control, repair, storage, alteration, transfer or other
application or disposition, return, overhaul, testing, servicing, replacement or
registration of any Unit or Pledged Unit (including, without limitation, injury,
death or property damage of passengers, shippers or others, and environmental
control, noise and pollution regulations, or the



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<PAGE>

presence, discharge, treatment, storage, handling, generation, disposal,
spillage, release, escape of or exposure of any Person or thing to (directly or
indirectly) Hazardous Substances or damage to the environment (including,
without limitation, costs of investigations or assessments, clean-up costs,
response costs, remediation costs, removal costs, restoration costs, monitoring
costs, costs of corrective actions and natural resource damages)) whether or not
in compliance with the terms of the Lease or the Collateral Agency Agreement, as
applicable, or by any of the commodities, items or materials from time to time
contained in any Unit or Pledged Unit, whether or not in compliance with the
terms of the Lease or the Collateral Agency Agreement, as applicable, or by the
inadequacy of any Unit or Pledged Unit or deficiency or defect in any Unit or
Pledged Unit or by any other circumstances in connection with any Unit or
Pledged Unit or by the performance of any Unit or Pledged Unit or any risks
relating thereto;

                           (ii) the construction, manufacture, financing,
refinancing, design, purchase, acceptance, rejection, delivery, non-delivery or
condition of any Unit or any Pledged Unit (including, without limitation, latent
and other defects, whether or not discoverable, and any claim for patent,
trademark or copyright infringement);

                           (iii) any act or omission (whether negligent or
otherwise) or any breach of or failure to perform or observe, or any other
non-compliance with, any covenant, condition or agreement to be performed by, or
other obligation of, the Lessee or any Affiliate of the Lessee under any of the
Operative Agreements, or the falsity of any representation or warranty of the
Lessee or any Affiliate of the Lessee in any of the Operative Agreements to
which it is a party or in any document or certificate delivered by the Lessee or
any Affiliate of the Lessee in connection therewith other than representations
and warranties in the Tax Indemnity Agreement;

                           (iv) the offer, sale or delivery of any Equipment
Notes or Pass Through Certificates or any interest in the Trust Estate or in
connection with a refinancing in accordance with the terms hereof; and

                           (v) any violation of law, rule, regulation or order
by the Lessee or any Affiliate of Lessee or any Sublessee or any Pledged
Equipment Lessee or their respective directors, officers, employees, agents or
servants.

                  (d) Claims Excluded. The following are excluded from the
Lessee's agreement to indemnify under this Section 7.2:

                           (i) Claims with respect to any Unit to the extent
attributable to acts or events occurring after (except (A) in any case where
remedies



                                          Participation Agreement (TRLI 2001-1A)
                                       71
<PAGE>

are being exercised under Section 15 of the Lease for so long as the Lessor
shall be entitled to exercise remedies under such Section 15, or (B) the Lessee
has assumed any of the obligations with respect to the Equipment Notes under
Section 3.6 of the Indenture and the Equipment Notes remain outstanding under
the Indenture) the later to occur of (x) with respect to such Unit, the earlier
to occur of the termination of the Lease or the expiration of the Lease Term in
accordance with the terms thereof, and (y) with respect to such Unit, the return
of such Unit to the Lessor in accordance with the terms of the Lease (it being
understood that, so long as any such Unit is in storage as provided in Section
6.1(c) of the Lease, the date of return thereof for the purpose of this clause
(i) shall be the last day of the Storage Period);

                           (ii) Claims which are Taxes, whether or not the
Lessee is required to indemnify therefor under Section 7.1 hereof or under the
Tax Indemnity Agreement or any loss of tax benefits or increases in tax
liability whether or not the Lessee is required to indemnify a Indemnified
Person elsewhere in the Operative Agreements; provided that this clause (ii)
shall not apply to Taxes necessary to pay Claims on an After-Tax Basis;

                           (iii) with respect to any particular Indemnified
Person, Claims to the extent resulting from (x) the gross negligence or willful
misconduct of such Indemnified Person or a Related Party, or (y) any breach of
any covenant to be performed by such Indemnified Person or a Related Party under
any of the Operative Agreements, or the falsity of any representation or
warranty of such Indemnified Person or a Related Party in any of the Operative
Agreements or in a document or certificate delivered in connection therewith;

                           (iv) Claims to the extent attributable to any
transfer by the Lessor of the Equipment or any portion thereof or any transfer
by the Owner Participant of all or any portion of its interest in the Trust
Estate other than (A) any transfer after a Lease Event of Default, (B) the
transfer of all or any portion of the Equipment or any Owner Participant's
interest in the Equipment to the Lessee, (C) the transfer of all or any portion
of the Equipment to a third party pursuant to Lessee's election to terminate the
Lease or (D) any transfer of all or any portion of the Equipment pursuant to
Section 6.9;

                           (v) with respect to any particular Indemnified
Person, unless such transfer is required by the terms of the Operative
Agreements or occurs during the continuance of a Lease Event of Default, Claims
relating to any offer, sale, assignment, transfer or other disposition
(voluntary or involuntary) (a) in the case of the Owner Participant, of any of
its interest in the Beneficial Interest (other than pursuant to Section 6.9) or
(b) with respect to the Loan Participant, of all or any portion of the Loan
Participant's interest in the Equipment Notes or the collateral therefor;



                                          Participation Agreement (TRLI 2001-1A)
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<PAGE>

                           (vi) with respect to any particular Indemnified
Person, Claims resulting from the imposition of (x) any Lessor's Lien
attributable to such Indemnified Person or a Related Party or (y) any Lien
attributable to such Indemnified Person or a Related Party not expressly
permitted under the Operative Agreements or which such Indemnified Person is
required to remove pursuant to the terms of the Operative Agreements;

                           (vii) with respect to any particular Indemnified
Person, Claims to the extent the risk thereof has been expressly assumed by such
Indemnified Person in connection with the exercise by such Indemnified Person of
the right of inspection granted under Section 6.2 of the Lease, inspection or
restenciling under Section 6.1(c) of the Lease or inspection under Section 13.2
of the Lease;

                           (viii) Claims relating to any amount that constitutes
principal of, or interest or premium on the Equipment Notes or the Pass Through
Certificates;

                           (ix) Claims relating to the payment of any amount
which constitutes Transaction Costs which the Owner Trustee is obligated to pay
pursuant to Section 2.5(a) (other than those that the Lessee may be required to
pay under Section 2.5(c) or Section 2.5(e)) or any other amount to the extent
such Indemnified Person or a Related Party has expressly agreed to pay such
amount without a right of reimbursement, or any Claim payable by any Indemnified
Person pursuant to any provision of any Operative Agreement that expressly
states that such Claim is not subject to indemnification or reimbursement by the
Lessee, or any Claim arising out of obligations expressly assumed by the
Indemnified Person seeking indemnification or a Related Party;

                           (x) Claims relating to any amount that is an ordinary
and usual operating or overhead expense of any Indemnified Person (it being
understood out-of-pocket expenses payable to third parties do not constitute
"ordinary and usual operating or overhead expenses");

                           (xi) Claims relating to an Indenture Event of Default
that is not attributable to a Lease Event of Default;

                           (xii) with respect to the Owner Trustee in its
individual and trust capacities, and its Related Indemnitee Group, Claims
relating to a failure on the part of the Owner Trustee to distribute in
accordance with the Trust Agreement any amounts distributable by it thereunder;



                                          Participation Agreement (TRLI 2001-1A)
                                       73
<PAGE>

                           (xiii) with respect to the Indenture Trustee in its
individual and trust capacities, Claims relating to failure on the part of the
Indenture Trustee to distribute in accordance with the Indenture any amounts
distributable by it thereunder;

                           (xiv) with respect to the Pass Through Trustee in its
individual and trust capacities, Claims relating to failure on the part of the
Pass Through Trustee to distribute in accordance with the Pass Through Trust
Agreement any amounts distributable by it thereunder;

                           (xv) Claims relating to the offer, sale or delivery
of any Equipment Note or any interest in the Trust Estate;

                           (xvi) Claims relating to any sale, transfer or
holding of the Equipment Notes or Pass Through Certificates being deemed to
result in a "prohibited transaction" under ERISA; or

                           (xvii) without affecting Lessee's obligations under
Section 2.5(b), Claims relating to the authorization or giving or withholding of
any future amendments, supplements, waivers or consents with respect to any of
the Operative Agreements which amendments, supplements, waivers or consents are
not requested by Lessee or are not specifically required by the Operative
Agreements.

                  (e) Insured Claims. In the case of any Claim indemnified by
the Lessee hereunder which is covered by a policy of insurance maintained by the
Lessee pursuant to Section 12 of the Lease or otherwise, each Indemnified Person
agrees to provide reasonable cooperation to the insurers in the exercise of
their rights to investigate, defend, settle or compromise such Claim as may be
required to retain the benefits of such insurance with respect to such Claim.

                  (f) Claims Procedure. An Indemnified Person shall, after
obtaining knowledge thereof, promptly notify the Lessee of any Claim as to which
indemnification is sought; provided, however, that the failure to give such
notice shall not release the Lessee from any of its obligations under this
Section 7.2, except (but only if neither the Lessee nor TILC shall have actual
knowledge of such Claim) to the extent that failure to give notice of any
action, suit or proceeding against such Indemnified Person shall have a material
adverse effect on Lessee's ability to defend such Claim or recover proceeds
under any insurance policies maintained by the Lessee or to the extent Lessee's
indemnification obligations are increased as a result of such failure. The
Lessee shall, after obtaining knowledge thereof, promptly notify each
Indemnified Person of any indemnified Claim affecting such Indemnified Person.
Subject to the provisions of the following paragraph, the Lessee shall at its
sole cost and expense be entitled to control, and shall assume full
responsibility for,



                                          Participation Agreement (TRLI 2001-1A)
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<PAGE>

the defense of such claim or liability; provided that the Lessee shall confirm
to such Indemnified Person Lessee's obligations to indemnify hereunder for such
Claim, shall keep the Indemnified Person which is the subject of such proceeding
fully apprised of the status of such proceeding and shall provide such
Indemnified Person with all information with respect to such proceeding as such
Indemnified Person shall reasonably request. To the extent that a Claim is made
against Lessee pursuant to this Section 7.2 at a time when an identical claim
for indemnification arising from substantially similar facts and circumstances
is being asserted against TILC, TRMI and/or Trinity pursuant to this Section 7
or Section 4 of the Trinity Guaranty, if Lessee is entitled to control the
defense of such Claim pursuant to this Section 7.2 and at the same time TILC,
TRMI and/or Trinity, as the case may be, is entitled to control the defense of
such claim or liability pursuant to this Section 7 or Section 4 of the Trinity
Guaranty, Lessee's indemnification obligations under this Section 7.2 shall not
be reduced as a result of the inability of Lessee to control the defense of such
Claim where such inability to control the defense of such Claim is caused by the
exercise by TILC, TRMI and/or Trinity, as applicable, of such Person's right to
control the defense of such indemnified claim as provided by this Section 7 or
Section 4 of the Trinity Guaranty.

                  Notwithstanding any of the foregoing to the contrary, the
Lessee shall not be entitled to control and assume responsibility for the
defense of any Claim if (1) a Lease Event of Default shall have occurred and be
continuing, (2) such proceeding will involve any material danger of the sale,
forfeiture or loss of, or the creation of any Lien (other than any Lien
permitted under the Operative Agreements or a Lien which is adequately bonded to
the satisfaction of such Indemnified Person) on, any Unit or Pledged Unit, (3)
in the good faith opinion of such Indemnified Person, there exists an actual or
potential conflict of interest such that it is advisable for such Indemnified
Person to retain control of such proceeding, (4) such Claim involves the
possibility of criminal sanctions or liability to such Indemnified Person or (5)
an Equity Insufficiency Circumstance shall exist. In the circumstances described
in clauses (1) - (5), the Indemnified Person shall be entitled to control and
assume responsibility for the defense of such claim or liability at the expense
of the Lessee. In addition, any Indemnified Person may participate in any
proceeding controlled by the Lessee pursuant to this Section 7.2, but only to
the extent that such Person's participation does not in the reasonable opinion
of counsel to the Lessee materially interfere with such control, at its own
expense, in respect of any such proceeding as to which the Lessee shall have
acknowledged in writing its obligation to indemnify the Indemnified Person
pursuant to this Section 7.2, and at the expense of the Lessee in respect of any
such proceeding as to which the Lessee shall not have so acknowledged its
obligation to the Indemnified Person pursuant to this Section 7.2. The Lessee
may in any event participate in all such proceedings at its own cost. Nothing
contained in this Section 7.2(f) shall be deemed to require an Indemnified
Person to contest any Claim or to assume responsibility for or control of any
judicial



                                          Participation Agreement (TRLI 2001-1A)
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<PAGE>

proceeding with respect thereto. No Indemnified Person shall enter into any
settlement or other compromise with respect to any Claim without the prior
written consent of the Lessee unless the Indemnified Person waives its rights to
indemnification hereunder.

                  (g) Subrogation. If a Claim indemnified by the Lessee under
this Section 7.2 is paid in full by the Lessee and/or an insurer under a policy
of insurance maintained by the Lessee, the Lessee and/or such insurer, as the
case may be, shall be subrogated to the extent of such payment to the rights and
remedies of the Indemnified Person (other than under insurance policies
maintained by such Indemnified Person) on whose behalf such Claim was paid with
respect to the transaction or event giving rise to such Claim. Should an
Indemnified Person receive any refund, in whole or in part, with respect to any
Claim paid by the Lessee hereunder, it shall promptly pay over the amount
refunded (but not in excess of the amount the Lessee or any of its insurers has
paid) to the Lessee; provided, however, so long as a Lease Event of Default
shall have occurred and be continuing, such amount may be held by the Collateral
Agent as security for the Lessee's obligations under the Lease and the other
Operative Agreements; provided, further, only with respect to the Owner
Participant and its Related Indemnitee Group, so long as an event referred to in
clause (5) of Section 7.2(f) hereof shall have occurred and be continuing, such
amount may be held by the Owner Trustee as security for the Lessee's obligations
with respect to the Equity Insufficiency Circumstance.

         Section 7.3 Indemnification by TILC.

                  (a) Claims Indemnified. Whether or not any Unit is accepted
under the Lease, or the Closing occurs, and subject to the exclusions stated in
Section 7.3(b) below, TILC agrees to indemnify, protect, defend and hold
harmless each Indemnified Person on an After-Tax Basis against Claims directly
or indirectly resulting from or arising out of or alleged to result from or
arise out of (whether or not such Indemnified Person shall be indemnified as to
such Claim by any other Person but subject to Section 7.3(d)):

                           (i) any breach of or any inaccuracy in any
representation or warranty made by TILC in this Agreement or any of the other
Operative Agreements or in any certificate delivered by TILC pursuant hereto or
thereto;

                           (ii) any breach of or failure by TILC to perform any
covenant or obligation of TILC set out in or contemplated by this Agreement or
any of the other Operative Agreements; and



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<PAGE>

                           (iii) any violation of law, rule, regulation or order
by TILC or its directors, officers, employees, agents or servants.

                  (b) Claims Excluded. The following are excluded from TILC's
agreement to indemnify under this Section 7.3:

                           (i) Claims with respect to any Unit to the extent
attributable to acts or events occurring after (except (A) in any case where
remedies are being exercised under Section 15 of the Lease for so long as the
Lessor shall be entitled to exercise remedies under such Section 15, or (B) the
Lessee has assumed any of the obligations with respect to the Equipment Notes
under Section 3.6 of the Indenture and the Equipment Notes remain outstanding
under the Indenture) the later to occur of (x) with respect to such Unit, the
earlier to occur of the termination of the Lease or the expiration of the Lease
Term in accordance with the terms thereof, and (y) with respect to such Unit,
the return of such Unit to the Lessor in accordance with the terms of the Lease
(it being understood that, so long as any Unit is in storage as provided in
Section 6.1(c) of the Lease, the date of return thereof for the purpose of this
clause (i) shall be the last day of the Storage Period);

                           (ii) Claims which are Taxes or any loss of tax
benefits or increases in tax liability; provided that this clause (ii) shall not
apply to Taxes necessary to pay Claims on an After-Tax Basis;

                           (iii) with respect to any particular Indemnified
Person, Claims to the extent resulting from (x) the gross negligence or willful
misconduct of such Indemnified Person or a Related Party, or (y) any breach of
any covenant to be performed by such Indemnified Person or a Related Party under
any of the Operative Agreements, or the falsity of any representation or
warranty of such Indemnified Person or a Related Party in any of the Operative
Agreements or in a document or certificate delivered in connection therewith;

                           (iv) Claims to the extent attributable to any
transfer by the Lessor of the Equipment or any portion thereof or any transfer
by the Owner Participant of all or any portion of its interest in the Trust
Estate other than (A) any transfer after a Lease Event of Default, (B) the
transfer of all or any portion of the Equipment or any Owner Participant's
interest in the Equipment to the Lessee, (C) the transfer of all or any portion
of the Equipment to a third party pursuant to Lessee's election to terminate the
Lease or (D) any transfer of all or any portion of the Equipment pursuant to
Section 6.9;

                           (v) with respect to any particular Indemnified
Person, unless such transfer is required by the terms of the Operative
Agreements or occurs during the continuance of a Lease Event of Default, Claims
relating to any offer, sale,



                                          Participation Agreement (TRLI 2001-1A)
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<PAGE>

assignment, transfer or other disposition (voluntary or involuntary) (a) in the
case of the Owner Participant, of any of its interest in the Beneficial Interest
(other than pursuant to Section 6.9), or (b) with respect to the Loan
Participant, of all or any portion of its interest in the Equipment Notes or the
collateral therefor;

                           (vi) with respect to any particular Indemnified
Person, Claims resulting from the imposition of (x) any Lessor's Lien
attributable to such Indemnified Person or a Related Party or (y) any Lien
attributable to such Indemnified Person or a Related Party not expressly
permitted under the Operative Agreements or which such Indemnified Person is
required to remove pursuant to the terms of the Operative Agreements;

                           (vii) with respect to any particular Indemnified
Person, Claims to the extent the risk thereof has been expressly assumed by such
Indemnified Person in connection with the exercise by such Indemnified Person of
the right of inspection granted under Section 6.2 of the Lease, inspection or
restenciling under Section 6.1(c) of the Lease or inspection under Section 13.2
of the Lease;

                           (viii) Claims relating to any amount that constitutes
principal of, or interest or premium on the Equipment Notes or the Pass Through
Certificates;

                           (ix) Claims relating to the payment of any amount
which constitutes Transaction Costs which the Owner Trustee is obligated to pay
pursuant to Section 2.5(a) (other than those that the Lessee may be required to
pay under Section 2.5(c) or Section 2.5(e)) or any other amount to the extent
such Indemnified Person or a Related Party has expressly agreed to pay such
amount without a right of reimbursement, or any Claim payable by any Indemnified
Person pursuant to any provision of any Operative Agreement that expressly
states that such Claim is not subject to indemnification or reimbursement by the
Lessee, or any Claim arising out of obligations expressly assumed by the
Indemnified Person seeking indemnification or a Related Party;

                           (x) Claims relating to any amount that is an ordinary
and usual operating or overhead expense of any Indemnified Person (it being
understood out-of-pocket expenses payable to third parties do not constitute
"ordinary and usual operating or overhead expenses");

                           (xi) Claims relating to an Indenture Event of Default
that is not attributable to a Manager Default;

                           (xii) with respect to the Owner Trustee in its
individual and trust capacities, and its Related Indemnitee Group, Claims
relating to a failure on



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<PAGE>

the part of the Owner Trustee to distribute in accordance with the Trust
Agreement any amounts distributable by it thereunder;

                           (xiii) with respect to the Indenture Trustee in its
individual and trust capacities, Claims relating to failure on the part of the
Indenture Trustee to distribute in accordance with the Indenture any amounts
distributable by it thereunder;

                           (xiv) with respect to the Pass Through Trustee in its
individual and trust capacities, Claims relating to failure on the part of the
Pass Through Trustee to distribute in accordance with the Pass Through Trust
Agreement any amounts distributable by it thereunder;

                           (xv) Claims relating to the offer, sale or delivery
of any Equipment Note or any interest in the Trust Estate;

                           (xvi) Claims relating to any sale, transfer or
holding of the Equipment Notes or Pass Through Certificates being deemed to
result in a "prohibited transaction" under ERISA; or

                           (xvii) Claims relating to the authorization or giving
or withholding of any future amendments, supplements, waivers or consents with
respect to any of the Operative Agreements which amendments, supplements,
waivers or consents are not requested by TILC or are not specifically required
by the Operative Agreements.

                  (c) Claims Procedure. An Indemnified Person shall, after
obtaining knowledge thereof, promptly notify TILC of any Claim as to which
indemnification is sought; provided, however, that the failure to give such
notice shall not release TILC from any of its obligations under this Section
7.3, except (but only if TILC shall not have actual knowledge of such Claim) to
the extent that failure to give notice of any action, suit or proceeding against
such Indemnified Person shall have a material adverse effect on TILC's ability
to defend such Claim or recover proceeds under any insurance policies maintained
by TILC or to the extent TILC's indemnification obligations are increased as a
result of such failure. TILC shall, after obtaining knowledge thereof, promptly
notify each Indemnified Person of any indemnified Claim affecting such
Indemnified Person. Subject to the provisions of the following paragraph, TILC
shall at its sole cost and expense be entitled to control, and shall assume full
responsibility for, the defense of such claim or liability; provided that TILC
shall confirm to such Indemnified Person TILC's obligations to indemnify
hereunder for such Claim, shall keep the Indemnified Person which is the subject
of such proceeding fully apprised of the status of such proceeding and shall
provide such Indemnified Person with all information with respect to such



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<PAGE>

proceeding as such Indemnified Person shall reasonably request. To the extent
that a Claim is made against TILC pursuant to this Section 7.3 at a time when an
identical claim for indemnification arising from substantially similar facts and
circumstances is being asserted against Lessee, TRMI and/or Trinity pursuant to
this Section 7 or Section 4 of the Trinity Guaranty, if TILC is entitled to
control the defense of such Claim pursuant to this Section 7.3 and at the same
time Lessee, TRMI and/or Trinity, as the case may be, is entitled to control the
defense of such claim or liability pursuant to this Section 7 or Section 4 of
the Trinity Guaranty, TILC's indemnification obligations under this Section 7.3
shall not be reduced as a result of the inability of TILC to control the defense
of such Claim where such inability to control the defense of such Claim is
caused by the exercise by Lessee, TRMI and/or Trinity, as applicable, of such
Person's right to control the defense of such indemnified claim as provided by
this Section 7 or Section 4 of the Trinity Guaranty.

                  Notwithstanding any of the foregoing to the contrary, TILC
shall not be entitled to control and assume responsibility for the defense of
any Claim if (1) a Lease Event of Default shall have occurred and be continuing,
(2) such proceeding will involve any material danger of the sale, forfeiture or
loss of, or the creation of any Lien (other than any Lien permitted under the
Operative Agreements or a Lien which is adequately bonded to the satisfaction of
such Indemnified Person) on, any Unit or Pledged Unit, (3) in the good faith
opinion of such Indemnified Person, there exists an actual or potential conflict
of interest such that it is advisable for such Indemnified Person to retain
control of such proceeding, (4) such Claim involves the possibility of criminal
sanctions or liability to such Indemnified Person or (5) an Equity Insufficiency
Circumstance shall exist. In the circumstances described in clauses (1) - (5),
the Indemnified Person shall be entitled to control and assume responsibility
for the defense of such claim or liability at the expense of TILC. In addition,
any Indemnified Person may participate in any proceeding controlled by TILC
pursuant to this Section 7.3, but only to the extent that such Person's
participation does not in the reasonable opinion of counsel to TILC materially
interfere with such control, at its own expense, in respect of any such
proceeding as to which TILC shall have acknowledged in writing its obligation to
indemnify the Indemnified Person pursuant to this Section 7.3, and at the
expense of TILC in respect of any such proceeding as to which TILC shall not
have so acknowledged its obligation to the Indemnified Person pursuant to this
Section 7.3. TILC may in any event participate in all such proceedings at its
own cost. Nothing contained in this Section 7.3(c) shall be deemed to require an
Indemnified Person to contest any Claim or to assume responsibility for or
control of any judicial proceeding with respect thereto. No Indemnified Person
shall enter into any settlement or other compromise with respect to any Claim
without the prior written consent of TILC unless the Indemnified Person waives
its rights to indemnification hereunder.



                                          Participation Agreement (TRLI 2001-1A)
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<PAGE>

                  (d) Subrogation. If a Claim indemnified by TILC under this
Section 7.3 is paid in full by TILC and/or an insurer under a policy of
insurance maintained by TILC, TILC and/or such insurer, as the case may be,
shall be subrogated to the extent of such payment to the rights and remedies of
the Indemnified Person (other than under insurance policies maintained by such
Indemnified Person) on whose behalf such Claim was paid with respect to the
transaction or event giving rise to such Claim. Should an Indemnified Person
receive any refund, in whole or in part, with respect to any Claim paid by TILC
hereunder, it shall promptly pay over the amount refunded (but not in excess of
the amount TILC or any of its insurers has paid) to TILC; provided, however, so
long as a Lease Event of Default shall have occurred and be continuing, such
amount may be held by the Collateral Agent as security for TILC's obligations
under the Management Agreement and the other Operative Agreements; provided,
further, only with respect to the Owner Participant and its Related Indemnitee
Group, so long as an event referred to in clause (5) of Section 7.3(c) hereof
shall have occurred and be continuing, such amount may be held by the Owner
Trustee as security for the Lessee's obligations with respect to the Equity
Insufficiency Circumstance.

         Section 7.4 Indemnification by TRMI.

                  (a) Claims Indemnified. Whether or not any Unit is accepted
under the Lease, or the Closing occurs, and subject to the exclusions stated in
Section 7.4(b) below, TRMI agrees to indemnify, protect, defend and hold
harmless each Indemnified Person on an After-Tax Basis against Claims directly
or indirectly resulting from or arising out of or alleged to result from or
arise out of (whether or not such Indemnified Person shall be indemnified as to
such Claim by any other Person but subject to Section 7.4(d)):

                           (i) any breach of or any inaccuracy in any
representation or warranty made by TRMI in this Agreement or any of the other
Operative Agreements or in any certificate delivered by TRMI pursuant hereto or
thereto;

                           (ii) any breach of or failure by TRMI to perform any
covenant or obligation of TRMI set out in or contemplated by this Agreement or
any of the other Operative Agreements; and

                           (iii) any violation of law, rule, regulation or order
by TRMI or its directors, officers, employees, agents or servants.

                  (b) Claims Excluded. The following are excluded from TRMI's
agreement to indemnify under this Section 7.4:



                                          Participation Agreement (TRLI 2001-1A)
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<PAGE>

                           (i) Claims with respect to any Unit to the extent
attributable to acts or events occurring after (except (A) in any case where
remedies are being exercised under Section 15 of the Lease for so long as the
Lessor shall be entitled to exercise remedies under such Section 15, or (B) the
Lessee has assumed any of the obligations with respect to the Equipment Notes
under Section 3.6 of the Indenture and the Equipment Notes remain outstanding
under the Indenture) the later to occur of (x) with respect to such Unit, the
earlier to occur of the termination of the Lease or the expiration of the Lease
Term in accordance with the terms thereof, and (y) with respect to each Unit,
the return of such Unit to the Lessor in accordance with the terms of the Lease
(it being understood that, so long as any Unit is in storage as provided in
Section 6.1(c) of the Lease, the date of return thereof for the purpose of this
clause (i) shall be the last day of the Storage Period);

                           (ii) Claims which are Taxes or any loss of tax
benefits or increases in tax liability; provided that this clause (ii) shall not
apply to Taxes necessary to pay Claims on an After-Tax Basis;

                           (iii) with respect to any particular Indemnified
Person, Claims to the extent resulting from (x) the gross negligence or willful
misconduct of such Indemnified Person or a Related Party, or (y) any breach of
any covenant to be performed by such Indemnified Person or a Related Party under
any of the Operative Agreements, or the falsity of any representation or
warranty of such Indemnified Person or a Related Party in any of the Operative
Agreements or in a document or certificate delivered in connection therewith;

                           (iv) Claims to the extent attributable to any
transfer by the Lessor of the Equipment or any portion thereof or any transfer
by the Owner Participant of all or any portion of its interest in the Trust
Estate other than (A) any transfer after a Lease Event of Default, (B) the
transfer of all or any portion of the Equipment or any Owner Participant's
interest in the Equipment to the Lessee, (C) the transfer of all or any portion
of the Equipment to a third party pursuant to Lessee's election to terminate the
Lease or (D) any transfer of all or any portion of the Equipment pursuant to
Section 6.9;

                           (v) with respect to any particular Indemnified
Person, unless such transfer is required by the terms of the Operative
Agreements or occurs during the continuance of a Lease Event of Default, Claim
relating to any offer, sale, assignment, transfer or other disposition
(voluntary or involuntary) (a) in the case of the Owner Participant, of any of
its interest in the Beneficial Interest (other than pursuant to Section 6.9), or
(b) with respect to the Loan Participant, of all or any portion of its interest
in the Equipment Notes or the collateral therefor;



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<PAGE>

                           (vi) with respect to any particular Indemnified
Person, Claims resulting from the imposition of (x) any Lessor's Lien
attributable to such Indemnified Person or a Related Party or (y) any Lien
attributable to such Indemnified Person or a Related Party not expressly
permitted under the Operative Agreements or which such Indemnified Person is
required to remove pursuant to the terms of the Operative Agreements;

                           (vii) with respect to any particular Indemnified
Person, Claims to the extent the risk thereof has been expressly assumed by such
Indemnified Person in connection with the exercise by such Indemnified Person of
the right of inspection granted under Section 6.2 of the Lease, inspection or
restenciling under Section 6.1(c) of the Lease or inspection under Section 13.2
of the Lease;

                           (viii) Claims relating to any amount that constitutes
principal of, or interest or premium on the Equipment Notes or the Pass Through
Certificates;

                           (ix) Claims relating to the payment of any amount
which constitutes Transaction Costs which the Owner Trustee is obligated to pay
pursuant to Section 2.5(a) (other than those that the Lessee may be required to
pay under Section 2.5(c) or Section 2.5(e)) or any other amount to the extent
such Indemnified Person or a Related Party has expressly agreed to pay such
amount without a right of reimbursement, or any Claim payable by any Indemnified
Person pursuant to any provision of any Operative Agreement that expressly
states that such Claim is not subject to indemnification or reimbursement by the
Lessee, or any Claim arising out of obligations expressly assumed by the
Indemnified Person seeking indemnification or a Related Party;

                           (x) Claims relating to any amount that is an ordinary
and usual operating or overhead expense of any Indemnified Person (it being
understood out-of-pocket expenses payable to third parties do not constitute
"ordinary and usual operating or overhead expenses");

                           (xi) Claims relating to an Indenture Event of Default
that is not attributable to a Manager Default;

                           (xii) with respect to the Owner Trustee in its
individual and trust capacities, and its Related Indemnitee Group, any Claims
relating to a failure on the part of the Owner Trustee to distribute in
accordance with the Trust Agreement any amounts distributable by it thereunder;

                           (xiii) with respect to the Indenture Trustee in its
individual and trust capacities, any Claims relating to failure on the part of
the



                                          Participation Agreement (TRLI 2001-1A)
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<PAGE>

Indenture Trustee to distribute in accordance with the Indenture any amounts
distributable by it thereunder;

                           (xiv) with respect to the Pass Through Trustee in its
individual and trust capacities, any Claims relating to failure on the part of
the Pass Through Trustee to distribute in accordance with the Pass Through Trust
Agreement or Pass Through Trust Supplement any amounts distributable by it
thereunder;

                           (xv) Claims relating to the offer, sale or delivery
of any Equipment Note or any interest in the Trust Estate;

                           (xvi) Claims relating to any sale, transfer or
holding of the Equipment Notes or Pass Through Certificates being deemed to
result in a "prohibited transaction" under ERISA; or

                           (xvii) any Claims relating to the authorization or
giving or withholding of any future amendments, supplements, waivers or consents
with respect to any of the Operative Agreements which amendments, supplements,
waivers or consents are not requested by TRMI or are not specifically required
by the Operative Agreements.

                  (c) Claims Procedure. An Indemnified Person shall, after
obtaining knowledge thereof, promptly notify TRMI of any Claim as to which
indemnification is sought; provided, however, that the failure to give such
notice shall not release TRMI from any of its obligations under this Section
7.4, except (but only if TRMI shall not have actual knowledge of such Claim) to
the extent that failure to give notice of any action, suit or proceeding against
such Indemnified Person shall have a material adverse effect on TRMI's ability
to defend such Claim or recover proceeds under any insurance policies maintained
by TRMI or to the extent TRMI's indemnification obligations are increased as a
result of such failure. TRMI shall, after obtaining knowledge thereof, promptly
notify each Indemnified Person of any indemnified Claim affecting such
Indemnified Person. Subject to the provisions of the following paragraph, TRMI
shall at its sole cost and expense be entitled to control, and shall assume full
responsibility for, the defense of such claim or liability; provided that TRMI
shall confirm to such Indemnified Person TRMI's obligations to indemnify
hereunder for such Claim, shall keep the Indemnified Person which is the subject
of such proceeding fully apprised of the status of such proceeding and shall
provide such Indemnified Person with all information with respect to such
proceeding as such Indemnified Person shall reasonably request. To the extent
that a Claim is made against TRMI pursuant to this Section 7.4 at a time when an
identical claim for indemnification arising from substantially similar facts and
circumstances is being asserted against Lessee, TILC and/or Trinity pursuant to
this Section 7 or Section 4 of the Trinity Guaranty, if TRMI is entitled to
control the defense of such



                                          Participation Agreement (TRLI 2001-1A)
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<PAGE>

Claim pursuant to this Section 7.4 and at the same time Lessee, TILC and/or
Trinity, as the case may be, is entitled to control the defense of such claim or
liability pursuant to this Section 7 or Section 4 of the Trinity Guaranty,
TRMI's indemnification obligations under this Section 7.4 shall not be reduced
as a result of the inability of TRMI to control the defense of such Claim where
such inability to control the defense of such Claim is caused by the exercise by
Lessee, TILC and/or Trinity, as applicable, of such Person's right to control
the defense of such indemnified claim as provided by this Section 7 or Section 4
of the Trinity Guaranty.

                  Notwithstanding any of the foregoing to the contrary, TRMI
shall not be entitled to control and assume responsibility for the defense of
any Claim if (1) a Lease Event of Default shall have occurred and be continuing,
(2) such proceeding will involve any material danger of the sale, forfeiture or
loss of, or the creation of any Lien (other than any Lien permitted under the
Operative Agreements or a Lien which is adequately bonded to the satisfaction of
such Indemnified Person) on, any Unit or Pledged Unit, (3) in the good faith
opinion of such Indemnified Person, there exists an actual or potential conflict
of interest such that it is advisable for such Indemnified Person to retain
control of such proceeding, (4) such Claim involves the possibility of criminal
sanctions or liability to such Indemnified Person or (5) an Equity Insufficiency
Circumstance shall exist. In the circumstances described in clauses (1) - (5),
the Indemnified Person shall be entitled to control and assume responsibility
for the defense of such claim or liability at the expense of TRMI. In addition,
any Indemnified Person may participate in any proceeding controlled by TRMI
pursuant to this Section 7.4, but only to the extent that such Person's
participation does not in the reasonable opinion of counsel to TRMI materially
interfere with such control, at its own expense, in respect of any such
proceeding as to which TRMI shall have acknowledged in writing its obligation to
indemnify the Indemnified Person pursuant to this Section 7.4, and at the
expense of TRMI in respect of any such proceeding as to which TRMI shall not
have so acknowledged its obligation to the Indemnified Person pursuant to this
Section 7.4. TRMI may in any event participate in all such proceedings at its
own cost. Nothing contained in this Section 7.4(c) shall be deemed to require an
Indemnified Person to contest any Claim or to assume responsibility for or
control of any judicial proceeding with respect thereto. No Indemnified Person
shall enter into any settlement or other compromise with respect to any Claim
without the prior written consent of TRMI unless the Indemnified Person waives
its rights to indemnification hereunder.

                  (d) Subrogation. If a Claim indemnified by TRMI under this
Section 7.4 is paid in full by TRMI and/or an insurer under a policy of
insurance maintained by TRMI, TRMI and/or such insurer, as the case may be,
shall be subrogated to the extent of such payment to the rights and remedies of
the Indemnified Person (other than under insurance policies maintained by such



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<PAGE>

Indemnified Person) on whose behalf such Claim was paid with respect to the
transaction or event giving rise to such Claim. Should an Indemnified Person
receive any refund, in whole or in part, with respect to any Claim paid by TRMI
hereunder, it shall promptly pay over the amount refunded (but not in excess of
the amount TRMI or any of its insurers has paid) to TRMI; provided, however, so
long as a Lease Event of Default shall have occurred and be continuing, such
amount may be held by the Collateral Agent as security for TRMI's obligations
under the Administrative Services Agreement and the other Operative Agreements;
provided, further, only with respect to the Owner Participant and its Related
Indemnitee Group, so long as an event referred to in clause (5) of Section
7.4(c) hereof shall have occurred and be continuing, such amount may be held by
the Owner Trustee as security for the Lessee's obligations with respect to the
Equity Insufficiency Circumstance.

SECTION 8.        LESSEE'S RIGHT OF QUIET ENJOYMENT.

         Each party to this Agreement acknowledges notice of, and consents in
all respects to, the terms of the Lease, and expressly, severally and as to its
own actions only, agrees that, so long as no Lease Event of Default has occurred
and is continuing, it shall not take or cause to be taken any action contrary to
the Lessee's rights under the Lease, including, without limitation, the right to
possession, use and quiet enjoyment by the Lessee of the Equipment, or by any
Sublessee of the Equipment or by any Pledged Equipment Lessee of the Pledged
Equipment.

SECTION 9.        SUCCESSOR INDENTURE TRUSTEE.

         In the event that the Indenture Trustee gives notice of its resignation
pursuant to Section 8.2 of the Indenture, the Owner Trustee shall promptly
appoint a successor Indenture Trustee reasonably acceptable to the Lessee.

SECTION 10.       MISCELLANEOUS.

         Section 10.1 Consents. Each Participant covenants and agrees (subject,
in the case of the Loan Participant, to all of the terms and provisions of the
Indenture) that it shall not unreasonably withhold its consent to any consent
requested by the Lessee, TILC, TRMI, the Owner Trustee, the Pass Through Trustee
or the Indenture Trustee, as the case may be, under the terms of the Operative
Agreements that by its terms is not to be unreasonably withheld by the Owner
Trustee or the Indenture Trustee.

         Section 10.2 Refinancing. So long as no Lease Event of Default shall
have occurred and be continuing, the Lessee shall have the right, at any time
following the fifth anniversary of the Closing Date, and provided that Lessee is
simultaneously exercising the refinancing option provided by Section 10.2 of the
Other Participation



                                          Participation Agreement (TRLI 2001-1A)
                                       86
<PAGE>

Agreement, to request the Owner Participant and the Owner Trustee to effect an
optional prepayment of all, but not less than all, of the Equipment Notes
pursuant to Section 2.10(d) of the Indenture as part of a refunding or
refinancing operation, provided that the Lessee shall obtain the prior consent
of the Owner Participant to be granted in the sole discretion of the Owner
Participant acting in good faith if such refinancing imposes any increased risk
or liability on or otherwise adversely affects, the Owner Participant; provided
further, that the Owner Participant shall not withhold such consent if in its
sole judgment (i) any increased risk, or liability is both remote and not
material, (ii) the Lessee is at the time at least as creditworthy as on the
Closing Date and (iii) Lessee provides an indemnity, in form and substance
satisfactory to the Owner Participant, for such increased risk or liability. As
soon as practicable after receipt of such request and consent, if required, the
Owner Participant and the Lessee will enter into an agreement, in form and
substance satisfactory to the parties thereto, as to the terms of such refunding
or refinancing as follows:

                  (a) the Lessee, the Owner Participant, the Indenture Trustee,
the Owner Trustee, and any other appropriate parties will enter into a financing
or loan agreement (which may involve an underwriting agreement in connection
with a public offering), in form and substance reasonably satisfactory to the
parties thereto, providing for (i) the issuance and sale by the Owner Trustee or
such other party as may be appropriate on the date specified in such agreement
(for the purposes of this Section 10.2, the "Refunding Date") of debt securities
in an aggregate principal amount (in the lawful currency of the United States)
equal to the principal amount of the Equipment Notes outstanding on the
Refunding Date, having the same maturity date as said Equipment Notes and having
a weighted average life which is not less than or greater than (in either case,
by more than three months) the Remaining Weighted Average Life of said Equipment
Notes, (ii) the application of the proceeds of the sale of such debt securities
to the prepayment of all such Equipment Notes on the Refunding Date, and (iii)
payment by Lessee to the Person or Persons entitled thereto of all other
amounts, in respect of accrued interest, any Make Whole Amount or other premium,
if any, payable on such Refunding Date;

                  (b) the Lessee and the Owner Trustee will amend the Lease in a
manner such that (i) if the Refunding Date is not a Rent Payment Date and the
accrued and unpaid interest on the Equipment Notes is not otherwise paid
pursuant to Section 10.2(a), the Lessee shall on the Refunding Date prepay that
portion of the next succeeding installment of Basic Rent as shall equal the
aggregate interest accrued on the Equipment Notes outstanding to the Refunding
Date, (ii) Basic Rent payable in respect of the period from and after the
Refunding Date shall be recalculated to preserve the Net Economic Return which
the Owner Participant would have realized had such refunding not occurred,
provided that the net present value of Basic Rent shall be minimized to the
extent consistent therewith, and (iii)



                                          Participation Agreement (TRLI 2001-1A)
                                       87
<PAGE>

amounts payable in respect of Stipulated Loss Value, Stipulated Loss Amount,
Early Purchase Price, Termination Value and Termination Amount from and after
the Refunding Date shall be appropriately recalculated to preserve the Net
Economic Return which the Owner Participant would have realized had such
refunding not occurred (it being agreed that any recalculations pursuant to
subclauses (ii) and (iii) of this clause (b) shall be performed in accordance
with the requirements of Section 2.6 hereof);

                  (c) the Owner Trustee will enter into an agreement to provide
for the securing thereunder of the debt securities issued by the Owner Trustee
pursuant to clause (a) of this Section 10.2 in like manner as the Equipment
Notes and/or will enter into such amendments and supplements to the Indenture as
may be necessary to effect such refunding or refinancing, which agreements,
amendments and/or supplements shall be reasonably satisfactory in form and
substance to the Owner Participant; provided that, no such agreement or
amendment shall provide for any increase in the security for the new debt
securities; and provided further that, notwithstanding the foregoing (but
subject to the provisions of clauses (a) and (b) and the lead in paragraph of
this Section 10.2 above), the Lessee reserves the right to set the economic
terms and other terms not customarily negotiated between an owner participant
and a lender of the refunding or refinancing transaction except to the extent
adversely affecting cash flow, coverage ratios and reserve accounts as to the
Owner Participant to be so offered to the extent that they are passed through to
the Lessee in, or define rights or obligations of the Lessee under, the
Operative Agreements; provided, further, that no such amendment or supplement
will in the sole judgment of the Owner Participant increase its obligations or
impair its rights under the Operative Agreements or otherwise adversely affect
it without the consent of the Owner Participant;

                  (d) (i) in the case of a refunding or refinancing involving a
public offering of debt securities, neither the Owner Trustee nor the Owner
Participant shall be an "issuer" for securities law purposes or an "obligor"
within the meaning of the Trust Indenture Act of 1939, as amended, the offering
materials (including any registration statement) for the refunding or
refinancing transaction shall be reasonably satisfactory to the Owner
Participant and (ii) the Lessee shall provide satisfactory indemnity to the
Owner Trustee and Owner Participant with respect to the refunding or
refinancing;

                  (e) unless otherwise agreed by the Owner Participant, the
Lessee shall pay to the Owner Trustee as Supplemental Rent an amount, on an
After-Tax Basis, equal to any Make-Whole Amount, Late Payment Premium, if any,
payable in respect of Equipment Notes outstanding on the Refunding Date pursuant
to the Indenture, all interest which is accrued and unpaid in respect of late
payments of Basic Rent or any part thereof, all reasonable fees, costs, expenses
of such refunding



                                          Participation Agreement (TRLI 2001-1A)
                                       88
<PAGE>

or refinancing and of the parties hereto incurred in connection with such
refunding or refinancing (including all reasonable out-of-pocket legal fees and
expenses and the reasonable fees of any financial advisors);

                  (f) the Lessee shall give the Indenture Trustee, the Pass
Through Trustee and the Owner Participant not less than 25 days prior written
notice of the Refunding Date;

                  (g) the Owner Participant, the Owner Trustee, the Pass Through
Trustee and the Indenture Trustee shall have received (i) such opinions of
counsel as they may reasonably request concerning compliance with the Securities
Act of 1933, as amended, and any other applicable law relating to the sale of
securities and (ii) such other opinions of counsel and such certificates and
other documents, each in form and substance reasonably satisfactory to them, as
they may reasonably request in connection with compliance with the terms and
conditions of this Section 10.2; and

                  (h) all necessary authorizations, approvals and consents shall
have been obtained and shall be in full force and effect.

                  The Lessee shall pay to or reimburse the Participants, the
Owner Trustee and the Indenture Trustee for all costs and expenses (including
reasonable attorneys' and accountants' fees) paid or incurred by them in
connection with such refunding or refinancing.

         Section 10.3 Amendments and Waivers. Except as otherwise provided in
the Indenture, no term, covenant, agreement or condition of this Agreement may
be terminated, amended or compliance therewith waived (either generally or in a
particular instance, retroactively or prospectively) except by an instrument or
instruments in writing executed by each party against which enforcement of the
termination, amendment or waiver is sought.

         Section 10.4 Notices. Unless otherwise expressly specified or permitted
by the terms hereof, all communications and notices provided for herein shall be
in writing or by facsimile, and any such notice shall become effective (i) upon
personal delivery thereof, including, without limitation, by reputable overnight
courier, or (ii) in the case of notice by facsimile, upon confirmation of
receipt thereof, provided such transmission is promptly further confirmed by any
of the methods set forth in clause (i) above, in each case addressed to each
party hereto at its address set forth below or, in the case of any such party
hereto, at such other address as such party may from time to time designate by
written notice to the other parties hereto:



                                          Participation Agreement (TRLI 2001-1A)
                                       89
<PAGE>

                  If to the Lessee:

                           Trinity Rail Leasing I L.P.
                           2525 Stemmons Freeway
                           Dallas, TX 75207
                           Attention: Vice President Leasing Operations
                           Re: (TRLI 2001-1A)
                           Fax No.: (214) 589-8271
                           Confirmation No.: (214) 631-4420


                  If to TILC:

                           Trinity Industries Leasing Company
                           2525 Stemmons Freeway
                           Dallas, TX 75207
                           Attention: Vice President Leasing Operations
                           Re: (TRLI 2001-1A)
                           Fax No.: (214) 589-8271
                           Confirmation No.: (214) 631-4420

                  If to TRMI:

                           Trinity Rail Management, Inc.
                           2525 Stemmons Freeway
                           Dallas, TX 75207
                           Attention: Vice President Leasing Operations
                           Re: (TRLI 2001-1A)
                           Fax No.: (214) 589-8271
                           Confirmation No.: (214) 631-4420

                  If to the Owner Trustee:

                           TRLI 2001-1A Railcar Statutory Trust
                           c/o State Street Bank and Trust Company of
                           Connecticut, National Association
                           225 Asylum Street, Goodwin Square,
                           Hartford, CT 06103
                           Attention: Corporate Trust Administration
                           Facsimile No.: (860) 244-1889
                           Confirmation No.:(860) 244-1800

                  with a copy to:

                           the Owner Participant at the address set forth below



                                          Participation Agreement (TRLI 2001-1A)
                                       90
<PAGE>

                  If to the Owner Participant:

                           Trimaran Leasing, L.P.
                           c/o Philip Morris Capital Corporation
                           225 High Ridge Road, Suite 300
                           Stamford, CT 06905
                           Attention: Vice President, Structured Finance
                           Fax No.: (914) 335-8297
                           Confirmation No.: (914) 335-8204

                  If to the Indenture Trustee:

                           LaSalle Bank National Association
                           135 South LaSalle Street
                           Suite 1960
                           Chicago, IL 60603
                           Attention: Kristine Schossow,
                                      Corporate Trust Services Division
                           Facsimile No.: (312) 904-2236
                           Confirmation No.: (312) 904-2571

                  If to the Pass Through Trustee:

                           LaSalle Bank National Association
                           135 South LaSalle Street
                           Suite 1960
                           Chicago, IL 60603
                           Attention: Kristine Schossow,
                                      Corporate Trust Services Division
                           Facsimile No.: (312) 904-2236
                           Confirmation No.: (312) 904-2571

                  If to the Rating Agency:

                           Standard & Poor's Corporation
                           25 Broadway
                           New York, New York 10004
                           Attention: Stephen F. Rooney
                           Facsimile No.: (212) 438-2646
                           Confirmation No.: (212) 438-2591



                                          Participation Agreement (TRLI 2001-1A)
                                       91
<PAGE>

         Section 10.5 Survival. All warranties, representations, indemnities and
covenants made by any party hereto, herein or in any certificate or other
instrument delivered by any such party or on the behalf of any such party under
this Agreement, shall be considered to have been relied upon by each other party
hereto and shall survive the consummation of the transactions contemplated
hereby on the Closing Date regardless of any investigation made by any such
party or on behalf of any such party.

         Section 10.6 No Guarantee of Residual Value or Debt. Nothing contained
herein or in the Lease, the Indenture, the Trust Agreement or the Tax Indemnity
Agreement or in any certificate or other statement delivered by the Lessee in
connection with the transactions contemplated hereby shall be deemed to be (i) a
guarantee by the Lessee, TILC or TRMI to the Owner Trustee, the Owner
Participant, the Indenture Trustee, the Pass Through Trustee or the Loan
Participant that the Equipment will have any residual value or useful life, or
(ii) a guarantee by the Indenture Trustee, the Owner Trustee, the Owner
Participant, the Lessee, TILC or TRMI of payment of the principal of, premium,
if any, or interest on the Equipment Notes.

         Section 10.7 Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of, and shall be enforceable by, the parties
hereto and their respective successors and assigns as permitted by and in
accordance with the terms hereof, including each successive holder of the
Beneficial Interest permitted under Section 6.1 hereof and each successive
holder of any Equipment Note permitted under the Indenture issued and delivered
pursuant to this Agreement or the Indenture. The parties hereto agree that the
Collateral Agent shall be a third party beneficiary of this Agreement. Except as
expressly provided herein or in the other Operative Agreements, no party hereto
may assign their interests herein without the consent of the parties hereto.

         Section 10.8 Business Day. Notwithstanding anything herein or in any
other Operative Agreement to the contrary, if the date on which any payment is
to be made pursuant to this Agreement or any other Operative Agreement is not a
Business Day, the payment otherwise payable on such date shall be payable on the
next succeeding Business Day with the same force and effect as if made on such
succeeding Business Day and (provided such payment is made on such succeeding
Business Day) no interest shall accrue on the amount of such payment from and
after such scheduled date to the time of such payment on such next succeeding
Business Day.

         SECTION 10.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES (OTHER THAN SECTION 5-1401 OF THE
NEW YORK GENERAL OBLIGATIONS LAW).



                                          Participation Agreement (TRLI 2001-1A)
                                       92
<PAGE>

         Section 10.10 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

         Section 10.11 Counterparts. This Agreement may be executed in any
number of counterparts, each executed counterpart constituting an original but
all together only one Agreement.

         Section 10.12 Headings and Table of Contents. The headings of the
Sections of this Agreement and the Table of Contents are inserted for purposes
of convenience only and shall not be construed to affect the meaning or
construction of any of the provisions hereof.

         Section 10.13 Limitations of Liability; Extent of Interest.

                  (a) Liabilities of Participants. Neither the Indenture
Trustee, the Owner Trustee nor any Participant shall have any obligation or duty
to the Lessee, to TILC, TRMI, to any other Participant or to others with respect
to the transactions contemplated hereby, except those obligations or duties of
such Participant expressly set forth in this Agreement and the other Operative
Agreements, and neither the Indenture Trustee nor any Participant shall be
liable for performance by any other party hereto of such other party's
obligations or duties hereunder. Without limitation of the generality of the
foregoing, under no circumstances whatsoever shall the Indenture Trustee or any
Participant be liable to the Lessee, TILC or TRMI for any action or inaction on
the part of the Owner Trustee in connection with the transactions contemplated
herein, whether or not such action or inaction is caused by willful misconduct
or gross negligence of the Owner Trustee, unless such action or inaction is at
the direction of the Indenture Trustee or any Participant, as the case may be,
and such action or inaction is expressly prohibited hereby.

                  (b) No Recourse to the Owner Trustee. It is expressly
understood and agreed by and between Trust Company, the Owner Trustee, the
Lessee, the Owner Participant, the Indenture Trustee, and the Loan Participant,
and their respective successors and permitted assigns that, subject to the
proviso contained in this Section 10.13(b), all representations, warranties and
undertakings of the Owner Trustee hereunder shall be binding upon the Owner
Trustee only in its capacity as Owner Trustee under the Trust Agreement, and
(except as expressly provided herein) Trust Company shall not be liable for any
breach thereof, except for its gross



                                          Participation Agreement (TRLI 2001-1A)
                                       93
<PAGE>

negligence or willful misconduct, or for breach of its covenants,
representations and warranties contained herein, except to the extent covenanted
or made in its individual capacity; provided, however, that nothing in this
Section 10.13(b) shall be construed to limit in scope or substance those
representations and warranties of Trust Company made expressly in its individual
capacity set forth herein. The term "Owner Trustee" as used in this Agreement
shall include any successor trustee under the Trust Agreement, or the Owner
Participant if the trust created thereby is revoked.

                  (c) Extent of Interest of Holders of Equipment Notes. No
holder of an Equipment Note shall have any further interest in, or other right
with respect to, the mortgage and security interests created by the Indenture
when and if the principal of and interest on all Equipment Notes held by such
holder and all other sums payable to such holder hereunder, under the Indenture
and under such Equipment Notes shall have been paid in full. Each holder of the
Equipment Notes by its acceptance of an Equipment Note, agrees that it will look
solely to the income and proceeds from the Indenture Estate to the extent
available for distribution to such holder as provided in Article III of the
Indenture and that neither TILC, TRMI, the Lessee, the Owner Participant, the
Indenture Trustee nor the Owner Trustee shall be personally liable to any holder
of the Equipment Notes for any amounts payable under the Equipment Notes, the
Indenture or hereunder, except as expressly provided in the Operative
Agreements.

                  (d) Loan Participant's Source of Funds. It is expressly
understood and agreed by and between the Owner Trustee, the Lessee, the Owner
Participant, the Indenture Trustee and the Loan Participant, and their
respective successors and permitted assigns that, subject to the proviso
contained in this Section 10.13(d), the undertakings of the Loan Participant
hereunder are limited to the application of the proceeds of the sale of the Pass
Through Certificates to the purchase by the Pass Through Trustee of the
Equipment Notes; provided, however, that nothing in this Section 10.13(d) shall
be construed to limit in scope or substance those representations and warranties
of the Loan Participant made expressly in its individual capacity set forth
herein.

         Section 10.14 Maintenance of Non-Recourse Debt. The parties hereto
agree that if the Owner Trustee becomes a debtor subject to the reorganization
provisions of the Bankruptcy Code, 11 U.S.C. Section 101 et seq. (the
"Bankruptcy Code") or any successor provision, the parties hereto will make an
election under 1111(b)(1)(A)(i) of the Bankruptcy Code. If (a) the Owner Trustee
becomes a debtor subject to the reorganization provisions of the Bankruptcy Code
or any successor provision, (b) pursuant to such reorganization provisions the
Owner Trustee is required, by reason of the Owner Trustee being held to have
recourse liability to the Pass Through Trustee or the Indenture Trustee,
directly or indirectly, to make payment on account of any amount payable under
the Equipment Notes or any of the other Operative



                                          Participation Agreement (TRLI 2001-1A)
                                       94
<PAGE>

Agreements and (c) the Indenture Trustee and/or the Pass Through Trustee
actually receives any Excess Amount (as hereinafter defined) which reflects any
payment by the Owner Trustee on account of (b) above, then the Indenture Trustee
and/or the Pass Through Trustee, as the case may be, shall promptly refund to
the Owner Trustee such Excess Amount. For purposes of this Section 10.14,
"Excess Amount" means the amount by which such payment exceeds the amount which
would have been received by the Indenture Trustee or the Pass Through Trustee if
the Owner Trustee had not become subject to the recourse liability referred to
in (b) above.

         Section 10.15 Ownership of and Rights in Units and Pledged Units. The
sale of the Units described on Schedule 1 hereto, the Existing Equipment
Subleases, the Pledged Units and the Existing Pledged Equipment Leases by TILC
contemplated hereby is intended for all purposes to be a true sale of all of
TILC's right, title and interest in and to such Units, the Existing Equipment
Subleases, the Pledged Units and the Existing Pledged Equipment Leases to the
Lessee, which shall be the legal owner thereof upon such sale. Upon consummation
of the sale and leaseback transactions contemplated hereby, the Lessee's
interest in such Units is intended to be that of a lessee only. It is intended
that for federal and state income tax purposes the Owner Participant will be the
owner of such Units. The rights of the Indenture Trustee in and to such Units
pursuant to the Indenture is intended to be that of a secured party holding a
security interest, subject to the Lease and the rights of the Lessee thereunder.
No holder of an Equipment Note is intended to have any right, title or interest
in or to such Units except as a beneficiary of the Lien granted by the Owner
Trustee to the Indenture Trustee pursuant to the Indenture in trust for the
equal and ratable benefit of the holders from time to time of the Equipment
Notes.

         Section 10.16 No Petition. Each party hereto agrees that, prior to the
date which is one year and one day after payment in full of all outstanding
Equipment Notes and all obligations of the Lessee under the Operative Agreements
and release of all Collateral held under the Collateral Agency Agreement (i) no
party hereto shall authorize the Lessee to commence a voluntary winding-up or
other voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to the Lessee or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect in any jurisdiction
or seeking the appointment of an administrator, a trustee, receiver, liquidator,
custodian or other similar official of the Lessee or any substantial part of its
property or to consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
commenced against the Lessee, or to make a general assignment for the benefit of
any party hereto or any other creditor of the Lessee, and (ii) none of the
parties hereto shall commence or join with any other Person in commencing any
proceeding against the Lessee under any bankruptcy, reorganization, liquidation
or insolvency law or statute now or hereafter in effect in any jurisdiction.
Each of the parties hereto agrees that, prior to the date which is one year and
one day after the



                                          Participation Agreement (TRLI 2001-1A)
                                       95
<PAGE>
payment in full of all outstanding Equipment Notes and all obligations of the
Lessee under the Operative Agreements and release of all Collateral held under
the Collateral Agency Agreement, it will not institute against, or join any
other Person in instituting against, Lessee an action in bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or similar
proceeding under the laws of the United States or any state of the United
States.

         Section 10.17 Consent To Jurisdiction. Each of the parties hereto
hereby irrevocably and unconditionally:

                           (i) submits for itself and its property in any legal
action or proceeding relating to this Agreement or any other Operative Agreement
or for recognition and enforcement of any judgment in respect hereof or thereof,
to the nonexclusive general jurisdiction of the courts of the State of New York,
the courts of the United States of America for the Southern District of New
York, and the appellate courts from any thereof;

                           (ii) consents that any such action or proceeding may
be brought in such courts, and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;

                           (iii) agrees that service of process in any such
action or proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form and mail), postage prepaid, to
each party hereto at its address set forth in Section 10.4 hereof, or at such
other address of which the other parties shall have been notified pursuant
thereto; and

                           (iv) agrees that nothing herein shall affect the
right to effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction.

         SECTION 10.18 WAIVER OF JURY TRIAL. EACH PARTY TO THIS AGREEMENT HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, SUIT OR COUNTERCLAIM ARISING IN CONNECTION WITH THIS AGREEMENT.



                                      * * *



                                          Participation Agreement (TRLI 2001-1A)
                                       96
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Participation
Agreement to be executed and delivered, all as of the date first above written.

                                       Lessee:

                                       TRINITY RAIL LEASING I L.P.

                                       By  TILX GP I, LLC
                                           its General Partner

                                           By:
                                              ----------------------------------
                                           Name: Eric Marchetto
                                           Title: Vice President


                                       TILC:

                                       TRINITY INDUSTRIES LEASING COMPANY


                                       By:
                                          --------------------------------------
                                       Name: Eric Marchetto
                                       Title: Vice President


                                       TRMI:

                                       TRINITY RAIL MANAGEMENT, INC.


                                       By:
                                          --------------------------------------
                                       Name: Eric Marchetto
                                       Title: Vice President



                                          Participation Agreement (TRLI 2001-1A)
<PAGE>

                                       Owner Trustee:

                                       TRLI 2001-1A RAILCAR STATUTORY TRUST,
                                       By: State Street Bank and Trust Company
                                           of Connecticut, National Association,
                                           not in its individual capacity except
                                           as expressly provided herein but
                                           solely as Owner Trustee


                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------



                                          Participation Agreement (TRLI 2001-1A)
<PAGE>

                                       Owner Participant:

                                       TRIMARAN LEASING, L.P.

                                       By: Trimaran Leasing Investors, L.L.C.-I,
                                           its General Partner

                                           By:  Grant Holdings, Inc.,
                                                its sole member


                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------



                                          Participation Agreement (TRLI 2001-1A)
<PAGE>

                                       Indenture Trustee:

                                       LASALLE BANK NATIONAL ASSOCIATION,
                                       not in its individual capacity except
                                       as expressly provided herein but solely
                                       as Indenture Trustee


                                       By:
                                          --------------------------------------
                                       Name: Sarah H. Webb
                                       Title: Senior Vice President


                                       Pass Through Trustee:

                                       LASALLE BANK NATIONAL ASSOCIATION,
                                       not in its individual capacity except as
                                       expressly provided herein but solely as
                                       Pass Through Trustee


                                       By:
                                          --------------------------------------
                                       Name: Sarah H. Webb
                                       Title: Senior Vice President



                                          Participation Agreement (TRLI 2001-1A)

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.16.2
<SEQUENCE>9
<FILENAME>d94851ex10-16_2.txt
<DESCRIPTION>EQUIPMENT LEASE AGREEMENT (TRL 1 2001-1B)
<TEXT>
<PAGE>


                                                                 Exhibit 10.16.2

                        ________________________________


                            EQUIPMENT LEASE AGREEMENT
                                 (TRLI 2001-1B)
                            Dated as of July 12, 2001

                                     between

                      TRLI 2001-1B RAILCAR STATUTORY TRUST,
  By: State Street Bank and Trust Company of Connecticut, National Association,
                    not in its individual capacity except as
             expressly provided herein but solely as Owner Trustee,
                                     Lessor

                                       and

                          TRINITY RAIL LEASING I L.P.,
                                     Lessee

                        Tank Cars and Covered Hopper Cars

                        ________________________________


     CERTAIN OF THE RIGHT, TITLE AND INTEREST OF LESSOR IN AND TO THIS LEASE,
THE EQUIPMENT COVERED HEREBY AND THE RENT DUE AND TO BECOME DUE HEREUNDER HAVE
BEEN ASSIGNED AS COLLATERAL SECURITY TO, AND ARE SUBJECT TO A SECURITY INTEREST
IN FAVOR OF, LASALLE BANK NATIONAL ASSOCIATION, NOT IN ITS INDIVIDUAL CAPACITY
BUT SOLELY AS INDENTURE TRUSTEE UNDER A TRUST INDENTURE AND SECURITY AGREEMENT
(TRLI 2001-1B), DATED AS OF JULY 12, 2001 BETWEEN SAID INDENTURE TRUSTEE, AS
SECURED PARTY, AND LESSOR, AS DEBTOR. INFORMATION CONCERNING SUCH SECURITY
INTEREST MAY BE OBTAINED FROM THE INDENTURE TRUSTEE AT ITS ADDRESS SET FORTH IN
SECTION 20 OF THIS LEASE. SEE SECTION 25.2 FOR INFORMATION CONCERNING THE RIGHTS
OF THE ORIGINAL HOLDER AND HOLDERS OF, THE VARIOUS COUNTERPARTS HEREOF.

                        ________________________________


<PAGE>

                                TABLE OF CONTENTS
                                                                            Page
                                                                            ----
SECTION 1.  Definitions........................................................1

SECTION 2.  Acceptance and Leasing of Equipment................................1

SECTION 3.  Term and Rent......................................................2
     Section 3.1    Lease Term.................................................2
     Section 3.2    Basic Rent.................................................2
     Section 3.3    Supplemental Rent..........................................3
     Section 3.4    Adjustment of Rent.........................................4
     Section 3.5    Manner of Payments.........................................4

SECTION 4.  Ownership and Marking of Equipment.................................4
     Section 4.1    Retention of Title.........................................4
     Section 4.2    Duty to Number and Mark Equipment..........................5
     Section 4.3    Prohibition Against Certain Designations...................5

SECTION 5.  Disclaimer of Warranties...........................................6
     Section 5.1    Disclaimer of Warranties...................................6
     Section 5.2    Rights Under Existing Equipment Subleases..................7

SECTION 6.  Return of Equipment; Storage.......................................7
     Section 6.1    Return; Holdover Rent......................................7
     Section 6.2    Condition of Equipment....................................10

SECTION 7.  Liens.............................................................11

SECTION 8.  Maintenance; Possession; Compliance with Laws.....................11
     Section 8.1    Maintenance and Operation.................................11
     Section 8.2    Possession and Use........................................13
     Section 8.3    Sublease..................................................13

SECTION 9.  Modifications.....................................................16
     Section 9.1    Required Modifications....................................16
     Section 9.2    Optional Modifications....................................17
     Section 9.3    Removal of Property; Replacements.........................18


<PAGE>


                                                                            Page
                                                                            ----
SECTION 10. Voluntary Termination.............................................18
     Section 10.1   Right of Termination......................................18
     Section 10.2   Sale of Equipment.........................................19
     Section 10.3   Retention of Equipment by Lessor..........................21
     Section 10.4   Termination of Lease......................................22
     Section 10.5   Funding of Accounts on Termination........................22

SECTION 11. Loss, Destruction Requisition, Etc................................23
     Section 11.1   Event of Loss.............................................23
     Section 11.2   Replacement or Payment upon Event of Loss.................23
     Section 11.3   Rent Termination..........................................25
     Section 11.4   Disposition of Equipment; Replacement of Unit.............26
     Section 11.5   Eminent Domain............................................28

SECTION 12. Insurance.........................................................28
     Section 12.1   Insurance.................................................28
     Section 12.2   Physical Damage Insurance.................................30
     Section 12.3   Public Liability Insurance................................31
     Section 12.4   Certificate of Insurance..................................32
     Section 12.5   Additional Insurance......................................33
     Section 12.6   Post-Lease Term Insurance.................................34

SECTION 13. Reports; Inspection...............................................34
     Section 13.1   Duty of Lessee to Furnish.................................34
     Section 13.2   Lessor's Inspection Rights................................35

SECTION 14. Lease Events of Default...........................................36

SECTION 15. Remedies..........................................................39
     Section 15.1   Remedies..................................................39
     Section 15.2   Cumulative Remedies.......................................43
     Section 15.3   No Waiver.................................................43
     Section 15.4   Notice of Lease Default...................................43
     Section 15.5   Lessee's Duty to Return Equipment Upon Default............43
     Section 15.6   Specific Performance; Lessor Appointed Lessee's Agent.....44

SECTION 16. Filings; Further Assurances.......................................45
     Section 16.1   Filings...................................................45


                                       ii


<PAGE>


                                                                            Page
                                                                            ----
     Section 16.2   Further Assurances........................................45
     Section 16.3   Other Filings.............................................46
     Section 16.4   Expenses..................................................46

SECTION 17. Lessor's Right to Perform.........................................46

SECTION 18. Assignment........................................................47
     Section 18.1   Assignment by Lessor......................................47
     Section 18.2   Assignment by Lessee......................................47
     Section 18.3   Sublessee's or Others Performance and Rights..............47

SECTION 19. Net Lease, Etc....................................................48

SECTION 20. Notices...........................................................49

SECTION 21. Concerning the Indenture Trustee..................................51
     Section 21.1   Limitation of the Indenture Trustee's Liabilities.........51
     Section 21.2   Right, Title and Interest of the Indenture Trustee
                       Under Lease............................................51

SECTION 22. Purchase Options; Renewal Options.................................51
     Section 22.1   Early Purchase Option.....................................51
     Section 22.2   Election to Retain or Return Equipment at End
                       of Basic or Renewal Term...............................54
     Section 22.3   Purchase Option...........................................54
     Section 22.4   Renewal Option............................................55
     Section 22.5   Rent Appraisal; Outside Renewal Date......................56
     Section 22.6   Stipulated Loss Amount and Termination Amount
                       During Renewal Term....................................57
     Section 22.7   Deemed Renewals...........................................57
     Section 22.8   Funding of Accounts on Purchase...........................58

SECTION 23. Limitation of Lessor's Liability..................................58

SECTION 24. Investment of Security Funds......................................58

SECTION 25. Miscellaneous.....................................................58
     Section 25.1   Governing Law; Severability...............................58


                                       iii


<PAGE>


                                                                            Page
                                                                            ----
     Section 25.2   Execution in Counterparts.................................59
     Section 25.3   Headings and Table of Contents; Section References........59
     Section 25.4   Successors and Assigns....................................59
     Section 25.5   True Lease................................................59
     Section 25.6   Amendments and Waivers....................................60
     Section 25.7   Survival..................................................60
     Section 25.8   Business Days.............................................60
     Section 25.9   Directly or Indirectly; Performance by Managers...........60
     Section 25.10  Incorporation by Reference................................61


                                       iv


<PAGE>


                             APPENDICES AND EXHIBITS

Exhibit A    --  Form of Lease Supplement
Exhibit B-1  --  Form of Net Sublease
Exhibit B-2  --  Form of Full Service Sublease


                                        v


<PAGE>


                            EQUIPMENT LEASE AGREEMENT
                                 (TRLI 2001-1B)

     This Equipment Lease Agreement (TRLI 2001-1B), dated as of July 12, 2001
(this "Lease"), is by and between TRLI 2001-1B Railcar Statutory Trust by State
Street Bank and Trust Company of Connecticut, National Association, not in its
individual capacity except as expressly provided herein, but solely as trustee
under the Trust Agreement, as Lessor, and Trinity Rail Leasing I L.P., a Texas
limited partnership, as Lessee.

     In consideration of the mutual agreements herein contained and other good
and valuable consideration, receipt of which is hereby acknowledged, the parties
hereto agree as follows:


SECTION 1. Definitions.

     Unless otherwise defined herein or required by the context, all capitalized
terms used herein shall have the respective meanings assigned to such terms in
Appendix A to the Participation Agreement (TRLI 2001-1B), dated as of May 17,
2001 (the "Participation Agreement"), by and among (i) Trinity Rail Leasing I
L.P., a Texas limited partnership (together with its permitted successors and
assigns, the "Lessee"), (ii) Trinity Rail Management, Inc., a Delaware
corporation, (iii) Trinity Industries Leasing Company, a Delaware corporation,
(iv) TRLI 2001-1B Railcar Statutory Trust, a Connecticut statutory trust, by
State Street Bank and Trust Company of Connecticut, National Association, a
national banking association, ("Trust Company"), not in its individual capacity
except as expressly provided herein but solely as trustee (together with its
permitted successors and assigns, the "Owner Trustee"), (v) Trimaran Leasing,
L.P., a Delaware limited partnership (together with its permitted successors and
assigns, the "Owner Participant") and (vi) LaSalle Bank National Association, a
national banking association, not in its individual capacity except as expressly
provided herein but solely as pass through trustee and indenture trustee, for
all purposes of this Lease.


SECTION 2. Acceptance and Leasing of Equipment.

     Subject to Section 4 of the Participation Agreement, Lessor hereby agrees
to accept delivery of each Unit from Lessee and to lease such Unit to Lessee
hereunder, and Lessee hereby agrees, immediately following such acceptance by
Lessor, to lease from Lessor hereunder such Unit, such acceptance by Lessor and
lease by Lessee to be evidenced by the execution and delivery by Lessee and
Lessor of a Lease Supplement covering such Unit, all in accordance with Section
2.3(b) of the Participation Agreement. Lessee hereby agrees that its execution
and delivery of a Lease Supplement covering any Unit shall, without further
act, irrevocably constitute acceptance by Lessee of such Unit for all purposes
of this Lease.


<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)


Supplement covering such Unit, all in accordance with Section 2.3(b) of the
Participation Agreement. Lessee hereby agrees that its execution and delivery
of a Lease Supplement covering any Unit shall, without further act, irrevocably
constitute acceptance by Lessee of such Unit for all purposes of this Lease.

SECTION 3. Term and Rent.

     Section 3.1 Lease Term. The basic term of this Lease (the "Basic Term")
shall commence on the Basic Term Commencement Date and, subject to earlier
termination pursuant to Section 10, 11, 15 or 22.1, shall expire at 11:59 p.m.
(Chicago, Illinois time) on the Basic Term Expiration Date. Subject and pursuant
to Section 22.4, Lessee may elect one or more Renewal Terms and, as provided in
Section 22.7 hereof, in certain circumstances a Renewal Term shall be deemed to
have occurred with respect to some or all of the Units.

     Section 3.2 Basic Rent. Lessee hereby agrees to pay Lessor Basic Rent for
each Unit throughout the Basic Term applicable thereto in consecutive monthly
installments payable on each Rent Payment Date. Each such monthly payment of
Basic Rent shall be in an amount equal to the product of the Equipment Cost for
such Unit multiplied by the Basic Rent percentage set forth opposite such Rent
Payment Date on Schedule 3-A to the Participation Agreement (as such Schedule
3-A shall be adjusted pursuant to Section 2.6 of the Participation Agreement).
Schedule 3-B to the Participation Agreement sets forth the Basic Rent allocated
for Federal income tax purposes to each lease period and calendar year
throughout the Basic Term and in addition, sets forth that for certain months,
amounts of Basic Rent shall be allocated to the following and/or preceding
calendar year. Schedule 3-B to the Participation Agreement also sets forth the
application of Basic Rent payments to the calendar year to which such payments
relate. It is the intention of Lessor and Lessee that the allocations of Basic
Rent set forth on Schedule 3-B to the Participation Agreement constitute
specific allocations of fixed rent within the meaning of Treas. Reg. Section
1.467-1(c)(2)(ii). Stipulated Loss Amounts and Termination Amounts have been
calculated on the basis that (i) any Basic Rents actually due on the date of
such calculation shall not be paid and (ii) any Basic Rents scheduled to have
been paid prior to the date of such calculation are assumed to have been paid
and have been appropriately reflected in such calculations. Lessor and Lessee
agree to include in income and deduct the Basic Rents allocated to each lease
period and calendar year according to Schedule 3-B of the Participation
Agreement. In addition, Lessor and Lessee intend that under no circumstances are
any Basic


                                       2


<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)


Rents to be considered related to (i) any period after the calendar year
succeeding the calendar year in which such Basic Rents are payable or any period
before the calendar year preceding the calendar year in which such Basic Rents
are payable or (ii) the period beginning on the Closing Date and ending on (but
not including) September 29, 2001 (the "Basic Rent Holiday").

     Notwithstanding anything to the contrary contained herein or in the
Participation Agreement, each installment of Basic Rent (both before and after
any adjustment pursuant to Section 2.6 of the Participation Agreement) shall be,
under any circumstances and in any event, in an amount at least sufficient for
Lessor to pay in full as of the due date of such installment, any payment of
principal of and interest on the Equipment Notes required to be paid by Lessor
pursuant to the Indenture on such due date in accordance with the Scheduled
Amortization.

     Section 3.3 Supplemental Rent. Lessee also agrees to pay to Lessor, or to
whosoever shall be entitled thereto, any and all Supplemental Rent, promptly as
the same shall become due and owing, or where no due date is specified, promptly
after demand by the Person entitled thereto, and in the event of any failure on
the part of Lessee to pay any Supplemental Rent, Lessor shall have all rights,
powers and remedies provided for herein or by law or equity or otherwise as in
the case of nonpayment of Basic Rent. Lessee will also pay, as Supplemental
Rent, (i) on demand, to the extent permitted by applicable law, an amount equal
to Late Payment Interest on any part of any installment of Basic Rent not paid
when due for any period for which the same shall be overdue and on any payment
of Supplemental Rent not paid when due or promptly after demanded for the period
from such due date or demand date, as applicable, until the same shall be paid
and (ii) as and when due in accordance with the Trust Indenture or the
Participation Agreement, any Make-Whole Amount payable with respect to any
Equipment Note, including, without limitation, amounts of Make-Whole Amount due
in the case of the termination of this Lease with respect to any Unit pursuant
to Section 10, in the case of the purchase of any Unit (but not in the case of a
purchase of the Beneficial Interest or if the Equipment Notes are assumed in
accordance with the Operative Agreements) pursuant to Section 22.1 or Section
6.9 of the Participation Agreement, and in the case of any refinancing of the
Equipment Notes pursuant to Section 10.2 of the Participation Agreement. All
Supplemental Rent to be paid pursuant to this Section 3.3 shall be payable in
the type of funds and in the manner set forth in Section 3.5.


                                       3


<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)


     Section 3.4 Adjustment of Rent. Lessee and Lessor agree that the Basic
Rent, Stipulated Loss Values, Stipulated Loss Amounts, Termination Values and
Termination Amount percentages and the Early Purchase Price shall be adjusted to
the extent provided in Section 2.6 of the Participation Agreement.

     Section 3.5 Manner of Payments. All Rent (other than Supplemental Rent
payable to Persons other than Lessor, which shall be payable to such other
Persons in accordance with written instructions furnished to Lessee by such
Persons, as otherwise provided in any of the Operative Agreements or as required
by law) shall be paid by Lessee to Lessor at its office at 225 Asylum Street,
Goodwin Square, Hartford, CT, 06103, Attention: Corporate Trust Administration,
provided, that so long as the Indenture shall not have been discharged pursuant
to the terms thereof, Lessor hereby directs, and Lessee hereby agrees, that all
Rent (excluding Excepted Property) payable to Lessor shall be paid into the
Payment Account directly to the Indenture Trustee at the times and in funds of
the type specified in this Section 3.5 at the office of the Indenture Trustee at
135 S. LaSalle Street, Suite 1960, Chicago, IL 60603, ABA No. 071000505, Account
608775318, Attn: Kristine Schossow, Corporate Trust Services Division, Trust
TRLI 2001-1B, or at such other location in the United States of America as the
Indenture Trustee may otherwise direct. All Rent shall be paid by Lessee to the
recipient not later than 11:00 a.m. Chicago, Illinois time on the date of such
payment in funds consisting of lawful currency of the United States of America,
which shall be immediately available. Notwithstanding anything contained in this
Lease to the contrary, any amounts received pursuant to distribution from any of
the Accounts (as such term is defined in the Collateral Agency Agreement) shall
for all purposes hereof be deemed payment in satisfaction of the related
obligation hereunder to which such distribution relates and any failure by
Lessor, the Indenture Trustee or any Indemnified Party to receive from the
Collateral Agent the full amount of any such distribution measured by reference
to Basic Rent, Supplemental Rent or any component thereof shall be deemed a
failure by Lessee to pay such Basic Rent or Supplemental Rent hereunder, as the
case may be.


SECTION 4. Ownership and Marking of Equipment.

     Section 4.1 Retention of Title. Lessor shall and hereby does retain full
legal title to and beneficial ownership of each Unit notwithstanding the
delivery to and possession and use of such Unit by Lessee hereunder or any
Sublessee under any sublease permitted hereby.


                                       4


<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)


     Section 4.2 Duty to Number and Mark Equipment. With respect to the Units to
be delivered on the Closing Date, Lessee represents that Manager has caused, and
as soon as practicable after the date on which a Lease Supplement is executed
and delivered in respect of a Replacement Unit pursuant to Section 11.4(b),
Lessee will cause, each Unit to be numbered with its reporting mark shown on the
Lease Supplement dated the date on which such Unit was delivered and covering
such Unit, and will from and after such date keep and maintain, plainly,
distinctly, permanently and conspicuously marked by a plate or stencil printed
in contrasting colors upon each side of each Unit, in letters not less than one
inch in height, a legend substantially as follows:


                   "OWNERSHIP SUBJECT TO A SECURITY AGREEMENT
                  FILED WITH THE SURFACE TRANSPORTATION BOARD"

with appropriate changes thereof and additions thereto as from time to time may
be required by law in order to protect Lessor's right, title and interest in and
to such Unit, its rights under this Lease and the rights of the Indenture
Trustee. Except as provided hereinabove, Lessee will not place any such Units in
operation or exercise any control or dominion over the same until the required
legend shall have been so marked on both sides thereof, and will replace
promptly any such word or words in such legend which may be removed, defaced,
obliterated or destroyed. In the event of a change in the reporting mark of any
Unit, within 60 days after a Responsible Officer of the Manager has received
notice of any such changed mark, a statement of the new reporting mark to be
substituted therefor shall be delivered by Lessee to Lessor and, so long as the
Indenture shall not have been discharged pursuant to its terms, to the Indenture
Trustee. As soon as practicable after the delivery of such statement a
supplement to this Lease and, if not so discharged, the Indenture, with respect
to such new reporting marks, shall be filed or recorded in all public offices
where this Lease and the Indenture shall have been filed or recorded and in such
other places, if any, where Lessor and, so long as the Indenture shall not have
been discharged pursuant to its terms, the Indenture Trustee may reasonably
request in order to protect, preserve and maintain its right, title and interest
in the Units. The costs and expenses of all such supplements, filings and
recordings shall be borne by Lessee.

     Section 4.3 Prohibition Against Certain Designations. Except as above
provided, Lessee will not allow the name of any Person to be placed on any Unit
as a designation that might reasonably be interpreted as a claim of ownership;


                                       5


<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)


provided, however, that, subject to the delivery of the statement of new
reporting marks specified in Section 4.2, Lessee may cause any Unit to be
lettered with the names or initials or other insignia customarily used by Lessee
or any Sublessee or any of their respective Affiliates on railroad equipment
used by it of the same or a similar type for convenience of identification of
the right of Lessee to use such Unit hereunder or any Sublessee to use such Unit
pursuant to a Permitted Sublease.


SECTION 5. Disclaimer of Warranties.

     Section 5.1 Disclaimer of Warranties. Without waiving any claim Lessee may
have against any seller, supplier or manufacturer, LESSEE ACKNOWLEDGES AND
AGREES THAT (i) EACH UNIT IS OF A SIZE, DESIGN, CAPACITY AND MANUFACTURE
SELECTED BY AND ACCEPTABLE TO LESSEE, (ii) LESSEE IS SATISFIED THAT EACH UNIT IS
SUITABLE FOR ITS PURPOSES AND LESSEE HAS ACCEPTED EACH UNIT, (iii) NEITHER
LESSOR NOR OWNER PARTICIPANT IS A MANUFACTURER OR A DEALER IN PROPERTY OF SUCH
KIND OR HAS INSPECTED THE UNITS PRIOR TO DELIVERY TO AND ACCEPTANCE BY LESSEE,
(iv) EACH UNIT IS LEASED HEREUNDER SUBJECT TO ALL APPLICABLE LAWS AND
GOVERNMENTAL REGULATIONS NOW IN EFFECT OR HEREAFTER ADOPTED AND (v) LESSOR
LEASES AND LESSEE TAKES EACH UNIT "AS-IS", "WHERE-IS" AND "WITH ALL FAULTS", IN
WHATEVER CONDITION IT MAY BE, AND LESSEE ACKNOWLEDGES THAT NEITHER LESSOR, AS
LESSOR OR IN ITS INDIVIDUAL CAPACITY, NOR OWNER PARTICIPANT MAKES NOR SHALL BE
DEEMED TO HAVE MADE, AND EACH EXPRESSLY DISCLAIMS, ANY AND ALL RIGHTS, CLAIMS,
WARRANTIES OR REPRESENTATIONS EITHER EXPRESS OR IMPLIED, AS TO THE VALUE,
CONDITION, FITNESS FOR ANY PARTICULAR PURPOSE, DESIGN, OPERATION,
MERCHANTABILITY THEREOF OR AS TO THE TITLE OF ANY UNIT, THE QUALITY OF THE
MATERIAL OR WORKMANSHIP THEREOF OR CONFORMITY THEREOF TO SPECIFICATIONS, FREEDOM
FROM PATENT, COPYRIGHT OR TRADEMARK INFRINGEMENT, THE ABSENCE OF ANY LATENT OR
OTHER DEFECT, WHETHER OR NOT DISCOVERABLE, OR AS TO THE ABSENCE OF ANY
OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER EXPRESS OR IMPLIED
REPRESENTATION OR WARRANTY WHATSOEVER WITH RESPECT THERETO AND EACH OF LESSOR
AND OWNER PARTICIPANT EXPRESSLY DISCLAIMS SELECTION


                                       6


<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)


OF THE UNITS, except that Lessor, in its individual capacity, represents and
warrants that on the Closing Date, Lessor shall have received whatever title to
each Unit as was conveyed to Lessor by Lessee and each Unit will be free of
Lessor's Liens attributable to Lessor and provided that the foregoing
disclaimer in clause (v) shall not extend to Owner Participant's representation
and warranty contained in Section 3.5(e) of the Participation Agreement. Lessor
hereby appoints and constitutes Lessee its agent and attorney-in-fact during the
Lease Term to assert and enforce, from time to time, in the name and for the
account of Lessor and Lessee, as their interests may appear, but in all cases at
the sole cost and expense of Lessee, whatever claims and rights Lessor may have
as owner of each Unit against the manufacturers or any prior owner thereof;
provided, however, that if at any time a Lease Event of Default shall have
occurred and be continuing, at Lessor's option, such power of attorney shall
terminate, and Lessor may assert and enforce, at Lessee's sole cost and expense,
such claims and rights. Lessee's delivery of a Lease Supplement shall be
conclusive evidence as between Lessee and Lessor that all Units described
therein are in all the foregoing respects satisfactory to Lessee, and Lessee
will not assert any claim of any nature whatsoever against Lessor based on any
of the foregoing matters.

     Section 5.2 Rights Under Existing Equipment Subleases. Unless a Lease Event
of Default shall have occurred and be continuing under Section 14 and Lessor
shall have given written notice to Lessee, Lessor agrees to make available to
Lessee such rights as Lessor may have, and Lessee shall be entitled to exercise
all rights of Lessor under, each Sublease.


SECTION 6. Return of Equipment; Storage.

     Section 6.1 Return; Holdover Rent. (a) Not less than 180 days prior to the
end of the Basic Term or the end of any Renewal Term, if Lessee has elected to
return the Units under Section 22.2, Lessee will provide Lessor with a list of
not less than ten (10) alternative storage locations ("Storage Locations") used
for the storage of rolling stock within the Contiguous United States sufficient
to store the Units and the available storage capacities of such locations.
Unless Lessee shall have purchased the Units pursuant to Section 22 of this
Lease or pursuant to Section 6.9 of the Participation Agreement, not less than
90 days prior to the end of the Lease Term, Lessor will give Lessee irrevocable
notice of its decision either to take possession of or store the Units. If
Lessor shall have decided to take possession of the Units, the terms of Section
6.1(b) will apply. If Lessor shall have decided to store the Units, the terms of
Section 6.1(c) will apply.


                                       7


<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)

     (b)  Unless Lessee shall have purchased the Units pursuant to Section 22 of
this Lease or pursuant to Section 6.9 of the Participation Agreement, if Lessor
shall have decided to take possession of the Units, Lessee will, at its sole
risk and expense, deliver possession of the Units at any storage location,
f.o.b. such location, (i) as may be agreed upon by Lessor and Lessee in writing
or (ii) in the absence of such agreement as Lessor may reasonably select by
written notice to Lessee on or before the 90th day before the end of the Lease
Term; provided, that (x) with respect to all Units being so delivered, there
shall be no more than ten (10) locations (each of which shall be located within
the Contiguous United States and shall have adequate storage capacities) and (y)
Lessor's notice shall specify the total number and type of Units to be delivered
to each location.

     (c)  (i) Unless Lessee shall have purchased the Units pursuant to Section
22 of this Lease or pursuant to Section 6.9 of the Participation Agreement, if
Lessor shall have elected to store the Units upon the expiration of the Lease
Term with respect thereto, Lessee shall store the Units free of charge and at
the risk and expense of Lessee for a period (the "Storage Period") beginning,
for any particular Storage Location, on the expiration of the Lease Term for
such Units (the "Storage Period Commencement Date") and ending not more than 60
days thereafter. On or before the 90th day before the end of the Lease Term,
Lessor shall provide Lessee with written notice designating its choices from
among the Storage Locations provided by Lessee pursuant to Section 6.1(a). Any
storage provided by Lessee during the Storage Period shall be at the sole risk
and expense of Lessee, and Lessee shall maintain the insurance required by
Section 12.1 with respect to all stored Units. During the Storage Period, Lessee
will permit Lessor or any Persons designated by it, including the authorized
representative or representatives of any prospective purchaser or user of such
Units, to restencil the marks on such Units and to inspect the same during
Lessee's normal business hours upon at least three Business Days' prior written
or telephonic notice; provided, however, that such inspection and restenciling
shall not interfere with the normal conduct of Lessee's business; and provided,
further, that (x) such inspection and restenciling shall be at such Person's own
risk and expense, (y) Lessee shall be indemnified by Lessor against any loss or
damage incurred by it in connection with any such inspection or restenciling by
such Person and (z) Lessee (except in the case of Lessee's gross negligence or
wilful misconduct) shall not be liable for any injury to, or the death of, any
person exercising, either on behalf of Lessor or any prospective purchaser or
user, the rights of inspection and restenciling granted pursuant hereto. Lessee
shall not be required


                                       8


<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)


to store any Unit after the Storage Period. If Lessee does store any Unit after
the expiration of the Storage Period, such storage shall be at the sole risk and
expense of Lessor.

     (ii) Upon the request and direction of Lessor (and at Lessor's sole risk
and expense), on not more than one occasion with respect to each stored Unit and
upon not less than 15 days' prior written notice from Lessor to Lessee, Lessee
will, on or before the expiration of the Storage Period, transport such Unit to
any railroad interchange point or points within the Contiguous United States on
any railroad lines or to any connecting carrier for shipment (with appropriate
instructions to cause such Unit to be transported to such locations in the
Contiguous United States as Lessor shall direct), whereupon Lessee shall have no
further liability or obligation with respect to such Unit.

     (iii) Upon receipt of Lessor's written notice designating its choices from
among the alternative Storage Locations provided by Lessee under Section 6.1(a),
Lessee shall have the option to store such Units at such Storage Locations as it
shall choose in which case the Storage Period shall be at the sole risk and
expense of Lessee for a period of 60 days, during which period Lessee shall be
obligated to insure such Units as provided in Section 12. Upon receipt of such
notice, Lessee will promptly give notice to Lessor of the locations at which
Lessee will store such Units. If Lessee shall exercise such option, Lessee shall
on or before the expiration of the Storage Period transport the Units to any
railroad interchange point or points within the Contiguous United States on any
railroad lines or to any connecting carrier for shipment (with appropriate
instructions to cause such Units to be transported to such locations (provided
that such Units shall be transported to no more than ten (10) locations, each
having adequate storage capacity) designated by Lessor upon not less than 15
days' prior written notice). The movement of any Unit from such Unit's location
as designated by Lessee pursuant to this Section 6.1(c)(iii) to an interchange
point thereafter designated by Lessor in accordance with the foregoing sentence
will be at the risk and expense of Lessor; provided, however, that any
incremental costs associated with movement from the storage facility designated
by Lessee pursuant to this clause (iii) over the costs that would be incurred in
movement from the storage facility designated by Lessor pursuant to Section 6.1
(a) shall be for the account of Lessee. During any Storage Period, Lessee shall
store the Units in such manner as the Manager normally stores similar units of
railroad equipment owned or managed by it.


                                       9


<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)

     (d)  Upon the latest of (i) expiration of the Lease Term with respect to a
Unit, (ii) tender of such Unit at the location determined in accordance with
Section 6.1(b) or, as applicable, the tender of such Unit for storage in
accordance with Section 6.1(c) and (iii) compliance by such Unit with Section
6.2, this Lease and the obligation to pay Basic Rent for such Unit accruing
subsequent to the expiration of the Lease Term with respect to such Unit shall
terminate.

     (e)  In the event any Unit is not (i) returned to Lessor in accordance with
the provisions of Section 6.1(b) on the last day of the Lease Term with respect
thereto, or, if requested by Lessor pursuant to Section 6.1(c), delivered and
stored on such last day of the Lease Term, and, in either case, in the condition
specified in Section 6.2 or (ii) deemed automatically renewed in accordance with
the provisions of Section 22.7, the Lease with respect to such Unit shall
continue in effect and Lessee shall pay to Lessor for each such day from the
scheduled expiration of the Lease Term with respect to such Unit until the date
on which such Unit is returned to Lessor in accordance with the provisions of
Section 6.1(b) and in the condition specified in Section 6.2, an amount equal to
the daily equivalent of the average Basic Rent for the Basic Term or the Renewal
Term, as applicable, to such Unit. Notwithstanding the foregoing, nothing in
this Section 6.1(e) shall be construed as permitting or authorizing Lessee to
fail to meet, or be construed as Lessor consenting to or waiving any failure by
Lessee to perform, Lessee's obligation to return the Units in accordance with
the requirements of this Lease. Nothing herein shall be in abrogation of
Lessor's right to terminate this Lease under Section 15 as a result of such
failure or to have such Unit returned to it for possession or storage.

     Section 6.2 Condition of Equipment. Each Unit when returned to Lessor
pursuant to Section 6.1 shall be (i) capable of performing the functions for
which it was designed, with all loading and unloading components operating in
good working order with allowance for normal wear and tear, (ii) suitable for
continued commercial use in the commodity last carried immediately prior to such
return, (iii) suitable for use in interchange in accordance with then applicable
Federal regulations, the Field Manual of the AAR, the Interchange Rules and FRA
rules and regulations, (iv) in all material respects in the condition required
by Section 8.1, (v) in conformance with any requirement pertaining to warranties
of the manufacturer of the Units during the warranty period, (vi) empty, (vii)
unless industry custom or practice indicates to the contrary, steam cleaned or
otherwise cleaned in a comparable commercially acceptable manner and (viii) free
and clear of all Liens except Lessor's Liens. All logs, records, books and other
materials, or appropriate


                                       10


<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)


copies of any thereof, relating to the maintenance of such Unit shall, upon
Lessor's request, be delivered to Lessor or its designee upon the return of such
Unit. Lessor shall have the right to inspect any Unit that is returned pursuant
to Section 6.1 to ensure that such Unit is in compliance with the conditions set
forth in this Section 6.2, at Lessor's sole cost, expense and risk (including,
without limitation, the risk of personal injury or death), by its authorized
representatives, during Lessee's normal business hours and upon reasonable prior
notice to Lessee; provided, however, that Lessee shall not be liable for any
injury to, or the death of, any Person exercising, on behalf of Lessor, the
rights of inspection granted under this Section 6.2 unless caused by Lessee's
gross negligence or wilful misconduct; and further provided, that if such Unit
is not in compliance with the conditions set forth in this Section 6.2, then
Lessee will (i) promptly take such steps as are necessary to bring such Unit in
compliance with the conditions set forth in this Section 6.2 and (ii) pay the
reason able cost and expense of the original inspection of such Unit and any
reinspection of such Unit conducted by Lessor required because of such
non-compliance with Section 6.2. No inspection pursuant to this Section 6.2
shall interfere with the normal conduct of Lessee's business or the normal
conduct of any Sublessee's business, and Lessee shall not be required to
undertake or incur any additional liabilities in connection therewith. A Unit
shall not be deemed to have been returned to Lessor for purposes of this Lease
unless and until it is in compliance with the conditions set forth in this
Section 6.2.


SECTION 7. Liens.

     Lessee will not directly or indirectly create, incur, assume, permit or
suffer to exist any Lien on or with respect to any Unit or Lessee's leasehold
interest therein under this Lease, except Permitted Liens, Lessor's Liens and
Liens described in Section 6.4(a) and 6.4(b) of the Participation Agreement.
Lessee shall promptly, at its own expense, take such action or cause such action
to be taken as may be necessary to duly discharge (or bond to the reasonable
satisfaction of Lessor and Indenture Trustee) any such Lien not excepted above
if the same shall arise at any time.


SECTION 8. Maintenance; Possession; Compliance with Laws.

     Section 8.1 Maintenance and Operation. (a) Lessee, at its own cost and
expense, shall maintain, repair and keep each Unit, or cause the Manager under
the Management Agreement to maintain, repair and keep each Unit, (i) according
to


                                       11


<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)


prudent industry practice and in all material respects, in good working order,
and in good physical condition for railcars of a similar age and usage, normal
wear and tear excepted, (ii) in a manner in all material respects consistent
with maintenance practices used by the Manager or, with respect to any Equipment
subject to an Existing Equipment Sublease that is a Net Sublease, the applicable
Sublessee, as applicable, in respect of railcars owned or managed by the Manager
or, with respect to any Equipment subject to an Existing Equipment Sublease that
is a Net Sublease, the applicable Sublessee, as applicable, similar in type to
such Unit, (iii) in accordance in all material respects with all manufacturer's
warranties in effect and in accordance with all applicable provisions, if any,
of insurance policies required to be maintained pursuant to Section 12 and (iv)
in compliance in all material respects with any applicable laws and regulations
from time to time in effect, including, without limitation, the Field Manual of
the AAR, FRA rules and regulations and Interchange Rules as they apply to the
maintenance and operation of the Units in interchange regardless of upon whom
such applicable laws and regulations are nominally imposed; provided, however,
that, so long as the Manager or, with respect to any Equipment subject to an
Existing Equipment Sublease, the applicable Sublessee, as applicable, is
similarly contesting such law or regulation with respect to all other similar
equipment owned or operated by Manager or, with respect to any Equipment subject
to an Existing Equipment Sublease, the applicable Sublessee, as applicable,
Lessee may, in good faith and by appropriate proceedings diligently conducted,
contest the validity or application of any such standard, rule or regulation in
any reasonable manner which does not materially interfere with the use,
possession, operation or return of any of the Units or materially adversely
affect the rights or interests of Lessor and the Indenture Trustee in the Units
or hereunder or other wise expose Lessor, the Indenture Trustee or any
Participant to criminal sanctions or release Lessee from the obligation to
return the Units in compliance with the provisions of Section 6.2; provided
further, that Lessee shall promptly notify Lessor and Indenture Trustee in
reasonable detail of any such contest. In no event shall Lessee discriminate in
any material respect as to the use or maintenance of any Unit (including the
periodicity of maintenance or recordkeeping in respect of such Unit) as compared
to equipment of a similar nature which the Manager owns or manages. Lessee will
maintain in all material respects all records, logs and other materials required
by relevant industry standards or any governmental authority having jurisdiction
over the Units required to be maintained in respect of any Unit, all as if
Lessee were the owner of such Units, regardless of whether any such
requirements, by their terms, are nominally imposed on Lessee, Lessor or Owner
Participant.


                                       12


<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)

     (b)  Without the written waiver or consent of Lessor (which waiver or
consent will not be unreasonably withheld), Lessee shall not change, or permit
any Sublessee to change, a DOT/AAR classification (as provided for in 49 C.F.R.
Part 179 or any successor thereto), or permit any Sublessee to operate any Unit
under a different DOT/AAR classification, from that classification in effect for
such Unit on the Closing Date, except for any change in tank test pressure
rating provided such change does not increase the pressure rating of the Unit
above the tank test pressure to which the Unit was manufactured; provided
however, that in the event Lessor shall not have provided Lessee with a written
waiver or consent to such a reclassification or operation of any Unit within 10
Business Days after receipt of Lessee's written request therefor (or Lessor
expressly rejects such a request by Lessee), Lessee may elect to replace such
Unit in accordance with and subject to the provisions of Sections 11.2(i), 11.3
and 11.4.

     Section 8.2 Possession and Use. Lessee shall be entitled to the possession
of the Units and to the use of the Units by it or any Affiliate in the United
States and, subject to the remaining provisions of this Section 8.2 and Section
8.3, Canada and Mexico, only in the manner for which it was designed and
intended and so as to subject it only to ordinary wear and tear. In no event
shall Lessee use, store or permit the use or storage of any Unit in any
jurisdiction not included in the insurance coverage required by Section 12. The
Units shall be used primarily on domestic routes in the United States, and in no
event shall more than forty percent (40%) of the Units and the Other Units (as
determined by mileage records and measured annually on a calendar year basis) be
used outside the Contiguous United States at the same time. Nothing in this
Section 8.2 shall be deemed to constitute permission by Lessor to any Person
that acquires possession of any Unit to take any action inconsistent with the
terms and provisions of this Lease or any of the other Operative Agreements.

     Section 8.3 Sublease. Lessee shall be entitled, without the prior approval
of Lessor, to enter into a sublease, car contract or other contract granting
permission for the use of a Unit to:

     (i)  a railroad company or companies (that is not a Credit Bankrupt,
Trinity or any Affiliate of Trinity) organized under the laws of the United
States of America or any state thereof or the District of Columbia, Canada or
any province thereof, or Mexico or any state thereof, upon lines of railroad
owned or operated by


                                       13


<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)


such railroad company or companies or over which such railroad company or
companies have trackage rights or rights for operation of their trains, and upon
connecting and other carriers in the usual interchange of traffic;

     (ii) responsible companies (i.e., a company with which the Manager would do
business in the ordinary course of its business with respect to railcars which
it owns or manages) (other than railroad companies, Trinity, Affiliates of
Trinity or Credit Bankrupts) for use in their business; or

     (iii) wholly-owned Subsidiaries of Trinity organized under the laws of (x)
Canada or any political subdivision thereof (each a "Canadian Affiliate") or (y)
Mexico or any political subdivision thereof (each a "Mexican Affiliate")
(subleases to any of such sublessees referred to in clauses (i), (ii) or (iii)
of this Section 8.3 being herein referred to as "Permitted Subleases");

provided, however, that Lessee shall not (A) sublease to a sublessee organized
under the laws of Mexico or any state thereof (a "Mexican Sublessee") if, after
giving effect to such sublease, the percentage of Units, Other Units and Pledged
Units in the aggregate (as measured by number of Units, Other Units and Pledged
Units and not mileage records) subleased to Mexican Sublessees exceeds the
lesser of (I) 7% (or, with Rating Agency Confirmation, 20%) of the Units, Other
Units and the Pledged Units in the aggregate, or (II) the percentage of railcars
leased or subleased to Mexican Sublessees in the Total Managed Fleet, and (B)
sublease more than 50 Units and Other Units to any single Mexican Sublessee
(other than (x) with Rating Agency Confirmation, to a Mexican Affiliate or (y) a
Mexican Sublessee (I) with a credit rating of at least BBB and Baa2 as
determined by S&P and Moody's, respectively (or, in the event that either S&P
or Moody's shall not or cease to provide a credit rating for such entity, a
credit rating of at least BBB or Baa2 by S&P or Moody's, as the case may be) or
(II) with a full, unconditional irrevocable guaranty from such Mexican
Sublessee's parent with a credit rating at least BBB and Baa2 as determined by
S&P and Moody's, respectively, or (III) with a letter of credit from a provider
with a credit rating at least A+ or A1 as determined by S&P and Moody's,
respectively), provided, further, that Lessee shall not at any time sublease
more than 20% (or, with Rating Agency Confirmation, 30%) of the Units and the
Other Units (as measured by number of Units and Other Units and not mileage
records) in the aggregate to Canadian Affiliates, provided, further, that any
Unit subleased to a Canadian Affiliate or a Mexican Affiliate shall be
sub-subleased to Persons of the type described in clause (i) or (ii) above
pursuant to a sub-sublease containing terms


                                       14


<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)


and conditions similar in all material respects to the applicable sublease
between Lessee and the applicable Canadian Affiliate or Mexican Affiliate and,
provided, further, that no sub-sublease may provide greater rights to the
sub-sublessee than those provided to the sublessee in the related sublease.

     Each Sublease (and to the extent permitted, sub-sublease) other than
Existing Equipment Subleases shall include appropriate provisions so that such
sublease (i) shall require the payment of rent (x) in dollars (y) at Fair Market
Rental Value and (z) not disproportionately in the earlier term of the sublease
compared to in the later term of the sublease; (ii) shall not permit any
sub-subleasing (or in the case of any sub-sublease, any subleasing), other than
(A) sub-subleases by Canadian Affiliates or Mexican Affiliates to Persons of the
type described in clauses (i) or (ii) of the immediately preceding paragraph
containing terms and conditions similar in all material respects to the
applicable sublease between Lessee and the applicable Canadian Affiliate or
Mexican Affiliate, (B) "single trip" subleases or (C) sub-subleases by
Permitted Sublessees so long as such sub-sublease is (X) of a term of not more
than one year, (Y) subject and subordinate to the Sublease and (Z) to a
sub-sublessee and on terms such that it would be a Permitted Sublease if it were
entered into directly by the Partnership and shall not permit any sub-sub-sub
leasing, (iii) provide that the rights of the Sublessee to offset or otherwise
set-off against amounts due to Lessee from any such Sublessee under the
applicable Sublease be limited to matters arising under the Sublease (except
that the Sublessee may offset or otherwise set off amounts due to the Marks
Company Trustee under the Sublease), (iv) without regard to the payment of Basic
Rent or the Lease Term, shall not include any term or provision which is
inconsistent with the terms and conditions of this Lease or which could
reasonably be expected to result in material adverse consequences to Lessor, any
Participant or the Indenture Trustee (it being agreed that a sublease
substantially in the form attached as Exhibit B-1 or Exhibit B-2 satisfies the
provisions of this sentence) and (v) does not have a term which extends three
years beyond the later of (i) the Basic Term Expiration Date or (ii) if
applicable, the end of any Renewal Term then in effect.

     Lessee will use commercially reasonable efforts to have each Sublease other
than Existing Equipment Subleases (i) provide that such Sublease and all rights
of the Sublessee (and of any other person claiming or who may hereafter claim
under or through the Sublessee) under such Sublease, including any purchase
options of the Sublessee thereunder, be made subject and subordinate to the
terms of this Lease and (ii) be substantially in the form attached as Exhibit
B-1 or Exhibit B-2.


                                       15


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                                                  Lease Agreement (TRLI 2001-1B)

     Notwithstanding the foregoing, in no event shall Lessee or any of its
Affiliates be required to take any action to perfect any security interest which
any Person may have in any Sublease, other than the filing of a UCC-1 Financing
Statement against the Partnership in the jurisdiction in which the Partnership's
chief executive office is located and in the Partnership's jurisdiction of
formation covering all Subleases generally.

     No sublease entered into by Lessee hereunder shall relieve Lessee of any
liability or obligation hereunder, which shall be and remain those of a
principal and not a surety. Nothing in this Section 8.3 shall be deemed to
constitute permission to any Person in possession of any Unit pursuant to any
such sublease to take any action inconsistent with the terms and provisions of
this Lease or any of the other Operative Agreements. As used in this Section
8.3, "sublease" as a noun means a sublease, car contract or other contract
granting permission for the use of a Unit and "sublease" as a verb means to
enter into any of the foregoing.


SECTION 9. Modifications.

     Section 9.1 Required Modifications. In the event a Required Modification to
a Unit is required, Lessee agrees to make such Required Modification at its own
expense; provided, however, that Lessee may, in good faith and by appropriate
proceedings diligently conducted, contest the validity or application of any
such law, regulation, requirement or rule in any reasonable manner which does
not materially interfere with the use, possession, operation or return of any
Unit or materially adversely affect the rights or interests of Lessor or the
Indenture Trustee in the Units or hereunder or otherwise expose Lessor, the
Indenture Trustee or any Participant to criminal sanctions or relieve Lessee of
the obligation to return the Units in compliance with the provisions of Section
6.2; provided, further, that, with respect to a Unit subject to a Full Service
Sublease, the Manager, and with respect to a Unit subject to a Net Sublease, the
Sublessee, as applicable, is similarly contesting such law, regulation,
requirement or rule with respect to all other similar equipment owned or
operated by the Manager or the Sublessee, as applicable. Title to any Required
Modification shall immediately vest in Lessor. Notwithstanding anything herein
to the contrary, if Lessee, on a non-discriminatory basis, determines in its
reasonable judgment (as evidenced by an Officer's Certificate of Lessee to such
effect, confirmed by an Officer's Certificate of the Manager) that any Required
Modification to a Unit would be economically impractical and the Manager
certifies that it has made a similar determination with respect to similar
railcars in similar


                                       16


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                                                  Lease Agreement (TRLI 2001-1B)


circumstances which are part of the Manager's Fleet, in lieu of making the
Required Modification as provided above, Lessee may provide written notice of
such determination to Lessor in such Officer's Certificate and treat such Unit
as if an Event of Loss had occurred as of the date of such written notice with
respect to such Unit and in such event the provisions of Sections 11.2(ii), 11.3
and 11.4 shall apply with respect to such Unit except that the amount payable
under Section 11.2(ii)(a) as a result of such determination shall be an amount
equal to the greater of the Fair Market Sales Value or Stipulated Loss Amount of
such Unit; provided that there shall also be included in such Officer's
Certificate a statement of how Lessee intends to meet the financial obligations
imposed under said Sections 11.2, 11.3 and 11.4 with respect to such Units.

     Section 9.2 Optional Modifications. Lessee at any time may or may permit a
Sublessee to, in its discretion and at its own or such Sublessee's cost and
expense, modify, alter or improve any Unit in a manner which is not required by
Section 9.1 (a "Modification"); provided that no Modification shall diminish the
fair market value, utility, capacity, residual value or remaining economic
useful life of such Unit below the fair market value, utility, capacity,
residual value or remaining economic useful life thereof immediately prior to
such Modification, in more than a de minimis respect, assuming such Unit was
then at least in the condition required to be maintained by the terms of this
Lease. Title to any Non-Severable Modification shall be immediately vested in
Lessor. Title to any Severable Modification (other than Required Modifications)
shall remain with Lessee or the Sublessee as applicable. If Lessee shall at its
cost cause such Severable Modifications (other than Required Modifications) to
be made to any Unit, Lessor shall have the right, upon 90 days prior written
notice in the case of the return of such Unit pursuant to Section 6.1, to
purchase any such Severable Modifications (other than Severable Modifications
consisting of proprietary or communications equipment) title to which is held by
Lessee at their then Fair Market Sales Value (taking into account their actual
condition). If Lessor does not so elect to purchase such Severable
Modifications, Lessee may remove such Severable Modifications at Lessee's cost
and expense, and if requested (which request shall be made by not less than 90
days prior written notice in the case of a return other than pursuant to Section
15.6) by Lessor will so remove such Severable Modifications at Lessee's cost and
expense, and Lessee shall, at its expense, repair any damage resulting from the
removal of any such Severable Modifications in a manner consistent with Section
8.1. If Lessee has not removed any Severable Modification prior to the return of
the related Unit as


                                       17


<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)


provided herein, title to such Severable Modification shall pass to Lessor as of
the date of such return.


     Section 9.3 Removal of Property; Replacements. Lessee may, in the ordinary
course of maintenance or repair of any Unit, remove any item of property
constituting a part of such Unit, and unless the removal of such item is
required by Section 9.1 hereof, Lessee shall replace such item as promptly as
practicable by an item of property that is free and clear of all Liens (other
than Permitted Liens) and in as good operating condition as, and with a fair
market value, utility, capacity, residual value and remaining economic useful
life at least equal to, the item of property being replaced, assuming that such
replaced item was in the condition required to be maintained by the terms of
this Lease. Any item of property removed from such Unit in the ordinary course
of maintenance and repair as provided in the preceding sentence shall remain the
property of Lessor until replaced in accordance with the terms of such sentence,
but shall then, without further act, become the property of Lessee. Any
replacement property which is incorporated into a Unit in the ordinary course of
maintenance and repair shall, without further act, become the property of Lessor
and be deemed part of such Unit for all purposes hereof.


SECTION 10. Voluntary Termination.

     Section 10.1 Right of Termination. Lessee shall have the right, at its
option at any time or from time to time during the Basic Term on or after the
seventh anniversary of the Basic Term Commencement Date to terminate the Lease
with respect to any or all of the Units (provided that, if such termination is
for less than all Units in a Functional Group across the Partnership Fleet,
Lessee shall exercise such termination hereunder and under the comparable
provisions contained in the Other Lease (i) with respect to at least 50 railcars
in the aggregate of the type included in such Functional Group, (ii) no fewer
than 25 railcars of the type included in such Functional Group shall in the
aggregate remain subject to this Lease and the Other Lease, (iii) such
termination shall be made hereunder and under the Other Lease pro rata in
accordance with the number of units in such Functional Group subject to each
such lease and (iv) the determination as to which Units are subject to
termination shall otherwise be made by Lessee on a random basis without
discrimination based on maintenance status, operating condition of the Units in
question or otherwise) (the "Terminated Units") if (x) Lessee determines in good
faith (as evidenced by a certified copy of a resolution adopted by the General
Partner's Managers and a certificate executed by the Chief Financial Officer of
the General Partner and the


                                       18


<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)


Chief Financial Officer of the Manager) that such Units have become obsolete or
surplus to Lessee's requirements, (y) Lessor has received an Officer's
Certificate from Lessee and the Manager to the effect that there has been no
discrimination in the selection of the Terminated Units when measured against
the other Units and the Manager's Fleet, and that, following the termination of
this Lease with respect to the Terminated Units, the Units remaining subject to
this Lease will constitute a pool of Units which is of a sufficient quantity and
quality to sustain over the remaining Basic Term the Coverage Ratios applicable
at the time of such termination and (z) Lessee delivers at least 120 days' prior
notice to Lessor and the Indenture Trustee (i) specifying a proposed date of
termination for such Units (the "Termination Date"), which date shall be a Rent
Payment Date, any such termination to be effective on the Termination Date upon
Lessee's compliance with this Section 10, and (ii) if some but less than all of
the Units in a Functional Group are designated as Terminated Units, describing
in such Officer's Certificate the nondiscriminatory manner in which Lessee
proposes to determine which Units in that Functional Group are to be Terminated
Units. Notwithstanding anything herein contained to the contrary, there shall be
no determination that a Unit is surplus or obsolete for purposes of this Lease
if, on the Termination Date, such Unit is subject to a Sublease. Except as
expressly provided otherwise herein, there will be no conditions to Lessee's
right to terminate this Lease with respect to the Terminated Units pursuant to
this Section 10.1. So long as (a) Lessor shall not have given Lessee a notice of
election to retain the Terminated Units in accordance with Section 10.3 or (b)
notice of prepayment of the Equipment Notes shall not have been given pursuant
to Section 2.10 of the Indenture, Lessee may withdraw the termination notice
referred to above at any time prior to the 60th day prior to the scheduled
Termination Date, whereupon this Lease shall continue in full force and effect;
provided that Lessee may not exercise its right to withdraw a termination notice
more than once annually or more than four times during the Basic Term
(irrespective of which Units are covered thereby). Lessee agrees that whether or
not it withdraws a termination notice it will reimburse Lessor, each Participant
and the Indenture Trustee on an After Tax Basis for all reasonable out-of-pocket
costs and expenses (including reasonable legal fees and expenses) incurred by
any thereof in connection with such termination or proposed termination.

     Section 10.2 Sale of Equipment. During the period from the date of such
notice given pursuant to Section 10.1 to the Termination Date, Lessee, as
non-exclusive agent for Lessor and, except as provided in Section 10.3, at
Lessee's sole cost and expense, shall use reasonable best efforts to obtain bids
from Persons other than Lessee or Affiliates thereof for the cash purchase of
the Terminated Units,


                                       19


<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)


and Lessee shall promptly, and in any event at least five Business Days prior to
the proposed date of sale, certify to Lessor in writing the amount and terms of
each such bid, the proposed date of such sale and the name and address of the
party submitting such bid. Unless Lessor shall have elected to retain the
Terminated Units in accordance with Section 10.3, on the Termination Date: (i)
Lessee shall deliver the Terminated Units (excluding any optional Severable
Modifications removed by Lessee pursuant to Section 9.2) to the bidder (which
shall not be Lessee or an Affiliate of Lessee (for the avoidance of doubt the
bidder may be a Customer, or a customer of the Manager, and neither the Manager
nor any Affiliate shall be prohibited from managing the Units for such bidder
after the purchase by such bidder)), which shall have submitted the highest cash
bid prior to such date (or to such other bidder as Lessee and Lessor shall
agree) and (ii) subject to the prior or concurrent receipt (x) by Lessor of all
amounts owing to Lessor pursuant to the next sentence and (y) by the Persons
entitled thereto of all unpaid Supplemental Rent due on or before the
Termination Date, Lessor shall, without recourse or warranty (except as to the
absence of any Lessor's Lien) simultaneously therewith transfer all of its
right, title and interest in and to the Terminated Units to such bidder. The net
proceeds of sale realized at such sale shall be paid to and retained by Lessor
and, in addition, on the Termination Date, Lessee shall pay to Lessor (A) all
Basic Rent with respect to such Terminated Units due and payable prior to the
Termination Date (exclusive of any Basic Rent due on such date), (B) the excess,
if any, of (1) the Termination Amount for the Terminated Units computed as of
the Termination Date over (2) the net cash sales proceeds (after the deduction
of all reasonable costs and expenses (including any applicable sales, transfer
or similar taxes) of Lessor and Owner Participant in connection with such sale)
of the Terminated Units, (C) an amount equal to the Make-Whole Amount and any
unpaid Late Payment Premium in respect of the principal amount of the Equipment
Notes to be prepaid in accordance with Section 2.10(a) of the Indenture and (D)
all other Rent (exclusive of any Basic Rent due on such date) then due and
payable hereunder (which shall include, without limitation, the Accumulated
Equity Deficiency Amount (without duplication of amounts calculated above) and
Late Payment Interest related thereto), so that, after receipt and application
of all such payments, but without withdrawal from any Reserve Account, Owner
Participant shall be entitled under the terms of the Collateral Agency
Agreement to receive, and does receive, taking into account all payments of
Basic Rent, in respect of all such Units, the sum of the Accumulated Equity
Deficiency Amount and Late Payment Interest related thereto and any other
amounts then due to Owner Participant. If no sale shall have occurred, whether
as a result of Lessee's failure to pay all of the amounts hereinabove required
or otherwise,


                                       20


<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)



this Lease shall continue in full force and effect with respect to such Units
and Lessee agrees to reimburse Lessor, each Participant and the Indenture
Trustee for all reasonable costs and expenses (including reasonable legal fees
and expenses) incurred by any thereof in connection therewith; provided that if
such sale shall not have occurred solely because of Lessee's failure to pay the
amounts hereinabove required, Lessee shall have no further right to terminate
this Lease with respect to such Units. Lessee, in acting as agent for Lessor,
shall have no liability to Lessor for failure to obtain the best price, shall
act in its sole discretion and shall be under no duty to solicit bids publicly
or in any particular market. Lessee's sole interest in acting as agent shall be
to use its reasonable best efforts to sell the Units at the highest price then
obtainable consistent with the terms of this Lease. Owner Participant shall
have the right, but not the obligation, to obtain bids either directly or
through agents other than Lessee.

     Section 10.3 Retention of Equipment by Lessor. Notwithstanding the
provisions of Sections 10.1 and 10.2, Lessor may irrevocably elect by written
notice to Lessee, not later than 60 days after receipt of Lessee's notice of
termination, not to sell the Terminated Units on the Termination Date, whereupon
Lessee shall (i) deliver the Terminated Units to Lessor in the same manner and
condition as if delivery were made to Lessor pursuant to Section 6.1(b) and
Section 6.2, and shall extend storage rights to the same extent as provided in
Section 6.1(c), treating the Termination Date as the termination date of the
Lease Term with respect to the Terminated Units and (ii) pay to Lessor, or to
the Persons entitled thereto, all Basic Rent and all Supplemental Rent due and
owing on the Termination Date and unpaid (exclusive of any Basic Rent due on
such date in respect of the Terminated Units, but inclusive of any Supplemental
Rent measured by the Make-Whole Amount and any unpaid Late Payment Interest in
respect of the Terminated Units), so that, after receipt and application of all
such payments, but without withdrawal from any Reserve Account, Owner
Participant shall be entitled under the terms of the Collateral Agency
Agreement to receive, and does receive, taking into account all payments of
Basic Rent, in respect of all such Units, the sum of the Accumulated Equity
Deficiency Amount and Late Payment Interest related thereto and any other
amounts then due to Owner Participant. On any Termination Date where Lessee is
required to make payments pursuant to the preceding sentence, Lessee shall pay
as additional Basic Rent (or Lessor shall pay as a refund of Basic Rent) an
amount equal to the Basic Rent Adjustment (or the absolute value of the negative
Basic Rent Adjustment) set forth on Schedule 4-B to the Participation Agreement
for the relevant Rent Payment Date. If Lessor elects not to sell the Terminated
Units as


                                       21


<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)



provided in this Section 10.3, then Lessor shall pay, or cause to be paid, to
the Indenture Trustee an amount equal to the product obtained by multiplying the
unpaid principal amount of the Equipment Notes outstanding on such date (after
deducting therefrom the principal installment, if any, to be paid on such date)
by a fraction, the numerator of which shall be the Equipment Cost of the
Terminated Units and the denominator of which shall be the aggregate Equipment
Costs of all Units then subject to this Lease. Upon payment by Lessor of the
foregoing, Lessee shall pay to Lessor an amount of rent equal to the Make-Whole
Amount and any unpaid Late Payment Interest in respect of the principal amount
of the Equipment Notes to be prepaid together with all Basic Rent (including
Basic Rent due on the Termination Date) and Supplemental Rent due and owing;
provided that unless all such amounts shall have been paid to the Indenture
Trustee on the Termination Date, this Lease shall continue in full force and
effect. If after giving the notice referred to above Lessor shall fail to pay
the amounts required pursuant to the third sentence of this Section 10.3 and as
a result thereof this Lease shall not be terminated with respect to the
Terminated Units on a proposed Termination Date, Lessor shall (x) thereafter no
longer be entitled to exercise its election to retain such Terminated Units and
(y) reimburse Lessee for any reasonable out-of-pocket expenses (including
reasonable legal fees and expenses) incurred by it in attempting to sell the
Terminated Units pursuant to Section 10.2 immediately prior to Lessor's exercise
of such preemptive election, and Lessee may at its option at any time thereafter
prior to the immediately following Rent Payment Date submit a new termination
notice pursuant to Section 10.1 with respect to such Terminated Units specifying
a proposed Termination Date occurring on a Determination Date occurring not
earlier than 25 days from the date of such notice.

     Section 10.4 Termination of Lease. In the event of either (x) any such sale
and receipt by Lessor and the Indenture Trustee of all of the amounts provided
in Section 10.2 in respect of the Terminated Units or (y) retention of the
Terminated Units and full performance by Lessor and Lessee of their respective
payment obligations in compliance with Section 10.3, and upon compliance by
Lessee with the other provisions of this Section 10, the obligation of Lessee to
pay Basic Rent hereunder for such Terminated Units shall cease and the Lease
Term for the Terminated Units shall end.

     Section 10.5 Funding of Accounts on Termination. Lessee will not exercise a
termination option under this Section 10 with respect to all of the Units unless
either (a) the full amount required to fund the Post Lease Term Reserve


                                       22


<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)


Account is (upon consummation of such purchase and distribution of all amounts
required to be distributed by the Collateral Agent under the Collateral Agency
Agreement) and will be then available to the Collateral Agent to fund such Post
Lease Term Reserve Account or (b) an indemnity pursuant to Section 3.13 of the
Collateral Agency Agreement has been provided.


SECTION 11. Loss, Destruction Requisition, Etc.

     Section 11.1 Event of Loss. In the event that any Unit (i) shall suffer
damage or contamination which, in Lessee's reasonable judgment (as evidenced by
an Officer's Certificate of Lessee to such effect, confirmed by an Officer's
Certificate of the Manager), makes repair uneconomic or renders such Unit unfit
for commercial use, (ii) shall suffer destruction which constitutes a total
loss, or shall suffer theft or disappearance (after reasonable efforts by Lessee
to locate the same) for a period exceeding 6 months (or, if earlier, the end of
the Basic Term or Renewal Term then in effect), (iii) shall be permanently
returned to the manufacturer pursuant to any patent indemnity provisions, (iv)
shall have title thereto taken or appropriated by any governmental authority,
agency or instrumentality under the power of eminent domain or otherwise or (v)
shall be taken or requisitioned for use by any governmental authority or any
agency or instrumentality thereof under the power of eminent domain or
otherwise, and such taking or requisition is for a period that exceeds the
remaining Basic Term or any Renewal Term then in effect (unless such taking or
requisition is by any governmental authority, agency or instrumentality of
Mexico or any state thereof in which case such period shall be the lesser of the
period as aforesaid or 365 days) (any such occurrence being hereinafter called
an "Event of Loss"), Lessee, in accordance with the terms of Section 11.2, shall
promptly and fully inform Lessor and the Indenture Trustee of such Event of
Loss.

     Section 11.2 Replacement or Payment upon Event of Loss. Upon the occurrence
of an Event of Loss or the deemed occurrence of an Event of Loss pursuant to
Section 9.1 or an election to replace pursuant to Section 8.1(b), Lessee shall
as soon as reasonably practical and in any event within 60 days after a
Responsible Officer of the Manager shall have actual knowledge of the occurrence
of such Event of Loss or election to replace give Lessor and the Indenture
Trustee notice thereof (which initial notice shall identify the Unit involved).
Thereafter, within the 60-day period following such initial notice, Lessee shall
give Lessor and the Indenture Trustee a second notice as to which of the
following options Lessee shall elect to perform (it being agreed that, except in
the case of an election to replace


                                       23


<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)


pursuant to Section 8.1(b) (in which case Lessee will comply with the provisions
of Section 8.1(b)), if Lessee shall fail to give such second notice, Lessee
shall be deemed to have elected to perform the option set forth in Section
11.2(ii)):

     (i)  Upon Lessee's election to perform under this clause (i) pursuant to
the above-mentioned second notice (or in the circumstances of an election
described in Section 8.1(b) with respect to any Unit), as promptly as
practicable following such election, and in any event on or before the 60th day
following such second notice (or Section 8.1(b) election), Lessee shall comply
with Section 11.4(b) and shall convey or cause to be conveyed to Lessor a
replacement unit ("Replacement Unit") to be leased to Lessee hereunder, such
Replacement Unit to be of the same car type of the same or newer model year (or
otherwise approved by Lessor, which approval shall not be unreasonably
withheld), and free and clear of all Liens (other than Permitted Liens of the
type described in clause (ii) with respect to Permitted Subleases, and in
clauses (iv) and (vii) of the definition thereof) and to have a fair market
value, utility, residual value, remaining economic useful life and condition at
least equal to the Unit so replaced (assuming such Unit was in the condition
required to be maintained by the terms of this Lease) and to be (as of the date
of conveyance) then subject to a currently effective Permitted Sublease having a
remaining term of not less than one year; provided, that, if only railcars of
newer age or greater value are available for such replacement, Lessee may on one
occasion re-substitute a railcar with a value closer to or equal to that of the
Unit which originally suffered the Event of Loss or was replaced (which
re-substitution shall occur within twenty-four months of the original
replacement (but in no event within the three year period immediately preceding
the Basic Term Expiration Date) and shall comply with this Section 11 as if an
Event of Loss had occurred); provided also that, if Lessee shall elect the
option under this clause (i) but shall fail to perform its obligation to effect
such replacement under this clause (i) within the 60-day period hereinabove
provided for, then (except in the case of a failure to perform an election to
replace pursuant to Section 8.1(b)) at the end of such 60-day period Lessee
shall immediately give Lessor and the Indenture Trustee notice of such failure
and specify that Lessee shall pay to Lessor on the next succeeding Rent Payment
Date that is at least 25 days after the end of such 60-day period, or in the
case of Supplemental Rent, to the Person entitled thereto, the amounts specified
in clause (ii) below as of such next succeeding Rent Payment Date, and Lessee
shall pay such amounts on such Rent Payment Date; provided further that Lessee
shall have no right to elect replacement or re-substitution under this clause
(i) if, at the time of the notice of the Event of Loss under Section 11.2 above
or at the time such replacement or


                                       24


<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)



re-substitution is to occur, either (A), a Lease Default pursuant to Section
14(a), 14(b), 14(g) or 14(h) or a Lease Event of Default shall have occurred and
be continuing or (B) sufficient cash amounts shall not have been made available
to the Collateral Agent such that all amounts then required to be applied under
Section 3.4 of the Collateral Agency Agreement in order to satisfy the amounts
referred to in clauses (1) through (11) thereof, inclusive shall have been
distributed as specified thereby; or

     (ii) on the Rent Payment Date which is not less than 25 days nor more than
60 days following the date of notice of Lessee's election to perform under this
clause (ii), Lessee shall pay or cause to be paid to Lessor (or in the case of
Supplemental Rent, to the Persons entitled thereto) in funds of the type
specified in Section 3.5, (a) an amount equal to the Stipulated Loss Amount of
each such Unit suffering an Event of Loss or deemed Event of Loss determined as
of such Rent Payment Date, (b) all Basic Rent payable on such date in respect of
such Unit (exclusive of any Basic Rent due on such date in respect of the Unit
or Units suffering the Event of Loss), (c) any unpaid Late Payment Premium in
respect of the principal amount of the Equipment Notes to be prepaid in
accordance with Section 2.10(b) of the Indenture and (d) all other Rent
(exclusive of any Basic Rent due on such date in respect of the Unit or Units
suffering the Event of Loss) then due and payable hereunder (including, without
limitation, the Accumulated Equity Deficiency Amount (without duplication of
amounts calculated above) and Late Payment Interest related thereto) so that,
after receipt and application of all such payments, but without withdrawal from
any Reserve Account, Owner Participant shall be entitled under the terms of the
Collateral Agency Agreement to receive, and does receive, taking into account
all payments of Basic Rent in respect of such Unit, the sum of the Accumulated
Equity Deficiency Amount and Late Payment Interest related thereto and any other
amounts then due to Owner Participant, it being understood that until such
Stipulated Loss Amount and such other sums are paid, there shall be no abatement
or reduction of Basic Rent on account of such Event of Loss.

     Section 11.3 Rent Termination. Upon the replacement of any Unit or Units in
compliance with Sections 11.2(i) and 11.4(b) (but only as to replaced Units and
not any Replacement Unit) or upon the payment of all sums required to be paid
pursuant to Section 11.2 in respect of any Unit or Units, the Lease Term with
respect to such Unit or Units and the obligation to pay Basic Rent for such Unit
or Units accruing subsequent to the date of payment of Stipulated Loss Amount or
date of conveyance of such Replacement Unit or Units pursuant to Section 11.2
shall


                                      25


<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)


terminate; provided that Lessee shall be obligated to pay all Rent in respect of
such Unit or Units which is payable under Section 11.2 with respect to such
payment of Stipulated Loss Amount or such replacement of such Unit or Units and
in respect of all other Units then continuing to remain subject to this Lease.

     Section 11.4 Disposition of Equipment; Replacement of Unit. (a) Upon the
payment of all sums required to be paid pursuant to Section 11.2 in respect of
any Unit or Units, Lessor will convey to Lessee or its designee all right, title
and interest of Lessor in and to such Unit or Units, "as is", "where is",
without recourse or warranty, except for a warranty as to the absence of
Lessor's Liens, and shall execute and deliver to Lessee or its designee, at
Lessee's cost and expense, such bills of sale and other documents and
instruments as Lessee or its designee may reason ably request to evidence such
conveyance. As to each separate Unit so disposed of, so long as no Lease Event
of Default shall have occurred and be continuing, Lessee or its designee shall
(subject to any insurer's right of subrogation, if any) be entitled to any
amounts arising from such disposition, plus any awards, insurance or other
proceeds and damages received by Lessee, Lessor or the Indenture Trustee by
reason of such Event of Loss up to the Stipulated Loss Amount attributable
thereto and any remainder shall be divided between Lessee and Lessor, as their
respective interests may appear.

     (b)  At the time of or prior to any replacement of any Unit or Replacement
Unit, Lessee, at its own expense, will (A) furnish Lessor with a Bill of Sale
with respect to the Replacement Unit substantially in the form delivered
pursuant to Section 4.1(h) of the Participation Agreement, (B) cause a Lease
Supplement substantially in the form of Exhibit A hereto, subjecting such
Replacement Unit to this Lease, and duly executed by Lessee, to be delivered to
Lessor for execution by the appropriate parties, it being understood that upon
such execution (x) Lessee will cause such Lease Supplement to be filed for
recordation in the same manner as provided for the original Lease Supplement in
Section 16.1 and (y) to the extent that the Indenture has not been satisfied and
discharged, Lessor shall deliver possession of the "original" counterpart of
such Lease Supplement to the Indenture Trustee, (C) so long as the Indenture
shall not have been satisfied and discharged, cause an Indenture Supplement
substantially in the form of Exhibit A to the Indenture for such Replacement
Unit, to be delivered to Lessor and to the Indenture Trustee for execution and,
upon such execution, to be filed for recordation in the same manner and within
the same time periods as provided for the original Indenture Supplement in
Section 16.1, (D) furnish Lessor with an opinion of Lessee's


                                       26


<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)


counsel (which may be the General Counsel or Assistant General Counsel of
Trinity), (x) to the effect that the Bill of Sale referred to in clause (A)
above constitutes an effective instrument for the conveyance of title to the
Replacement Unit to Lessor, and that legal and beneficial title to the
Replacement Unit has been delivered to Lessor and (y) describing all filings and
recordings required pursuant to Section 16 with respect to the Replacement
Units, (E) furnish to Owner Participant (and its applicable Affiliates) an
agreement of Lessee to indemnify Owner Participant (and its applicable
Affiliates) against any adverse tax consequences suffered as a result of such
replacement that are not otherwise indemnified under the Tax Indemnity
Agreement, (F) furnish Lessor with an engineer's certificate (which may be from
an employee of the Manager) certifying as to the utility, condition, model year
and remaining useful life required under clause (i) of Section 11.2, (G) furnish
to Lessor and the Indenture Trustee an Officer's Certificate certifying that the
Replacement Unit has a fair market value, utility, residual value, model year
and remaining economic useful life and condition at least equal to the Unit
being replaced and is free and clear of all Liens (other than Permitted Liens of
the type described in clause (ii) with respect to Permitted Subleases, and in
clauses (iv) and (vii) of the definition thereof), (H) furnish Lessor with an
opinion from independent tax counsel reasonably acceptable to Owner Participant
to the effect that Owner Participant should not suffer any adverse consequence
as a result of such replacement, (I) furnish Lessor with an opinion of
independent transportation counsel or in-house counsel for Manager as to the
absence of Liens of record with the STB and as to the completion of all
necessary STB filings and deposits with the Registrar General of Canada
described in Section 16.1 hereof with respect to such Replacement Unit and (J)
furnish such other documents and evidence as any Participant, Lessor or the
Indenture Trustee, or their respective counsel, may reasonably request in order
to establish the consummation of the transactions contemplated by this Section
11.4. For all purposes hereof, (i) Lessee shall be deemed to have complied with
the requirements of this Section 11.4(b) as of the date of its delivery to
Lessor, the Participants and the Indenture Trustee of the documents and
instruments referred to in the foregoing clauses (A) through (J), signed by
Lessee or its counsel, as applicable, in due form for any required filing or
recording, and such filing or recording shall have been made if such documents
and instruments have been executed and delivered by Lessor or Indenture Trustee
or both of them in a timely manner, (ii) title to the Replacement Unit shall be
deemed to have been transferred to Lessor as of such date and (iii) upon such
passage of title thereto to Lessor the Replacement Unit shall be deemed part of
the property leased hereunder and the Replacement Unit shall be deemed a "Unit"
as defined herein. Upon such passage of title, Lessor will transfer to Lessee,
"as is" and "where is" and


                                       27


<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)


without recourse or warranty (except as to Lessor's Liens), all Lessor's right,
title and interest in and to the replaced Unit, and upon such transfer, Lessor
will request in writing that the Indenture Trustee execute and deliver to Lessee
an appropriate instrument releasing such replaced Unit from the lien of the
Indenture. Lessee shall pay all reasonable out-of-pocket costs and expenses
(including reasonable legal fees and expenses) incurred by Lessor, any
Participant or the Indenture Trustee in connection with any replacement pursuant
to this Section 11.4. Lessee further agrees that, upon receipt of fully signed
counterparts of the Lease Supplement and Indenture Supplement referred to in
clauses (B) and, if applicable, (C) of the first sentence of this Section
11.4(b), it will, at its sole cost and expense, cause such documents to be filed
or recorded in the manner contemplated by Section 16.1.

     Section 11.5 Eminent Domain. In the event that during the Lease Term the
use of any Unit is requisitioned or taken by any governmental authority under
the power of eminent domain or otherwise for a period which does not constitute
an Event of Loss, all of Lessee's obligations under the Operative Agreements,
including without limitation, Lessee's obligation to pay all installments of
Basic Rent, shall continue for the duration of such requisitioning or taking.
Any amount referred to in Section 11.4(a) or in Section 12 which is payable to
Lessor shall be deposited in the related Non-Shared Payments Account established
under the Collateral Agency Agreement.

SECTION 12. Insurance.

     Section 12.1 Insurance. Lessee will at all times after delivery and
acceptance of each Unit, at its own expense, keep or cause the Insurance Manager
under the Insurance Agreement to keep such Unit insured with insurers of
recognized responsibility with a rating of at least A- by A.M. Best Company (or
a comparable rating by a nationally or internationally recognized rating group
of comparable stature) or by other insurers approved in writing by Lessor, which
approval shall not be unreasonably withheld, in amounts and against risks and
with deductibles and terms and conditions not less than the insurance, if any,
maintained by the Manager with respect to similar equipment which it owns or
leases, but in no event shall such coverage be for amounts or against risks less
than the prudent industry standard for companies engaged in leasing of railcars.
Without limiting the foregoing, Lessee will in any event:


                                       28


<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)


     (a)  keep each Unit insured against physical damage (which may be
accomplished pursuant to a contingent physical damage policy) in an amount not
less than the Stipulated Loss Amount attributable thereto as shown on Schedule 4
to the Participation Agreement, subject to an aggregate limit for all Units of
not less than $1,500,000 per occurrence, provided that such coverage may provide
for deductible amounts of not more than $50,000 per occurrence; and

     (b)  maintain public liability insurance naming Owner Participant, Lessor,
the Trust Company, the Indenture Trustee and Loan Participant as additional
insureds (but only with respect to liability arising out of or related to the
Operative Agreements and the Units) against bodily injury, death or property
damage arising out of the use or operation of the Units with general and excess
liability limits of not less than $100,000,000 per occurrence or in the
aggregate, provided that such coverage may provide for deductible amounts not
exceeding the lesser of (w) $10,000,000 or (x) the difference (not less than
zero (0)) between (i) the level of the then current deductible maintained by
Manager for the Manager's Fleet (or if Manager, its successors and assigns is no
longer engaged in the railcar leasing business, the average level of the then
current deductible amounts maintained by the three largest companies engaged in
such business in the United States) and (ii) such amount of additional coverage
as may be obtained by Lessee in reduction of the then current deductible
maintained by Manager for an additional incremental annual premium payable by
Lessee in the aggregate in respect of the entire Partnership Fleet of up to
$100,000 as adjusted by the Inflation Factor; provided, further, that such
policies which are carried on a "claims made" basis shall provide for a
retroactive date not more recent than either (y) the Closing Date, or (z) a date
seven years prior to the effective date of the policy.

     (c)  It is understood and agreed that the insurance required under this
Section 12.1 may be part of a company-wide insurance program of the Insurance
Manager or its Affiliates, including risk-retention and self-insurance. Any
policy of insurance maintained in accordance with this Section 12.1 and any
policy purchased in substitution or replacement for any of such policies shall
provide that if any such insurance lapses or is cancelled or terminated for any
reason whatever (other than upon normal policy expiration), Lessor, the
Indenture Trustee, Loan Participant and Owner Participant shall receive 30 days'
prior written notice of such lapse, cancellation or termination.


                                       29
<PAGE>

                                                  Lease Agreement (TRLI 2001-1B)

         (d) If Lessee or the Insurance Manager shall maintain any liability
coverages for the benefit of Lessee in excess of the coverages required
hereunder (whether or not such excess coverage complies with the requirements
under this Section 12), Lessee will cause all such coverages to name Owner
Participant, Lessor, the Trust Company, the Indenture Trustee and Loan
Participant as additional insureds (but only with respect to liability arising
out of or related to the Operative Agreements or the Units), provided, however,
that, the requirements of this Section 12 shall not otherwise apply to such
coverages.

         Section 12.2 Physical Damage Insurance. (a) The insurance maintained
pursuant to Section 12.1(a) shall provide that (i) so long as the Equipment
Notes remain outstanding, the proceeds up to the Stipulated Loss Amount for any
loss or damage to any Unit shall be paid to the Indenture Trustee under a
standard loss payable clause, and thereafter to Lessor and (ii) so long as no
Lease Event of Default shall have occurred and be continuing, Lessee will be
entitled, at its own expense, to make all proofs of loss and/or take all other
steps necessary to collect the proceeds of such insurance.

         (b) In lieu of maintaining the physical damage insurance required by
Section 12.1(a), Lessee may self-insure with respect to the Units for such
amounts and against such risks as shall be consented to by Lessor and the
Indenture Trustee, which consent shall be based upon reasonable practices then
in effect in the railcar leasing and insurance industries and upon the financial
condition of Lessee taking into account Lessee's capital structure and that
Lessee is a special purpose corporation.

         (c) The entire proceeds of any property insurance or third party
payments for damages to any Unit received by Lessor or the Indenture Trustee
shall be held by such party until, with respect to such Unit, the repairs
referred to in clause (i) below are made as specified therein or payment of the
Stipulated Loss Amount is made, and such entire proceeds will be paid, so long
as no Lease Event of Default shall have occurred and be continuing, either:

                  (i) to Lessee promptly following receipt by the Indenture
         Trustee or Lessor, as the case may be, of a written application signed
         by Lessee for payment to Lessee for repairing or restoring the Units
         which have been damaged so long as (1) Lessee shall have complied with
         the applicable


                                       30
<PAGE>

                                                  Lease Agreement (TRLI 2001-1B)

         provisions of this Lease, and (2) Lessee shall have certified that any
         damage to such Units shall have been fully repaired or restored; or

                  (ii) if this Lease is terminated with respect to such Unit
         because of an Event of Loss and Lessee has paid the Stipulated Loss
         Amount and all other amounts due as a result thereof, such proceeds
         shall be promptly paid over to, or retained by, Lessee.

         Section 12.3 Public Liability Insurance. (a) The public liability
insurance referred to in paragraph 12.1(b) shall (i) provide that in as much as
such policies cover more than one insured, all terms, conditions, insuring
agreements and endorsements, with the exception of limits of liability,
deductibles or retentions and liability for premiums, commissions, assessments
or calls (which shall be solely a liability of Lessee), shall operate in the
same manner as if there were a separate policy or policies covering each
insured, (ii) waive any rights of subrogation of the insurers against Owner
Participant, Lessor, the Trust Company, the Indenture Trustee, and Loan
Participant (iii) provide that neither Owner Participant, Lessor, the Trust
Company, the Indenture Trustee nor Loan Participant shall have any
responsibility for any insurance premiums, whether for coverage before or after
cancellation or termination of any such policies as to Lessee and (iv) be
primary without contribution from any similar insurance maintained by Owner
Participant, Lessor, the Trust Company, the Indenture Trustee or Loan
Participant.

         (b) Lessee shall use its reasonable efforts to obtain public liability
insurance policies which stipulate that coverage thereunder will not be
invalidated (as to Owner Participant, Loan Participant, Lessor, as Lessor of the
Units and in its individual capacity, and the Indenture Trustee) by any act or
neglect of Lessee, or any breach or violation by Lessee of any warranties,
declarations or conditions contained in such policies, but shall be under no
obligation to obtain such policies containing such stipulations if they are not
available to Lessee at commercially reasonable rates in the markets in which
Lessee has then placed its insurance program.

         (c) In the event any public liability insurance policy or coverage
thereunder which are required to be maintained under Section 12.1(b) shall not
be available to Lessee in the commercial insurance market on commercially
reasonable terms, Lessor shall not unreasonably withhold its agreement to waive
such requirement. Lessee shall make written request for any such waiver in
writing, accompanied by written reports prepared, at Lessee's option, either by
(i) one


                                       31

<PAGE>

                                                  Lease Agreement (TRLI 2001-1B)

independent insurance advisor chosen by Lessee and Lessor or (ii) three
independent insurance advisors, one chosen by Lessor, one chosen by Lessee and
one chosen by the other two advisors (one of which may be the regular insurance
broker or brokers of Lessee). The fees and expenses of all such advisors shall
be paid by Lessee. The written reports required hereunder shall (x) state that
such insurance (or the required coverage thereunder) is not reasonably available
to Lessee at commercially reasonable premiums in the commercial insurance
markets within which Lessee or the Manager normally purchases its insurance from
insurers, acceptable to Lessee, with a Best's rating of A- or better for
railcars of similar type and capacity and (y) explain in detail the basis for
such conclusions. Upon the granting of any such waiver, Lessee shall within 15
days thereafter certify to Lessor in writing the cost (on the basis of the
Manager's Fleet) of liability insurance premiums for the coverage required by
Section 12.1 (b) for the immediately preceding fiscal year; and in the event
that any such certificate is not received by Lessor within such 15-day period,
any such waiver shall be deemed revoked. At any time after the granting of such
waiver, but not more often than once a year, Lessor may make a written request
for a supplemental report (in form reasonably acceptable to Lessor) from such
insurance advisor(s) updating the prior report and reaffirming the conclusions
set forth therein. Lessee shall provide any such required supplemental report
within 60 days after receipt of the written request therefor. Any such waiver
shall be effective for only as long as such insurance is not reasonably
available to Lessee in the commercial markets in which Lessee normally purchases
its insurance at commercially reasonable rates, it being understood that the
failure of Lessee to furnish timely any such supplemental report shall be
conclusive evidence that such condition no longer exists. If such supplemental
report shows that such coverage is available, Lessee shall within 90 days of
such report obtain such insurance coverage. During any period with respect to
which such waiver has been granted and remains in effect under this Section
12.3(c), Lessee shall obtain public liability insurance as set forth in Section
12.1(b) from such carriers, in such amounts and with coverage limits and
deductibles as may be reasonable in its judgment under the circumstances, but in
any event (i) no less than prudent industry standards and (ii) in an amount that
may be purchased for a premium equal to 200% of Lessee's cost (on a fleet-wide
basis) of public liability insurance premiums for the coverage on a fleet-wide
basis required by Section 12.1(b) for the final year immediately preceding the
fiscal year in which such waiver first was granted.

         Section 12.4 Certificate of Insurance. (a) Lessee shall, prior to the
Closing Date and when the renewal certificate referred to below is sent (but in
any


                                       32

<PAGE>

                                                  Lease Agreement (TRLI 2001-1B)

event not less than annually), furnish (or, in the case of (iii) below, use
reasonable efforts to furnish) Lessor, the Indenture Trustee, Owner Participant
and the Loan Participant with a certificate signed by the insurer or an
independent insurance broker (i) showing the insurance then maintained by Lessee
pursuant to Section 12.1, (ii) stating that, except as noted in such
certificate, such insurance complies with the requirements contained in Exhibit
B-1 (as to public liability insurance) and/or B-2 (as to physical/damage
insurance) to the Participation Agreement, (iii) stating that, except as noted
in such certificate, such insurance complies with the requirements contained in
this Section 12 and (iv) to the extent that any provision that Lessee is
required to use reasonable efforts to obtain is not contained in such insurance,
such certificate shall so state and shall confirm that, in such broker's
opinion, such provision is not reasonably obtainable. Lessor shall be entitled
at its expense to review copies of all applicable insurance policies. With
respect to any renewal policy or policies, certificates or binders evidencing
such renewal shall be furnished as soon as practicable, but in no event later
than 30 days after the earlier of the date such renewal is effected or the
expiration date of the original policy or policies. Simultaneously, with the
furnishing of such certificate, Lessee will provide appropriate evidence,
reasonably satisfactory to Lessor and the Indenture Trustee, that all premiums
due on such insurance have been paid.

         (b) Lessee agrees to use reasonable efforts to cause each of its
insurers to agree that, with respect to any policy of insurance maintained
pursuant to Section 12.1, such insurer will provide not less than 30 days' prior
written notice to Lessor, the Indenture Trustee, Loan Participant and Owner
Participant of any non-renewal or material adverse change with respect to such
policy. For purposes of this Section 12.4(b), "material adverse change" shall
mean a material adverse change in policy limits, exclusions or deductibles or
any material adverse change in policy coverage inconsistent with the
requirements of Section 12.1(b). If any of Lessee's insurers delivers such
notice of non-renewal, Owner Participant may attempt to obtain and provide
satisfactory insurance and Lessee shall reimburse Owner Participant for
reasonable and prudent expenses incurred (i) during the period 10 days prior to
expiration of existing insurance policies, for all Owner Participant's expenses
excluding broker fees and commissions and insurance premiums, and (ii) on and
after the expiration of existing insurance policies, for all Owner Participant's
expenses including broker fees and commissions and insurance premiums.

                Section 12.5 Additional Insurance. In the event that Lessee
shall fail to maintain insurance as herein provided in Section 12.1 or, if
applicable, Section 12.3,


                                       33
<PAGE>

                                                  Lease Agreement (TRLI 2001-1B)


Lessor may at its option, upon prior written notice to Lessee, provide such
insurance and, in such event, Lessee shall, upon demand from time to time
reimburse Lessor for the cost thereof together with interest from the date of
payment thereof at the Late Rate, on the amount of the cost to Lessor of such
insurance which Lessee shall have failed to maintain. If after Lessor has
provided such insurance, Lessee then obtains the coverage provided for in
Section 12.1 which was replaced by the insurance provided by Lessor, and Lessee
provides Lessor with evidence of such coverage reasonably satisfactory to
Lessor, Lessor shall cancel the insurance it has provided pursuant to the first
sentence of this Section 12.5. In such event, Lessee shall reimburse Lessor for
all costs to Lessor of cancellation, including without limitation any short rate
penalty, together with interest from the date of Lessor's payment thereof at the
Late Rate. In addition, at any time Lessor (either directly or in the name of
Owner Participant) may at its own expense carry insurance with respect to its
interest in the Units, provided that such insurance does not interfere with
Lessee's ability to insure the Units as required by this Section 12 or adversely
affect Lessee's insurance or the cost thereof, it being understood that all
salvage rights to each Unit shall remain with Lessee's insurers at all times.
Any insurance payments received from policies maintained by Lessor pursuant to
the previous sentence shall be retained by Lessor without reducing or otherwise
affecting Lessee's obligations hereunder, other than with respect to Unit(s)
with respect to which such payments have been made.

         Section 12.6 Post-Lease Term Insurance. Lessee agrees that upon the
expiration or earlier termination of the Lease Term, Lessee will, with respect
to the public liability insurance otherwise required to be carried under this
Section 12, either: (A) purchase a seven year extended reporting period for
Owner Participant, Lessor and Owner Trustee, or (B) obtain the written agreement
of the Manager in form and substance satisfactory to Owner Participant to carry
or cause to be carried for such seven year period public liability insurance
which satisfies the requirements of this Section 12 and which names Owner
Participant, Lessor, the Collateral Agent and Owner Trustee as additional
insureds.

SECTION 13. Reports; Inspection.

         Section 13.1 Duty of Lessee to Furnish. On or before July 31, 2002, and
on or before each July 31 thereafter, Lessee will furnish (or cause the Manager
under the Management Agreement to furnish) to Lessor, Owner Participant, Loan
Participant, the Indenture Trustee and the Rating Agency an accurate statement,
as of


                                       34

<PAGE>

                                                  Lease Agreement (TRLI 2001-1B)

the preceding March 31, (a) showing the amount, description and reporting marks
of the Units then leased hereunder, the amount, description and reporting marks
of all Units that may have suffered an Event of Loss during the 12 months ending
on such March 31 (or since the Closing Date, in the case of the first such
statement), and such other information regarding the condition or repair of the
Units as Lessor may reasonably request, (b) stating that, in the case of all
Units repainted during the period covered by such statement, the markings
required by Section 4.2 hereof shall have been preserved or replaced, (c)
showing the percentage of use in the United States and in each of Canada and
Mexico based on the total mileage traveled by all railcars in the Total Managed
Fleet (or by the Units, if and to the extent generally made available to the
Manager in the ordinary course with respect to railcars in general interchange
service similar to the Units) for the prior calendar year as reported to the
Manager by railroads (provided, that Lessee shall cooperate with Owner
Participant and Lessor and shall provide such additional information on such
matters as Owner Participant or Lessor may reasonably request to enable Owner
Participant and Lessor to pursue or fulfill their respective tax audit and tax
litigation rights and obligations) and (d) stating that Lessee is not aware of
any condition of any Unit which would cause such Unit not to comply in any
material respect with the rules and regulations of the FRA and the interchange
rules of the Field Manual of the AAR as they apply to the maintenance and
operation of the Units in interchange and any other requirements hereunder.

         Section 13.2 Lessor's Inspection Rights. Lessor, Owner Participant and
the Indenture Trustee each shall have the right, but not the obligation, at
their respective sole cost and expense, unless a Lease Event of Default shall
have occurred and be continuing, by their respective authorized representatives,
to inspect the Units, all subleases thereof and Lessee's records with respect
thereto. All inspections shall be conducted during Lessee's normal business
hours, on the Manager's premises or in areas that are not the premises of a
Sublessee to which Lessee has reasonable access, and upon reasonable prior
notice to Lessee. Lessee shall not be liable for any injury to, or the death of,
any Person exercising, either on behalf of Lessor, Owner Participant, the
Indenture Trustee or any prospective user, the rights of inspection granted
under this Section 13.2 unless caused by Lessee's gross negligence or wilful
misconduct. Except following the occurrence and continuance of a Lease Event of
Default, no inspection pursuant to this Section 13.2 shall interfere with the
use, operation or maintenance of the Units or the ordinary course of Lessee's or
any Sublessee's business, and except as provided herein, Lessee shall not be
required to undertake or incur any additional liabilities in connection
therewith.

                                       35

<PAGE>

                                                  Lease Agreement (TRLI 2001-1B)

SECTION 14. Lease Events of Default.

         The following events shall constitute Lease Events of Default
hereunder (whether any such event shall be voluntary or involuntary or come
about or be effected by operation of law or pursuant to or in compliance with
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body) and each such Lease Event of Default
shall be deemed to exist and continue so long as, but only as long as, it shall
not have been remedied:

         (a) Lessee shall fail to (i) make or (ii) be deemed by virtue of the
last sentence of Section 3.5 hereof to have made any payment of Basic Rent,
Early Purchase Price, any other purchase price to be paid by Lessee for any
Units pursuant to this Lease or the Participation Agreement, Stipulated Loss
Amount or Termination Amount within 10 Business Days after the same shall have
become due; provided, however, that so long as any Equipment Notes remain
outstanding, failure to make (or be deemed to have made) any portion of Basic
Rent on any Rent Payment Date shall not be a Lease Event of Default so long as
the amounts applied under Section 3.4, clause (4), of the Collateral Agency
Agreement are sufficient to make the distributions required under such clause
(4) with respect to the obligations owed under this Lease; or

         (b) Lessee shall fail to (i) make or (ii) be deemed by virtue of
payments made by the Collateral Agent to have made any payment of Supplemental
Rent; including indemnity or tax indemnity payments, but not including
Stipulated Loss Amount, Termination Amount, Early Purchase Price, or any other
purchase price to be paid by Lessee for any Units pursuant to this Lease or the
Participation Agreement after the same shall have become due and such failure
shall continue unremedied for 10 Business Days after receipt by Lessee of
written notice of such failure from Lessor, Owner Participant or the Indenture
Trustee; provided, however, that so long as any Equipment Notes remain
outstanding, failure to make (or be deemed to have made) payment of any of the
amounts referred to in or to be applied pursuant to clauses (5) through (14) of
Section 3.4 of the Collateral Agency Agreement shall not be a Lease Event of
Default; or

         (c) Lessee shall fail to maintain in effect the insurance required by
Section 12 or Section 6.4 of the Collateral Agency Agreement and such failure
shall not have been waived as provided for therein; or


                                       36

<PAGE>

                                                  Lease Agreement (TRLI 2001-1B)

         (d) Lessee shall use or permit the use of the Units or the Pledged
Units or any portion thereof in a way which is not permitted by this Lease (with
respect to the Units) or the Collateral Agency Agreement (with respect to the
Pledged Units), provided that such unauthorized use shall not constitute a Lease
Event of Default for a period of 45 days after the occurrence thereof so long as
(i) such unauthorized use is not the result of any willful action of Lessee and
(ii) such unauthorized use is capable of being cured and Lessee diligently
pursues such cure throughout such 45-day period; or Lessee shall make or permit
any unauthorized assignment or transfer of this Lease in violation of Section
18.2; or

         (e) Lessee shall fail to observe or perform in any material respect any
of the covenants or agreements to be observed or performed by Lessee in Section
6.2 or 6.3 of the Collateral Agency Agreement; or

         (f) Any representation or warranty made by Lessee in any Lessee
Agreement or any representation or warranty made by TILC or TRMI in any
Operative Agreement to which any such Person is a party is untrue or incorrect
in any material respect as of the date of making thereof and such untruth or
incorrectness shall continue to be material and unremedied; provided that, if
such untruth or incorrectness is capable of being remedied, no such untruth or
incorrectness shall constitute a Lease Event of Default hereunder for a period
of 30 days after receipt of notice from Lessor, Owner Participant or the
Indenture Trustee so long as Lessee, TILC or TRMI, as the case may be, is
diligently proceeding to remedy such untruth or incorrectness and shall in fact
remedy such untruth or incorrectness within such period; provided that such
untrue or incorrect representation or warranty shall be deemed to be remediable
or remedied only after all adverse consequences thereof, if any, can be and have
been remedied as applicable; or

         (g) Lessee or the General Partner shall (i) commence a voluntary case
or other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect, or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or (ii) consent to any such relief or to the
appointment of or taking possession by any such official in any voluntary case
or other proceeding commenced against it, or (iii) admit in writing its
inability to pay its debts generally as they come due, or (iv) make a general
assignment for the benefit of creditors, or (v) take any corporate action to
authorize any of the foregoing; or



                                       37
<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)

         (h) An involuntary case or other proceeding shall be commenced against
Lessee or the General Partner seeking liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect, or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or

         (i) Lessee shall fail to observe or perform any other of the covenants
or agreements to be observed or performed by Lessee under any Lessee Agreement
or any certificate and such failure shall continue unremedied for 30 days after
notice from Lessor, Owner Participant or the Indenture Trustee to Lessee,
specifying the failure and demanding the same to be remedied; provided that, if
such failure is capable of being remedied, and the remedy requires an action
other than, or in addition to, the payment of money, no such failure (other than
one relating to the payment of such money) shall constitute a Lease Event of
Default hereunder for a period of 90 days after receipt of such notice so long
as Lessee is diligently proceeding to remedy such failure and shall in fact
remedy such failure within such period; or

         (j) A Manager Default shall have occurred and be continuing under the
Management Agreement, and Lessee shall have failed to exercise its rights under
the Management Agreement in respect of such Manager Default for a period of 30
days after receipt by Lessee of written notice from Lessor, Owner Participant or
the Indenture Trustee demanding that such action be taken; or

         (k) An Insurance Manager Default shall have occurred and be continuing
under the Insurance Agreement, and Lessee shall have failed to exercise its
rights under the Insurance Agreement in respect of such Insurance Manager
Default for a period of 30 days after receipt by Lessee of written notice from
Lessor, Owner Participant or the Indenture Trustee demanding that such action be
taken;

         (1) The Administrator shall have defaulted in any material respect in
the performance of any of its obligations under the Administrative Services
Agreement, and Lessee shall have failed to exercise its rights under the
Administrative Services Agreement in respect of such default for a period of 30
days after receipt by Lessee of written notice from Lessor, Owner Participant or
the Indenture Trustee , demanding that such action be taken; or



                                       38
<PAGE>

                                                  Lease Agreement (TRLI 2001-1B)

                (m) A "Lease Event of Default" (as defined in the Other Lease)
shall have occurred and be continuing with respect to the Other Lease.

         Notwithstanding anything to the contrary contained in this Lease, any
failure of Lessee to perform or observe any covenant or agreement herein shall
not constitute a Lease Event of Default if such failure is caused solely by
reason of an event which constitutes an "Event of Loss" so long as Lessee is
continuing to comply with the applicable terms of Section 11.

SECTION 15. Remedies.

         Section 15.1 Remedies. Upon the occurrence of any Lease Event of
Default and at any time thereafter so long as the same shall be continuing,
Lessor may, at its option, declare this Lease to be in default by a written
notice to Lessee (except that this Lease shall, without any action on the part
of Lessor, be automatically deemed to have been declared in default upon the
occurrence of a Lease Event of Default described in Section 14(g) or (h)); and
at any time thereafter, unless Lessee shall have remedied all outstanding Lease
Events of Default prior to the commencement of the exercise by Lessor of any of
its remedies hereunder, Lessor may do one or more of the following as Lessor in
its sole discretion shall elect, to the extent permitted by, and subject to
compliance with any mandatory requirements of, applicable law then in effect:

         (a) proceed by appropriate court action or actions, either at law or in
equity, to enforce performance by Lessee of the applicable covenants of this
Lease or to recover damages for the breach thereof;

         (b) by notice in writing to Lessee, Lessor may demand that Lessee, and
Lessee shall, upon written demand of Lessor and at Lessee's expense (but subject
to the rights of any Sublessee which has been granted the right of quiet
enjoyment of the Unit by Lessee pursuant to a Sublease, so long as no event of
default by the Sublessee shall have occurred and be continuing under the
relevant Sublease), (i) forthwith return all or any part of the Units so
demanded to Lessor or its order in the manner and condition required by, and
otherwise in accordance with all of the provisions of, Section 15.5; or Lessor
with or without notice or judicial process may by its agents enter upon the
premises of Lessee or other premises where any of the Units may be located and
take possession of and remove all or any of the Units, and Lessor may use and
employ in connection with such removal any services, aids,



                                       39
<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)

equipment, trackage and other facilities of Lessee as is reasonably required to
remove such Units and thenceforth hold, possess and enjoy the same free from any
right of Lessee, or its successor or assigns, to use such Units for any purpose
whatever and (ii) with respect to any Unit which is then subject to a Sublease,
assign all of Lessee's right, title and interest in such Sublease to Lessor;

         (c) sell any Unit and/or assign any Sublease at public or private sale
in such manner as Lessor may determine, free and clear of any rights of Lessee
(but subject to the rights of any Sublessee which has been granted the right of
quiet enjoyment of the Unit by Lessee pursuant to a Sublease, so long as no
event of default by the Sublessee shall have occurred and be continuing under
the relevant Sublease) and without any duty to account to Lessee or any
Sublessee with respect to such sale or for the proceeds thereof (except to the
extent required by paragraph (f) below if Lessor elects to exercise its rights
under said paragraph), in which event Lessee's obligation to pay Basic Rent with
respect to such Unit hereunder due for any periods subsequent to the date of
such sale shall terminate (except to the extent that Basic Rent is to be
included in computations under paragraph (e) or (f) below if Lessor elects to
exercise its rights under either of said paragraphs);

         (d) hold, keep idle or lease to others any Unit not then subject to a
Sublease as Lessor in its sole discretion may determine, free and clear of any
rights of Lessee and without any duty to account to Lessee or any Sublessee with
respect to such action or inaction or for any proceeds with respect thereto,
except that Lessee's obligation to pay Basic Rent with respect to such Unit due
for any periods subsequent to the date upon which Lessee shall have been
deprived of possession and use of such Unit pursuant to this Section 15 shall be
reduced by the net proceeds, if any, received by Lessor from leasing such Unit
to any Person other than Lessee;

         (e) whether or not Lessor shall have exercised, or shall thereafter at
any time exercise, any of its rights under paragraph (a), (b), (c) or (d) above
with respect to any Unit, Lessor, by written notice to Lessee specifying a
payment date (which date shall be a Determination Date for the purposes of
computing Stipulated Loss Amount) which shall be not less than 10 days after the
date of such notice, may demand that Lessee pay to Lessor, and Lessee shall pay
to Lessor, on the payment date specified in such notice, as liquidated damages
for loss of a bargain and not as a penalty (in lieu of the Basic Rent for such
Unit due after the payment date specified in such notice), all Rent, other than
Stipulated Loss Amount and Termination Amount or amounts calculated by reference
thereto, due and payable, or accrued, in


                                       40
<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)

respect of such Unit as of the payment date specified in such notice (exclusive
of any Basic Rent due on such date) plus whichever of the following amounts
Lessor, in its sole discretion, shall specify in such notice: (i) an amount with
respect to each such Unit which represents the excess of the present value, as
of such payment date, of all rentals for such Unit which would otherwise have
accrued hereunder from such payment date for the remainder of the Basic Term or
any Renewal Term then in effect over the then present value of the then Fair
Market Rental Value of such Unit (taking into account its actual condition) for
such period discounted from the end of such Term to such payment date, such
present value to be computed in each case using a per annum discount rate equal
to the Debt Rate, compounded monthly from the respective dates upon which
rentals would have been payable hereunder had this Lease not been terminated; or
(ii) an amount equal to the excess, if any, of the Stipulated Loss Amount for
such Unit computed as of the payment date specified in such notice over the Fair
Market Sales Value of such Unit (taking into account its actual condition) as of
the payment date specified in such notice; or (iii) if Lessor shall not have
sold such Unit pursuant to the exercise of its rights under paragraph (c) above
with respect to such Unit, an amount equal to the higher of Stipulated Loss
Amount for such Unit computed as of the payment date specified in such notice or
the Fair Market Sales Value of such Unit (assuming it is in the condition
required by this Lease) as of the payment date specified in such notice; and
upon payment by Lessee pursuant to said clause (iii) of such Stipulated Loss
Amount or Fair Market Sales Value, as the case may be, any Late Payment Premium
and of all other amounts (other than Basic Rent due on such date) payable by
Lessee under this Lease and under the other Operative Agreements in respect of
such Unit, Lessor shall transfer "as is" and "where is" and without recourse or
warranty all right, title and interest of Lessor in and to such Unit to Lessee
or as it may direct, and Lessor shall execute and deliver such documents
evidencing such transfer as Lessee shall reasonably request;

         (f) if Lessor shall have sold any Unit pursuant to paragraph (c) above,
Lessor, in lieu of exercising its rights under paragraph (e) above with respect
to such Unit may, if it shall so elect, demand that Lessee pay to Lessor, and
Lessee shall pay to Lessor, as liquidated damages for loss of a bargain and not
as a penalty (in lieu of the Basic Rent for such Unit due subsequent to the Rent
Payment Date next preceding such sale), any accrued and unpaid Rent for such
Unit as of the date of such sale (Basic Rent for this purpose accruing at a per
diem rate equal to the monthly amount due on the next following Rent Payment
Date divided by 30) (exclusive of any Basic Rent due on such date), plus the
amount, if any, by which the Stipulated Loss Amount of such Unit computed as of
the Rent Payment Date next



                                       41
<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)

preceding the date of such sale or, if such sale occurs on a Rent Payment Date,
then computed as of such Rent Payment Date, plus the amount of any Late Payment
Premium, exceeds the net proceeds of such sale (taking into account for this
purpose all costs and expenses, including legal fees and expenses, incurred by
Lessor in connection with such sale or otherwise exercising remedies hereunder)
plus interest on such excess from the date of such sale to the date of payment
at the Late Rate; and

         (g) Lessor may terminate the leasing of any or all Units under this
Lease and/or any Sublease (except with respect to a Sublease which grants the
Sublessee thereunder the right of quiet enjoyment with respect to the Unit, so
long as no event of default by the Sublessee shall have occurred and be
continuing under the relevant Sublease) or may exercise any other right or
remedy that may be available to it under applicable law.

         In addition, Lessee shall be liable, except as otherwise provided
above, for any and all unpaid Rent due hereunder before or during the exercise
of any of the foregoing remedies (including, without limitation, Late Payment
Interest, but exclusive of any Basic Rent due on such date), and for legal fees
and other costs and expenses incurred by reason of the occurrence of any Lease
Event of Default or the exercise of Lessor's remedies with respect thereto,
including without limitation the repayment in full of any costs and expenses
necessary to be expended in repairing any Unit in order to cause it to be in
compliance with all maintenance and regulatory standards imposed by this Lease.

         In the event Lessor terminates this Lease pursuant to any provision of
this Section 15.1, and the Stipulated Loss Amount is not payable, the amounts
otherwise payable by Lessee hereunder shall be increased by any positive amount
(as a payment for accrued but unpaid Basic Rent) of the Basic Rent Adjustment
set forth on Schedule 4-A of the Participation Agreement opposite the relevant
Rent Payment Date or decreased by the absolute value of any negative amount (as
a rebate of prepaid Basic Rent) of the Basic Rent Adjustment set forth on
Schedule 4-A of the Participation Agreement opposite the relevant Rent Payment
Date; provided, however, that to the extent that such payment or refund does not
precisely reflect the difference between Basic Rent allocated and Basic Rent
paid as of the date Basic Rent ceases to accrue, the amounts due hereunder shall
be further adjusted to ensure that the aggregate amount of Basic Rent paid
equals the aggregate amount of Basic Rent allocated as of the date Basic Rent
ceases to accrue.



                                       42
<PAGE>

                                                  Lease Agreement (TRLI 2001-1B)

         Section 15.2 Cumulative Remedies. The remedies in this Lease provided
in favor of Lessor shall not be deemed exclusive, but shall be cumulative and
shall be in addition to all other remedies in its favor existing at law or in
equity. Lessee hereby waives any mandatory requirements of law, now or hereafter
in effect, which might limit or modify any of the remedies herein provided, to
the extent that such waiver is permitted by law. Except to the extent provided
in the Operative Agreements, Lessee hereby waives any and all existing or future
claims of any right to assert any offset or counterclaim against the Rent
payments due hereunder, and agrees to make the rent payments regardless of any
offset or counterclaim or claim which may be asserted by Lessee on its behalf in
connection with the lease of the Units. Lessee further agrees that Lessee's
obligations to pay all Rent (including, without limitation, all Basic Rent and
Supplemental Rent) and its obligations to maintain the Units pursuant to Section
8 hereof and to maintain the insurance pursuant to Section 12 hereof shall
constitute monetary obligations of Lessee for all purposes of Section 365 of the
Bankruptcy Code. To the extent permitted by applicable law, Lessee hereby
waives any rights now or hereafter conferred by statute or otherwise that may
require Lessor to sell, lease or otherwise use the Units in mitigation of
Lessor's damages as set forth in Section 15.1 or that may otherwise limit or
modify any of Lessor's rights and remedies provided in this Section 15.

         Section 15.3 No Waiver. No delay or omission to exercise any right,
power or remedy accruing to Lessor upon any breach or default by Lessee under
this Lease shall impair any such right, power or remedy of Lessor, nor shall any
such delay or omission be construed as a waiver of any breach or default, or of
any similar breach or default hereafter occurring; nor shall any waiver of a
single breach or default be deemed a waiver of any subsequent breach or default.

         Section 15.4 Notice of Lease Default. Lessee agrees to furnish to
Lessor, Owner Participant and the Indenture Trustee, promptly upon any officer
acquiring actual knowledge of any condition which constituted or constitutes a
Lease Default under this Lease, written notice specifying such condition and the
nature and status thereof.

         Section 15.5 Lessee's Duty to Return Equipment Upon Default. If Lessor
or any assignee of Lessor shall terminate this Lease pursuant to this Section 15
and shall have provided to Lessee the written demand specified in Section
15.1(b), Lessee shall forthwith deliver possession of the Units not then subject
to a Sublease to Lessor (except where Lessor has received all amounts payable by
Lessee



                                       43
<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)

pursuant to any notice provided by Lessor under Section 15.1(e)(iii)). For the
purpose of delivering possession of any Unit not then subject to a Sublease to
Lessor as above required, Lessee shall at its own cost, expense and risk (except
as hereinafter stated):

         (a) forthwith place such Units upon such storage tracks of Lessee or
any of its Affiliates or, at the expense of Lessee, on any other storage tracks,
as Lessor may designate or, in the absence of such designation, as Lessee may
select;

         (b) permit Lessor to store such Units on such tracks without charge for
insurance, rent or storage until such Units have been sold, leased or otherwise
disposed of by Lessor and during such period of storage Lessee shall continue to
maintain all insurance required by Section 12.1 hereof; and

         (c) transport the Units to any place on any lines of railroad or to any
connection carrier for shipment, all as Lessor may direct in writing. All such
Units not then subject to a Sublease returned shall be in the condition required
by Section 6.2 hereof.

         All amounts earned in respect of the Units after the date of
termination of this Lease pursuant to this Section 15, but not exceeding amounts
actually received therefor, shall be paid to Lessor or, so long as the Indenture
shall not have been discharged pursuant to its terms, the Indenture Trustee,
and, if received by Lessee, shall be promptly turned over to Lessor or the
Indenture Trustee as aforesaid. In the event any Unit not then subject to a
Sublease is not assembled, delivered and stored as hereinabove provided within
15 days after the termination of the leasing of such Unit pursuant to Section
15, Lessee shall, in addition, pay to Lessor or the Indenture Trustee as
aforesaid as liquidated damages and not as a penalty, for each day thereafter an
amount equal to the amount, if any, by which the daily equivalent of the average
Basic Rent for the term in effect immediately prior to the expiration of the
Lease for such Unit exceeds the amount, if any, received by Lessor or the
Indenture Trustee as aforesaid (either directly or from Lessee) for such day for
such Unit pursuant to the preceding sentence.

         Section 15.6 Specific Performance; Lessor Appointed Lessee's Agent. The
assembling, delivery, storage and transporting of the Units not then subject to
a Sublease as provided in Section 15.5 are of the essence of this Lease, and
upon application to any court of equity having jurisdiction in the premises,
Lessor shall be



                                       44
<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)

entitled to a decree against Lessee requiring specific performance of the
covenants of Lessee so to assemble, deliver, store and transport the Units not
then subject to a Sublease. Without in any way limiting the obligation of Lessee
under the provisions of Section 15.5, Lessee hereby irrevocably appoints Lessor
as the agent and attorney of Lessee, with full power and authority, at any time
while Lessee is obligated to deliver possession of any Units not then subject to
a Sublease to Lessor pursuant to this Section 15, to demand and take possession
of such Unit in the name and on behalf of Lessee from whosoever shall be at the
time in possession of such Unit.

SECTION 16. Filings; Further Assurances.

         Section 16.1 Filings. This Lease or a counterpart or copy hereof or
evidence hereof may be filed or recorded in any public office in the United
States as may be necessary or appropriate to protect the interest of Lessor,
Owner Participant or the Indenture Trustee herein or in the Units. On or prior
to the Closing Date Lessee will (i) cause a memorandum of each of this Lease and
the Lease Supplements dated the Closing Date, the TILC Bill of Sale, the Bill of
Sale, the TILC Assignment, the Assignment, the Indenture and the Indenture
Supplements dated the Closing Date (x) to be duly filed and recorded with the
STB in accordance with 49 U.S.C. Section 11301 and (y) to be deposited with the
Registrar General of Canada pursuant to Section 105 of the Canada Transportation
Act (and all necessary actions shall have been taken for publication of such
deposit in the Canada Gazette in accordance with said Section 105), (ii) cause
precautionary UCC-1 financing statements to be filed in appropriate
jurisdictions as reasonably requested by Lessor naming Lessor as "lessor" and
Lessee as "lessee" of the Equipment and (iii) will furnish Lessor, the Indenture
Trustee and Owner Participant proof thereof. Notwithstanding the foregoing, in
no event shall Lessee or any of its Affiliates be required to take any action to
perfect any security interest which any Person may have in any Sublease, other
than the filing of a UCC-1 Financing Statement against the Partner ship in the
jurisdiction in which the Partnership's chief executive office is located and in
the Partnership's jurisdiction of formation covering all Subleases generally.

         Section 16.2 Further Assurances. Lessee will duly execute and deliver
to Lessor such further documents and assurances and take such further action as
Lessor may from time to time reasonably request or as may be required by
applicable law or regulation in order to effectively carry out the intent and
purpose of this Lease and to establish and protect the rights and remedies
created or intended to be created



                                       45
<PAGE>

                                                  Lease Agreement (TRLI 2001-1B)

in favor of Lessor, the Participants and the Indenture Trustee hereunder,
including, without limitation, the execution and delivery of supplements or
amendments hereto, in recordable form, subjecting to this Lease any Replacement
Unit and the recording or filing of counterparts hereof or thereof or Uniform
Commercial Code financing statements in accordance with the laws of such
jurisdiction as Lessor may from time to time deem advisable; provided, that in
no event shall Lessee or any of its Affiliates be required to take any action to
perfect any security interest which any Person may have in any Sublease, other
than the filing of a UCC-1 Financing Statement against the Partnership in the
jurisdiction in which the Partnership's chief executive office is located and in
the Partnership's jurisdiction of formation covering all Subleases generally.

         Section 16.3 Other Filings. If, at any time after the Closing Date and
during the Lease Term, Mexico, or one or more states in Mexico, establishes a
state or other system for filing and perfecting the ownership and/or security
interests of entities such as Lessor and/or the Indenture Trustee, at the time
that Lessee or the Manager takes such action with respect to other equipment
similar to the Units (whether owned or leased by Lessee) and also upon the
request of Lessor, any Participant, or the Indenture Trustee, Lessee shall cause
any and all of the Operative Agreements to be recorded with or under such system
and shall cause all other filings and recordings and all such other action
required under such system to be effected and taken, in order to perfect and
protect the respective right, title and interests of Lessor, Owner Participant,
Loan Participant and the Indenture Trustee; provided, that in no event shall
Lessee or any of its Affiliates be required to take any action to perfect any
security interest which any Person may have in any Sublease.

         Section 16.4 Expenses. Lessee will pay all costs, charges and expenses
(including reasonable attorneys fees) incident to any such filing, refiling,
recording and rerecording or depositing and re-depositing of any such
instruments or incident to the taking of such action.

SECTION 17. Lessor's Right to Perform.

         If Lessee fails to make any payment required to be made by it hereunder
or fails to perform or comply with any of its other agreements contained herein,
Lessor may itself make such payment or perform or comply with such agreement,
after giving not less than five Business Days' prior notice thereof to Lessee
(except in the event that an Indenture Default resulting from a Lease Default or
a Lease Event



                                       46
<PAGE>

                                                  Lease Agreement (TRLI 2001-1B)

of Default shall have occurred and be continuing, in which event Lessor may
effect such payment, performance or compliance to the extent necessary to cure
such Indenture Default with notice given concurrently with such payment,
performance or compliance), but shall not be obligated hereunder to do so, and
the amount of such payment and of the reasonable expenses of Lessor incurred in
connection with such payment or the performance of or compliance with such
agreement, as the case may be, together with interest thereon at the Late Rate
from such date of payment, to the extent permitted by applicable law, shall be
deemed to be Supplemental Rent, payable by Lessee to Lessor on demand.

SECTION 18. Assignment.

         Section 18.1 Assignment by Lessor. Lessee and Lessor hereby confirm
that concurrently with the execution and delivery of this Lease, Lessor has
executed and delivered to the Indenture Trustee the Indenture, which assigns as
collateral security and grants a security interest in favor of the Indenture
Trustee in, to and under this Lease and certain of the Rent payable hereunder
(excluding Excepted Property), all as more explicitly set forth in the
Indenture. Lessor agrees that it shall not otherwise assign or convey its right,
title and interest in and to this Lease or any Unit, except as expressly
permitted by and subject to the provisions of the Participation Agreement, the
Trust Agreement and the Indenture.

         Section 18.2 Assignment by Lessee. Except in the case of any
requisition for use by any governmental authority or any agency or
instrumentality thereof referred to in Section 11.1, Lessee will not, except as
expressly permitted in the Operative Agreements, without the prior written
consent of Lessor and the Indenture Trustee, assign any of its rights hereunder.

         Section 18.3 Sublessee's or Others Performance and Rights. Any
obligation imposed on Lessee in this Lease shall require only that Lessee
perform or cause to be performed such obligation, even if stated herein as a
direct obligation, and the performance of any such obligation by the Manager
under the Management Agreement, the Insurance Manager under the Insurance
Agreement or any Sublessee under a Sublease then in effect and permitted by the
terms of this Lease shall constitute performance by Lessee and discharge such
obligation by Lessee. Except as otherwise expressly provided herein, any right
granted to Lessee in this Lease shall grant Lessee the right to (a) exercise
such right or permit such right to be exercised by the Manager or the Insurance
Manager or (b) in Lessee's capacity as sublessor



                                       47
<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)

pursuant to any Permitted Sublease permit any Sublessee to exercise
substantially equivalent rights under any such sublease as are granted to Lessee
under this Lease; provided, however, that Lessee's right to terminate this Lease
pursuant to Section 10 and Lessee's purchase and renewal options set forth in
Section 22 may be exercised only by Lessee; provided, further, that nothing in
this Section 18.3 shall or shall be deemed to (i) create any privity of contract
between any such Sublessee, on the one hand, and any of Lessor, Owner
Participant or any subsequent transferee or Affiliate of any such Person, on the
other hand, (ii) create any duty or other liability of any nature whatsoever on
the part of any of Lessor, Owner Participant or any subsequent transferee or
Affiliate of any such Person, to any such Sublessee or any Affiliate thereof or
(iii) modify or waive any term or provision of Section 8.3 hereof, which Section
8.3 shall control if any conflict arises between any of the provisions thereof
and this Section 18.3. The inclusion of specific references to obligations or
rights of any such Sublessee in certain provisions of this Lease shall not in
any way prevent or diminish the application of the provisions of the two
sentences immediately preceding with respect to obligations or rights in
respect of which specific reference to any such Sublessee has not been made in
this Lease.

SECTION 19. Net Lease, Etc.

         This Lease is a net lease and Lessee's obligation to pay all Rent
payable hereunder shall be absolute, unconditional and irrevocable and shall not
be affected by any circumstance of any character including, without limitation,
(i) any set-off, abatement, counterclaim, suspension, recoupment, reduction,
rescission, defense or other right that Lessee may have against Lessor, Owner
Participant, the Indenture Trustee or any holder of an Equipment Note or Pass
Through Certificate, any vendor or manufacturer of any Unit, or any other Person
for any reason whatsoever, (ii) any defect in or failure of title,
merchantability, condition, design, compliance with specifications, operation or
fitness for use of all or any part of any Unit, (iii) any damage to, or removal,
abandonment, requisition, taking, condemnation, loss, theft or destruction of
all or any part of any Unit or any interference, interruption, restriction,
curtailment or cessation in the use or possession of any Unit by Lessee or any
other Person for any reason whatsoever or of whatever duration, (iv) any
insolvency, bankruptcy, reorganization or similar proceeding by or against
Lessee, Lessor, Owner Participant, the Indenture Trustee, Loan Participant, any
holder of an Equipment Note or Pass Through Certificate or any other Person, (v)
the invalidity, illegality or unenforceability of this Lease, any other
Operative Agreement, or any other instrument referred to herein or therein



                                       48
<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)

or any other infirmity herein or therein or any lack of right, power or
authority of Lessee, Lessor, Owner Participant, the Indenture Trustee, any
holder of an Equipment Note or Pass Through Certificate or any other Person to
enter into this Lease or any other Operative Agreement or to perform the
obligations hereunder or thereunder or consummate the transactions contemplated
hereby or thereby or any doctrine of force majeure, impossibility, frustration
or failure of consideration, (vi) the breach or failure of any warranty or
representation made in this Lease or any other Operative Agreement by Lessee,
Lessor, Owner Participant, Loan Participant, the Indenture Trustee, any holder
of an Equipment Note or Pass Through Certificate or any other Person, (vii) the
requisitioning, seizure or other taking of title to or use of such Unit by any
government or governmental authority or otherwise, whether or not by reason of
any act or omission of Lessor, Lessee or the Indenture Trustee, or any other
deprivation or limitation of use of such Unit in any respect or for any length
of time, whether or not resulting from accident and whether or not without fault
on the part of Lessee or (viii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing. To the extent permitted by
applicable law, Lessee hereby waives any and all rights which it may now have or
which at any time hereafter may be conferred upon it, by statute or otherwise,
to terminate, cancel, quit or surrender this Lease with respect to any Unit,
except in accordance with the express terms hereof. If for any reason whatsoever
this Lease shall be terminated in whole or in part by operation of law or
otherwise, except as specifically provided herein, Lessee nonetheless agrees, to
the maximum extent permitted by law, to pay to Lessor or to the Indenture
Trustee, as the case may be, an amount equal to each installment of Basic Rent
and all Supplemental Rent due and owing, at the time such payment would have
become due and payable in accordance with the terms hereof had this Lease not
been terminated in whole or in part. Each payment of Rent made by Lessee
hereunder shall be final and Lessee shall not seek or have any right to recover
all or any part of such payment from Lessor or any Person for any reason
whatsoever. Nothing contained herein shall be construed to waive any claim which
Lessee might have under any of the Operative Agreements or otherwise or to limit
the right of Lessee to make any claim it might have against Lessor or any other
Person or to pursue such claim in such manner as Lessee shall deem appropriate.

SECTION 20. Notices.

         Unless otherwise expressly specified or permitted by the terms hereof,
all communications and notices provided for herein shall be in writing or by
facsimile capable of creating a written record, and any such notice shall
become



                                       49
<PAGE>
                                                  Lease Agreement (TRLI 2001-1B)


effective (i) upon personal delivery thereof, including, without limitation, by
reputable overnight courier or (ii) in the case of notice by facsimile, upon
confirmation of receipt thereof, provided such transmission is promptly further
confirmed in writing by the method set forth in clause (i) addressed to the
following Person at its respective address set forth below or at such other
address as such Person may from time to time designate by written notice to the
other Persons listed below:

   If to Lessor:      -         TRLI 2001-1B Railcar Statutory Trust
                      -         c/o State Street Bank and Trust Company of
                      -         Connecticut, National Association
                      -         225 Asylum Street
                      -         Goodwin Square
                      -         Hartford, CT 06103
                      -         Attention: Corporate Trust Administration
                      -         Fax No.: (617) 662-1465
                      -         Confirmation No.: (617) 662-1680

                      -         With copies to Owner Participant.

   If to Owner Participant:     Trimaran Leasing, L.P.
                      -         c/o Philip Morris Capital Corporation
                      -         225 High Ridge Road, Suite 300
                      -         Stamford, CT 06905
                                Attention: Vice President, Structured Finance
                      -         Fax No.: (914) 335-8297
                      -         Confirmation No.: (914) 335-8204

   If to the Indenture Trustee: LaSalle Bank National Association
                                135 S. LaSalle Street, Suite 1960
                      -         Chicago, IL 60603
                                Attention:  Kristine Schossow
                                Fax No.: (312) 904-2236
                                Confirmation No.: (312) 904-2571

   If to Lessee:      -         Trinity Rail Leasing I L.P.
                      -         2525 Stemmons Freeway
                      -         Dallas, TX 75207



                                       50
<PAGE>

                                                  Lease Agreement (TRLI 2001-1B)

                      -    Attention: Vice President Leasing Operations
                      -    Re:   TRLI 2001-1B
                      -    Fax No.:  (214) 589-8271
                      -    Confirmation No.:  (214) 631-4420


SECTION 21. Concerning the Indenture Trustee.

         Section 21.1 Limitation of the Indenture Trustee's Liabilities.
Notwithstanding any provision to the contrary contained herein or in any of the
Operative Agreements, the Indenture Trustee's obligation to take or refrain from
taking any actions, or to use its discretion (including, but not limited to, the
giving or withholding of consent or approval and the exercise of any rights or
remedies under such Operative Agreements), and any liability therefor, shall, in
addition to any other limitations provided herein or in the other Operative
Agreements, be limited by the provisions of the Indenture, including, but not
limited to, Article VI thereof.

         Section 21.2 Right, Title and Interest of the Indenture Trustee Under
Lease. It is understood and agreed that the right, title and interest of the
Indenture Trustee in, to and under this Lease and the Rent due and to become due
hereunder shall by the express terms granting and conveying the same be subject
to the interest of Lessee in and to the Units as created pursuant to and
governed by the terms of this Lease.

SECTION 22. Purchase Options; Renewal Options.

         Section 22.1 Early Purchase Option. In addition to the option granted
Lessee pursuant to Section 6.9 of the Participation Agreement and provided that
Lessee shall have duly given the notice required by the next succeeding sentence
and the corresponding notice under the Other Lease and shall concurrently
purchase all (but not less than all) of the units then subject to the Other
Lease, Lessee shall have the right and, upon the giving of such notice, the
obligation to purchase all (but not less than all) of the Units leased hereunder
(as specified in such notice) on the Early Purchase Date for such Units at a
price equal to the Early Purchase Price of such Units plus the other amounts
specified below. Lessee shall give Lessor written notice not less than 90 days
and not more than 180 days prior to the Early Purchase Date of its election to
exercise the purchase option provided for in this Section 22.1, which notice
shall be irrevocable. Payment of the Early Purchase Price, together with (w) all
unpaid Basic Rent therefor due and payable, or accrued, prior to the



                                       51
<PAGE>

                                                  Lease Agreement (TRLI 2001-1B)

Early Purchase Date, (x) any Make-Whole Amount and Late Payment Interest with
respect to the Equipment Notes then being prepaid, (y) the Accumulated Equity
Deficiency Amount (without duplication of amounts calculated above) and any Late
Payment Interest related thereto and (z) any other Supplemental Rent due and
owing by Lessee under the Operative Agreements (so that, after receipt and
application of all such payments, but without withdrawal from any Reserve
Account, Owner Participant shall be entitled under the terms of the Collateral
Agency Agreement to receive, and does receive, taking into account all payments
of Basic Rent in respect of the Units, the sum of the Accumulated Equity
Deficiency Amount and Late Payment Interest related thereto and any other
amounts then due to Owner Participant) shall be made on the Early Purchase Date
at the place of payment specified in Section 3.5 hereof in immediately available
funds against delivery of a bill of sale transferring and assigning to Lessee
all right, title and interest of Lessor in and to such Units on an "as-is"
"where-is" basis and containing a warranty as to the absence of Lessor's Liens.
Lessor shall not be required to make any other representation or warranty as to
the condition of such Units or any other matters, and may specifically disclaim
any such representations or warranties. The costs of preparing the bill of sale
and all other documentation relating to any purchase by Lessee pursuant to this
Section 22.1 and the costs of all necessary filings relating to such purchase
will be borne by Lessee. In the event of any such purchase and receipt by Lessor
of all of the amounts provided in this Section 22.1, the obligation of Lessee to
pay Basic Rent hereunder shall cease and the Lease Term shall end.

         If Lessee elects to exercise the purchase option provided for in this
Section 22.1, Lessee shall, as the purchase price therefor, in the sole
discretion of Lessee, either (i) pay the Early Purchase Price, together with all
other amounts due and owing by Lessee under the Operative Agreements, as
specified in the paragraph above or (ii) pay the difference between the amount
specified in clause (i) and the outstanding principal amount of the Equipment
Notes as of the Early Purchase Date and assume on a full recourse basis all of
the Owner Trustee's obligations under the Indenture in respect of the
indebtedness evidenced by such Equipment Notes related to such Units as provided
in Section 3.6 of the Indenture; provided, that, following such assumption, the
purchased Units shall remain subject to the Lien of a separate indenture similar
to the Indenture pursuant to Section 3.6 of the Indenture. Lessee will make the
payments required by foregoing clause (i) or assume the indebtedness evidenced
by the Equipment Notes as provided in foregoing clause (ii) on the Early
Purchase Date in immediately available funds against delivery of a bill of sale
transferring and assigning to Lessee all right, title and interest of Lessor in
and to the



                                       52
<PAGE>

                                                  Lease Agreement (TRLI 2001-1B)

Units on an "as-is" "where-is" basis and containing a warranty as to the absence
of Lessor's Liens; provided, however, that Lessee shall have the option of
specifying in such notice under this Section 22.1 its election to defer payment
of a portion of the Early Purchase Price for such Units in four (4) installments
in the amounts and on the dates set forth on Schedule 6 to the Participation
Agreement so long as the portion of the Early Purchase Price payable by Lessee
on the Early Purchase Date in the event of any such election by Lessee, under
any circumstances and in any event, together with other amounts of Supplemental
Rent payable by Lessee on such date, will be at least sufficient to pay in full,
as of the date of payment thereof, the aggregate unpaid principal and accrued
interest of the Equipment Notes together with any Make Whole Amount, Late
Payment Interest and all other amounts owed to the holders of the Equipment
Notes under the Operative Agreements; and provided further, that such deferred
portion (i) may be prepaid by Lessee at any time in whole and (ii) will be
secured in favor of Lessor by a letter of credit by a bank or financial
institution acceptable to Owner Participant in its sole discretion or if
acceptable to Owner Participant in its sole discretion a guaranty of Trinity in
form and substance reason ably satisfactory to Lessor. If Lessee shall fail to
fulfill its obligations under this second paragraph of Section 22.1, all of
Lessee's obligations under this Lease and the Operative Agreements, including,
without limitation, Lessee's obligation to pay installments of Rent, shall
continue and Lessee shall be obligated to pay all costs and expenses, including
legal fees and expenses, incurred by Lessor, Owner Participant and Indenture
Trustee as a result of the notice given by Lessee pursuant to this Section.

         Listed on Schedule 6 to the Participation Agreement as the Basic Rent
Adjustment for the Early Purchase Date is the amount of Basic Rent that, as of
the Early Purchase Date, has been paid for periods after the Early Purchase Date
(based upon the assumption that all prior amounts of Basic Rent due have been
paid) or the amount of Basic Rent that, as of the Early Purchase Date, is the
amount of Basic Rent that has accrued but has not been paid for periods prior to
the Early Purchase Date. If Lessee exercises its Early Purchase Option and the
Basic Rent Adjustment is negative and Lessee pays all other amounts due in
relation to such exercise, then Lessee shall pay an amount equal to the Early
Purchase Price less the absolute value of the amount of such Basic Rent
Adjustment listed on Schedule 6 to the Participation Agreement (as a rebate of
such Basic Rent and not as a reduction in Early Purchase Price). If Lessee
exercises the Early Purchase Option and the Basic Rent Adjustment is positive,
Lessee shall pay an amount equal to the Early Purchase Price plus the Basic Rent
Adjustment (as a payment of accrued, but



                                       53
<PAGE>

                                                  Lease Agreement (TRLI 2001-1B)

unpaid Basic Rent and not an increase in the Early Purchase Price). If Lessee
elects to pay the Early Purchase Price in installments, then the amount of Basic
Rent Adjustment listed on Schedule 6 to the Participation Agreement shall
increase or decrease, as the case may be, the amount of Early Purchase Price
payable by Lessee on the Early Purchase Date.


         Notwithstanding the foregoing provisions of this Section 22.1 to the
contrary, Lessee may purchase or cause an Affiliate of Lessee to purchase the
Beneficial Interest in lieu of Lessee purchasing the Units pursuant to this
Section 22.1 for a purchase price equal to the Beneficial Interest Purchase
Price and may keep this Lease (and the Equipment Notes) in place; provided, that
Lessee shall remain liable under this Lease to pay Basic Rent and all other
payments hereunder in full, provided, further, that such purchase shall be made
in all respects in accordance with Section 6.9 of the Participation Agreement.

         Section 22.2 Election to Retain or Return Equipment at End of Basic or
Renewal Term. Not less than 180 days and not more than 360 days prior to the end
of the Basic Term or any Renewal Term, Lessee shall give Lessor a preliminary
notice of its decision to return or retain the Units and the units subject to
the Other Lease (it being understood that at the end of the Basic Term or any
Renewal Term Lessee must return all (and not less than all) such Units and units
if it returns any, or retain all (and not less than all) such Units and units if
it retains any) at the end of the Basic Term or such Renewal Term and not less
than 120 days prior to the end of the Basic Term or the end of any Renewal Term,
Lessee shall give Lessor irrevocable written notice of its decision to return or
retain the Units at the end of the Basic Term or such Renewal Term. If Lessee
elects to retain Units, Lessee shall comply with Section 22.3 and/or 22.4
hereof, as it may elect in accordance with the provisions thereof including the
notice requirements stated therein. If Lessee fails to give the 120 days' notice
required by this Section 22.2, or a subsequent notice required by Section 22.3
or 22.4, Lessee shall be deemed to have irrevocably elected to return all of the
Units at the end of the Basic Term or the applicable Renewal Term, as the case
may be, in accordance with Section 6.

         Section 22.3 Purchase Option. Provided that Lessee shall have duly
given the notice required by Section 22.2 and by the next succeeding sentence of
this Section 22.3 and, in the case of a purchase, Lessee shall have given a
corresponding notice under the Other Lease and shall upon the purchase of the
Units hereunder concurrently purchase the units under the Other Lease, Lessee
shall have the right



                                       54
<PAGE>

                                                  Lease Agreement (TRLI 2001-1B)

and, upon the giving of such notice under this Section 22.3, the obligation to
purchase all of the Units at a price equal to the Fair Market Sales Value of
such Units, at the expiration of the Basic Term, or, if a Renewal Term is then
in effect, at the end of such Renewal Term, plus all other amounts due and owing
by Lessee under the Operative Agreements, including, without limitation, Late
Payment Interest and any unpaid Rent (so that, after receipt and application of
all such payments, but without withdrawal from any Reserve Account, Owner
Participant shall be entitled under the terms of the Collateral Agency Agreement
to receive, and does receive, taking into account all Basic Rent payments in
respect of the Units, the sum of the Accumulated Equity Deficiency Amount and
Late Payment Interest related thereto and any other amounts then due to Owner
Participant). Lessee shall give Lessor written notice not less than 90 days and
not more than 360 days prior to the end of the Basic Term or any Renewal Term,
as the case may be, of its election to exercise the purchase option provided for
in this Section 22.3, which notice shall be irrevocable. Payment of the purchase
price, together with all other amounts due and owing by Lessee under the
Operative Agreements shall be made at the place of payment specified in Section
3.5 hereof in immediately available funds against delivery of a bill of sale
transferring and assigning to Lessee all right, title and interest of Lessor in
and to such Units on an "as-is" "where-is" basis and containing a warranty as to
the absence of Lessor's Liens. Lessor shall not be required to make any other
representation or warranty as to the condition of such Units or any other
matters, and may specifically disclaim any such representations or warranties.

         Section 22.4 Renewal Option. Provided no Event of Default shall have
occurred and be continuing and Lessee shall have duly given the notice required
by Section 22.2, and the corresponding notice under the Other Lease and shall
upon the renewal of the Units hereunder concurrently renew the units under the
Other Lease and Lessee has not exercised its option to purchase the Units
pursuant to Section 22.3, Lessee shall have the right and, upon the giving of a
notice under this Section 22.4 as below provided, the obligation to lease
pursuant to this Lease all (but not less than all) of the Units at the
expiration of the Basic Term or any applicable Renewal Term. Lessee may exercise
this renewal option by giving Lessor written notice not less than 90 days and
not more than 360 days prior to the end of the Basic Term (or, in the
circumstances described below the then Renewal Term) that Lessee elects to renew
this Lease with respect to all, but not less than all, of the Units then leased
hereunder at a rental payment calculated by reference to the then fair market
rental value (a "Fair Market Renewal") or a fixed rental (a "Fixed Rate
Renewal"). At Lessee's option, such renewal may, in the case of a Fair Market
Renewal, be for a



                                       55
<PAGE>

                                                  Lease Agreement (TRLI 2001-1B)

renewal term of one or more years or, in the case of a Fixed Rate Renewal, be
for an initial renewal term of three years (but not to extend beyond the Outside
Renewal Date) and in connection with any renewal term following the initial
renewal term, a term of one year or more expiring not later than the Outside
Renewal Date, in each case as Lessee shall specify in such notice, which notice
shall be irrevocable. The Basic Rent for each Unit during any Renewal Term (the
"Renewal Rent") shall (a) in the case of any Fixed Rate Renewal, be 1/12th of
100% of the average annual Basic Rent allocated over the period from the end of
the Basic Rent Holiday through the Basic Term Expiration Date, payable monthly
in arrears and (b) in the case of any Fair Market Renewal, be 100% of the Fair
Market Rental Value determined as of the commencement of the applicable Renewal
Term; provided, however, that in the case of the first two years of the Fair
Market Renewal period(s) that immediately follow the Basic Term Expiration Date
(whether under Section 22.4 or Section 6.1), be 105% of the Fair Market Rental
Value determined as of the commencement of the applicable Renewal Term; provided
further, however, that the preceding proviso shall not apply in the event that
the Lessee provides the Lessor, at the Lessee's sole cost and expense, with an
opinion of independent tax counsel selected by Lessor (which counsel shall be
selected by Lessor from among four nationally recognized law firms proposed by
Lessee, each of which must be experienced in leveraged leasing transactions
similar to the transactions contemplated herein) to the effect that applicable
Treasury Regulations (or other administrative pronouncements upon which
taxpayers may rely for Federal income tax purposes) will permit rent for such
Renewal Term at a rate equal to 100% of the fair market rent determined as of
the time of such Renewal Term without resulting in any adverse Federal income
tax consequences to the Owner Participant Parent (within the meaning of the Tax
Indemnity Agreement) under Code Section 467 or any successor provision thereto.
Each Renewal Term shall commence immediately upon the expiration of the Basic
Term or the preceding Renewal Term, as the case may be. Lessee shall not be
entitled to enter any Fixed Rate Renewal following the expiry of any Fair Market
Renewal.

         Section 22.5 Rent Appraisal; Outside Renewal Date. Promptly following
Lessee's irrevocable written notice pursuant to Section 22.2 of its election to
retain the Units at the end of the Basic Term or any Renewal Term (and, in any
event, if it is anticipated that there will be any Extended Units at the end of
the Basic Term or such Renewal Term), Lessor and Lessee shall determine (a) if
Lessee shall have exercised a Fixed Rate Renewal, (i) the remaining useful life
and Fair Market Sales Value (based on the actual condition of a reasonable
sampling of such Units



                                       56
<PAGE>

                                                  Lease Agreement (TRLI 2001-1B)

and determined pursuant to the appraisal procedure set forth in the definition
of Fair Market Sales Value) of the Units, and (ii) the latest date such that (1)
the period from the Closing Date to such date would not exceed 80% of the useful
life of any Unit (as determined in subclause (i) above) from and after the
Closing Date, and (2) the Fair Market Sales Value of each Unit (determined
without regard to inflation or deflation from the Closing Date) on such date
would not be less than 20% of the Equipment Cost of such Unit (such date
determined under this subclause (ii) shall thereafter be the latest date to
which this Lease may be renewed pursuant to a Fixed Rate Renewal under Section
22.4 (the "Outside Renewal Date")), (b) if Lessee shall have exercised the
purchase option under Section 22.3(i) or any renewal option under Section 22.4,
the Fair Market Sales Value of the applicable Units as of the end of the then
existing Basic Term or Renewal Term, as applicable, in each case assuming such
Units are at least in the condition required by this Lease, and (c) if Lessee
shall have exercised a Fair Market Renewal (or if it is anticipated that there
will be any Extended Units at the end the Basic Term or such Renewal Term), the
Fair Market Rental Value of the applicable Units as of the end of the then
existing Basic Term or Renewal Term, as applicable, in each case assuming such
Units are at least in the condition required by this Lease.

         Section 22.6 Stipulated Loss Amount and Termination Amount During
Renewal Term. All of the provisions of this Lease, other than Section 10, shall
be applicable during any Renewal Term for such Units, except as specified in the
next sentence. During any Renewal Term, the Stipulated Loss Amount and
Termination Amount of any Unit shall be determined on the basis of the Fair
Market Sales Value of such Unit as of the first day of such Renewal Term,
reduced in equal monthly increments to the Fair Market Sales Value of such Unit
as of the last day of such Renewal Term; provided that in no event during any
Fixed Rate Renewal shall the Stipulated Loss Amount and Termination Amount of
any Unit be less than 20% of the Equipment Cost of such Unit.

         Section 22.7 Deemed Renewals. If Lessee does not exercise its purchase
option under Section 22.3 or its renewal option under Section 22.4 at the end of
the Basic Term or any Renewal Term, then the Lease for any Unit subject to a
Sublease at the end of the Basic Term or such Renewal Term shall be deemed
automatically renewed for a Renewal Term expiring at the expiration of such
Sublease's term (but in no event later than three years following the expiry of
the Basic Term or such Renewal Term, as applicable) (such Unit, an "Extended
Unit"). The terms and conditions of any such deemed renewal of a Unit under this
Section



                                       57
<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)

22.7 including rent shall otherwise be those generally provided in
Section 22.4 in respect of a Fair Market Renewal for the period thereof (which
shall be considered a Renewal Term).

         Section 22.8 Funding of Accounts on Purchase. Lessee will not exercise
the purchase option under this Section 22 unless either (a) the full amount
required to fund the Post Lease Term Reserve Account is (upon consummation of
such purchase and distribution of all amounts required to be distributed by the
Collateral Agent under the Collateral Agency Agreement) and will be then
available to the Collateral Agent to fund such account or (b) an indemnity
pursuant to Section 3.13 of the Collateral Agency Agreement has been provided.

SECTION 23. Limitation of Lessor's Liability.

         It is expressly agreed and understood that all representations,
warranties and undertakings of Lessor hereunder (except as expressly provided
herein) shall be binding upon Lessor only in its capacity as Owner Trustee under
the Trust Agreement and in no case shall the Trust Company be personally liable
for or on account of any statements, representations, warranties, covenants or
obligations stated to be those of Lessor hereunder, except that the Trust
Company shall be personally liable for its gross negligence or wilful misconduct
and for its breach of its covenants, representations and warranties contained
herein to the extent covenanted or made in its individual capacity.

SECTION 24. Investment of Security Funds.

         Any moneys received by Lessor or the Indenture Trustee pursuant to
Section 12.2 which are required to be paid to Lessee after completion of repairs
to be made pursuant to Section 12.2 or pursuant to Section 11.4(a) or 11.5, as
the case may be, shall be paid directly to the appropriate Non-Shared Payments
Account established under the Collateral Agency Agreement.

SECTION 25. Miscellaneous.

         Section 25.1 Governing Law; Severability. THIS LEASE SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES (OTHER THAN SECTION
5-1401 OF THE



                                       58
<PAGE>

                                                  Lease Agreement (TRLI 2001-1B)

NEW YORK GENERAL OBLIGATIONS LAW). Whenever possible, each provision of this
Lease shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Lease shall be prohibited by or
invalid under the laws of any jurisdiction, such provision, as to such
jurisdiction, shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Lease in any other jurisdiction.

         Section 25.2 Execution in Counterparts. This Lease may be executed in
any number of counterparts, each executed counterpart constituting an original
and in each case such counterparts shall constitute but one and the same
instrument; provided, however, that to the extent that this Lease constitutes
chattel paper (as such term is defined in the Uniform Commercial Code) no
security interest in this Lease may be created through the transfer or
possession of any counterpart hereof other than the counterpart bearing the
receipt therefor executed by the Indenture Trustee on the signature page hereof,
which counterpart shall constitute the only "original" hereof for purposes of
the Uniform Commercial Code.

         Section 25.3 Headings and Table of Contents; Section References. The
headings of the sections of this Lease and the Table of Contents are inserted
for purposes of convenience only and shall not be construed to affect the
meaning or construction of any of the provisions hereof. All references herein
to numbered sections, unless otherwise indicated, are to sections of this Lease.

         Section 25.4 Successors and Assigns. This Lease shall be binding upon
and shall inure to the benefit of, and shall be enforceable by, the parties
hereto and their respective permitted successors and permitted assigns.

         Section 25.5 True Lease. It is the intent of the parties to this Lease
that it will be a true lease and not a "conditional sale", that Lessor shall at
all times be considered to be the owner of each Unit which is the subject of
this Lease for the purposes of all federal, state, city and local income taxes,
that this Lease conveys to Lessee no right, title or interest in any Unit except
as lessee and that the Lease will be a finance lease under the provisions of
Article 2A of the New York Uniform Commercial Code. Nothing contained in this
Section 25.5 shall be construed to limit Lessee's use or operation of any Unit
or constitute a representation, warranty or covenant by Lessee as to tax
consequences.


                                       59
<PAGE>

                                                  Lease Agreement (TRLI 2001-1B)

         The parties hereto hereby agree that Lessee's obligation to make
payments of the type described in the definition of "Excepted Property" is a
separate and independent obligation from its obligation to make other Rent
payments, and that Lessee's obligation to make payments of the type described in
the definition of "Excepted Property" may be independently enforced and may be
assigned, pledged or otherwise transferred separately from Lessee's obligations
to make other Rent payments. The obligation to make such payments has been
included herein for the convenience of the parties.

         Section 25.6 Amendments and Waivers. No term, covenant, agreement or
condition of this Lease may be terminated, amended or compliance therewith
waived (either generally or in a particular instance, retroactively or
prospectively) except by an instrument or instruments in writing executed by
each party hereto and except as may be permitted by the terms of the Indenture.

         Section 25.7 Survival. All warranties, representations, indemnities and
covenants made by either party hereto, herein or in any certificate or other
instrument delivered by such party or on the behalf of any such party under this
Lease, shall be considered to have been relied upon by the other party hereto
and shall survive the consummation of the transactions contemplated hereby on
the Closing Date regard less of any investigation made by either such party or
on behalf of either such party, and to the extent having accrued and not been
paid or relating to or otherwise arising in connection with the transactions
contemplated by the Operative Agreements during the Lease Term, shall survive
the expiration or other termination of this Lease or any other Operative
Agreement.

         Section 25.8 Business Days. If any payment is to be made hereunder or
any action is to be taken hereunder on any date that is not a Business Day, such
payment or action otherwise required to be made or taken on such date shall be
made or taken on the immediately succeeding Business Day with the same force and
effect as if made or taken on such scheduled date and as to any payment
(provided any such payment is made on such succeeding Business Day) no interest
shall accrue on the amount of such payment from and after such scheduled date to
the time of such payment on such next succeeding Business Day.

         Section 25.9 Directly or Indirectly; Performance by Managers. Where any
provision in this Lease refers to action to be taken by any Person, or which
such Person is prohibited from taking, such provision shall be applicable
whether such



                                       60
<PAGE>

                                                  Lease Agreement (TRLI 2001-1B)

action is taken directly or indirectly by such Person. In this regard, it is
understood and agreed that Lessee has entered into the Management Agreement with
the Manager and the Insurance Agreement with the Insurance Manager, under which
agreements certain rights and obligations of Lessee hereunder will be exercised
and performed by such Persons on behalf of Lessee. Lessee agrees to instruct the
Manager and the Insurance Manager to take such actions as shall be necessary or
appropriate under such agreements so that Lessee shall be in compliance in all
material respects with its obligations hereunder and under the other Operative
Agreements.

         Section 25.10 Incorporation by Reference. The payment obligations set
forth in Sections 7.1 and 7.2 of the Participation Agreement are hereby
incorporated by reference.

                                      * * *


                                       61
<PAGE>

                                                  Lease Agreement (TRLI 2001-1B)


         IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease to be duly
executed and delivered on the day and year first above written.

                               Lessor:

                               TRLI 2001-1B RAILCAR STATUTORY
                               TRUST,

                               By: State Street Bank and Trust Company of
                               Connecticut, National Association, not in
                               its individual capacity except as otherwise
                               expressly provide but solely as Owner Trustee


                               By:
                                  --------------------------------------------
                               Name:
                                    ------------------------------------------
                               Title:
                                     -----------------------------------------

                               Lessee:

                               TRINITY RAIL LEASING I L.P.

                               By TILX GP I, LLC,
                                  its General Partner

                                  By:
                                     -----------------------------------------
                                  Name:  Eric Marchetto
                                  Title: Vice President


<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)

         Receipt of this original counterpart of the foregoing Lease is hereby
acknowledged on the ___ day of _______, 2001.

                               LASALLE BANK NATIONAL ASSOCIATION,
                               Indenture Trustee

                               By:
                                  --------------------------------------------
                               Name:  Sarah H. Webb
                               Title:  Senior Vice President




<PAGE>

                                                  Lease Agreement (TRLI 2001-1B)

                                    EXHIBIT A

                           LEASE SUPPLEMENT NO. _____
                                 (TRLI 2001-1B)

         This Lease Supplement No. ___, dated as of ____________, between TRLI
2001-1B Railcar Statutory Trust by State Street Bank and Trust Company of
Connecticut, National Association, not in its individual capacity but solely as
Owner Trustee under the Trust Agreement ("Lessor"), and Trinity Rail Leasing I
L.P., a Texas limited partnership ("Lessee");

                                   Witnesseth:

         Lessor and Lessee have heretofore entered into that certain Equipment
Lease Agreement (TRLI 2001-1B) dated as of July 12, 2001 (the "Lease"). The
terms used herein are used with the meanings assigned to such terms in the
Lease.

         The Lease provides for the execution and delivery of one or more Lease
Supplements substantially in the form hereof for, among other things, the
purpose of particularly describing all or a portion of the Units to be leased to
Lessee under the Lease.

         Now, therefore, in consideration of the premises and other good and
sufficient consideration, and pursuant to Section 2 of the Lease, Lessor and
Lessee hereby agree as follows:

         1. Lessor hereby delivers and leases to Lessee, and Lessee hereby
accepts and leases from Lessor, under the Lease as herein supplemented, the
Units described in Schedule 1 hereto.

         2. All of the terms and provisions of the Lease are hereby incorporated
by reference in this Lease Supplement to the same extent as if fully set forth
herein.

         3. To the extent that this Lease Supplement constitutes chattel paper
(as such term is defined in the Uniform Commercial Code) no security interest in
this Lease Supplement may be created through the transfer or possession of any
counterpart hereof other than the counterpart bearing the receipt therefor
executed by



<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)

the Indenture Trustee on the signature page hereof, which counterpart shall
constitute the only "original" hereof for purposes of the Uniform Commercial
Code.

         4. THIS LEASE SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAW PRINCIPLES (OTHER THAN SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW).

         5. This Lease Supplement may be executed in any number of counterparts,
each executed counterpart constituting an original but all together constituting
one and the same instrument.


                                      * * *


                                       A-2

<PAGE>


                                                  Lease Agreement (TRLI 2001-1B)

         IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease Supplement
to be duly executed as of the day and year first above written and to be
delivered as of the date first above written.

                               Lessor:

                               TRLI 2001-1B RAILCAR STATUTORY
                               TRUST,

                               By: State Street Bank and Trust Company of
                               Connecticut, National Association, not in its
                               individual capacity but solely as Owner
                               Trustee

                               By:
                                  --------------------------------------------
                               Name:
                                    ------------------------------------------
                               Lessee:
                                      ----------------------------------------

                               TRINITY RAIL LEASING I L.P.

                               By TILX GP I, LLC,
                                  its General Partner

                                  By:
                                     -----------------------------------------
                                  Name:
                                       ---------------------------------------
                                  Title:
                                        --------------------------------------

         (1) Receipt of this original counterpart of the foregoing Lease
Supplement is hereby acknowledged on this ___ day of ______, 20__.

                               LASALLE BANK NATIONAL ASSOCIATION,
                               as Indenture Trustee

                               By:
                                  --------------------------------------------
                               Name:
                                    ------------------------------------------
                               Title:
                                     -----------------------------------------

- ----------
(1)      This language contained in the original counterpart only.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.16.3
<SEQUENCE>10
<FILENAME>d94851ex10-16_3.txt
<DESCRIPTION>PARTICIPATION AGREEMENT (TRL 1 2001-1B)
<TEXT>
<PAGE>
                                                                 EXHIBIT 10.16.3



                     PARTICIPATION AGREEMENT (TRLI 2001-1B)

                            Dated as of May 17, 2001

                                      among

                          TRINITY RAIL LEASING I L.P.,
                                   as Lessee,

                         TRINITY RAIL MANAGEMENT, INC.,

                       TRINITY INDUSTRIES LEASING COMPANY,
                                   as Manager,

                      TRLI 2001-1B RAILCAR STATUTORY TRUST,
             BY STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
                             NATIONAL ASSOCIATION,
                                as Owner Trustee,

                             TRIMARAN LEASING, L.P.,
                              as Owner Participant

                                       and

                       LASALLE BANK NATIONAL ASSOCIATION,
                  as Indenture Trustee and Pass Through Trustee






                   Tank Cars, Covered Hopper Cars and Box Cars



                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
SECTION 1.            DEFINITIONS; INTERPRETATION OF THIS AGREEMENT...........3

SECTION 2.            SALE AND PURCHASE; PARTICIPATION IN EQUIPMENT COST;
                      CLOSING; TRANSACTION COSTS .............................4
     Section 2.1      Sale and Purchase of Equipment..........................4
     Section 2.2      Participation in Equipment Cost.........................4
     Section 2.3      Closing Date; Procedure for Participation...............4
     Section 2.4      Owner Participant's Instructions to the Owner Trustee;
                      Satisfaction of Conditions..............................6
     Section 2.5      Expenses................................................6
     Section 2.6      Calculation of Adjustments to Basic Rent, Stipulated
                      Loss Value and Termination Value; Confirmation and
                      Verification............................................9
     Section 2.7      Postponement of Closing Date...........................12

SECTION 3.            REPRESENTATIONS AND WARRANTIES.........................14
     Section 3.1      Representations and Warranties of the Trust Company....14
     Section 3.2      Representations and Warranties of the Lessee...........17
     Section 3.3      Representations and Warranties of the Indenture
                      Trustee................................................22
     Section 3.4      Representations, Warranties and Covenants Regarding
                      Beneficial Interest, Equipment Note and Pass Through
                      Certificates...........................................23
     Section 3.5      Representations and Warranties of the Owner
                      Participant............................................25
     Section 3.6      Representations and Warranties of TILC.................27
     Section 3.7      Representations and Warranties of TRMI.................31
     Section 3.8      Representations and Warranties of the Pass Through
                      Trustee................................................33
     Section 3.9      Opinion Acknowledgment.................................35

SECTION 4.            CLOSING CONDITIONS.....................................35
     Section 4.1      Conditions Precedent to Investment by Each
                      Participant............................................35
     Section 4.2      Additional Conditions Precedent to Investment by the
                      Loan Participant.......................................42
     Section 4.3      Additional Conditions Precedent to Investment by the
                      Owner Participant......................................43
     Section 4.4      Conditions Precedent to the Obligation of TILC and the
                      Lessee.................................................44

SECTION 5.            FINANCIAL AND OTHER REPORTS OF THE LESSEE..............46

SECTION 6.            CERTAIN COVENANTS OF THE PARTICIPANTS, THE TRUSTEES AND
                      THE LESSEE.............................................47
</Table>


                                       i

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

<Table>
<Caption>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
     Section 6.1      Restrictions on Transfer of Beneficial Interest........47
     Section 6.2      Lessor's Liens Attributable to the Owner Participant...51
     Section 6.3      Lessor's Liens Attributable to Trust Company...........51
     Section 6.4      Liens Created by the Indenture Trustee and the Loan
                      Participant............................................51
     Section 6.5      Covenants of Owner Trustee, Owner Participant and
                      Indenture Trustee .....................................52
     Section 6.6      Amendments to Operative Agreements That Are Not
                      Lessee Agreements .....................................53
     Section 6.7      Certain Representations, Warranties and Covenants......53
     Section 6.8      Covenants of the Manager...............................53
     Section 6.9      Lessee's Purchase in Certain Circumstances.............53
     Section 6.10     Owner Participant as Affiliate of Lessee...............55
     Section 6.11     Records; U.S. Income Tax Information...................55

SECTION 7.            LESSEE'S INDEMNITIES...................................56
     Section 7.1      General Tax Indemnity..................................56
     Section 7.2      General Indemnification................................65
     Section 7.3      Indemnification by TILC................................71
     Section 7.4      Indemnification by TRMI................................76

SECTION 8.            LESSEE'S RIGHT OF QUIET ENJOYMENT......................81

SECTION 9.            SUCCESSOR INDENTURE TRUSTEE............................81

SECTION 10.           MISCELLANEOUS..........................................81
     Section 10.1     Consents...............................................81
     Section 10.2     Refinancing............................................82
     Section 10.3     Amendments and Waivers.................................84
     Section 10.4     Notices................................................84
     Section 10.5     Survival...............................................86
     Section 10.6     No Guarantee of Residual Value or Debt.................87
     Section 10.7     Successors and Assigns.................................87
     Section 10.8     Business Day...........................................87
     SECTION 10.9     GOVERNING LAW..........................................87
     Section 10.10    Severability...........................................88
     Section 10.11    Counterparts...........................................88
     Section 10.12    Headings and Table of Content..........................88
     Section 10.13    Limitations of Liability...............................88
     Section 10.14    Maintenance of Non-Recourse Debt.......................89
     Section 10.15    Ownership of and Rights in Units.......................90
     Section 10.16    No Petition............................................90
     Section 10.17    Consent To Jurisdiction................................91
</Table>


                                       ii

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

<Table>
<Caption>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
     SECTION 10.18    WAIVER OF JURY TRIAL...................................91

ANNEX A               -    DEFINITIONS
</Table>


                                       iii

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
                             EXHIBITS AND SCHEDULES

Exhibit A-1       -     Form of Certificate of Insurance Broker Confirming
                        Insurance Coverage (Primary Liability)
Exhibit A-2       -     Form of Certificate of Insurance Broker Confirming
                        Insurance Coverage (Excess Liability)
Exhibit B-1       -     Insurance Requirements as to Public Liability Insurance
Exhibit B-2       -     Insurance Requirements as to Physical Damage Insurance
Exhibit C         -     Form of Transfer Agreement
Exhibit D         -     Form of Notice of Assignment of Sublease
Exhibit E         -     Form of Officer's Solvency Certificate
Schedule 1        -     Description of Equipment, Designation of Basic Groups,
                        Designation of Functional Groups and Equipment Cost
Schedule 1-B      -     List of Existing Subleases
Schedule 2        -     Commitment Percentage and Payment Information for
                        Participants
Schedule 3-A      -     Schedule of Basic Rent Payments and Basic Rent
                        Expiration Date
Schedule 3-B      -     Basic Rent Allocation Schedule
Schedule 4-A      -     Schedule of Stipulated Loss Value and Termination Value
Schedule 4-B      -     Termination Amount Schedule
Schedule 5        -     Terms of Equipment Note (including amortization)
Schedule 6        -     Purchase Information (price and date)
Schedule 3.2(m)   -     Written Information Provided by Trinity Rail Leasing I
                        L.P., Trinity Industries Leasing Company and Trinity
                        Rail Management, Inc.


                                       iv

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

                     PARTICIPATION AGREEMENT (TRLI 2001-1B)


         This PARTICIPATION AGREEMENT (TRLI 2001-1B), dated as of May 17, 2001
(this "Agreement"), is by and among (i) Trinity Rail Leasing I L.P., a Texas
limited partnership (together with its permitted successors and assigns, the
"Lessee"), (ii) Trinity Rail Management, Inc., a Delaware corporation ("TRMI"),
(iii) Trinity Industries Leasing Company, a Delaware corporation ("TILC"), (iv)
TRLI 2001-1B Railcar Statutory Trust, a Connecticut statutory trust, by State
Street Bank and Trust Company of Connecticut, National Association, a national
banking association, ("Trust Company"), not in its individual capacity except as
expressly provided herein but solely as trustee (together with its permitted
successors and assigns, the "Owner Trustee") under the Trust Agreement (such
term and other defined terms used herein shall have the meanings assigned
thereto in Section 1 below), (v) Trimaran Leasing, L.P., a Delaware limited
partnership (together with its permitted successors and assigns, the "Owner
Participant") and (vi) LaSalle Bank National Association, a national banking
association, not in its individual capacity except as expressly provided herein
but solely as pass through trustee under the Pass Through Trust Agreement (in
such capacity, together with its permitted successors and assigns, the "Pass
Through Trustee" or the "Loan Participant"), and as trustee under the Indenture
(in such capacity, together with its permitted successors and assigns, the
"Indenture Trustee"). The Owner Participant and the Loan Participant are
sometimes hereinafter referred to collectively as the "Participants."

                                   WITNESSETH:

         WHEREAS, on or prior to the date hereof, the Owner Participant and the
Trust Company have entered into the Trust Agreement pursuant to which the Owner
Trustee has agreed, among other things, to hold the Trust Estate for the benefit
of the Owner Participant thereunder on the terms specified in the Trust
Agreement, subject, however, to the Lien created under the Indenture and,
subject to the terms and conditions hereof, to purchase on the Closing Date the
Equipment described in Schedule 1 hereto from the Lessee and concurrently
therewith to lease such Equipment to the Lessee;

         WHEREAS, on or prior to the date hereof and pursuant to the Pass
Through Trust Agreement a grantor trust was created to facilitate the financing
contemplated hereby;

         WHEREAS, on the Closing Date, the Owner Trustee and the Indenture
Trustee will enter into the Indenture, pursuant to which the Owner Trustee will
agree, among other things, to borrow from the Loan Participant the loan in
connection with the financing of the Total Equipment Cost and to issue to the
Loan Participant the Equipment Note as evidence of such loan;


                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

         WHEREAS, TILC will, on the Closing Date, pursuant to the Transfer and
Assignment Agreement (i) sell to the Partnership all of TILC's right, title and
interest in and to the Equipment described on Schedule 1 hereto and (ii) assign
and transfer to the Partnership all of TILC's right, title and interest in and
to any Existing Equipment Subleases;

         WHEREAS, TILC will, on the date hereof, pursuant to the Pledged
Equipment Transfer and Assignment Agreement (i) sell to the Partnership all of
TILC's right, title and interest in and to the Pledged Equipment and (ii) assign
and transfer to the Partnership all of TILC's right, title and interest in and
to any Existing Pledged Equipment Leases;

         WHEREAS, pursuant to the terms of the Trust Agreement, the Owner
Participant has authorized and directed the Owner Trustee to, and the Owner
Trustee will, among other things and subject to the terms and conditions of the
Operative Agreements, (i) purchase the Equipment described in Schedule 1 hereto
from the Lessee and accept delivery from the Lessee of the Bill of Sale
evidencing the purchase and transfer of title of each Unit to the Owner Trustee,
(ii) own the Equipment described in Schedule 1 hereto as provided in the
Operative Agreements, (iii) accept pursuant to the Assignment the assignment and
transfer from the Lessee of all Lessee's right, title and interest in and to the
Existing Equipment Subleases and (iv) execute and deliver the Lease, pursuant to
which, subject to the terms and conditions set forth therein, the Owner Trustee
agrees to lease to the Lessee, and the Lessee agrees to lease from the Owner
Trustee, each Unit to be delivered on the Closing Date, such lease to be
evidenced by the execution and delivery of the Lease Supplement covering such
Units, and to assign the Existing Equipment Subleases to the Lessee, such
assignment to be evidenced by the execution and delivery of the Assignment
covering such Existing Equipment Subleases;

         WHEREAS, on the date hereof, the Lessee, TILC, TRMI, the Owner Trustee,
the Indenture Trustee and the Collateral Agent have entered into the Collateral
Agency Agreement, pursuant to which the Lessee will agree, among other things,
to grant to the Collateral Agent for the security and the benefit of the Owner
Trustee a security interest in the Collateral to secure the performance by the
Lessee of its obligations under the Lease;

         WHEREAS, pursuant to the terms of the Trust Agreement, the Owner
Participant has authorized and directed the Owner Trustee to, and the Owner
Trustee will, among other things and subject to the terms and conditions of the
Operative Agreements, grant to the Indenture Trustee for the security and the
benefit of the holder of the Equipment Note a security interest in the Indenture
Estate;


                                       2

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

         WHEREAS, on the Closing Date, Lessee, Trinity and the Owner Participant
(or an Affiliate of the Owner Participant) will enter into the Tax Indemnity
Agreement;

         WHEREAS, the proceeds from the sale of the Equipment Note to the Loan
Participant will be applied, together with the equity contribution made by the
Owner Participant pursuant to this Agreement, to effect the purchase of the
Equipment described on Schedule 1 hereto by the Owner Trustee from the Lessee as
contemplated hereby;

         WHEREAS, concurrently with the execution and delivery of this
Agreement, the Lessee and TILC have entered into the Management Agreement,
pursuant to which TILC will provide management services with respect to the
Equipment and the Pledged Equipment;

         WHEREAS, concurrently with the execution and delivery of this
Agreement, the Lessee and TILC have entered into the Insurance Agreement,
pursuant to which TILC will provide services to the Lessee in connection with
obtaining, managing and maintaining insurance with respect to the Equipment and
the Pledged Equipment required under the Operative Agreements;

         WHEREAS, concurrently with the execution and delivery of this
Agreement, the Lessee, the General Partner, the Limited Partner and TRMI have
entered into the Administrative Services Agreement, pursuant to which TRMI will
provide certain administrative services with respect to the Partnership, the
General Partner and the Limited Partner; and

         WHEREAS, concurrently with the execution and delivery of this
Agreement, Trinity Industries, Inc. has issued the Trinity Guaranty in favor of
the beneficiaries named therein, pursuant to which Trinity Industries, Inc. will
guarantee performance of the obligations of TILC and TRMI under the Operative
Agreements to which TILC or TRMI is a party, respectively.

         NOW, THEREFORE, in consideration of the mutual agreements herein
contained and other good and valuable consideration, receipt of which is
acknowledged, the parties hereto agree as follows:

SECTION 1. DEFINITIONS; INTERPRETATION OF THIS AGREEMENT.

         Unless otherwise defined herein or unless the context shall otherwise
require, capitalized terms used in this Agreement shall have the meanings
assigned to such terms in Appendix A hereto. Unless otherwise indicated, all
references herein to Sections, Schedules and Exhibits refer to Sections,
Schedules and Exhibits of this Agreement.


                                       3

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

SECTION 2. SALE AND PURCHASE; PARTICIPATION IN EQUIPMENT COST; CLOSING;
           TRANSACTION COSTS.

         Section 2.1 Sale and Purchase of Equipment. Subject to the terms and
conditions hereof and on the basis of the representations and warranties set
forth herein, the Lessee agrees to sell to the Owner Trustee, and the Owner
Trustee agrees to purchase from the Lessee, on the Closing Date and immediately
following consummation of the transactions described in the third and fourth
recital clauses above, the Equipment described in Schedule 1, and, in connection
therewith, the Owner Trustee agrees to pay to the Lessee the cost for each Unit
as specified in Schedule 1. On the Closing Date, the Lessee shall deliver each
Unit described on Schedule 1 to the Owner Trustee, and the Owner Trustee shall
accept such delivery.

         Section 2.2 Participation in Equipment Cost.

                    (a) Equity Participation. On the Closing Date, subject to
the terms and conditions hereof and on the basis of the representations and
warranties set forth herein, the Owner Participant agrees to participate in the
payment of the Total Equipment Cost for the Units delivered on the Closing Date
by making an equity investment in the beneficial ownership of such Units in the
amount equal to the product of the Total Equipment Cost for such Units delivered
on the Closing Date and the percentage set forth opposite the Owner
Participant's name in Schedule 2 (the "Owner Participant's Commitment"). The
aggregate amount of the Owner Participant's Commitment plus the aggregate amount
of Transaction Costs payable by the Owner Participant shall not exceed the sum
of (x) the Owner Participant's Commitment and (y) 2% of the Total Equipment
Cost. The Owner Participant's Commitment shall be paid to the Indenture Trustee
to be held (but not as part of the Indenture Estate) and applied on behalf of
the Owner Trustee toward payment of the Total Equipment Cost as provided in
Section 2.3.

                    (b) Debt Participation. On the Closing Date, subject to the
terms and conditions hereof and on the basis of the representations and
warranties set forth herein, the Loan Participant agrees to participate in the
payment of the Total Equipment Cost for the Units delivered on the Closing Date
by making a secured loan, not from its own funds but solely from funds available
to it for such purposes under the Pass Through Trust Agreement, to be evidenced
by the Equipment Note, to the Owner Trustee in the amount equal to the product
of the Total Equipment Cost for the Units delivered on the Closing Date and the
percentage set forth opposite the Loan Participant's name in Schedule 2 (the
"Loan Participant's Commitment"). The Equipment Note shall bear interest at the
Debt Rate.

         Section 2.3 Closing Date; Procedure for Participation.

                    (a) Notice of Closing Date. Not later than three Business
Days' prior to the Closing Date (or such lesser notice as may be agreed upon by
the Lessee,


                                       4

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
the Owner Participant and the Loan Participant), the Lessee shall give the Owner
Participant, the Indenture Trustee, the Owner Trustee and the Loan Participant a
notice (a "Notice of Delivery") by facsimile or other form of telecommunication
or telephone (to be promptly confirmed in writing) of the Closing Date, which
Notice of Delivery shall specify in reasonable detail the number and type of
Units to be delivered on such date, the Total Equipment Cost of such Units, and
the respective amounts of the Owner Participant's Commitment and the Loan
Participant's Commitment required to be paid with respect to the Units. Prior to
11:00 a.m., Chicago time, on the Closing Date, subject to the satisfaction (or
waiver) of the respective conditions specified in Section 4, the Owner
Participant shall make the amount of the Owner Participant's Commitment required
to be paid on the Closing Date available to the Indenture Trustee, and
immediately prior to the delivery and acceptance of the Units as specified in
Section 2.3(b), the Loan Participant shall make the amount of the Loan
Participant's Commitment for the Total Equipment Cost required to be paid on the
Closing Date available to the Indenture Trustee, in either case, by transferring
or delivering such amounts, in funds immediately available on the Closing Date,
to the Indenture Trustee, either directly to, or for deposit in, the Indenture
Trustee's account at LaSalle Bank National Association, ABA No. 071000505, Att.:
Kristine Schossow, Corporate Trust Services Division, Trust TRLI 2001-1B,
Account 608775300. The making available by the Owner Participant of the amount
of the Owner Participant's Commitment for the Total Equipment Cost shall be
deemed a waiver of the Notice of Delivery by the Owner Participant and the Owner
Trustee. The making available by the Loan Participant of the amount of the Loan
Participant's Commitment for the Total Equipment Cost shall be deemed a waiver
of the Notice of Delivery by the Loan Participant and the Indenture Trustee.

                    (b) Closing. The closing of the transactions contemplated
hereby (the "Closing") shall take place on or before 2:00 p.m., Chicago time, on
the Closing Date at the offices of Skadden, Arps, Slate, Meagher & Flom
(Illinois), or at such other place or time as the parties hereto shall agree.
Upon receipt by the Indenture Trustee on the Closing Date of the full amount of
the Owner Participant's Commitment and the Loan Participant's Commitment in
respect of the Units delivered on the Closing Date, TILC shall pursuant to the
Transfer and Assignment Agreement deliver the Units described on Schedule 1
hereto to the Lessee by delivery of the TILC Bill of Sale and shall make an
assignment of the Existing Equipment Subleases to the Lessee by delivery of the
TILC Assignment, and immediately thereafter, (i) the Indenture Trustee, on
behalf of the Owner Trustee, shall, subject to the conditions set forth in
Sections 4.1, 4.2 and 4.3 having been fulfilled to the satisfaction of the
Participants or waived by the Participants, pay to the Lessee from the funds
then held by it, in immediately available funds, an amount equal to the Total
Equipment Cost for the Units delivered on the Closing Date, (ii) the Lessee
shall pay to TILC pursuant to the Transfer and Assignment Agreement an amount
equal to the Total Equipment Cost for the Units delivered on the Closing Date,
(iii) the Lessee shall deliver the Units described on Schedule 1 hereto by


                                       5

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

delivery of the Bill of Sale, (iv) the Owner Trustee shall, pursuant to the
Lease, lease and deliver the Units listed on Schedule 1 hereto to the Lessee,
and the Lessee, pursuant to the Lease, shall accept delivery of the Units
described on Schedule 1 hereto under the Lease, such lease, delivery and
acceptance of such Units under the Lease shall be conclusively evidenced by the
execution and delivery by the Lessee and the Owner Trustee of the Lease
Supplement covering the Equipment so delivered as described in Schedule 1 and
(v) the Owner Trustee shall execute and deliver the Equipment Note relating to
such Lease Supplement to the Loan Participant. Each of the Lessee, the Owner
Participant, the Owner Trustee, TILC, the Loan Participant and the Indenture
Trustee hereby agrees to take all actions required to be taken by it in
connection with the Closing as contemplated by this Section 2.3(b).

         Section 2.4 Owner Participant's Instructions to the Owner Trustee;
Satisfaction of Conditions.

                    (a) The Owner Participant agrees that the making available
to the Indenture Trustee of the amount of the Owner Participant's Commitment for
the Units delivered on the Closing Date in accordance with the terms of this
Section 2 shall constitute, without further act, authorization and direction by
the Owner Participant to the Owner Trustee, subject, on the Closing Date, to the
conditions set forth in Sections 4.1 and 4.3 having been fulfilled to the
satisfaction of the Owner Participant or waived by the Owner Participant, to
take the actions specified in Section 2.04 of the Trust Agreement with respect
to the Units on the Closing Date.

                    (b) The Owner Participant agrees that the authorization by
the Owner Participant or its counsel to the Indenture Trustee to release to the
Lessee the Owner Participant's Commitment with respect to the Units delivered on
the Closing Date shall constitute, without further act, notice and confirmation
that all conditions to closing set forth in Sections 4.1 and 4.3 were either met
to the satisfaction of the Owner Participant or, if not so met, were waived by
the Owner Participant.

                    (c) The Loan Participant agrees that the authorization by
the Loan Participant or its counsel to the Indenture Trustee to release to the
Lessee the Loan Participant's Commitment with respect to the Units delivered on
the Closing Date shall constitute, without further act, notice and confirmation
that all conditions to closing set forth in Sections 4.1 and 4.2 were either met
to the satisfaction of the Loan Participant or, if not so met, were waived by
the Loan Participant.

         Section 2.5 Expenses.

                    (a) If the Owner Participant shall have made its investment
provided for in Section 2.2 and the transactions contemplated by this Agreement
are consummated, either the Owner Participant will promptly pay, or the Owner
Trustee will promptly pay, with funds the Owner Participant hereby agrees to pay
(which,


                                       6

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

together with the Owner Participant's Commitment, shall not exceed the
amount set forth in the second sentence of Section 2.2(a)) to the Owner Trustee,
the following collectively referred to as the "Transaction Costs") if evidenced
by an invoice delivered to the Owner Participant within four (4) months after
the Closing Date and approved by the Lessee and the Owner Participant (such
approval not to be unreasonably withheld or delayed):

                                 (i) the cost of reproducing, printing and
filing the Operative Agreements, the Equipment Note, and all amendments and
supplements to the foregoing, including all costs and fees in connection with
the initial filing and recording of the Lease, the Indenture and any other
document required to be filed or recorded pursuant to the provisions hereof or
of any other Operative Agreement;

                                 (ii) the reasonable out-of-pocket expenses of
the Owner Participant and the reasonable fees of Winston & Strawn, special
counsel for the Owner Participant, plus disbursements, for their services
rendered in connection with the negotiation, execution and delivery of this
Agreement and the other Operative Agreements;

                                 (iii) the reasonable out-of-pocket expenses of
the Collateral Agent and the reasonable fees and expenses of Andrews & Kurth
L.L.P., special counsel for the Collateral Agent, for their services rendered in
connection with the negotiation, execution and delivery of the Operative
Agreements;

                                 (iv) the reasonable fees and expenses of
Skadden, Arps, Slate, Meagher & Flom (Illinois), special counsel for TILC, the
Lessee and TRMI, for their services rendered in connection with the preparation
of documentation, negotiation, execution and delivery of this Agreement and the
other Operative Agreements;

                                 (v) the reasonable fees and expenses of Vinson
& Elkins L.L.P., special counsel for the Initial Purchasers, for their services
rendered in connection with the review of this Agreement and the other Operative
Agreements;

                                 (vi) the reasonable fees and expenses of (x)
Alvord & Alvord, special STB counsel and (y) McCarthy Tetrault, special Canadian
rail counsel;

                                 (vii) the reasonable fees and expenses of
Bingham Dana LLP, special counsel for the Owner Trustee, for their services
rendered in connection with the negotiation, execution and delivery of this
Agreement and the other Operative Agreements;

                                 (viii) the reasonable fees and expenses of
Schwartz, Cooper, Greenberger & Krauss, special counsel for the Indenture
Trustee and the


                                       7

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

Pass Through Trustee, for their services rendered in connection with the
negotiation, execution and delivery of this Agreement and the other Operative
Agreements;

                                 (ix) the reasonable fees and expenses payable
to the Arrangers for their services rendered as advisor to the Lessee;

                                 (x) the initial fees and reasonable
out-of-pocket expenses of the Owner Trustee;

                                 (xi) the initial fees and reasonable
out-of-pocket expenses of the Indenture Trustee;

                                 (xii) the reasonable fees, if any, of Rail
Solutions, Inc. (which fees shall in no event exceed the agreed-upon amount),
plus disbursements, if any, for their services rendered in connection with
delivering the Appraisal required by Section 4.3(a) and for other consulting
services; and

                                 (xiii) the costs incurred in connection with
any adjustment pursuant to Section 2.6(a).

                    Except as expressly provided above, Transaction Costs shall
not include internal costs and expenses such as salaries and overhead of
whatsoever kind or nature of, or costs incurred by, parties to this Agreement
pursuant to arrangements with third parties for services (other than those
expressly referred to above).

                    (b) Upon the consummation of the transactions contemplated
by this Agreement, the Lessee agrees to be responsible for, and will pay when
due as Supplemental Rent: (i) the reasonable expenses (including reasonable
legal fees and expenses) of the Owner Trustee, the Indenture Trustee and the
Participants incurred subsequent to the delivery of the Equipment on the Closing
Date, in connection with any supplements, amendments, modifications,
alterations, waivers or consents (whether or not consummated) of any of the
Operative Agreements which are either (1) requested by the Lessee or (2)
required by any applicable law or regulation (other than laws or regulations
solely relating to the business of the Lessor, the Indenture Trustee, the Trust
Company, the Pass Through Trustee, the Initial Purchasers, the Collateral Agent
or any Participant) or (3) entered into in connection with, or as a result of, a
Lease Default or (4) required pursuant to the terms of the Operative Agreements
(including such reasonable expenses incurred in connection with any adjustment
pursuant to Section 2.6), (ii) the ongoing fees of the Owner Trustee under the
Trust Agreement; (iii) the ongoing fees of the Indenture Trustee under the
Operative Agreements, (iv) the ongoing fees of the Collateral Agent under the
Collateral Agency Agreement and (v) the ongoing fees of the Pass Through Trustee
under the Pass Through Trust Agreement; provided that, the fees referred to in
clauses (iv) and (v) immediately above shall be allocated between the
transactions contemplated hereby and the transactions contemplated by the Other
Participation


                                       8

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
Agreement on a pro rata basis based on the aggregate commitments of the
Participants hereunder as compared with the aggregate commitments of the
participants under the Other Participation Agreement.

                    (c) If the transactions contemplated hereby are not
consummated as a result of a default by the Owner Participant in its obligations
to consummate the transactions contemplated hereby, the Owner Participant shall
pay those Transaction Costs referred to in Section 2.5(a)(ii) and (xii) above
and the Lessee shall pay the remainder. If the transactions contemplated hereby
are not consummated due to any other reason, the Lessee shall pay all
Transaction Costs.

                    (d) Notwithstanding the foregoing provisions of this Section
2.5, the Lessee shall have no liability for (i) any costs or expenses relating
to any voluntary transfer of the Owner Participant's interest in the Equipment
pursuant to Section 6.1 other than during the continuance of a Lease Event of
Default and no such costs or expenses shall constitute Transaction Costs, (ii)
any costs or expenses relating to any voluntary transfer of any Loan
Participant's interest in the Equipment Note and (iii) any costs or expenses
relating to any voluntary transfer of any Certificateholder's interest in the
Pass Through Certificates, and in each case no such costs or expenses shall
constitute Transaction Costs.

                    (e) To the extent Transaction Costs exceed 2% of the Total
Equipment Cost, Lessee shall pay the Transaction Costs specified in Sections
2.5(a) (iv) and (ix) above up to an amount equal to the amount of such excess.

         Section 2.6 Calculation of Adjustments to Basic Rent, Stipulated Loss
Value and Termination Value; Confirmation and Verification.

                    (a) Calculation of Adjustments. In the event that (A) the
Closing Date is other than June 29, 2001, (B) the amortization of the Equipment
Note is different from that set forth on Schedule 5, (C) a refinancing
contemplated by Section 10.2 occurs, (D) the actual aggregate Equipment Cost or
composition of the Units is different from that set forth on Schedule 1, (E) the
actual aggregate amount of Transaction Costs paid pursuant to Section 2.5(a) is
other than an amount equal to 2% of the Total Equipment Cost, (F) there is any
change in, or cost relating to a revision in, the structure of the transaction
contemplated hereby as required by the Rating Agency, (G) there is any change in
the Code or in the regulations promulgated thereunder or other official
administrative pronouncement, which change is enacted or effective after the
execution of this Agreement and prior to the Closing Date (provided that the
Owner Participant or the Lessee, as the case may be, shall have provided notice
to the other prior to the Closing Date), and which change alters or eliminates
any tax assumption used in calculating Basic Rent, Stipulated Loss Values,
Stipulated Loss Amounts, Termination Values, Termination Amounts and Early
Purchase Price, (H) there is any change in, or cost relating to revision in, the
structure of the transaction contemplated hereby as a result of any change to
the


                                       9

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
Equipment or the Existing Subleases from those listed in Schedule 1 and Schedule
1- A hereto, (I) there is any change in, or cost relating to revision in, the
structure of the transaction contemplated hereby as a result of any change in
generally accepted accounting principles affecting the accounting treatment of
the transaction by the Owner Participant then, in each such case, the Owner
Participant shall recalculate the payments or amounts, as the case may be, of
Basic Rent, the allocation of Basic Rent, Stipulated Loss Values, Stipulated
Loss Amounts, Termination Values, Termination Amounts, Early Purchase Price,
Scheduled Amortization and Scheduled Amortization Amount (and the corresponding
Rated Amortization and Rated Amortization Amount) (i) to preserve the Net
Economic Return that the Owner Participant would have realized had such event
not occurred, and (ii) to minimize to the greatest extent possible, consistent
with the foregoing clause (i), the present value (discounted monthly at an
interest rate per annum equal to the Debt Rate) of the sum of the payments of
Basic Rent to the Early Purchase Date and the Early Purchase Price; provided,
however, that in no event shall the Early Purchase Price be less than the
expected fair market value of the Equipment on the Early Purchase Date and the
Basic Term Expiration Date, respectively, as determined by the Appraisal. Any
such recalculation performed due to the occurrence of any one or more of the
events described in clause (A), (B), (D), (E), (F), (G), (H) or (I) above shall
be made prior to the Closing Date. In performing any such recalculation and in
determining the Owner Participant's Net Economic Return, the Owner Participant
shall utilize the same methods and assumptions originally used in making the
computations of Basic Rent, Stipulated Loss Values, Stipulated Loss Amounts,
Termination Values, Termination Amounts and Early Purchase Price initially set
forth in Schedules 3-A, 3-B, 4-A, 4-B and 6 (other than those assumptions
changed as a result of any of the events described in clauses (A) through (I) of
the preceding sentence necessitating such recalculation; it being agreed that
such recalculation shall reflect solely any changes of assumptions or facts
resulting directly from the event or events necessitating such recalculation).
Such adjustments shall comply (to the extent the original structure complied)
with Section 467 of the Code and the requirements of Sections 4.02(5), 4.07(1)
and (2) of Revenue Procedure 2001-28 calculated, except in the case of a
refinancing pursuant to Section 10.2, without taking into account any change
after the Closing Date in or to Section 467 of the Code (and any regulations
thereunder).

                    (b) Confirmation and Verification. Upon completion of any
recalculation described in Section 2.6(a), a duly authorized officer of the
Owner Participant shall provide a certificate to the Lessee either (x) stating
that the amounts of Basic Rent, Stipulated Loss Values, Stipulated Loss Amounts,
Termination Values, Termination Amounts and Early Purchase Price as are then set
forth in Schedules 3-A, 3-B, 4-A, 4-B and 6 do not require change, or (y)
setting forth such adjustments to the amounts of Basic Rent, Stipulated Loss
Values, Stipulated Loss Amounts, Termination Values, Termination Amounts or
Early Purchase Price as have been calculated by the Owner Participant in
accordance with Section 2.6(a). Such certificate shall describe in reasonable
detail the basis for any such adjustments, and any such


                                       10

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
adjustment and corresponding adjustments to the Stipulated Loss Values,
Termination Values and Early Purchase Price will be computed on a basis
consistent with that used by the Owner Participant in the original calculation
of Basic Rent. Any such adjustment shall be deemed approved upon notice of such
approval by the Lessee to the Owner Participant or on the thirty-first (31st)
day following delivery of such certificate by the Owner Participant to the
Lessee unless the Lessee, prior to such day, requests verification pursuant to
the following sentence, and shall become effective, in the case of adjustments
made pursuant to clause (A), (B), (D), (E), (F), (G), (H) or (I) of the first
sentence of Section 2.6(a), as of the earlier of (i) the first Rent Payment Date
and (ii) the date the Lessee approves or has been deemed to have approved such
adjustment, and, in the case of an adjustment made pursuant to clause (C) of the
first sentence of Section 2.6(a), as of the date of the refinancing. If the
Lessee shall so request, the recalculation of any such adjustments described in
this Section 2.6 shall be verified by a nationally recognized firm of
independent accountants selected by the Owner Participant and reasonably
acceptable to the Lessee, and any such recalculation of such adjustment as so
verified shall be binding on the Lessee and the Owner Participant. Such
accounting firm shall be requested to make its determination within 30 days. The
Owner Participant shall provide to a representative of such accounting firm, on
a confidential basis, such information as it may reasonably require, including
the original assumptions used by the Owner Participant and the methods used by
the Owner Participant in the original calculation of, and any recalculation of,
Basic Rent, Stipulated Loss Values, Stipulated Loss Amounts, Termination Values,
Termination Amounts and Early Purchase Price and such other information as is
necessary to determine whether the computation is accurate and in conformity
with the provisions of this Agreement, provided that in no event shall the Owner
Participant have any obligation to provide the Lessee with any such information;
and provided, further, that the Owner Participant shall have no obligation to
disclose to the Lessee, such accounting firm or any other Person, or to permit
the Lessee, such accounting firm or any other Person, to examine any federal,
state or local income tax returns of the Owner Participant, or books or
accounting records related thereto, for any taxable year. Subject to the
immediately following sentence, the costs of such verification shall be borne by
the Lessee. If such accounting firm's verification shall result in a decrease in
the net present value (expressed as a percentage of Total Equipment Cost,
discounted monthly at a rate per annum equal to the Debt Rate) of the sum of the
Basic Rent to the Early Purchase Date and the Early Purchase Price, calculated
as of the Closing Date, as compared to the net present value of the sum of the
Basic Rent to the Early Purchase Date and the Early Purchase Price, proposed by
the Owner Participant, by more than the greater of (i) ten basis points or (ii)
5% of the proposed adjustment, then the Owner Participant agrees to reimburse
the Lessee for any amounts paid for such verification. Any revised adjustment
resulting from such verification shall become effective on the next Rent Payment
Date after such verification has been concluded (except that, in the case of an
adjustment pursuant to clause (C) of the first sentence of Section 2.6(c), such
adjustment shall be effective as of the date of the refinancing), and shall take
into account any


                                       11

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
underpayment or overpayment, together with interest thereon at the Debt Rate,
resulting from an earlier effectiveness of the original adjustment.

                        (c) Compliance. Notwithstanding the foregoing, any
adjustment made to the payments of Basic Rent, Stipulated Loss Amounts,
Termination Amounts or Early Purchase Price, pursuant to the foregoing, shall
comply with the following requirements: (i) each installment of Basic Rent, as
so adjusted, under any circumstances and in any event, will be in an amount at
least sufficient for the Owner Trustee to pay in full as of the due date of such
installment any payment of principal of and interest on the Equipment Note
required to be paid on the due date of such installment of Basic Rent in
accordance with the Scheduled Amortization, and (ii) Stipulated Loss Amount,
Termination Amount and Early Purchase Price, as so adjusted, under any
circumstances and in any event, will be an amount which, together with any other
amounts required to be paid by the Lessee under the Lease in connection with an
Event of Loss or a termination of the Lease, as the case may be, will be at
least sufficient to pay in full, as of the date of payment thereof, the
aggregate unpaid principal of and all unpaid interest on the Equipment Note in
accordance with the Scheduled Amortization accrued to the date on which
Stipulated Loss Amount, Termination Amount or Early Purchase Price, as the case
may be, is paid in accordance with the terms of the Lease.

                    (d) Invoices. All invoices in respect of Transaction Costs
to the extent not delivered on the Closing Date shall be directed to the Owner
Participant at the address set forth in Section 10.4, with a copy to the Lessee.

         Section 2.7 Postponement of Closing Date.

                    (a) If for any reason whatsoever the Closing is not
consummated on the Closing Date provided for pursuant to Section 2.3 (the
"Scheduled Closing Date"), the Closing shall be deemed postponed to the next
Business Day or to such other Business Day on or prior to August 31, 2001 as the
Lessee shall specify by facsimile or telephonic (confirmed in writing) notice to
the Owner Participant, the Indenture Trustee, the Owner Trustee, the Pass
Through Trustee and the Initial Purchasers, in which case the Participants will
keep their funds available, provided that the notice of postponement shall be
received by each party no later than 4:30 p.m., Chicago time, on the originally
scheduled Closing Date, and the term "Closing Date" as used in this Agreement
shall mean the postponed "Closing Date."

                    (b) If the closing fails to occur on the Scheduled Closing
Date, the Indenture Trustee shall promptly return to each Participant that makes
funds avail able to it in accordance with this Section 2 such funds, together
with interest or income earned thereon.

                    (c) If the Closing fails to occur on the Scheduled Closing
Date and funds are not returned to each Participant that made funds available by
the


                                       12

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

Indenture Trustee as provided by Section 2.7(b) above, the Indenture Trustee
shall, if so instructed by the Lessee in the facsimile or telephonic (confirmed
in writing) notice from the Lessee (which notice shall specify the Specified
Investments to be purchased), use reasonable best efforts to invest, at the risk
of the Lessee (except as provided below with respect to the Indenture Trustee's
gross negligence or willful misconduct), the funds received by the Indenture
Trustee from the Participants in Specified Investments in accordance with the
Lessee's instructions. Any such Specified Investments purchased by the Indenture
Trustee upon instructions from the Lessee shall be held in trust by the
Indenture Trustee (but not as part of the Indenture Estate under the Indenture)
for the benefit of the Participants that provided such funds. In order to obtain
funds for the payment of the Equipment Cost for the Units on the Closing Date or
to return funds to the Participants pursuant to Section 2.7(b), the Indenture
Trustee is authorized to sell any Specified Investments purchased as aforesaid.
The Indenture Trustee shall not be liable for failure to invest such funds or
for any losses incurred on such investments except for losses resulting from its
own willful misconduct or gross negligence.

                    (d) If the Closing fails to occur on the Scheduled Closing
Date, unless the Indenture Trustee returns all funds to the Participants by 2:00
p.m., Chicago time, on the Scheduled Closing Date, the Lessee shall reimburse
each Participant that has made funds available pursuant to this Section 2 for
the loss of the use of its funds an amount equal to the excess, if any, of (x)
interest on such funds at the Debt Rate for the period from and including the
Scheduled Closing Date to but excluding the actual Closing Date or, if earlier,
the day on which such Participant's funds are returned if such return is made by
2:00 p.m., Chicago time (or to but excluding the next following Business Day if
such return is not made by such time); provided that with respect to the Owner
Participant such period shall in any case be at least one day, unless the Owner
Participant shall have received, prior to 12:00 noon (Chicago time) on the
Business Day preceding the Scheduled Closing Date, a notice of postponement of
the Scheduled Closing Date pursuant to Section 2.7(a), over (y) any amount paid
to such Participant in respect of interest or income earned by the Indenture
Trustee on such funds pursuant to Section 2.7(c) above.

                    (e) If the Closing fails to occur on the Scheduled Closing
Date, the Lessee shall, on the Closing Date or on the date funds are required to
be returned to the Participants pursuant to Section 2.7(b) above, reimburse the
Indenture Trustee, for the benefit of the Participants that provided funds which
are invested by the Indenture Trustee pursuant to this Section 2.7 for any
losses incurred on such investments (except with respect to any Participant, if
the Closing failed to occur as a result of default by such Participant, or with
respect to the Owner Participant, as result of default of the Owner Trustee
(acting pursuant to instructions from the Owner Participant)). All income and
profits on the investment of such funds shall be for the respective accounts of
such Participants, and the Indenture Trustee shall not be liable for failure to
invest such funds or for any losses incurred on such investments, except for its
willful misconduct or gross negligence.


                                       13

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

                    (f) Notwithstanding the provisions of Section 2.7(a), the
Participants shall not be under any obligation to make their respective
commitments available beyond 2:00 p.m. (Chicago time) on August 31, 2001.

SECTION 3. REPRESENTATIONS AND WARRANTIES.

         Section 3.1 Representations and Warranties of the Trust Company. Trust
Company, in its individual capacity (except with respect to clauses (c), (k) and
(m) (to the extent applicable to Trust Company in its capacity as Owner Trustee)
below) and as Owner Trustee with respect to clauses (c), (f) and (k) (to the
extent applicable to Trust Company in its capacity as Owner Trustee) below,
represents and warrants to each of the Owner Participant, the Indenture Trustee,
the Pass Through Trustee, TILC, TRMI and the Lessee, notwithstanding the
provisions of Section 10.13 or any similar provision in any other Operative
Agreement, that, as of the date hereof:

                    (a) Trust Company (i) is a national banking association duly
incorporated, validly existing and in good standing under the laws of the United
States of America, (ii) has the full corporate power, authority and legal right
under the laws of the State of Connecticut and the United States pertaining to
its banking, trust and fiduciary powers to carry on its business as now
conducted and execute, deliver and perform its obligations hereunder and under
the Trust Agreement and (iii) assuming due authorization, execution and delivery
of the Trust Agreement by the Owner Participant, has full power and authority,
as Owner Trustee and/or, to the extent expressly provided herein or therein, in
its individual capacity, to execute, deliver and perform its obligations under
each of the Owner Trustee Agreements;

                    (b) (i) Trust Company has duly authorized, executed and
delivered the Trust Agreement, (ii) assuming the due authorization, execution
and delivery of the Trust Agreement by the Owner Participant, Trust Company in
its trustee capacity and, to the extent expressly provided therein, in its
individual capacity, has, or on or prior to the Closing Date will have, duly
authorized, executed and delivered each of the other Owner Trustee Agreements
and, as of the Closing Date, the Equipment Note, the Lease Supplement and the
Indenture Supplement to be delivered on the Closing Date, (iii) assuming the due
authorization, execution and delivery of the Trust Agreement by the Owner
Participant, the Trust is a Connecticut statutory trust duly organized and
validly existing in good standing under the laws of the State of Connecticut and
(iv) the Trust Agreement constitutes a legal, valid and binding obligation of
Trust Company enforceable against it in accordance with the terms thereof except
as enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally and by
general principles of equity;

                    (c) assuming the due authorization, execution and delivery
of the Trust Agreement by the Owner Participant, each of the Owner Trustee
Agreements


                                       14

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
(other than the Trust Agreement) to which it is a party constitutes, or when
entered into will constitute, a legal, valid and binding obligation of the Owner
Trustee, enforceable against it in accordance with the terms thereof, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the rights of creditors generally and
by general principles of equity;

                    (d) neither the execution and delivery by Trust Company or
Owner Trustee, as the case may be, of the Owner Trustee Agreements or the
Equipment Note to be delivered on the Closing Date, nor the consummation by
Trust Company or Owner Trustee, as the case may be, of any of the transactions
contemplated hereby or thereby, nor the compliance by Trust Company or Owner
Trustee, as the case may be, with any of the terms and provisions hereof and
thereof, (i) requires or will require any approval of its stockholders, or
approval or consent of any trustees or holders of any indebtedness or
obligations of it in its individual capacity, or (ii) violates or will violate
its articles of association or bylaws, or contravenes or will contravene any
provision of, or constitutes or will constitute a default under, or results or
will result in any breach of, any indenture, mortgage, chattel mortgage, deed of
trust, conditional sale contract, bank loan or credit agreement, license or
other agreement or instrument to which Trust Company is a party or by which it
or any of its properties may be bound or affected, or contravenes or will
contravene any law, governmental rule or regulation of the United States of
America or the State of Connecticut governing the banking, trust or fiduciary
powers of Trust Company, or any judgment or order applicable to or binding on
it;

                    (e) there are no Taxes payable by Trust Company or the Owner
Trustee, imposed by the State of Connecticut or any political subdivision
thereof in connection with the execution and delivery by Trust Company of the
Trust Agreement, and, as Trust Company or Owner Trustee, as the case may be, of
this Agreement, the other Owner Trustee Agreements (other than the Trust
Agreement) or the Equipment Note to be delivered on the Closing Date solely
because Trust Company is a national banking association with its principal place
of business in Connecticut and performs certain of its duties as Owner Trustee
in the State of Connecticut; and there are no Taxes payable by Trust Company or
the Owner Trustee, as the case may be, imposed by the State of Connecticut or
any political subdivision thereof in connection with the acquisition of its
interest in the Equipment (other than franchise or other taxes based on or
measured by any fees or compensation received by Trust Company or the Owner
Trustee for services rendered in connection with the transactions contemplated
hereby) solely because Trust Company is a national banking association with its
principal place of business in Connecticut and performs certain of its duties as
Owner Trustee in the State of Connecticut;

                    (f) there are no pending or, to its knowledge, threatened
actions or proceedings against Trust Company or the Owner Trustee, before any
court or


                                       15

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
administrative agency which individually or in the aggregate, if determined
adversely to it, would materially adversely affect the ability of Trust Company
or the Owner Trustee, as the case may be, to perform its obligations under the
Trust Agreement, the other Owner Trustee Agreements or the Equipment Note to be
delivered on the Closing Date;

                    (g) both its chief executive office, and the place where its
records concerning the Equipment and all its interest in, to and under all
documents relating to the Trust Estate, are located in Hartford, Connecticut,
and Trust Company agrees to give the Owner Participant, the Indenture Trustee
and the Lessee written notice within 30 days following any relocation of said
chief executive office or said place from its present location;

                    (h) no consent, approval, order or authorization of, giving
of notice to, or registration with, or taking of any other action in respect of,
any Connecticut state or local governmental authority or agency or any United
States federal governmental authority or agency regulating the banking or trust
powers of Trust Company is required for the execution and delivery of, or the
carrying out by, Trust Company or the Owner Trustee, as the case may be, of any
of the transactions contemplated hereby or by the Trust Agreement or of any of
the transactions contemplated by any of the other Owner Trustee Agreements,
other than any such consent, approval, order, authorization, registration,
notice or action as has been duly obtained, given or taken;

                    (i) on the Closing Date, the Owner Trustee's right, title
and interest in and to the Equipment delivered on the Closing Date shall be free
and clear of any Lessor's Lien attributable to Trust Company;

                    (j) proceeds received by the Owner Trustee from the Owner
Participant pursuant to the Trust Agreement will be administered by it in
accordance with Article III of the Trust Agreement;

                    (k) the Owner Trustee shall receive from the Lessee such
title as was conveyed to it by the Lessee, subject to the rights of the Owner
Trustee and the Lessee under the Lease and the Lien created pursuant to the
Indenture and the Indenture Supplement in respect of the Equipment delivered on
the Closing Date, and there will be no Lessor's Liens attributable to the Owner
Trustee on the Equipment or any interest therein or on the Trust Estate;

                    (l) on the Closing Date, to its knowledge, no Indenture
Default shall have occurred and be continuing; and

                    (m) the Owner Trustee is not engaged in the business of
extending credit for the purposes of purchasing or carrying margin stock, and no
proceeds of the Equipment Note or the Owner Participant's Commitment as
contemplated by


                                       16

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

this Agreement and the other Operative Agreements will be used by the Owner
Trustee for a purpose which violates, or would be inconsistent with, Section 7
of the Securities Exchange Act of 1934, as amended, or Regulations T, U and X of
the Federal Reserve System. Terms for which meanings are provided in Regulations
T, U and X of the Federal Reserve System or any regulations substituted
therefor, as from time to time in effect, are used in this Section 3.1(m) with
such meanings.

         Section 3.2 Representations and Warranties of the Lessee. The Lessee
represents and warrants to the Owner Trustee, the Indenture Trustee and the
Participants, as of the date hereof:

                    (a) as to organization, powers and partnership
organizational documents:

                           (i) the Lessee is a limited partnership duly
organized, validly existing, and in good standing under the laws of the State of
Texas, is duly licensed or qualified and in good standing in each jurisdiction
in which the failure to so qualify would have a material adverse effect on its
ability to carry on its business as now conducted or to enter into and perform
its obligations under the Lessee Agreements, is a special purpose limited
partnership organized to enter into the transactions contemplated by this
Agreement, the other Operative Agreements to which it is a party and the Pass
Through Documents to which it is a party, has the limited partnership power and
authority to sell the Equipment described on Schedule 1 hereto to the Owner
Trustee, to assign the Existing Equipment Subleases as contemplated by this
Agreement and to carry on its business as now conducted, has the requisite
limited partnership power and authority to execute, deliver and perform its
obligations under the Lessee Agreements and has conducted no business or
operations prior to the date hereof (other than those associated with its
organization and capitalization or as contemplated by the Operative Agreements
or the Operative Agreements (as defined in the Other Participation Agreement),

                           (ii) the General Partner is a limited liability
company duly formed, validly existing and in good standing under the laws of the
State of Delaware and has the power and authority to execute, deliver and
perform its obligations under the Partnership Agreement and each other
organizational document of the Partnership to which the General Partner is a
party,

                           (iii) the Limited Partner is a limited liability
company duly formed, validly existing and in good standing under the laws of the
State of Delaware and has the power and authority to execute, deliver and
perform its obligations under the Partnership Agreement and each other
organizational document of the Partnership to which the Limited Partner is a
party,


                                       17

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

                           (iv) the General Partner and the Limited Partner are
the only partners of the Partnership;

                           (v) the execution, delivery and performance by each
Partner of the Partnership Agreement and each other organizational document of
the Partner ship to which such Partner is a party (A) have been duly authorized
by all requisite limited liability company or member action of such Partner and
(B) did not and do not (x) violate (i) any provision of law, statute, rule or
regulation, or of the certificate of formation or limited liability company
agreement or other constitutive documents of such Partner, (ii) any order of any
governmental authority or (iii) any provision of any indenture, agreement or
other instrument to which such Partner is a party or by which it or any of its
property is or may be bound, (y) conflict with, result in a breach of or
constitute (alone or with notice, or lapse of time or both) a default under any
such indenture, agreement or other instrument or (z) result in the creation or
imposition of any Lien upon any property or assets of such Partner,

                           (vi) each of the Partnership Agreement and each other
organizational document of the Partnership has been duly executed and delivered
by each party thereto and constitutes a legal, valid and binding obligation of
each such party enforceable against such party in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of creditors
generally and by general principles of equity;

                    (b) each of the Lessee Agreements and the Pass Through
Documents to which the Lessee is a party have been duly authorized by all
necessary limited partnership action of the Lessee and, if required, limited
liability company action of each Partner, this Agreement has been duly executed
and delivered (and in the case of the other Lessee Agreements, such other Lessee
Agreements will on the Closing Date have been duly executed and delivered) by
the General Partner in its capacity as the general partner of the Lessee, and
constitutes (and in the case of the other Lessee Agreements, such other Lessee
Agreements will on the Closing Date constitute) the legal, valid and binding
obligations of the Lessee (assuming the due authorization, execution and
delivery by each other party thereto), enforceable against the Lessee in
accordance with their respective terms except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the rights of creditors generally and by general principles of equity;

                    (c) the execution, delivery and performance by the Lessee of
each Lessee Agreement and each Pass Through Document to which Lessee is a party
and compliance by the Lessee with all of the provisions thereof do not and will
not contravene any law or regulation, or any order of any court or governmental
authority or agency applicable to or binding on the Lessee or any of its
properties, or contravene the provisions of, or constitute a default by the
Lessee under, or result in the creation of any Lien (except for Permitted Liens)
upon the property of the Lessee


                                       18

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
under its organizational documents or any indenture, mortgage, contract or other
agreement or instrument to which the Lessee is a party or by which the Lessee or
any of its properties may be bound or affected;

                    (d) there are no proceedings pending or, to the knowledge of
the Lessee, threatened against the Lessee or any Partner in any court or before
any governmental authority or arbitration board or tribunal. The Lessee and each
Partner are not subject to any order of any court or governmental authority or
arbitration board or tribunal;

                    (e) the unaudited balance sheet of the Lessee as at May 17,
2001 fairly presents, in conformity with generally accepted accounting
principles applied on a pro forma basis, the pro forma financial position of the
Lessee as of such date;

                    (f) no consent, approval or authorization of, or filing,
registration or qualification with, or the giving of notice to, any trustee or
any holder of indebtedness of the Lessee or any governmental authority on the
part of the Lessee is required in the United States or Canada in connection with
the execution and delivery by the Lessee of the Lessee Agreements or in order
for the Lessee to perform its obligations thereunder in accordance with the
terms thereof, other than (i) notices required to be filed with the STB and the
Registrar General of Canada as described in Section 3.2(g), which notices shall
have been filed on the Closing Date, (ii) as may be required under existing
laws, ordinances, governmental rules and regulations to be obtained, given,
accomplished or renewed at any time after the Closing Date in connection with
the operation and maintenance of the Equipment and the Subleases in accordance
with the Operative Agreements which are routine in nature and are not normally
applied for prior to the time they are required, and which the Lessee has no
reason to believe will not be timely obtained, (iii) as may be required under
the Operative Agreements in connection with any refinancing of the Equipment
Notes, (iv) as may be required under the Operative Agreements in consequence of
any transfer of the Beneficial Interest or any transfer of ownership of the
Equipment and (v) filing and recording to perfect the Liens under the Indenture
and the Collateral Agency Agreement as required thereunder;

                    (g) the Lease, the Lease Supplement, the Indenture and the
Indenture Supplement (each in respect of the Units delivered on the Closing
Date), the Collateral Agency Agreement (or a memorandum with respect to any or
all of such documents), the TILC Bill of Sale, the Bill of Sale, the TILC
Assignment, the and the Assignment will on or before the Closing Date be duly
filed with the STB pursuant to 49 U.S.C. Section 11301 and deposited with the
Registrar General of Canada pursuant to Section 105 of the Canada Transportation
Act, and such filing with the STB pursuant to 49 U.S.C. Section 11301 and such
deposit with the Registrar General of Canada will under the laws of the United
States and Canada perfect the Owner Trustee's, the Indenture Trustee's and the
Collateral Agent's rights in such Operative


                                       19

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
Agreements and in the Units described on Schedule 1 hereto and no other filing,
recording or deposit with, or giving of notice to any other U.S. federal, state
or local government or Canadian national or provincial government or agency
thereof, or any other action, is necessary in order to protect the rights of the
Owner Trustee, the Indenture Trustee and the Collateral Agent in such Operative
Agreements or in such Units in the United States, any state thereof or the
District of Columbia or Canada or any province thereof;

                    (h) the Equipment described on Schedule 1 hereto is covered
by the insurance required by Section 12 of the Lease and the Pledged Equipment
is covered by the insurance required by Section 6.4 of the Collateral Agency
Agreement, and all premiums due prior to the Closing Date in respect of such
insurance shall have been paid in full and such insurance is in full force and
effect;

                    (i) (i) no Lease Default has occurred and is continuing and,
to the knowledge of the Lessee, no Event of Loss or event which, with the giving
of notice, the passage of time or both, would constitute an Event of Loss has
occurred and (ii) no Lease Default (as defined in the Other Lease) has occurred
and is continuing;

                    (j) neither the Lessee nor any Partner is an "investment
company" or an "affiliated person" of an "investment company" within the meaning
of the Investment Company Act of 1940, as amended;

                    (k) the acquisition by the Owner Participant of the
Beneficial Interest for its own account will not constitute a prohibited
transaction within the meaning of Section 4975(c)(1)(A) through (D) of the Code
or Section 406(a)(1)(A) through (D) of ERISA. The representation made by the
Lessee in the preceding clause is made in reliance upon and subject to the
accuracy of the representation of the Owner Participant in Section 3.5(h) and
the accuracy of the representation of the Initial Purchasers set forth in
Section 4(e) of the Certificate Purchase Agreement;

                    (l) on the Closing Date, (i) the Lessee shall have and shall
pursuant to the Bill of Sale relating to the Equipment described on Schedule 1
hereto convey to the Owner Trustee, all legal and beneficial title to such
Equipment free and clear of all Liens (other than Permitted Liens of the type
described in clause (iii) below with respect to the Existing Equipment Subleases
and in clauses (iii), (iv) and (v) of the definition thereof), and such
conveyance will not be void or voidable under any applicable law; (ii) the
Lessee shall have, and the Assignment to be delivered on the Closing Date shall
assign to the Owner Trustee, all legal and beneficial title to the Existing
Equipment Subleases, and the Lessee shall have all legal and beneficial title to
the Existing Pledged Equipment Leases, free and clear of all Liens (other than
in each case Permitted Liens of the type described in clauses (iii), (iv) and
(v) of the definition thereof), and such assignment will not be void or voidable
under any applicable law; and (iii) all of the Units delivered on the Closing
Date are subject to


                                       20

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

sublease by Sublessees under the Existing Equipment Subleases on rental and
other terms which are no different, taken as a whole, from those for similar
railcars in the rest of the TILC Fleet;

                    (m) the written information provided by the Lessee or on
behalf of the Lessee to the Owner Participant and/or the Loan Participant in
each document set forth on Schedule 3.2(m) hereto does not contain any untrue
statement of a material fact and does not omit a material fact necessary to make
the statements contained therein, in light of the circumstances under which they
were made, not misleading. The assumptions and related financial information
relating to the proposed business and operations of the Lessee and the
Partnership Fleet which are contained in the information on Schedule 3.2(m) have
been prepared in good faith based upon information that the Lessee deems fair
and reasonable, and there are no statements or conclusions therein which are
based on or include information known to the Lessee to be misleading in any
material respect or which fail to take into account material information known
to the Lessee regarding the matters stated therein. Certain information
contained in the information on Schedule 3.2(m) (e.g. statistical information
relating to renewal and remarketing of railcars, potential increases in absolute
or nominal railcar lease rates, anticipated utilization, and maintenance costs)
is based on the historical experience of TILC. Subject to the foregoing, there
can be no assurance that past experience will be indicative of future
performance with respect to these or other operating and marketing factors set
forth in the information on Schedule 3.2(m);

                    (n) the Lessee and the Partners are not engaged in the
business of extending credit for the purposes of purchasing or carrying margin
stock, and no proceeds of the Equipment Note or the Owner Participant's
Commitment as contemplated by this Agreement and the other Operative Agreements
will be used by the Lessee or any Partner for a purpose which violates, or would
be inconsistent with, Section 7 of the Securities Exchange Act of 1934, as
amended, or Regulations T, U and X of the Federal Reserve System. Terms for
which meanings are provided in Regulations T, U and X of the Federal Reserve
System or any regulations substituted therefor, as from time to time in effect,
are used in this Section 3.2(n) with such meanings;

                    (o) the Lessee is not in violation of any term of any of its
organizational documents or any other agreement or instrument to which it is a
party or by which it may be bound. The Lessee is in compliance with all laws,
ordinances, governmental rules and regulations to which it is subject and the
Lessee has obtained all required licenses, permits, franchises and other
governmental authorizations material to the conduct of its business;

                    (p) on the Closing Date, all sales, use or transfer taxes,
if any, due and payable upon the purchase of the Equipment described on Schedule
1 hereto by


                                       21

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
the Lessee from TILC and by the Owner Trustee from the Lessee and upon the lease
thereof by the Owner Trustee to the Lessee and, if applicable, upon the
assignment of the Existing Equipment Subleases from TILC to the Lessee and by
the Lessee to   the Owner Trustee will have been paid or such transactions will
then be exempt from any such taxes, and the Lessee will cause any required forms
or reports in connection with such taxes to be filed in accordance with
applicable laws and regulations. No taxes, fees or other charges in connection
with the execution and delivery of the Operative Agreements or the issuance and
sale of the Equipment Note to be delivered on the Closing Date are payable;

                    (q) no broker's or finder's or placement fee or commission
will be payable with respect to the transactions contemplated by the Operative
Agreements as a result of any action by the Lessee, except for the fees of the
Arrangers, which shall be included in Transaction Costs as provided in this
Agreement, and the Lessee agrees that it will hold the Participants, the
Indenture Trustee, the Pass Through Trustee and the Owner Trustee harmless from
any claim, demand or liability for broker's or finder's or placement fees or
commission alleged to have been incurred as a result of any action by the Lessee
in connection with this transaction;

                    (r) each Unit delivered on the Closing Date, taken as a
whole, and each major component thereof, complies in all material respects with
all applicable laws and regulations, conforms with the specifications for such
Unit contained in the Appraisal referred to in Section 4.3(a) hereof (to the
extent a copy of such Appraisal or a relevant excerpt therefrom has been
delivered to the Lessee) and is substantially complete such that it is ready and
available to operate in commercial service and otherwise perform the function
for which it was designed; and the railcar identification marks shown on
Schedule 1 are the marks presently used on the Units of Equipment set forth on
Schedule 1; and

                    (s) neither the Lessee nor any Partner is subject to
regulation as a "holding company," an "affiliate" of a "holding company," or a
"subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended.

         Section 3.3 Representations and Warranties of the Indenture Trustee.
The Indenture Trustee represents and warrants to the Owner Participant, the
Owner Trustee, the Pass Through Trustee, TILC, TRMI and the Lessee that, as of
the date hereof:

                    (a) the Indenture Trustee is a national banking association
duly incorporated, validly existing and in good standing under the laws of the
United States and has the full corporate power, authority and legal right under
the laws of the State of Illinois and the United States pertaining to its
banking, trust and fiduciary powers to execute, deliver and perform its
obligations under each of the Indenture Trustee Agreements;


                                       22

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

                    (b) the execution, delivery and performance by the Indenture
Trustee of each of the Indenture Trustee Agreements have been duly authorized by
the Indenture Trustee and will not violate any applicable federal or Illinois
law governing its banking or trust powers or its charter documents or bylaws or
the provisions of any indenture, mortgage, contract or other agreement to which
it is a party or by which it or any of its properties may be bound or affected;

                    (c) this Agreement has been duly executed and delivered and
constitutes, and each of the other Indenture Trustee Agreements, when executed
and delivered, will constitute (assuming the due authorization, execution and
delivery by each other party thereto) the legal, valid and binding obligation of
the Indenture Trustee, enforceable against the Indenture Trustee in accordance
with its terms except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general principles of equity;

                    (d) there are no proceedings pending or, to the knowledge of
the Indenture Trustee, threatened, and to the knowledge of the Indenture Trustee
there is no existing basis for any such proceedings, against or affecting the
Indenture Trustee in or before any court or before any governmental authority or
arbitration board or tribunal which, individually or in the aggregate, if
adversely determined, might impair the ability of the Indenture Trustee to
perform its obligations under the Indenture Trustee Agreements;

                    (e) no authorization or approval or other action by, and no
notice to or filing with, any stockholder, trustee or holder of indebtedness or
any federal or Illinois state governmental authority or regulatory body
governing the Indenture Trustee in its trust capacity, is required for the due
execution, delivery and performance by the Indenture Trustee of the Indenture
Trustee Agreements, except as have been previously obtained, given or taken;

                    (f) the Indenture Trustee is not in default under any of the
Indenture Trustee Agreements; and

                    (g) neither the Indenture Trustee, nor any Person authorized
to act on behalf of the Indenture Trustee, has directly or indirectly offered
any interest in the Trust Estate or the Equipment Note or any security similar
to either thereof related to this transaction for sale to, or solicited offers
to buy any of the same from, or otherwise approached or negotiated with respect
to any of the same with, any Person other than the Pass Through Trustee and the
Initial Purchasers.

         Section 3.4 Representations, Warranties and Covenants Regarding
Beneficial Interest, Equipment Note and Pass Through Certificates.


                                       23

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

                    (a) Owner Trustee and Trust Company. Each of the Owner
Trustee and the Trust Company represents and warrants to the Lessee, the
Indenture Trustee, the Pass Through Trustee, TILC, TRMI and the Owner
Participant that, as of the date hereof and as of the Closing Date, except as
expressly provided in the Operative Agreements, neither the Owner Trustee, nor
the Trust Company nor any Person authorized or employed by the Owner Trustee or
the Trust Company as agent or otherwise has directly or indirectly offered or
sold any interest in the Beneficial Interest, the Equipment Note, the Pass
Through Certificates or any part thereof, or in any similar security or lease,
the offering of which for the purposes of the Securities Act would be deemed to
be part of the same offering as the offering of the Beneficial Interest, the
Equipment Note, the Pass Through Certificates or any part thereof or solicited
any offer to acquire any of the same in violation of the registration
requirements of Section 5 of the Securities Act.

                    (b) Lessee. The Lessee represents and warrants to the Owner
Trustee, the Indenture Trustee, the Owner Participant and the Pass Through
Trustee that, as of the date hereof and as of the Closing Date, neither the
Lessee nor any Person authorized or employed by the Lessee as agent or otherwise
has directly or indirectly offered or sold any interest in the Beneficial
Interest, the Equipment Note, the Pass Through Certificates or any part thereof,
the offering of which for the purposes of the Securities Act would be deemed to
be part of the same offering as the offering of the Beneficial Interest, the
Equipment Note, the Pass Through Certificates or any part thereof or solicited
any offer to acquire any of the same in violation of the registration
requirements of Section 5 of the Securities Act.

                    (c) TRMI. TRMI represents and warrants to the Owner Trustee,
the Indenture Trustee, the Owner Participant and the Pass Through Trustee that,
as of the date hereof and as of the Closing Date, neither TRMI nor any Person
authorized or employed by TRMI as agent or otherwise has directly or indirectly
offered or sold any interest in the Beneficial Interest, the Equipment Note, the
Pass Through Certificates or any part thereof, the offering of which for the
purposes of the Securities Act would be deemed to be part of the same offering
as the offering of the Beneficial Interest, the Equipment Note, the Pass Through
Certificates or any part thereof or solicited any offer to acquire any of the
same in violation of the registration requirements of Section 5 of the
Securities Act.

                    (d) TILC. TILC represents and warrants to the Owner Trustee,
the Indenture Trustee, the Owner Participant and the Pass Through Trustee that,
as of the date hereof and as of the Closing Date, neither TILC nor any Person
authorized or employed by TILC as agent or otherwise has directly or indirectly
offered or sold any interest in the Beneficial Interest, the Equipment Note, the
Pass Through Certificates or any part thereof, the offering of which for the
purposes of the Securities Act would be deemed to be part of the same offering
as the offering of the Beneficial Interest, the Equipment Note, the Pass Through
Certificates or any part


                                       24

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
thereof or solicited any offer to acquire any of the same in violation of the
registration requirements of Section 5 of the Securities Act.

                    (e) Owner Participant. The Owner Participant represents and
warrants to the Owner Trustee, the Indenture Trustee, TILC, TRMI, the Lessee and
the Pass Through Trustee that, as of the date hereof and as of the Closing Date,
neither the Owner Participant nor any Person authorized or employed by the Owner
Participant as agent or otherwise has directly or indirectly offered or sold any
interest in the Beneficial Interest, the Equipment Note, the Pass Through
Certificates or any part thereof, or in any similar security or lease, the
offering of which for the purposes of the Securities Act would be deemed to be
part of the same offering as the offering of the Beneficial Interest, the
Equipment Note, the Pass Through Certificates or any part thereof or solicited
any offer to acquire any of the same in violation of the registration
requirements of Section 5 of the Securities Act.

                    (f) Pass Through Trustee. The Pass Through Trustee
represents and warrants to the Owner Trustee, the Indenture Trustee, TILC, TRMI,
the Lessee and the Owner Participant that, as of the date hereof and as of the
Closing Date, neither the Pass Through Trustee nor any Person authorized or
employed by the Pass Through Trustee as agent or otherwise has directly or
indirectly offered or sold any interest in the Beneficial Interest, the
Equipment Note, the Pass Through Certificates or any part thereof, the offering
of which for the purposes of the Securities Act would be deemed to be part of
the same offering as the offering of the Beneficial Interest, the Equipment
Note, the Pass Through Certificates or any part thereof or solicited any offer
to acquire any of the same in violation of the registration requirements of
Section 5 of the Securities Act.

                    (g) Future Actions. Each of the Owner Trustee, the Trust
Company, the Owner Participant, the Lessee, TILC, TRMI, the Indenture Trustee
and the Pass Through Trustee agrees, as to its own actions only, severally but
not jointly, that neither the Owner Trustee, the Trust Company, the Owner
Participant, the Lessee, TILC, TRMI, the Indenture Trustee nor the Pass Through
Trustee nor anyone acting on behalf of the Owner Trustee, the Trust Company, the
Owner Participant, the Lessee, TILC, TRMI, the Indenture Trustee or the Pass
Through Trustee will offer the Beneficial Interest, the Equipment Note, the Pass
Through Certificates or any part thereof or any similar interest for issue or
sale to any prospective purchaser, or solicit any offer to acquire any of the
Beneficial Interest, the Equipment Note, the Pass Through Certificates or any
part thereof so as to cause Section 5 of the Securities Act to apply to the
issuance and sale of the Beneficial Interest, the Equipment Note, the Pass
Through Certificates or any part thereof.

         Section 3.5 Representations and Warranties of the Owner Participant.
The Owner Participant represents and warrants to the Owner Trustee, the
Indenture


                                       25

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
Trustee, the Pass Through Trustee, TILC, TRMI and the Lessee that, as of the
date hereof:

                    (a) the Owner Participant is a limited partnership duly
formed, validly existing and in good standing under the laws of the State of
Delaware and has full limited partnership power and authority to carry on its
business as now conducted;

                    (b) the Owner Participant has the requisite limited
partnership power and authority to execute, deliver and perform its obligations
under the Owner Participant Agreements, and the execution, delivery and
performance by it thereof do not and will not contravene any law or regulation,
or any order of any court or governmental authority or agency applicable to or
binding on the Owner Participant or any of its properties, or contravene the
provisions of, or constitute a default under, or result in the creation of any
Lien (other than such as are created by the Operative Agreements) upon the
Equipment under, its Certificate of Limited Partnership, limited partnership
agreement or any indenture, mortgage, contract or other agreement or instrument
to which the Owner Participant is a party or by which it or any of its
properties may be bound or affected;

                    (c) the Owner Participant Agreements have been duly
authorized by all necessary actions on the part of the Owner Participant and its
general partner, do not require any approval not already obtained of the
partners of the Owner Participant or any approval or consent not already
obtained of any trustee or holders of indebtedness or obligations of the Owner
Participant, have been, or on or before the Closing Date will be, duly executed
and delivered by the general partner of the Owner Participant in its capacity as
general partner of the Owner Participant and (assuming the due authorization,
execution and delivery by each other party thereto) constitute, or will
constitute, the legal, valid and binding obligations of the Owner Participant,
enforceable against the Owner Participant in accordance with their respective
terms, except as enforceability may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting the rights of creditors generally and
by general principles of equity;

                    (d) no authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery or performance by the Owner Participant
of the Trust Agreement, the Tax Indemnity Agreement or this Agreement;

                    (e) the Trust Estate is free and clear of any Lessor's Lien
attributable to the Owner Participant;

                    (f) there are no pending or, to the Owner Participant's
knowledge, threatened actions or proceedings against the Owner Participant
before any court or administrative agency which would materially adversely
affect the Owner


                                       26

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
Participant's ability to perform its obligations under the Trust Agreement, the
Tax Indemnity Agreement or this Agreement;

                    (g) as of the Closing Date, the Owner Participant is
purchasing the Beneficial Interest to be acquired by it for its own account with
no present intention of distributing such Beneficial Interest or any part
thereof in any manner which would violate the Securities Act, but without
prejudice, however, to the right of the Owner Participant at all times to sell
or otherwise dispose of all or any part of such Beneficial Interest in
compliance with the Securities Act and any state securities or "blue sky" laws;
provided, however, that subject to the provisions of Section 6.1, the
disposition of the Beneficial Interest shall at all times be within the Owner
Participant's control. The Owner Participant acknowledges that its Beneficial
Interest has not been registered under the Securities Act, and that neither the
Owner Participant, the Owner Trustee, Trust Company, the Lessee, TRMI nor TILC
contemplates filing, or is legally required to file, any such registration
statement. Notwithstanding the foregoing, the Owner Participant makes no
representation that the Beneficial Interest is a "security" within the meaning
of such term under the Securities Act;

                    (h) with respect to the source of the amount to be invested
by the Owner Participant pursuant to Section 2.2, no part of such amount
constitutes assets of any employee benefit plan subject to Title I of ERISA or
Section 4975 of the Code; and

                    (i) no broker's or finder's or placement fee or commission
will be payable with respect to the transactions contemplated by the Operative
Agreements as a result of any action by the Owner Participant, and the Owner
Participant agrees that it will hold TILC, TRMI, the Lessee, the Indenture
Trustee, the Loan Participant and the Owner Trustee harmless from any claim,
demand or liability for broker's or finder's or placement fees or commission
alleged to have been incurred as a result of any action by the Owner Participant
in connection with this transaction.

         Section 3.6 Representations and Warranties of TILC. TILC represents and
warrants to each of the Owner Trustee, the Indenture Trustee and the
Participants, as of the date hereof:

                    (a) TILC is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Delaware, is duly licensed
or qualified and in good standing in each jurisdiction in which the failure to
so qualify would have a material adverse effect on its ability to carry on its
business as now conducted or to execute, deliver and perform its obligations
under the TILC Agreements, has the power and authority to carry on its business
as now conducted, and has the requisite power and authority to execute, deliver
and perform its obligations under the TILC Agreements;


                                       27

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

                    (b) the TILC Agreements have been duly authorized by all
necessary corporate action, and are, or will on the Closing Date be, duly
executed and delivered by TILC, and (assuming the due authorization, execution
and delivery by each other party thereto) constitute or, will on the Closing
Date constitute, the legal, valid and binding obligations of TILC, enforceable
against TILC in accordance with their respective terms except as enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the rights of creditors generally and by general principles of
equity;

                    (c) the execution, delivery and performance by TILC of each
TILC Agreement and compliance by TILC with all of the provisions thereof do not
and will not contravene (i) any law or regulation, or any order of any court or
governmental authority or agency applicable to or binding on TILC or any of its
properties, or (ii) the provisions of, or constitute a default by TILC under,
its certificate of incorporation or bylaws or (iii) any indenture, mortgage,
contract or other agreement or instrument to which TILC is a party or by which
TILC or any of its properties may be bound or affected except, with respect to
clause (iii), where such contravention would not materially adversely affect
TILC's ability to perform its obligations under the TILC Agreements or
materially adversely affect its financial condition or business;

                    (d) there are no proceedings pending or, to the knowledge of
TILC, threatened against TILC in any court or before any governmental authority
or arbitration board or tribunal which, if adversely determined, would
materially adversely affect TILC's ability to perform its obligations under the
TILC Agreements or materially adversely affect its financial condition or
business;

                    (e) TILC is not in violation of any term of any charter
instrument or bylaw or any other material agreement or instrument to which it is
a party or by which it may be bound except where such violation would not
materially adversely affect TILC's ability to perform its obligations under the
TILC Agreements or materially adversely affect its financial condition or
business. TILC is in compliance with all laws, ordinances, governmental rules
and regulations to which it is subject, the failure to comply with which would
have a material and adverse effect on its operations or condition, financial or
otherwise, or would impair the ability of TILC to perform its obligations under
the TILC Agreements, and has obtained all required licenses, permits, franchises
and other governmental authorizations material to the conduct of its business;

                    (f) no consent, approval or authorization of, or filing,
registration or qualification with, or the giving of notice to, any trustee or
any holder of indebtedness of TILC or any governmental authority on the part of
TILC is required in the United States in connection with the execution and
delivery by TILC of the TILC Agreements, or is required to be obtained in order
for TILC to perform its


                                       28

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
obligations thereunder in accordance with the terms thereof, other than (i) as
may be required under existing laws, ordinances, governmental rules and
regulations to be obtained, given, accomplished or renewed at any time after the
Closing Date in connection with the performance of its obligations under the
TILC Agreements and which are routine in nature and are not normally applied for
prior to the time they are required, and which TILC has no reason to believe
will not be timely obtained or (ii) as may be required under the Operative
Agreements in consequence of any transfer of ownership of the Equipment
occurring after the Closing Date;

                    (g) to the best knowledge of TILC, no casualty event or
other event that may constitute an Event of Loss under the Lease has occurred as
of the date of this Agreement with respect to any Unit delivered on the Closing
Date;

                    (h) (i) TILC shall have, and the TILC Bill of Sale to be
delivered on the Closing Date shall convey to the Lessee, all legal and
beneficial title to the Units which are being delivered on the Closing Date,
free and clear of all Liens (other than Permitted Liens of the type described in
clause (ii) below with respect to the Existing Equipment Subleases, and in
clauses (iii), (iv) and (v) of the definition thereof), and such conveyance will
not be void or voidable under any applicable law; (ii) TILC shall have, and the
TILC Assignment to be delivered on the Closing Date shall assign to the Lessee,
all legal and beneficial title to the Existing Equipment Subleases, free and
clear of all Liens (other than subleases of the Existing Equipment Subleases by
the Sublessees as expressly permitted by the Existing Equipment Subleases and
other than Permitted Liens of the type described in clauses (iii), (iv) and (v)
of the definition thereof), and such assignment will not be void or voidable
under any applicable law; (iii) all of the Units being delivered on the Closing
Date other than an immaterial amount shall be subject to sublease by the
Sublessees under the Existing Equipment Subleases on rental and other terms
which are no different, taken as a whole, from those for similar railcars in the
rest of the TILC Fleet;

                    (i) all sales, use or transfer taxes, if any, due and
payable upon the sale of the Equipment and assignment of Existing Equipment
Subleases by TILC to the Lessee will have been paid or such transactions will
then be exempt from any such taxes and TILC will cause any required forms or
reports in connection with such taxes to be filed in accordance with applicable
laws and regulations;

                    (j) all Units delivered on the Closing Date are
substantially similar in terms of objectively identifiable characteristics that
are relevant for purposes of the services to be performed by TILC under the
Management Agreement to the equipment in the TILC Fleet;

                    (k) in selecting the Units to be sold on the Closing Date to
the Lessee pursuant to the TILC Bill of Sale, TILC has not discriminated against
the


                                       29

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
Lessee in a negative fashion when such Units are compared with the other
equipment in the TILC Fleet;

                    (l) the written information provided by TILC or on behalf of
TILC to the Owner Participant and/or the Loan Participant in each document set
forth on Schedule 3.2(m) hereto does not contain any untrue statement of a
material fact and does not omit a material fact necessary to make the statements
contained therein, in light of the circumstances under which they were made, not
misleading. The assumptions and related financial information relating to the
proposed business and operations of TILC and the Partnership Fleet which are
contained in the information on Schedule 3.2(m) have been prepared in good
faith based upon information that TILC deems fair and reasonable, and there are
no statements or conclusions therein which are based on or include information
known to TILC to be misleading in any material respect or which fail to take
into account material information known to TILC regarding the matters stated
therein. Certain information contained in the information on Schedule 3.2(m)
(e.g. statistical information relating to renewal and remarketing of railcars,
potential increases in absolute or nominal railcar lease rates, anticipated
utilization, and maintenance costs) is based on the historical experience of
TILC. Subject to the foregoing, there can be no assurance that past experience
will be indicative of future performance with respect to these or other
operating and marketing factors set forth in the information on Schedule 3.2(m);

                    (m) the representations and warranties of the Lessee
contained in Section 3.2(h), clause (iii) of Section 3.2(l), the first sentence
of Section 3.2(p) and in Section 3.2(r) (to the extent a copy of such Appraisal
or a relevant excerpt therefrom has been delivered to TILC) are true and correct
as of the date hereof;

                    (n) TILC is not in default under any Existing Equipment Sub
leases or Existing Pledged Equipment Leases, and, to the best of the TILC's
knowledge, there are (i) no defaults by any Sublessee or Pledged Equipment
Lessee thereunder existing as of the date hereof under the Existing Equipment
Subleases or Existing Pledged Equipment Leases, except such defaults as are not
material and (ii) no claims or liabilities arising as a result of the operation
or use of any Unit described on Schedule 1 hereto prior to the date hereof as to
which the Lessor, as owner of the Units delivered on the Closing Date, would be
liable;

                    (o) as of the Closing Date, TILC shall have provided, or
caused to be provided, in either case in accordance with the terms of the
relevant Existing Equipment Sublease, a notice relating to each Existing
Equipment Sublease (which notice shall be substantially in the form attached
hereto as Exhibit D) to the related Sublessee under such Existing Equipment
Sublease;

                    (p) (i) the balance sheet of TILC as of March 31, 2000, and
the related statements of operations, stockholders' equity and cash flows for
the period


                                       30

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

then ended, and (ii) the balance sheet of TILC as of December 31, 2000 and the
related statements of income and cash flows of TILC for the nine month period
beginning on April 1, 2000 and ending on December 31, 2000, have been prepared
in accordance with generally accepted accounting principles (except as may be
stated in the notes thereto and except, with respect to interim financial
statements, for year- end audit adjustments), consistently applied, and fairly
set forth, in all material respects, the financial condition of TILC as of such
dates and the results of their operations and cash flows for such periods; and

                    (q) TILC is not engaged in the business of extending credit
for the purposes of purchasing or carrying margin stock, and no proceeds of the
Equipment Note or the Owner Participant's Commitment as contemplated by this
Agreement and the other Operative Agreements will be used by TILC for a purpose
which violates, or would be inconsistent with, Section 7 of the Securities
Exchange Act of 1934, as amended, or Regulations T, U and X of the Federal
Reserve System. Terms for which meanings are provided in Regulations T, U and X
of the Federal Reserve System or any regulations substituted therefor, as from
time to time in effect, are used in this Section 3.6(q) with such meanings.

         Section 3.7 Representations and Warranties of TRMI. TRMI represents and
warrants to the Indenture Trustee, the Owner Trustee and the Participants, as of
the date hereof:

                    (a) TRMI is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Delaware, is duly licensed
or qualified and in good standing in each jurisdiction in which the failure to
so qualify would have a material adverse effect on its ability to carry on its
business as now conducted or to execute, deliver and perform its obligations
under the TRMI Agreements, has the power and authority to carry on its business
as now conducted, and has the requisite power and authority to execute, deliver
and perform its obligations under the TRMI Agreements;

                    (b) the TRMI Agreements have been duly authorized by all
necessary corporate action, executed and delivered by TRMI, and (assuming the
due authorization, execution and delivery by each other party thereto)
constitute the legal, valid and binding obligations of TRMI, enforceable against
TRMI in accordance with their respective terms except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and by general principles of equity;

                    (c) the execution, delivery and performance by TRMI of each
TRMI Agreement and compliance by TRMI with all of the provisions thereof do not
and will not contravene (i) any law or regulation, or any order of any court or
governmental authority or agency applicable to or binding on TRMI or any of its


                                       31

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

properties, or (ii) the provisions of, or constitute a default by TRMI under,
its certificate of incorporation or bylaws or (iii) any indenture, mortgage,
contract or other agreement or instrument to which TRMI is a party or by which
TRMI or any of its properties may be bound or affected except, with respect to
clause (iii) above, where such contravention would not materially adversely
affect TRMI's ability to perform its obligations under the TRMI Agreements or
materially adversely affect its financial condition or business;

                    (d) there are no proceedings pending or, to the knowledge of
TRMI, threatened against TRMI in any court or before any governmental authority
or arbitration board or tribunal which, if adversely determined, would
materially adversely affect TRMI's ability to perform its obligations under the
TRMI Agreements or materially adversely affect its financial condition or
business;

                    (e) TRMI is not in violation of any term of any charter
instrument or bylaw or any other material agreement or instrument to which it is
a party or by which it may be bound except where such violation would not
materially adversely affect TRMI's ability to perform its obligations under the
TRMI Agreements or materially adversely affect its financial condition or
business. TRMI is in compliance with all laws, ordinances, governmental rules
and regulations to which it is subject, the failure to comply with which would
have a material and adverse effect on its operations or condition, financial or
otherwise, or would impair the ability of TRMI to perform its obligations under
the TRMI Agreements, and has obtained all licenses, permits, franchises and
other governmental authorizations material to the conduct of its business;

                    (f) no consent, approval or authorization of, or filing,
registration or qualification with, or the giving of notice to, any trustee or
any holder of indebtedness of TRMI or any governmental authority on the part of
TRMI is required in the United States in connection with the execution and
delivery by TRMI of the TRMI Agreements, or is required to be obtained in order
for TRMI to perform its obligations thereunder in accordance with the terms
thereof, other than those which (i) are routine in nature and are not normally
applied for prior to the time they are required, and which TRMI has no reason to
believe will not be timely obtained or (ii) the failure to obtain would not have
a material and adverse effect on its operations or condition, financial or
otherwise, or would impair the ability of TRMI to perform its obligations under
the TRMI Agreements;

                    (g) the written information provided by TRMI or on behalf of
TRMI to the Owner Participant and/or the Loan Participant in each document set
forth on Schedule 3.2(m) hereto as of the date such information was provided to
the Owner Participant and/or the Loan Participant, as the case may be, did not
contain any untrue statement of a material fact and did not omit a material fact
necessary to make the statements contained therein, in light of the
circumstances under which


                                       32

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
they were made, not misleading. No representation or warranty is given with
respect to any forecasts or projections included therein or omitted therefrom;

                    (h) the representations and warranties of the Lessee
contained in Sections 3.2(a), (b), (c), (d), (e), (f), (g), (i), (j), (k),
clauses (i) and (ii) of (l), (m), (n), (o), (p) other than the first sentence
thereof, (q) and (s) are true and correct as of the date hereof (except with
respect to representations and warranties made as of an earlier date, in which
case such representations and warranties shall be true as of such earlier date);
and

                    (i) (x) the balance sheet of TRMI as of March 31, 2000, and
the related statements of operations, stockholders' equity and cash flows for
the period then ended, and (y) the balance sheet of TRMI as of December 31, 2000
and the related statements of income and cash flows of TRMI for the nine month
period beginning on April 1, 2000 and ending on December 31, 2000, have been
prepared in accordance with generally accepted accounting principles (except as
may be stated in the notes thereto and except, with respect to interim financial
statements, for year- end audit adjustments), consistently applied, and fairly
set forth, in all material respects, the financial condition of TRMI as of such
dates and the results of their operations and cash flows for the periods then
ended.

         Section 3.8 Representations and Warranties of the Pass Through Trustee.
The Pass Through Trustee represents and warrants to the Owner Trustee, the
Indenture Trustee, the Owner Participant, TILC, TRMI and the Lessee that, as of
the date hereof:

                    (a) the Pass Through Trustee is a national banking
association duly organized and validly existing in good standing under the laws
of the United States of America and has the full corporate power, authority and
legal right under the laws of the United States of America and the State of
Illinois pertaining to its banking, trust and fiduciary powers to execute,
deliver and perform its obligations under the Pass Through Trustee Agreements
and the Pass Through Documents to which it is a party;

                    (b) this Agreement has been, and on the Closing Date, each
of the other Pass Through Trustee Agreements will have been, duly authorized,
executed and delivered by the Pass Through Trustee; this Agreement constitutes,
and on the Closing Date, each of the other Pass Through Trustee Agreements will
constitute, the legal, valid and binding obligations of the Pass Through
Trustee, enforceable against the Pass Through Trustee in accordance with their
respective terms except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general principles of equity;


                                       33

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

                    (c) the execution, delivery and performance by the Pass
Through Trustee of each of the Pass Through Trustee Agreements, the purchase by
the Pass Through Trustee of the Equipment Note pursuant to this Agreement, and
the issuance of the Pass Through Certificates pursuant to the Pass Through Trust
Agreement, do not contravene any law, rule or regulation of any federal or
Illinois governmental authority or agency regulating the Pass Through Trustee's
banking, trust or fiduciary powers or any judgment or order applicable to or
binding on the Pass Through Trustee and do not contravene or result in any
breach of, or constitute a default under, the Pass Through Trustee's articles of
association or bylaws or any agreement or instrument to which the Pass Through
Trustee is a party or by which it or any of its properties may be bound or
affected;

                    (d) neither the execution and delivery by the Pass Through
Trustee of each of the Pass Through Trustee Agreements nor the consummation by
the Pass Through Trustee of any of the transactions contemplated thereby,
requires the consent or approval of, the giving of notice to, or the
registration with, or the taking of any other action with respect to, any
federal or Illinois governmental authority or agency regulating the Pass Through
Trustee's banking, trust or fiduciary powers;

                    (e) there are no pending or, to its knowledge, threatened
actions or proceedings against the Pass Through Trustee before any court or
administrative agency which individually or in the aggregate, if determined
adversely to it, would materially adversely affect the ability of the Pass
Through Trustee to perform its obligations under any of the Pass Through Trustee
Agreements;

                    (f) the Pass Through Trustee is not in default under any
Pass Through Trustee Agreement;

                    (g) the Pass Through Trustee does not directly or indirectly
control, and is not directly or indirectly controlled by or under common control
with, the Owner Participant, the Owner Trustee, the Initial Purchasers, TILC,
TRMI or the Lessee;

                    (h) the Pass Through Trustee is purchasing the Equipment
Note for the purposes contemplated by the Operative Agreements and not with a
view to the transfer or distribution of any Equipment Note to any other Person,
except as contemplated by the Operative Agreements; and

                    (i) except for the issue and sale of the Pass Through
Certificates contemplated hereby and by the other Pass Through Trustee
Agreements, the Pass Through Trustee has not directly or indirectly offered any
Equipment Note or Pass Through Certificate or any interest in or to the Trust
Estate, the Trust Agreement or any similar interest for sale to, or solicited
any offer to acquire any of the same from, anyone other than the Owner Trustee
and the Owner Participant, and the Pass


                                       34

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
Through Trustee has not authorized anyone to act on its behalf to offer directly
or indirectly any Equipment Note, any Pass Through Certificate or any interest
in and to the Trust Estate, the Trust Agreement or any similar interest related
to this transaction for sale to, or to solicit any offer to acquire any of the
same from, any Person other than the Owner Trustee and the Owner Participant.

         Section 3.9 Opinion Acknowledgment. Each of the parties hereto, with
respect to such party, expressly consents to the rendering by its counsel of the
opinion referred to in Section 4.1(e) and acknowledges that such opinion shall
be deemed to be rendered at the request and upon the instructions of such party.

SECTION 4. CLOSING CONDITIONS.

         Section 4.1 Conditions Precedent to Investment by Each Participant. The
obligation of each Participant to make the investment specified with respect to
such Participant in Section 2 on the Closing Date shall be subject to the
satisfaction or waiver of the following conditions precedent on or before August
31, 2001 (except that the obligations of any Person shall not be subject to such
Person's own performance or compliance):

                    (a) Execution of Operative Agreements. On or before the
Closing Date, the Lease, the Lease Supplement in respect of the Units delivered
on the Closing Date, the Indenture, the Indenture Supplement in respect of the
Units delivered on the Closing Date, the Equipment Note, the Transfer and
Assignment Agreement, the TILC Bill of Sale, the TILC Assignment, the Bill of
Sale, the Assignment and the OP Guaranty shall each be satisfactory in form and
substance to such Participant, shall have been duly executed and delivered by
the parties thereto (except that the execution and delivery of the documents
referred to above (other than this Agreement) by a party hereto or thereto shall
not be a condition precedent to such party's obligations hereunder), shall each
be in full force and effect, and executed counterparts of each shall have been
delivered to such Participant or its counsel on or before the Closing Date; and
no event shall have occurred and be continuing that constitutes a Lease Default
or an Indenture Default.

                    (b) The Operative Agreements (as defined in the Other
Participation Agreement) remain in full force and effect.

                    (c) Recordation and Filing. On or before the Closing Date
(except as expressly stated below), the Lessee shall have caused the Lease, the
Lease Supplement, the Indenture and the Indenture Supplement (each in respect of
Units delivered on the Closing Date), the TILC Bill of Sale, the Bill of Sale,
the TILC Assignment and the Assignment to be duly filed, recorded and deposited
in memorandum form with the STB in conformity with 49 U.S.C. Section 11301 and
with the Registrar General of Canada pursuant to Section 105 of the Canada
Transportation Act, and all necessary actions shall have been taken to cause
publication of notice of


                                       35

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
such deposit in The Canada Gazette in accordance with said Section 105 and all
appropriate Uniform Commercial Code financing statements to be filed where
necessary or reasonably advisable within 10 days after the Closing Date, and the
Lessee shall furnish the Indenture Trustee, the Owner Trustee, the Collateral
Agent and each Participant proof thereof. Without limiting the representations
and warranties set forth in any Operative Agreement, by such recording or
filing of the Lease (or a financing statement or similar notice thereof), the
Owner Trustee and the Lessee are not acknowledging or implying that the Lease
constitutes a "security agreement" or creates a "security interest" within the
meaning of the Uniform Commercial Code in any applicable jurisdiction.

                    (d) Representations and Warranties of the Lessee. On the
Closing Date, the representations and warranties of the Lessee contained in
Section 3.2 and Section 3.4(b) hereof shall be true and correct in all material
respects as of the Closing Date as though then made on and as of such date,
except to the extent that such representations and warranties relate solely to
an earlier date (in which case such representations and warranties were true and
correct on and as of such earlier date), and each of the Owner Trustee, the
Indenture Trustee and the Participants shall have received an Officer's
Certificate to such effect dated such date from the General Partner of the
Lessee certifying to the foregoing matters, and the Lessee shall have performed
and complied with all agreements and conditions herein contained which are
required to be performed or complied with by the Lessee on or before said date.

                    (e) Representations and Warranties of the Owner Trustee. On
the Closing Date, the representations and warranties of the Trust Company and
the Owner Trustee contained in Section 3.1 and Section 3.4(a) shall be true and
correct in all material respects as of the Closing Date as though then made on
and as of such date except to the extent that such representations and
warranties relate solely to an earlier date (in which case such representations
and warranties were true and correct on and as of such earlier date), and each
of the Lessee, the Indenture Trustee, TILC, TRMI and the Participants shall have
received an Officer's Certificate to such effect dated such date from the Trust
Company (in respect of the Trust Company) and the Owner Trustee (in respect of
the Owner Trustee), and the Trust Company and the Owner Trustee shall have
performed and complied with all agreements and conditions herein contained
which are required to be performed or complied with by the Trust Company and the
Owner Trustee, respectively, on or before said date.

                    (f) Opinions of Counsel. On the Closing Date, the Owner
Trustee, the Indenture Trustee and each Participant shall have received the
favorable written opinion of each of (i) Skadden, Arps, Slate, Meagher & Flom
(Illinois), special counsel for the Lessee, TILC and TRMI, substantially in the
form of the corresponding opinion delivered in connection with the closing under
the Other Participation Agreement, (ii) counsel for the Lessee, TILC and TRMI
(which counsel shall be the General Counsel of Trinity), substantially in the
form of the corresponding opinion delivered in connection with the closing under
the Other


                                       36

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
Participation Agreement, (iii) Bingham Dana LLP, counsel to the Owner Trustee,
substantially in the form of the corresponding opinion delivered in connection
with the closing under the Other Participation Agreement, (iv) Winston & Strawn,
special counsel to the Owner Participant, substantially in the form of the
corresponding opinion delivered in connection with the closing under the Other
Participation Agreement, (v) Philip Morris Capital Corporation Legal Department,
counsel to the Owner Participant, substantially in the form of the corresponding
opinion delivered in connection with the closing under the Other Participation
Agreement, (vi) Robert A. Wolz, Assistant Counsel to the Indenture Trustee,
substantially in the form of the corresponding opinion delivered in connection
with the closing under the Other Participation Agreement, (vii) Alvord & Alvord,
special STB counsel, substantially in the form of the corresponding opinion
delivered in connection with the closing under the Other Participation
Agreement, (viii) McCarthy Tetrault, special Canadian counsel, substantially in
the form of the corresponding opinion delivered in connection with the closing
under the Other Participation Agreement, (ix) Andrews & Kurth L.L.P., special
counsel for the Collateral Agent, substantially in the form of the corresponding
opinion delivered in connection with the closing under the Other Participation
Agreement and (x) Robert A. Wolz, Assistant Counsel to the Pass Through Trustee,
substantially in the form of the corresponding opinion delivered in connection
with the closing under the Other Participation Agreement.

                    (g) Title. On the Closing Date, after giving effect to the
transactions contemplated hereby, (i) the Owner Trustee shall have all legal
and beneficial title to each Unit to be delivered on the Closing Date, free and
clear of all Liens (other than Permitted Liens of the type described in clause
(ii) below with respect to the Existing Equipment Subleases, and in clauses
(iii), (iv) and (v) of the definition thereof), (ii) the Owner Trustee shall
have received all right, title and interest of the Lessee in and to the Existing
Equipment Subleases, free and clear of all Liens (other than subleases of the
Existing Equipment Subleases by the Sublessees as expressly permitted by the
Existing Equipment Subleases and other than Permitted Liens of the type
described in clauses (iii), (iv) and (v) of the definition thereof) and (iii)
each Sublessee under an Existing Equipment Sublease shall have been notified of
the assignment thereof to the Owner Trustee.

                    (h) Bills of Sale; Assignments. On the Closing Date, each of
the following documents shall each have been duly executed and delivered: (i)
the TILC Bill of Sale and the Bill of Sale, in each case in form and substance
reasonably satisfactory to the Lessee, the Owner Trustee, the Indenture Trustee
and the Pass Through Trustee, dated such date and covering the Units to be
delivered on such date, transferring to the Owner Trustee and the Lessee,
respectively, legal and beneficial title to such Units free and clear of all
Liens (other than Permitted Liens of the type described in clause (ii) below
with respect to the Existing Equipment Subleases, and in clauses (iii), (iv) and
(v) of the definition thereof) and warranting to the Owner Trustee that at the
time of delivery of each such Unit, TILC and the Lessee, as the case may be, had
legal and beneficial title thereto and good and lawful


                                       37

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
right to sell the same, and title thereto was free and clear of all Liens (other
than Permitted Liens of the type described in clause (ii) below with respect to
the Existing Equipment Subleases, and in clauses (iii), (iv) and (v) of the
definition thereof and, with respect to the TILC Bill of Sale, warranting that
TILC shall be responsible for discharging any Permitted Lien of the type
described in subclause (iii) or (iv) of the definition thereof which has
attached as of the Closing Date) and (ii) the TILC Assignment and the
Assignment, in each case in form and substance reasonably satisfactory to the
Lessee, the Owner Trustee, the Indenture Trustee and the Pass Through Trustee,
dated such date covering the Existing Equipment Subleases, assigning to the
Owner Trustee and Lessee respectively, all right, title and interest of TILC and
the Lessee, respectively, to the Existing Equipment Subleases, free and clear of
all Liens (other than Permitted Liens) and warranting to the Lessee that, at the
time of such assignment, TILC and the Lessee, respectively, had legal and
beneficial title to the Existing Equipment Subleases and good and lawful right
to sell the same, and title thereto was free and clear of all Liens (other than
Permitted Liens);

                    (i) Insurance Certificate. On or before the Closing Date,
the Indenture Trustee and each Participant shall have received (x) each
certificate relating to insurance that is required pursuant to Section 12 of the
Lease and Section 6.4 of the Collateral Agency Agreement and (y) certificates
from a nationally recognized insurance broker substantially in the forms
attached hereto as Exhibits A- 1 and A-2 with respect to the public liability
insurance required by Section 12.1(b) of the Lease and Section 6.4 of the
Collateral Agency Agreement.

                    (j) Corporate, Partnership, Limited Liability Company and
Other Organizational Documents. Each of the Participants shall have received
such documents and evidence with respect to Trinity, TILC, TRMI, the Lessee, the
General Partner, the Limited Partner, the Owner Participant, the Pass Through
Trustee, the Owner Trustee and the Indenture Trustee as the Participants may
reasonably request in order to establish the consummation of the transactions
contemplated by this Agreement and the taking of all corporate, limited
partnership and other proceedings in connection therewith.

                    (k) No Threatened Proceedings. No action or proceeding shall
have been instituted nor shall governmental action be threatened before any
court or governmental agency, nor shall any order, judgment or decree have been
issued or proposed to be issued by any court or governmental agency at the time
of the Closing Date, to set aside, restrain, enjoin or prevent the completion
and consummation of this Agreement or the transactions contemplated hereby.

                    (l) Representations and Warranties of the Owner Participant.
On the Closing Date, the representations and warranties of the Owner Participant
contained in Section 3.4(e) and Section 3.5 hereof shall be true and correct in
all material respects as of the Closing Date as though then made on and as of
such date,


                                       38

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
except to the extent that such representations and warranties relate solely to
an earlier date (in which case such representations and warranties were true and
correct on and as of such earlier date), and each of the Lessee, TILC, TRMI, the
Indenture Trustee and the Pass Through Trustee shall have received an Officer's
Certificate to such effect dated such date from the Owner Participant, and the
Owner Participant shall have performed and complied with all agreements and
conditions herein contained which are required to be performed or complied with
by the Owner Participant on or before said date.

                    (m) Notice of Delivery. The Indenture Trustee and the
Participants shall have received the Notice of Delivery described in Section
2.3(a).

                    (n) Representations and Warranties of the Indenture Trustee.
On the Closing Date, the representations and warranties of the Indenture Trustee
contained in Section 3.3 hereof shall be true and correct in all material
respects as of the Closing Date as though then made on and as of such date,
except to the extent that such representations and warranties relate solely to
an earlier date (in which case such representations and warranties were true and
correct on and as of such earlier date), and each of the Lessee, TILC, TRMI, the
Owner Trustee and the Participants shall have received an Officer's Certificate
to such effect dated such date from the Indenture Trustee, and the Indenture
Trustee shall have performed and complied with all agreements and conditions
herein contained which are required to be performed or complied with by the
Indenture Trustee on or before said date.

                    (o) No Illegality. No change shall have occurred after the
execution and delivery of this Agreement in applicable law or regulations
thereunder or interpretations thereof by regulatory authorities that, in the
opinion of such Participant or its counsel, would make it illegal for such
Participant to enter into any transaction contemplated by the Operative
Agreements.

                    (p) Participants' Investments. (i) The Owner Participant
shall have made available the Owner Participant's Commitment in the amount
specified in, and otherwise in accordance with, Sections 2.2(a) and 2.3 and (ii)
the Loan Participant shall have made available the Loan Participant's Commitment
in the amount specified in, and otherwise in accordance with, Sections 2.2(b)
and 2.3.

                    (q) Consents. All approvals and consents of any trustees or
holders of any indebtedness or obligations of the Lessee, Trinity, TILC and
TRMI, if any, required to have been obtained in connection with the transactions
contemplated by this Agreement and the other Operative Agreements shall have
been duly obtained and be in full force and effect.

                    (r) Governmental Actions. All actions, if any, required to
have been taken on or prior to the Closing Date in connection with the
transactions


                                       39

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
contemplated by this Agreement and the other Operative Agreements on the Closing
Date shall have been taken by any governmental or political agency, subdivision
or instrumentality of the United States, and all orders, permits, waivers,
exemptions, authorizations and approvals of such entities required to be in
effect on the Closing Date in connection with the transactions contemplated by
this Agreement and the other Operative Agreements on the Closing Date shall have
been issued, and all such orders, permits, waivers, exemptions, authorizations
and approvals shall be in full force and effect, on the Closing Date.

                    (s) Tax Indemnity Agreement. On or before the Closing Date,
the Tax Indemnity Agreement shall be satisfactory in form and substance to the
Owner Participant, shall have been duly executed and delivered by the Lessee and
the Guarantor and, assuming due authorization, execution and delivery by the
Owner Participant or one of its Affiliates, shall be in full force and effect.

                    (t) Appointment of Representative. The Owner Trustee shall
have authorized its representative, who shall be an individual designated by the
Lessee and acceptable to the Owner Trustee, to accept the Units being delivered
on the Closing Date from the Lessee and to deliver such Units to the Lessee. The
Lessee shall have authorized its representative (who shall be the same
individual designated by the Lessee under this Section 6.1(s)) to accept
delivery of such Units from the Owner Trustee as Lessor pursuant to the Lease.

                    (u) Solvency of the Lessee. The Lessee shall have furnished
to the Participants an Officer's Solvency Certificate (substantially in the form
attached hereto as Exhibit E) as to the solvency of the Lessee as of the Closing
Date.

                    (v) Schedule of Subleases and Units. The Participants and
the Collateral Agent shall have received a schedule, certified by the Lessee and
TILC, listing the Existing Equipment Subleases under the Lease, the Sublessee
under each thereof and the Units covered thereby.

                    (w) Projected Coverage Ratio. The Manager shall have
furnished to the Participants and the Collateral Agent that portion of the
report provided for in Section 7.1 of the Management Agreement setting forth the
Projected Coverage Ratio for the six-month period immediately succeeding the
Closing Date.

                    (x) Representations and Warranties of TILC. On the Closing
Date, the representations and warranties of TILC contained in Section 3.4(d) and
Section 3.6 hereof shall be true and correct in all material respects as of the
Closing Date as though then made on and as of such date, except to the extent
that such representations and warranties relate solely to an earlier date (in
which case such representations and warranties were true and correct on and as
of such earlier date), and each of the Owner Trustee, the Indenture Trustee and
the Participants shall have received an Officer's Certificate to such effect
dated such date from TILC, and TILC


                                       40

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
shall have performed and complied with all agreements and conditions herein
contained which are required to be performed or complied with by TILC on or
before said date.

                    (y) Representations and Warranties of TRMI. On the Closing
Date, the representations and warranties of TRMI contained in Section 3.4(c) and
Section 3.7 hereof shall be true and correct in all material respects as of the
Closing Date as though then made on and as of such date, except to the extent
that such representations and warranties relate solely to an earlier date (in
which case such representations and warranties were true and correct on and as
of such earlier date), and each of the Owner Trustee, the Indenture Trustee and
the Participants shall have received an Officer's Certificate to such effect
dated such date from TRMI, and TRMI shall have performed and complied with all
agreements and conditions herein contained which are required to be performed or
complied with by TRMI on or before said date.

                    (z) Representations and Warranties of the Pass Through
Trustee. On the Closing Date, the representations and warranties of the Pass
Through Trustee contained in Sections 3.4(f) and Section 3.8 hereof shall be
true and correct in all material respects as of the Closing Date as though then
made on and as of such date, except to the extent that such representations and
warranties relate solely to an earlier date (in which case such representations
and warranties were true and correct on and as of such earlier date), and each
of the Lessee, TILC, TRMI, the Indenture Trustee, the Owner Trustee and the
Owner Participant shall have received an Officer's Certificate to such effect
dated such date from the Pass Through Trustee, and the Pass Through Trustee
shall have performed and complied with all agreements and conditions herein
contained which are required to be performed or complied with by the Pass
Through Trustee on or before said date.

                    (aa) Representations and Warranties of Trinity. On the
Closing Date, the representations and warranties of Trinity contained in the
Trinity Guaranty shall be true and correct in all material respects as of the
Closing Date as though then made on and as of such date, except to the extent
that such representations and warranties relate solely to an earlier date (in
which case such representations and warranties were true and correct on and as
of such earlier date), and each of the Owner Trustee, the Indenture Trustee and
the Participants shall have received an Officer's Certificate to such effect
dated such date from Trinity, and Trinity shall have performed and complied with
all agreements and conditions herein contained which are required to be
performed or complied with by Trinity on or before said date.

                    (bb) Accountant's Letter. The Participants shall have
received an accountant's letter from PriceWaterhouseCoopers L.L.P. in form and
substance reasonably satisfactory to each of them.


                                       41

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

                    (cc) First Closing. The Closing Date (as defined in the
Other Lease) shall have occurred and no Indenture Default or Indenture Event of
Default (as defined in the Other Lease) shall have occurred and be continuing.

                    (dd) Sublease Consents. The Lessee shall have obtained the
consent to assignment from each Sublessee under each Existing Equipment Sub
lease, such consents to be substantially in the form of the consents received
with respect to the Other Participation Agreement.

                    (ee) Certificate Rating. On the Closing Date, the
Certificates shall be rated at least "AA" by S&P.

         Section 4.2 Additional Conditions Precedent to Investment by the Loan
Participant. The obligation of the Loan Participant to fund the Loan
Participant's Commitment and purchase and pay for the Equipment Note to be
purchased by it pursuant to Sections 2.2(b) and 2.3 on the Closing Date shall be
subject to the satisfaction or waiver of the following additional conditions
precedent:

                    (a) Equipment Note. The Equipment Note to be delivered on
the Closing Date shall have been duly authorized, executed and delivered to the
Loan Participant by a duly authorized officer of the Owner Trustee and duly
authenticated by the Indenture Trustee.

                    (b) Appraisal. The Pass Through Trustee and each Initial
Purchaser shall have received the verification of value, useful life and
estimated residual value prepared by the Appraiser in connection with the
Appraisal.

                    (c) No Material Adverse Change. No material adverse change
shall have occurred in the business, operations or financial condition of any of
the Lessee, the Manager, the Administrator, the Insurance Manager or Trinity.

                    (d) No Material Changes. If as a result of the operation of
Section 2.6, adjustments have been made to Basic Rent, Stipulated Loss Values,
Stipulated Loss Amounts, Termination Values, Termination Amounts, or the
Scheduled Amortization for the Equipment Notes, after the date hereof and prior
to the Closing Date, the following conditions remain true on the Closing Date
after giving effect to such adjustments: (i) the Rated Maturity Date shall be
unchanged; (ii) the adjusted Scheduled Amortization for the Equipment Notes
amortizes the Equipment Note by the Rated Maturity Date; (iii) the Debt Rate
shall remain unchanged; (iv) the weighted average life of the Equipment Note
does not differ from the weighted average life of the Equipment Note before such
adjustment by more than six (6) months; (v) the ratio of the principal amount of
the Equipment Note to the aggregate fair market value of the Equipment
calculated after such adjustment does not differ by more than 2% from the same
ratio calculated on or prior to the date hereof based on the Equipment listed in
Schedule 1 attached hereto; and (vi) there has been no


                                       42

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
material change in the composition of the pool of Subleases (in terms of the
nature and terms of the Subleases and the identity and credit quality of the
Sublessees) since the date hereof.

         Section 4.3 Additional Conditions Precedent to Investment by the Owner
Participant. The obligation of the Owner Participant to provide the funds
specified with respect to it in Sections 2.2(a) and 2.3 on the Closing Date with
respect to any Unit to be delivered on the Closing Date shall be subject to the
satisfaction or waiver of the following additional conditions precedent:

                    (a) Appraisal. On or before the Closing Date, the Owner
Participant shall have received an opinion (the "Appraisal") of Rail Solutions,
Inc. (the "Appraiser"), satisfactory in form and substance to the Owner
Participant (with a separate summary or other evidence of such Appraisal as it
relates to fair market value and useful life being provided to the Rating
Agency), concluding that: (i) the fair market value of each Unit being delivered
on the Closing Date is equal to the portion of the Total Equipment Cost with
respect to such Unit; (ii) at the expiration of the Basic Term and any Fixed
Rate Renewal Term, (A) without taking into account inflation or deflation from
and after the Closing Date or the existence of any purchase option, it is
reasonable to expect that each such Unit will have a fair market value of at
least 20% of the Total Equipment Cost with respect to such Unit and (B) the
remaining economic life of each such Unit will be at least equal to 20% of the
economic life of such Unit as estimated in the Appraisal; (iii) as of the Early
Purchase Date, the estimated fair market value of each such Unit being delivered
on the Closing Date, taking into account inflation or deflation from and after
the Closing Date, will not exceed the portion of the Early Purchase Price
attributable to such Unit; (iv) no Unit being delivered on the Closing Date is
Limited Use Property; (v) the Fixed Rate Renewal is greater than or equal to the
fair market rental value of each such Unit and the Lessee is not reasonably
expected to exercise any Fixed Rate Renewal option; and (vi) such other matters
as the Owner Participant may reason ably request; provided that the Lessee makes
no representation as to the fair market value, useful life, fair market rental
value or estimated residual value of the Equipment, and the Lessee shall not be
responsible for, or incur any liabilities as a result of, the contents of such
Appraisal or report to which it relates or, except to the extent provided in the
Tax Indemnity Agreement.

                    (b) Opinion with Respect to Certain Tax Aspects. On the
Closing Date, the Owner Participant shall have received the opinion of Winston &
Strawn, addressed to the Owner Participant, in form and substance satisfactory
to the Owner Participant, containing such counsel's favorable opinion with
respect to such tax matters as the Owner Participant may reasonably request.

                    (c) Absence of Change in Tax Laws. No change or proposed
change shall have occurred after the execution and delivery of this Agreement in
relevant United States tax laws, regulations, or administrative or judicial


                                       43

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

interpretation thereof which change would cause an adverse change to the tax
assumptions used to calculate Basic Rent, Stipulated Loss Values, Stipulated
Loss Amounts, Termination Values, Termination Amounts and Early Purchase Price,
unless the adjustment referred to in Section 2.6(a) is made to the Owner
Participant's satisfaction.

                    (d) Absence of Accounting Changes. No change shall have
occurred in generally accepted accounting principles which shall, in the opinion
of the Owner Participant, adversely affect its Net Economic Return.

                    (e) No Material Adverse Change. No material adverse change
shall have occurred in the business, operations or the financial condition of
any of Lessee, Manager, the Administrator, the Insurance Manager or Trinity.

                    (f) Absence of Certain Changes. The Owner Participant shall
be satisfied that the transaction is consistent in all respects with the Owner
Participant's internal approvals, including but not limited to its Investment
Committee approval relating to the transaction.

         Section 4.4 Conditions Precedent to the Obligation of TILC and the
Lessee. The obligation of TILC with respect to the sale of the Units to the
Lessee on the Closing Date, the obligation of the Lessee with respect to the
sale of such Units to the Owner Trustee and the obligation of the Lessee to
accept such Units under the Lease as of the Closing Date is subject to the
satisfaction or waiver of the following conditions precedent:

                    (a) Corporate Documents. On or before the Closing Date, the
Lessee shall have received such documents and evidence with respect to the
Participants, the Owner Trustee, the Pass Through Trustee and the Indenture
Trustee as the Lessee may reasonably request in order to establish the
authorization of the consummation of, or otherwise relating to the ability to
consummate, the transactions contemplated by this Agreement and the other
Operative Agreements, the taking of all corporate and other proceedings in
connection therewith and compliance with the conditions herein or therein set
forth.

                    (b) Operative Agreements. On or before the Closing Date, the
Operative Agreements shall have been duly authorized, executed and delivered by
the respective party or parties thereto (other than the Lessee, Trinity, TILC
and TRMI), and an executed counterpart of each thereof shall have been delivered
to the Lessee or its special counsel.

                    (c) Representations and Warranties. On the Closing Date, the
representations and warranties of each of the Owner Trustee, the Indenture
Trustee and the Participants contained in Section 3 hereof shall be true and
correct in all material respects as of the Closing Date as though made on and as
of such date, and


                                       44

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
the Lessee shall have received an Officer's Certificate to such effect dated
such date from each of the Owner Trustee as described in Section 4.1(d), the
Owner Participant as described in Section 4.1(k), the Indenture Trustee as
described in Section 4.1(m) and the Pass Through Trustee as described in Section
4.1(y).

                    (d) Opinions of Counsel. On the Closing Date, the Lessee
shall have received the opinions of counsel referred to in Section 4.1(e) (other
than that set forth in clauses (i) and (ii) therein), addressed to the Lessee.

                    (e) No Threatened Proceedings. No action or proceeding shall
have been instituted nor shall governmental action be threatened before any
court or governmental agency, nor shall any order, judgment or decree have been
issued or proposed to be issued by any court or governmental agency at the time
of the Closing Date, to set aside, restrain, enjoin or prevent the completion
and consummation of this Agreement or the transactions contemplated hereby.

                    (f) No Illegality. No change shall have occurred after the
execution and delivery of this Agreement in applicable law or regulations
thereunder or interpretations thereof by regulatory authorities that, in the
opinion of the Lessee or its counsel, would make it illegal for the Lessee to
enter into any transaction contemplated by the Operative Agreements.

                    (g) Participants' Investments. (i) The Owner Participant
shall have made available the Owner Participant's Commitment in the amount
specified in, and otherwise in accordance with, Sections 2.2(a) and 2.3 and (ii)
the Loan Participant shall have made available the Loan Participant's Commitment
in the amount specified in, and otherwise in accordance with, Sections 2.2(b)
and 2.3.

                    (h) Absence of Change in Rent. No adjustment under Section
2.6(a) would cause an increase in the net present value (expressed as a
percentage of Total Equipment Cost) of the Basic Rent (discounted monthly at a
rate per annum equal to the Debt Rate) to exceed 100 basis points.

                    (i) No Adverse Accounting Treatment. The Lessee shall not
have been advised by its independent accountants that the Lessee or its
affiliates will not be afforded "off-balance sheet" accounting treatment with
respect to the Lease and the transactions contemplated by the Operative
Agreements; provided, that the Lessee shall not have deliberately caused the
loss of "off-balance sheet" accounting treatment to provoke non-satisfaction of
such condition precedent pursuant to this Section 4.4(i).


                                       45

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

SECTION 5. FINANCIAL AND OTHER REPORTS OF THE LESSEE.

         The Lessee agrees during the Lease Term and (if longer, in the event
that the Lessee has assumed all of the rights and obligations of the Lessor
under the Indenture in respect of the Equipment Notes) so long as any Equipment
Note remains outstanding, that it will furnish directly to each Participant the
following:

                    (a) as soon as available and in any event within 60 days
after the end of each of the first three quarters of each fiscal year, a balance
sheet of the Lessee as at the end of such quarter, together with the related
consolidated statements of income and cash flows of the Lessee for the period
beginning on the first day of such fiscal year and ending on the last day of
such quarter, setting forth in each case (except for the balance sheet) in
comparative form the figures for the corresponding periods of the previous
fiscal year, all in reasonable detail and prepared in accordance with generally
accepted accounting principles;

                    (b) as soon as available and in any event within 120 days
after the last day of each fiscal year, a copy of the Lessee's audited annual
report covering the operations of the Lessee including a balance sheet, and
related statements of income and retained earnings and statement of cash flows
of the Lessee for such fiscal year, setting forth in each case in comparative
form the figures for the previous fiscal year, all in reasonable detail and
prepared in accordance with generally accepted accounting principles applied on
a consistent basis, which statements will have been certified by a firm of
independent public accountants of recognized national standing selected by the
Lessee;

                    (c) within the time period prescribed in paragraph (a)
above, a certificate, signed by the Treasurer or principal financial officer of
the General Partner, (i) to the effect that such officer is not aware (without
any obligation of due inquiry), as of the date of such certificate, of any Lease
Default, and if a Lease Default shall exist, specifying such Lease Default, the
nature and status thereof and what action Lessee is taking or plans to take with
respect thereto and (ii) setting forth the Historical Coverage Ratio and the
Projected Coverage Ratio as of the last Business Day of the immediately
preceding calendar quarter;

                    (d) within the time period prescribed in paragraph (b)
above, a certificate, signed by the Treasurer or principal financial officer of
the General Partner, (i) to the effect that the signer has reviewed the
Operative Agreements and activities and records of the Lessee during the
immediately preceding fiscal year and that, after due inquiry, such officer is
not aware, as of the date of such certificate, of any Lease Default, and if a
Lease Default shall exist, specifying such Lease Default, the nature and status
thereof and what action Lessee is taking or plans to take with respect thereto,
(ii) setting forth the Historical Coverage Ratio and the Projected Coverage
Ratio as of the last Business Day of the preceding fiscal year and (iii) setting
forth in summary terms the Lessee's compliance with Section 8.3 of the Lease


                                       46

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
as to new Subleases entered into by the Lessee, and sub-subleases entered into
by any Sublessee, during such fiscal year, including without limitation as to
whether such new Subleases are subject and subordinate to the terms of the
Lease;

                    (e) within the time periods presented in Section 7 of the
Management Agreement, each of the reports referred to therein delivered by the
Manager to the Lessee; and

                    (f) promptly after request therefor, such additional
information with respect to the financial condition or business of the Lessee as
the Owner Participant or the Indenture Trustee may from time to time reasonably
request.

SECTION 6. CERTAIN COVENANTS OF THE PARTICIPANTS, THE TRUSTEES AND THE LESSEE.

         Section 6.1 Restrictions on Transfer of Beneficial Interest. The Owner
Participant agrees that it shall not, directly or indirectly, sell, convey,
assign, pledge, mortgage or otherwise transfer all or any part of the Beneficial
Interest (collectively, for purposes of this Section 6.1, a "transfer") prior to
the expiration or earlier termination of the Lease Term without the Lessee's
prior written consent (which consent shall not be unreasonably withheld);
provided, however, no such consent shall be required in connection with any
indirect transfer of the Beneficial Interest resulting from (i) any direct or
indirect change of control of Philip Morris Capital Corporation or change of
control of any direct or indirect parent of Philip Morris Capital Corporation or
(ii) any transfer of substantially all of the assets of Philip Morris Capital
Corporation as an entirety; provided, further, that no such consent shall be
required if the following conditions are satisfied:

                    (a) the Person to whom such transfer is to be made (a
"Transferee") is (i) an institutional or corporate investor with tangible net
worth or, in the case of a bank or lending institution, combined capital and
surplus at the time of such transfer, of at least $75,000,000, determined in
accordance with generally accepted accounting principles, as of the date of such
transfer, or (ii) an Affiliate of an institutional or corporate investor that
satisfies the requirements set forth in clause (i) above if such investor
guarantees pursuant to a guaranty in form and substance satisfactory to the
Lessee the obligations of the Owner Participant under the Operative Agreements
assumed by such Affiliate as required herein or (iii) an Affiliate of the Owner
Participant; provided that in the event of a transfer pursuant to clause (iii)
which does not qualify under clauses (i) or (ii), the Owner Participant shall
remain liable for all of its obligations under this Agreement and the other
Operative Agreements;

                    (b) so long as no Lease Event of Default has occurred and is
continuing, neither the Transferee nor any of its Affiliates shall compete
(directly or


                                       47

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
indirectly) (other than as a passive investor or loan participant in the
financing of equipment or facilities used in railcar leasing) with the Lessee or
TILC (unless such non-competition requirement has been waived in writing by the
Lessee and TILC) in any respect material to the full service railcar leasing
business of the Lessee or TILC; provided, that no Transferee or Affiliate
thereof shall be deemed to (i) be engaged in railcar leasing or (ii) hold
(directly or indirectly) any material interest in any business that is
competitive with Lessee's or TILC's railcar leasing business, solely by reason
of any sale, lease or other disposition (or any actions in furtherance of any of
the foregoing) of any of such Person's interest in any equipment or facilities
directly or indirectly owned, leased or otherwise controlled pursuant to any
such Person's passive investment or loan participation in the financing of any
such equipment or facilities used in railcar leasing or any re-leasing or sale
of any rail equipment which is returned to or repossessed by or on behalf of
such Person from a lessee or borrower in connection with a lease financing or
lender transaction entered into by such Person as a passive lessor, investor or
lender;

                    (c) each of the Indenture Trustee, the Owner Trustee and the
Lessee shall have received 10 days (or, if a Lease Event of Default shall have
occurred and is continuing and the proposed Transferee or any of its Affiliates
would not, but for the occurrence of such Lease Event of Default, have satisfied
the requirements set forth in Section 6.1(b) above or Section 6.1(l) below,
fifteen (15) Business Days) prior written notice of such transfer specifying the
name and address of any proposed Transferee and such additional information as
shall be necessary to determine whether the proposed transfer satisfies the
requirements of this Section 6.1;

                    (d) such Transferee enters into an agreement (i) in the form
attached hereto as Exhibit C or (ii) otherwise in form and substance
satisfactory to each of the Lessee and the Owner Trustee and not reasonably
objected to by the Indenture Trustee whereby such Transferee confirms that it
shall be deemed a party to this Agreement and each other Operative Agreement to
which the transferring Owner Participant is a party, and agrees to be bound by
all the terms of, and to undertake all of the obligations and liabilities of the
transferring Owner Participant contained in, this Agreement and such other
Operative Agreements and in which the Transferee shall make representations and
warranties comparable to those of the Owner Participant contained herein and
therein;

                    (e) an opinion of counsel of the Transferee (which counsel
shall be reasonably acceptable to the Lessee, the Owner Trustee and the
Indenture Trustee and which may be internal counsel of the Transferee),
confirming (i) the existence, corporate power and authority of, and due
authorization, execution and delivery of all relevant documentation by, the
Transferee (with appropriate reliance on certificates of corporate officers or
public officials as to matters of fact), (ii) that each agreement referred to in
Section 6.1(d) above is the legal, valid, and binding obligation of the
Transferee, enforceable against the Transferee in accordance with


                                       48

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
its terms (subject to customary qualifications as to bankruptcy and equitable
principles) and (iii) compliance of the transfer with applicable requirements of
federal securities laws and securities laws of the Transferee's domicile, shall
be provided, prior to such transfer, to each of the Lessee, the Owner Trustee
and the Indenture Trustee, which opinion shall be in form and substance
reasonably satisfactory to the Lessee, the Owner Trustee and the Indenture
Trustee;

                    (f) such transfer complies in all respects with and does not
violate any applicable provisions of the federal securities laws and the
securities law of any applicable state or any other applicable law;

                    (g) except as specifically consented to in writing by each
of the Lessee, the Owner Trustee, the Pass Through Trustee and the Indenture
Trustee, the terms of the Operative Agreements shall not be altered;

                    (h) after giving effect to such transfer, the Beneficial
Interest and the beneficial interest with respect to the Other Trust shall be
held by not more than two Persons in the aggregate; provided that for the
purpose of calculating the number of Persons under this Section 6.1(h), Persons
that are Affiliates of each other shall be considered to be one Person;

                    (i) all reasonable expenses of the parties hereto
(including, without limitation, reasonable legal fees and expenses of special
counsel) incurred in connection with each transfer of such Beneficial Interest
shall be paid by the transferring Owner Participant;

                    (j) such transfer either (i) does not involve the use of any
funds which constitute assets of an employee benefit plan subject to Title I of
ERISA or Section 4975 of the Code or (ii) if clause (i) is not applicable, will
not constitute a prohibited transaction under ERISA or the Code;

                    (k) as a result of and following such transfer, no Indenture
Default attributable to the Owner Participant or the Owner Trustee shall have
occurred and be continuing;

                    (l) unless a Lease Event of Default shall have occurred and
is continuing, the transfer does not involve the sale of the stock of any Owner
Participant, the sole asset of which is all or a portion of the Beneficial
Interest, to, or the merger of any such Owner Participant with or into, any
Person who is a competitor of the Lessee or TILC as described in Section 6.1(b),
provided that the Lessee may waive this requirement in writing;

                    (m) the Transferee (i) is a "United States Person" within
the meaning of Section 7701(a)(30) of the Code or (ii) is engaged in a United
States trade or business for purposes of Subtitle A, Chapter 1, Subchapter N of
the Code


                                       49

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
and is acquiring such Beneficial Interest in connection with such trade or
business; and

                    (n) the Owner Participant shall deliver to the Lessee an
Officer's Certificate certifying as to compliance with the transfer requirements
contained herein; provided that no such Officer's Certificate is required in
case of a transfer of the Beneficial Interest to the Lessee (or Lessee's
designee) pursuant to Section 6.9.

         Upon any such transfer (i) except as the context otherwise requires,
such Transferee shall be deemed the "Owner Participant" for all purposes, and
shall enjoy the rights and privileges and perform the obligations of the Owner
Participant to the extent of the interest transferred hereunder and under each
other Operative Agreement to which the Owner Participant is a party, and,
except as the context otherwise requires, each reference in this Agreement and
each other Operative Agreement to the "Owner Participant" shall thereafter be
deemed to include such Transferee for all purposes to the extent of the interest
transferred, and (ii) the transferor, except to the extent provided in Section
6.1(i) hereof and except in the case of a transfer to a Transferee described in
the proviso to Section 6.1(a)(iii) hereof, shall be released from all
obligations hereunder and under each other Operative Agreement to which such
transferor is a party or by which such transferor is bound solely to the extent
such obligations are expressly assumed by a Transferee; and provided, further,
that in no event shall any such transfer or assignment waive or release the
transferor from any liability on account of any breach existing prior to such
transfer of any of its representations, warranties, covenants or obligations set
forth herein or in any of the other Operative Agreements or for any fraudulent
or willful misconduct. Subject to Section 6.1(l), the provisions of this Section
6.1 shall not be construed to restrict the Owner Participant from consolidating
with or merging into any other corporation or restricting another corporation
from merging into or consolidating with the Owner Participant. Notwithstanding
any transfer, the transferor Owner Participant shall be entitled to all benefits
accrued and all rights vested prior to such transfer, including, without
limitation, rights to indemnification under any of the Operative Agreements. No
transfer hereunder shall, by virtue of the Transferee engaging in a business or
activity not generally conducted by other institutional or corporate investors
in lease transactions, increase the Lessee's indemnification obligations under
Section 7.1 or 7.2. The Owner Participant hereby acknowledges and agrees (and
each Transferee by virtue of any transfer shall be deemed to have acknowledged
and agreed) to the terms of the Collateral Agency Agreement.

         The Lessee agrees to provide notice to the Rating Agency of any
proposed transfer by an Owner Participant no later than 5 days after Lessee's
receipt of notice of such proposed transfer from an Owner Participant.


                                       50

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

         Section 6.2 Lessor's Liens Attributable to the Owner Participant. The
Owner Participant hereby unconditionally agrees with and for the benefit of each
of the other parties to this Agreement that the Owner Participant shall not
directly or indirectly create, incur, assume or suffer to exist any Lessor's
Lien attributable to the Owner Participant on or against all or any portion of
the Indenture Estate or the Equipment, and the Owner Participant agrees that it
shall, at its own cost and expense, take such action as may be necessary to duly
discharge and satisfy in full any such Lessor's Lien; provided that the Owner
Participant may contest any such Lessor's Lien in good faith by appropriate
proceedings so long as such proceedings do not involve any material danger of
the sale, forfeiture or loss of the Equipment or any interest therein or
interference with the use, operation, or possession of the Equipment or any
portion thereof by the Lessee under the Lease or the rights of the Indenture
Trustee under the Indenture.

         Section 6.3 Lessor's Liens Attributable to Trust Company. Trust Company
hereby unconditionally agrees with and for the benefit of each of the other
parties to this Agreement that it shall not directly or indirectly create,
incur, assume or suffer to exist any Lessor's Lien attributable to it on or
against all or any portion of the Trust Estate or the Equipment, the Trust
Company agrees that it shall, at its own cost and expense, take such action as
may be necessary to duly discharge and satisfy in full any such Lessor's Lien;
provided that the Trust Company may contest any such Lessor's Lien in good faith
by appropriate proceedings so long as such proceedings do not involve any
material danger of the sale, forfeiture or loss of the Equipment or any interest
therein or interference with the use, operation, or possession of the Equipment
or any portion thereof by the Lessee under the Lease or the right of the
Indenture Trustee under the Indenture.

         Section 6.4 Liens Created by the Indenture Trustee and the Loan
Participant.

                    (a) The Indenture Trustee, in its individual capacity,
covenants and agrees with each of the Lessee, the Owner Trustee, the Owner
Participant and the Loan Participant that it shall not cause or permit to exist
any Lien on or against all or any portion of the Equipment, the Pledged
Equipment, the Trust Estate or the Indenture Estate arising as a result of (i)
claims against the Indenture Trustee in its individual capacity not related to
its interest in the Equipment, the Pledged Equipment and the Trust Estate, or
to the administration of the Indenture Estate pursuant to the Indenture, (ii)
acts of the Indenture Trustee in its individual capacity not contemplated by, or
failure of the Indenture Trustee to take any action it is expressly required to
perform by, any of the Operative Agreements, (iii) claims against the Indenture
Trustee attributable to the actions of the Indenture Trustee in its individual
capacity relating to Taxes or expenses that are not indemnified against by the
Lessee pursuant to Section 7 or (iv) claims against the Indenture Trustee
arising out of the transfer by the Indenture Trustee of all or any portion of
its interest


                                       51

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

in the Equipment, the Pledged Equipment, the Indenture Estate or the Operative
Agreements, other than a transfer permitted by the Operative Agreements and with
respect to which the Indenture Trustee will, at its own cost and expense (and
without any right of reimbursement from any other party hereto), promptly take
such action as may be necessary duly to discharge any such Lien.

                    (b) The Loan Participant covenants and agrees with each of
the Lessee, the Owner Trustee, the Owner Participant and the Indenture Trustee
that the Loan Participant shall not cause or permit to exist any Lien on or
against all or any portion of the Equipment, the Pledged Equipment, the Trust
Estate or the Indenture Estate arising as a result of (i) claims against the
Loan Participant not related to its interest in the Equipment, the Pledged
Equipment and the Trust Estate, (ii) acts of the Loan Participant not
contemplated by, or failure of the Loan Participant to take any action it is
expressly required to perform by, any of the Operative Agreements, (iii) claims
against the Loan Participant relating to Taxes or expenses that are not
indemnified against by the Lessee pursuant to Section 7, or (iv) claims against
the Loan Participant arising out of the transfer by the Loan Participant of all
or any portion of its interest in the Equipment, the Pledged Equipment, the
Indenture Estate or the Operative Agreements, other than a transfer permitted by
the Operative Agreements and with respect to which the Loan Participant will, at
its own cost and expense (and without any right of reimbursement from the
Lessee), promptly take such action as may be necessary duly to discharge any
such Lien.

         Section 6.5 Covenants of Owner Trustee, Owner Participant and Indenture
Trustee. Each of the Owner Participant and Trust Company, in its individual and
trust capacities, hereby agrees, as to its own actions only and severally and
not jointly, with (a) the Loan Participant and the Indenture Trustee (so long as
the Equipment Notes remain outstanding), not to amend, supplement, or otherwise
modify any provision of the Trust Agreement in such a manner as to adversely
affect the rights of the Loan Participant or the Indenture Trustee without the
prior written consent of such party and (b) with the Lessee, not to terminate or
revoke the Trust Agreement or the trust created by the Trust Agreement prior to
the payment in full and discharge of the Equipment Notes and all other
indebtedness secured by the Indenture and the final discharge thereof. Each of
the Trust Company and the Indenture Trustee agrees, for the benefit of the
Lessee and the Owner Participant, to comply with the provisions of the Indenture
and not to amend, supplement, or otherwise modify any provision of the Indenture
except in the manner provided in Article IX thereof. Notwithstanding anything to
the contrary contained herein or in any of the other Operative Agreements, the
Indenture Trustee's obligation to take or refrain from taking any actions, or to
use its discretion (including, but not limited to, the giving or withholding of
consent or approval and the exercise of any rights or remedies under such
Operative Agreement), and any liability therefor, shall, in addition to any
other limitations provided herein or in any of the other Operative Agreements,
be limited by the provisions of the Indenture.


                                       52

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

         Section 6.6 Amendments to Operative Agreements That Are Not Lessee
Agreements. Unless a Lease Event of Default shall have occurred and be
continuing, the Owner Trustee, the Indenture Trustee and the Participants shall
not terminate the Operative Agreements to which the Lessee is not or will not be
a party, or amend, supplement, waive or modify in any manner such Operative
Agreements to which the Lessee is not or will not be a party, (i) except in
accordance with such Operative Agreements in effect on the date hereof (as
amended, modified or supplemented from time to time in accordance with the
terms hereof and of such Operative Agreements), or (ii) adverse to the Lessee or
to any of its rights or interests under any of the Operative Agreements, except
with the prior written consent of the Lessee. Without limiting the generality of
the foregoing, each of the Owner Participant and the Owner Trustee, the Pass
Through Trustee and the Indenture Trustee (as applicable) agrees that, in any
event, unless a Lease Event of Default shall have occurred and be continuing, it
will not amend Section 2.10 or Article IX of the Indenture or Article IX of the
Trust Agreement without the prior written consent of the Lessee.

         Section 6.7 Certain Representations, Warranties and Covenants. The
Lessee hereby confirms its representations, warranties and covenants in Article
6 of the Collateral Agency Agreement, which are hereby incorporated in this
Agreement by this reference as fully as if set forth herein in their entirety.

         Section 6.8 Covenants of the Manager. The Manager hereby confirms the
covenants in Article 7 of the Management Agreement, which are hereby
incorporated in this Agreement by this reference as fully as if set forth herein
in their entirety.

         Section 6.9 Lessee's Purchase in Certain Circumstances.

                    (a) If (A) the Owner Participant or any Affiliate thereof is
or acquires, is acquired by, merges or otherwise consolidates with any company
or Affiliate thereof who would not be an eligible "Transferee" by reason of
Section 6.1(b) (and, in the case of an Affiliate, such entity continues to be an
Affiliate of the Owner Participant after such acquisition, merger or
consolidation), or (B) the Lessee shall have requested a waiver pursuant to
Section 12.3(c) of the Lease and the Lessor and the Owner Participant shall have
refused to grant such waiver or shall have granted such waiver but shall have
refused to further waive the requirement that amounts be deposited in the
Special Insurance Reserves Account pursuant to the Collateral Agency Agreement
in connection with the granting of the initial waiver, or (C) the Lessee shall
have elected to purchase, or arrange a purchase of, the Beneficial Interest
pursuant to Section 22.1 of the Lease, the Lessee may elect either to:


                                       53

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

                                 (i) keep the Lease and the Equipment Notes in
place and require that the Owner Participant, and the Owner Participant agrees
to, transfer its Beneficial Interest in accordance with the terms of Section 6.1
(other than provisions of Sections 6.1(a), (b), (i), (l) and (n)) to the Lessee
or such other transferee as the Lessee may designate (such transfer to occur on
a Determination Date which is designated by the Lessee by written notice to the
Owner Participant not less than 60 days prior to such Determination Date) at a
purchase price (the "Beneficial Interest Purchase Price") equal to (1) the
Equity Portion of Termination Amount as of the date of such transfer, plus (2)
in the case of clause (B) above, the excess, if any, of the Fair Market Sales
Value of the Equipment calculated as of such date over the Termination Value as
of such date, plus (3) the Equity Portion of Basic Rent accrued and unpaid
therefor as of the date of such transfer (exclusive of any Basic Rent payable on
such date), plus (4) without duplication or limitation of any amount under
clauses (1) to (3) above, the sum of the Accumulated Equity Deficiency Amount
and Late Payment Interest related thereto, plus (5) without duplication or
limitation of any amount under clauses (1) to (4) above, that portion of
Supplemental Rent due and unpaid on such date that is payable to the Owner
Participant; provided, however, that, without regard to such Owner Participant's
obligations under the Operative Agreements relating to the period prior to such
transfer, any transfer of the Beneficial Interest pursuant to this Section 6.9
shall be without additional representations or warranties of or other
liabilities or obligations on such Owner Participant other than those expressly
set forth in the Owner Participant Agreements; provided, further, that in case
such Owner Participant holds less than 100% of the Beneficial Interest (after
excluding any Beneficial Interests held by the Lessee, TILC or any Affiliate of
either thereof), the purchase price for such Owner Participant's Beneficial
Interest shall be equal to (x) (i) the sum of the amounts calculated under
clauses (1), (2), (3) and (4) above multiplied by (ii) a fraction equal to the
portion such Owner Participant's Beneficial Interest bears to 100% of the
Beneficial Interests, plus (y) without duplication or limitation of any amount
under clause (x) above, that portion of Supplemental Rent due and unpaid on such
date that is payable to such Owner Participant; or

                                 (ii) on a Determination Date which is
designated by the Lessee by written notice to the Owner Trustee and the
Indenture Trustee not less than 60 days prior to such Determination Date,
purchase the Equipment for a purchase price equal to (I) the Termination Amount
calculated as of such Determination Date, plus (II) in the case of clause (B)
of the lead paragraph of this Section 6.9(a), the excess, if any, of the Fair
Market Sales Value of the Equipment calculated as of such date over the
Termination Value as of such Determination Date, plus (III) without duplication
or limitation, all other amounts due and owing by the Lessee under the Operative
Agreements with respect to the Equipment, including, without limitation, all
accrued and unpaid Basic Rent therefor as of such Determination Date (exclusive
of any Basic Rent payable on such date), Make-Whole Amount then payable on the
Equipment Notes pursuant to Section 2.10(c) of the Indenture with respect to the
Equipment and Late Payment Premium, if any, due


                                       54

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
and owing under the Operative Agreements with respect to the Equipment so that,
after receipt and application of all such payments the Owner Participant shall
be entitled under the terms of the Collateral Agency Agreement to receive, and
does receive, in respect of all such Units, the sum of the Accumulated Equity
Deficiency Amount (without duplication of any amount provided under clauses (I)
- - (III) above) and Late Payment Interest related thereto and any other amounts
of Supplemental Rent due and unpaid on such Determination Date that are payable
to the Owner Participant.

                    (b) If the Lessee elects to exercise the option to purchase
the Equipment (as opposed to such Owner Participant's Beneficial Interest) as
provided in Section 6.9(a), the Lessee shall, as the purchase price therefor pay
the purchase price, as specified in Section 6.9(a)(ii), with respect to the
Equipment, together with all other amounts due and owing by the Lessee under the
Operative Agreements.

                    (c) In connection with any purchase of the Equipment under
this Section 6.9, the Lessee will make the payments required by Section
6.9(a)(ii) in immediately available funds against delivery of a bill of sale
transferring and assigning to the Lessee all right, title and interest of the
Lessor in and to the Equipment on an "as-is" "where-is" basis and containing a
warranty with respect to the absence of any Lessor's Lien. In such event, the
costs of preparing the bill of sale or other transfer documents and all other
documentation relating to such purchase and the costs of any necessary filings
related thereto will be borne by the Lessee.

                    If the Lessee shall fail to fulfill its obligations under
Sections 6.9(b) and (c), all of the Lessee's obligations under the Lease and the
Operative Agreements, including, without limitation, the Lessee's obligation to
pay installments of Rent, with respect to the Equipment shall continue.

         Section 6.10 Owner Participant as Affiliate of Lessee. If at any time
the original or any successor Owner Participant shall be an Affiliate of the
Lessee, such Owner Participant and the Lessee agree that, notwithstanding
Section 9.5 of the Indenture, they will not vote its Beneficial Interest in any
respect if there is another Owner Participant not affiliated with the Lessee,
and, if there is no such Owner Participant, they will not vote its Beneficial
Interest to modify, amend or supplement any provision of the Lease or this
Agreement or give, or permit the Owner Trustee to give, any consent, waiver,
authorization or approval thereunder if any such action could reasonably be
expected to adversely affect in a material manner the Indenture Trustee or any
holder of an Equipment Note unless such action shall have been consented to by
the Pass Through Trustee.

         Section 6.11 Records; U.S. Income Tax Information. Each of the Lessee,
TRMI and TILC covenants that it will maintain or cause to be maintained and
retain


                                       55

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
sufficient factual records (to the extent such records are maintained by the
Lessee, TRMI and TILC respectively, any sublessee, or any trustee for or
Affiliate of any thereof, in the ordinary course of their respective businesses)
to enable the Owner Participant to prepare required United States federal, state
and local tax returns. Upon request of the Owner Participant, the Lessee, TRMI
and TILC, respectively, shall deliver such records to the Owner Participant at
the expense of the Owner Participant. In addition, as soon as practicable, the
Lessee, TRMI and TILC, respectively, shall provide or cause to be provided (at
the expense of the Lessee) to the Owner Participant such information (in form
and substance reasonable satisfactory to the Owner Participant) as the Owner
Participant may reasonably request from and as shall be reasonably available to
the Lessee, TRMI and TILC, respectively, to enable the Owner Participant to
fulfill its tax return filing obligations, to respond to requests for
information, to verify information in connection with any income tax audit and
to participate effectively in any tax contest. Such information may include,
without limitation, information as to the location of and use of the Equipment
from time to time (to the extent such information is available on the basis of
the records regularly maintained by the Lessee, TRMI and TILC, respectively, any
sublessee, or any trustee for or Affiliate of any thereof, in the ordinary
course of their respective businesses).

SECTION 7. LESSEE'S INDEMNITIES.

         Section 7.1 General Tax Indemnity.

                    (a) Tax Indemnitee Defined. For purposes of this Section
7.1, "Tax Indemnitee" means the Pass Through Trustee, both in its individual
capacity and as trustee, the Owner Participant, its Affiliates (including,
without limitation, Philip Morris Capital Corporation, Grant Holdings, Inc.,
Trimaran Leasing Investors, L.L.C.-I, Trimaran Leasing Investors, L.L.C.-II and
Trimaran Leasing, L.P.), the Owner Trustee, the Trust Company, the Indenture
Trustee, both in its individual capacity and as trustee, each of their
successors or assigns permitted under the terms of the Operative Agreements, any
officer, director, employee or agent of any of the foregoing, the Trust Estate
and the Indenture Estate; "Equity Tax Indemnitee" means the Owner Participant,
its Affiliates, the Owner Trustee, the Trust Company, and each of their
respective successors, assigns, officers, directors, employees and agents and
the Trust Estate; "Lender Tax Indemnitee" means each Tax Indemnitee which is not
an Equity Tax Indemnitee.

                    (b) Taxes Indemnified. Except as provided below, all
payments by the Lessee to any Tax Indemnitee in connection with the transactions
contemplated by the Operative Agreements shall be free of withholdings of any
nature whatsoever (and at the time that any payment is made upon which any
withholding is required the Lessee shall pay an additional amount such that the
net amount actually received will, after such withholding and on an After-Tax
Basis,


                                       56

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
equal the full amount of the payment then due) and shall be free of expense to
each Tax Indemnitee for collection or other charges. Whether or not any Unit is
accepted under the Lease, or the Closing occurs, the Lessee shall defend,
indemnify and save harmless each Tax Indemnitee from and against, and as between
the Lessee and each Tax Indemnitee the Lessee hereby assumes liability with
respect to, all fees (including, without limitation, license fees and
registration fees), taxes (including, without limitation, income, gross
receipts, franchise, sales, use, value added, property and stamp taxes),
assessments, levies, imposts, duties, charges or withholdings of any nature
whatsoever, together with any and all penalties, additions to tax, fines or
interest thereon ("Taxes") imposed against any of the Tax Indemnitees, any item
of Equipment or Pledged Equipment or the Lessee, upon, arising from or relating
to

                                 (i) any item of the Equipment or the Pledged
Equipment,

                                 (ii) the construction, manufacture, financing,
purchase, delivery, ownership, acceptance, rejection, possession, improvement,
use, operation, leasing, subleasing, condition, maintenance, repair,
refinancing, registration, sale, return, replacement, storage, abandonment or
other application or disposition of any item of the Equipment or the Pledged
Equipment,

                                 (iii) the rental payments, receipts or earnings
arising from any item of the Equipment or the Pledged Equipment or payable
pursuant to the Operative Agreements, or

                                 (iv) the Operative Agreements, the Equipment
Note or any Sublease or any Pledged Equipment Lease or otherwise with respect to
or in connection with the transactions contemplated thereby.

                    (c) Taxes Excluded. The indemnity provided in Section 7.1(b)
shall not include:

                                 (i) as to any Equity Tax Indemnitee, any Income
Tax imposed by the United States federal government (but not excluding any
Income Tax required to make a payment on an After-Tax Basis);

                                 (ii) as to any Equity Tax Indemnitee, any
Income Tax imposed by any state, local or foreign government or taxing authority
or subdivision thereof; provided, however, that this exclusion shall not apply
to the extent such Taxes (but not including Income Taxes imposed on net income)
are attributable to (I) the use or location of any item of the Equipment or the
activities of the Lessee or its Affiliates or any sublessee in the taxing
jurisdiction, (II) the presence or organization of the Lessee or any sublessee
in the taxing jurisdiction, (III) the status of the Lessee or any sublessee as a
foreign entity or as an entity owned by a foreign person or (IV)


                                       57

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
Lessee or sublessee having made (or deemed to have made) payments to the Tax
Indemnitee from the relevant jurisdiction; provided, further, however, that the
preceding proviso shall not apply to any jurisdiction where the Owner Trust, the
Owner Trustee (other than in its individual capacity) or the Owner Participant
has its legal domicile or principal place of business (determined without regard
to the transactions contemplated by the Operative Agreement);

                                 (iii) as to any Equity Tax Indemnitee, any Tax
that is imposed as a result of the sale, transfer or other disposition, by the
Lessor or the Owner Participant of any of its rights with respect to any item of
Equipment or the Owner Participant's interest in the Trust Estate unless such
sale, transfer or other disposition is a result of an Event of Default, results
from any substitution, repair or replacement of any item of Equipment under the
Lease, or results from any sale, transfer or disposition required under the
Lease (including but not limited to Section 10 of the Lease);

                                 (iv) as to any Equity Tax Indemnitee, any Taxes
to the extent they exceed the Taxes that would have been imposed had an Equity
Tax Indemnitee not transferred, sold or disposed of its interest or rights in
any item of the Equipment to a non-U.S. Person;

                                 (v) Taxes imposed on a Lender Tax Indemnitee
with respect to any period after the payment in full of the Equipment Notes;
provided that the exclusion set forth in this clause (v) shall not apply to
Taxes to the extent such Taxes relate to events occurring or matters arising
prior to or simultaneously with the applicable time of payment of the Equipment
Notes or relate to any payment made by the Lessee after such date;

                                 (vi) as to any Tax Indemnitee, Taxes to the
extent caused by any misrepresentation or breach of warranty or covenant by such
Tax Indemnitee or a Related Party under any of the Operative Agreements or by
the gross negligence or willful misconduct of such Tax Indemnitee or a Related
Party;

                                 (vii) as to any Lender Tax Indemnitee, Taxes
which become payable as a result of a sale, assignment, transfer or other
disposition (whether voluntary or involuntary) by such Lender Tax Indemnitee of
all or any portion of its interest in the Equipment or any part thereof, the
Pledged Equipment or any part thereof, the Trust Estate, the Indenture Estate or
any of the Operative Agreements or rights created thereunder, other than as a
result of (A) the substitution, modification or improvement of the Equipment or
any part thereof or the Pledged Equipment or any part thereof, (B) a
modification to the Operative Agreements, or (C) a disposition which occurs as
the result of the exercise of remedies upon a Lease Event of Default; provided,
that, notwithstanding the foregoing, the Lessee shall not be obligated to
indemnify any Lender Tax Indemnitee with respect to net income taxes imposed
within the United States as the result of a


                                       58

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
sale, assignment, transfer or other disposition by such Lender Tax Indemnitee or
any Taxes imposed as a result of the status of the Lender Tax Indemnitee as
other than a resident of the United States for tax purposes;

                                 (viii) as to any Lender Tax Indemnitee, Taxes
imposed as the result of such Lender Tax Indemnitee not being a resident of the
United States for tax purposes;

                                 (ix) as to any Lender Tax Indemnitee, Income
Taxes or transfer taxes relating to any payments of principal, interest or Make
Whole Amount, if any, on the Equipment Notes or the Pass Through Certificates
paid to any such Tax Indemnitee that are imposed by (A) any other jurisdiction
in which such Indemnitee is subject to such Taxes as a result of it or an
Affiliate being organized in such jurisdiction or conducting activities in that
jurisdiction unrelated to the transactions contemplated by the Operative
Agreements, (B) the United States federal government or (C) any state or local
government within the United States;

                                 (x) Taxes to the extent directly resulting from
or that would not have been imposed but for (x) in the case of Taxes imposed on
or with respect to any Equity Tax Indemnitee, the existence of any Lessor Liens
with respect to such Equity Tax Indemnitee, (y) in the case of Taxes imposed on
or with respect to any Lender Tax Indemnitee, the existence of any Liens
attributable to the Indenture Trustee or Liens attributable to the Pass Through
Trustee;

                                 (xi) Taxes imposed on a Tax Indemnitee to the
extent that such Taxes would not have been imposed upon such Tax Indemnitee but
for any failure of such Tax Indemnitee or a Related Party to comply with (x) any
certification, information, documentation, reporting or other similar
requirements concerning the nationality, residence, identity or connection with
the jurisdiction imposing such Taxes, if such compliance is required under the
laws or regulations of such jurisdiction to obtain or establish relief or
exemption from or reduction in such Taxes and the Tax Indemnitee or such Related
Party was eligible to comply with such requirement or (y) any other
certification, information, documentation, reporting or other similar
requirements under the Tax laws or regulations of the jurisdiction imposing such
Taxes that would establish entitlement to otherwise applicable relief or
exemption from such Taxes; provided, however, that the exclusion set forth in
this clause (xii) shall not apply (I) if such failure to comply was due to a
failure of the Lessee to provide reasonable assistance on request in complying
with such requirement, (II) if, in the case of Taxes imposed on the Owner
Participant, in the good faith judgment of the Owner Participant there is a risk
of adverse consequence to the Owner Participant or any Affiliate from such
compliance against which the Owner Participant is not satisfactorily
indemnified, (III) in the case of Taxes imposed on the Owner Participant, if any
such failure to comply on the part of the Owner Trustee was the result of the
Owner Trustee's gross negligence or failure to act in accordance with
instructions of the Owner Participant, or (IV) in the


                                       59

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

case of any Tax Indemnitee, unless Lessee shall have given such Tax Indemnitee
prior written notice of such requirements;

                                 (xii) Taxes that are imposed with respect to
any period after the earlier of (x) return of the Equipment to the Lessor in
accordance with, and at a time and place contemplated by the Lease (including
the payment of all amounts due at such time) and (y) the termination of the Term
pursuant to Section 6, 10, 11, 15 or 22 of the Lease and the discharge in full
of Lessee's payment obligation's thereunder unless the Equipment is thereafter
required to be returned, in which case, after such return; provided, however,
that the exclusion set forth in this clause (xii) shall not apply to Taxes to
the extent such Taxes relate to events occurring or matters arising prior to or
simultaneously with such return or termination;

                                 (xiii) as to any Lender Tax Indemnitee, Taxes
in the nature of an intangible or similar tax upon or with respect to the value
of the interest of such Lender Tax Indemnitee in the Indenture Estate, in any
Equipment Note or Pass Through Certificate imposed as a result of such Lender
Tax Indemnitee or any Affiliate of such Lender Tax Indemnitee being organized
in, or conducting activities unrelated to the contemplated transactions in, the
jurisdiction imposing such Taxes;

                                 (xiv) Taxes imposed on the Owner Trustee or the
Indenture Trustee that are on, based on or measured by any trustee fees for
services rendered by such Tax Indemnitee in its capacity as trustee under the
Operative Agreements;

                                 (xv) Taxes imposed on any Tax Indemnitee, or
any other person who, together with such Tax Indemnitee, is treated as one
employer for employee benefit plan purposes, as a result of, or in connection
with, any "prohibited transaction," within the meaning of the provisions of the
Code or regulations thereunder or as set forth in Section 406 of ERISA or the
regulations implementing ERISA or Section 4975 of the Code or the regulations
thereunder;

                                 (xvi) Taxes for so long as (x) such Taxes are
being contested in accordance with the provisions of Section 7.1(e) hereof, (y)
the Lessee is in compliance with its obligations under Section 7.1(e), and (z)
the payment of such Taxes is not required pursuant to Section 7.1(e);

                                 (xvii) Taxes as to which such Tax Indemnitee is
indemnified pursuant to the Tax Indemnity Agreement;

                                 (xviii) any Taxes imposed on or with respect to
any Certificateholder; and

                                 (xix) Taxes imposed as a result of the
authorization or giving of any future amendments, supplements, waivers or
consents with respect to


                                       60

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
any Operative Agreement other than (w) those which are legally required, (x) in
connection with the exercise of remedies pursuant to Section 15 of the Lease,
(y) such as have been proposed by the Lessee or consented to by the Lessee or
(z) those that are required pursuant to the terms of the Operative Agreements.

                    (d) Payments to Tax Indemnitee. The Lessee agrees to pay, on
demand, any and all Taxes indemnified under this Section 7.1 ("Indemnified
Taxes"), and to keep at all times all and every part of each item of the
Equipment and Pledged Equipment free and clear of all Indemnified Taxes which
might in any way affect the interest of any Tax Indemnitee therein or result in
a Lien upon any such item of the Equipment or Pledged Equipment; provided,
however, that the Lessee shall be under no obligation to pay any Tax so long as
either the Tax Indemnitee or the Lessee is contesting in good faith and by
appropriate legal proceedings such tax and the nonpayment thereof does not, in
the reasonable opinion of the Tax Indemnitee, materially adversely affect the
interest of any Tax Indemnitee hereunder or under the Indenture.

                    Subject to Section 7.1(e), if any Indemnified Taxes shall
have been charged or levied against any Tax Indemnitee directly and paid by such
Tax Indemnitee after such Tax Indemnitee shall have given written notice thereof
to the Lessee and the same shall have remained unpaid for a period of ten
Business Days thereafter, the Lessee shall reimburse such Tax Indemnitee
payment.

                    (e) Contests. If a written claim is made by any taxing
authority against a Tax Indemnitee for any Taxes with respect to which the
Lessee may be required to indemnify against hereunder (a "Tax Claim"), such Tax
Indemnitee shall give the Lessee written notice of such Tax Claim promptly (but
in any event within twenty (20) days) after its receipt, and shall furnish
Lessee with copies of such Tax Claim and all other writings received from the
taxing authority to the extent relating to such claim (but failure to so notify
the Lessee shall relieve the Lessee of its obligations hereunder only to the
extent it effectively precludes a contest of the claim). The Tax Indemnitee
shall not pay such Tax Claim until at least thirty (30) days after providing the
Lessee with such written notice, unless (a) the Tax Indemnitee is required to do
so by law or regulation and (b) in the written notice described above, the Tax
Indemnitee has notified the Lessee of such requirement. If the Lessee shall so
request within 30 days after receipt of such notice, then such Tax Indemnitee
shall in good faith at Lessee's expense contest such Tax; provided, however,
that to the extent the contest involves only Taxes constituting property taxes,
sales taxes, or use taxes and does not involve any taxes or other issues
relating to a Tax Indemnitee which are unrelated to the transactions
contemplated by the Operative Agreements and if no Equity Insufficiency
Circumstance exists, such contest shall be undertaken by the Lessee at the
Lessee's expense and at no-after-tax cost to the Lessor or the Owner
Participant, but if such contest would involve any other type of Tax or any
taxes or issues relating to a Tax Indemnitee which are


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unrelated to the transactions contemplated by Operative Agreements or if an
Equity Insufficiency exists, then such Tax Indemnitee may, in its sole
discretion, control such contest (including selecting the forum for such
contest, and determining whether any such contest shall be conducted by (i)
paying such Tax under protest or (ii) resisting payment of such Tax or (iii)
paying such Tax and seeking a refund thereof; provided, further, however, that
at such Tax Indemnitee's option, such contest shall be conducted by the Lessee
in the name of such Tax Indemnitee). In no event shall such Tax Indemnitee be
required or the Lessee be permitted to contest any Tax for which the Lessee is
obligated to indemnify pursuant to this Section unless: (i) the Lessee shall
have acknowledged in writing its liability to such Tax Indemnitee for an
indemnity payment pursuant to this Section as a result of such claim if and to
the extent such Tax Indemnitee or the Lessee, as the case may be, shall not
prevail in the contest of such claim; provided, however, that the Lessee shall
not be required to indemnify for such Taxes to the extent the results of the
contest clearly and unambiguously demonstrate that the Tax is not an indemnified
Tax; (ii) such Tax Indemnitee shall have received the opinion of independent tax
counsel selected by the Tax Indemnitee and reasonably satisfactory to the Lessee
furnished at the Lessee's sole expense, to the effect that a reasonable basis
exists for contesting such claim or, in the event of an appeal of a court
decision, that it is more likely than not that an appellate court or an
administrative agency with appellate jurisdiction, as the case may be, will
reverse or substantially modify the adverse determination; (iii) the Lessee
shall have agreed to pay such Tax Indemnitee on demand (and at no after-tax
costs to the Lessor and the Owner Participant) all reasonable costs and expenses
that such Tax Indemnitee may incur in connection with contesting such claim
(including, without limitation, all costs, expenses, reasonable legal and
accounting fees, disbursements, penalties, interest and additions to the Tax);
(iv) no Lease Default described in Section 14(a), 14(b), 14(g) or 14(h) of the
Lease or a Lease Event of Default shall have occurred and shall have been
continuing, unless the Lessee shall have posted a satisfactory bond or other
security with respect to the costs of such contest and the Taxes which may be
required to be indemnified; (v) such Tax Indemnitee shall have determined that
the action to be taken will not result in any substantial danger of sale,
forfeiture or loss of, or the creation of any Lien, or the Lessee shall have or
otherwise made a provision to protect the interest of such Tax Indemnitee (in a
manner satisfactory to such Tax Indemnitee), on the Equipment or any portion
thereof or any interest therein; (vi) the amount of such claims alone, or, if
the subject matter thereof shall be of a continuing or recurring nature, when
aggregated with substantially identical potential claims shall be (A) at least
$5,000 in the event of a Lessee controlled contest, or (B) $25,000 in the event
of a Tax Indemnitee controlled contest; and (vii) if such contest shall be
conducted in a manner requiring the payment of the claim, the Lessee shall have
paid the amount required (and at no after-tax costs to the Lessor and the Owner
Participant). The Lessee shall cooperate with the Tax Indemnitee with respect to
any contest controlled and conducted by the Tax Indemnitee and the Tax
Indemnitee shall consult with the Lessee regarding the conduct of such contest.
The Tax Indemnitee shall cooperate with respect to any contest controlled and
conducted by


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                                          Participation Agreement (TRLI 2001-1B)
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the Lessee and the Lessee shall consult with the Tax Indemnitee regarding the
conduct of such contest.

                    Notwithstanding anything to the contrary contained in this
Section 7.1, no Tax Indemnitee shall be required to contest any claim if the
subject matter thereof shall be of a continuing or recurring nature and shall
have previously been adversely decided to the Tax Indemnitee pursuant to the
contest provisions of this Section unless there shall have been a change in the
law (including, without limitation, amendments to statutes or regulations,
administrative rulings or court decisions) enacted, promulgated or effective
after such claim shall have been so previously decided, and such Tax Indemnitee
shall have received an opinion of independent tax counsel selected by the Tax
Indemnitee and reasonably satisfactory to the Lessee, furnished at the Lessee's
sole expense, to the effect that such change is favorable to the position which
such Tax Indemnitee or the Lessee, as the case may be, had asserted in such
previous contest and as a result of such change, there is a reasonable basis to
contest such claim.

                    Notwithstanding anything contained in this Section 7.1, a
Tax Indemnitee will not be required to contest the imposition of any Tax and
shall be permitted to settle or compromise any claim without the Lessee's
consent if such Tax Indemnitee (A) shall waive its right to indemnity under this
Section 7.1 with respect to such Tax (and any directly related claim and any
claim the outcome of which is determined based upon the outcome of such claim)
and (B) shall pay to the Lessee any amount previously paid or advanced by the
Lessee pursuant to this Section 7.1 with respect to such Tax, plus interest at
the rate that would have been payable by the relevant taxing authority with
respect to a refund of such Tax.

                    (f) Payments to Lessee. With respect to any payment or
indemnity hereunder, such payment or indemnity shall have included an amount
payable to the Tax Indemnitee sufficient to hold such Tax Indemnitee harmless on
an After- Tax Basis from all Taxes required to be paid by such Tax Indemnitee
with respect to such payment or indemnity under the laws of any federal, state
or local government or taxing authority in or of the United States, or under the
laws of any taxing authority or governmental subdivision in or of a foreign
country; provided that, if any Tax Indemnitee realizes and recognizes a
permanent tax benefit by reason of such payment or indemnity (whether such tax
benefit shall be by means of a foreign tax credit, investment tax credit,
depreciation or recovery deduction or otherwise), such Tax Indemnitee shall pay
to the Lessee an amount equal to the sum of such tax benefit plus any tax
benefit realized as the result of any payment made pursuant to this proviso,
when, as, if and to the extent realized; provided further that, (i) if at the
time such payment shall be due to the Lessee, a Lease Event of Default shall
have occurred and be continuing, such amount shall not be payable until such
Lease Event of Default shall have been cured, and (ii) the amount which such Tax
Indemnitee shall be required to pay to the Lessee shall not exceed the amounts
which


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                                          Participation Agreement (TRLI 2001-1B)
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the Lessee has theretofore paid such Tax Indemnitee hereunder with respect to
such indemnity or a substantially identical indemnity.

                    For purposes of this Section 7.1, in determining the order
in which the consolidated (for federal income tax purposes) group to which such
Tax Indemnitee belongs utilizes withholding or other foreign taxes as a credit
against such group's United States income taxes, such Tax Indemnitee (and such
group) shall be deemed to utilize (i) first, all foreign taxes other than those
described in clauses (ii) and (iii) below; provided, however, that such other
foreign taxes which are carried back to the taxable year for which a
determination is being made pursuant to such clause (i) shall be deemed utilized
after the foreign taxes described in clause (ii) below, (ii) then, on a pari
passu basis, the foreign taxes indemnified hereunder together with all other
foreign taxes (including fees, taxes and other charges hereunder) with respect
to which such Tax Indemnitee (or any member of such group) is entitled to obtain
indemnification pursuant to an indemnification provision contained in any lease,
loan agreement, financing document or participation agreement (including,
without limitation, this Agreement) pursuant to which there is an agreement that
foreign taxes shall be, or shall be deemed to be, utilized on a basis no less
favorable to the indemnitor than those contemplated in this paragraph, and (iii)
third, foreign taxes attributable to transactions entered into by such Tax
Indemnitee (or any member of such group) which did not provide for foreign taxes
to be utilized or deemed utilized on at least a pari passu basis.

                    (g) Reports. In the event any reports with respect to
Indemnified Taxes are required to be made, the Lessee will either prepare and
file such reports (and in the case of reports which are required to be filed on
the basis of individual items of Equipment, such reports shall be prepared and
filed in such manner as to show, if required, the interest of each Tax
Indemnitee in such items of Equipment) or, if it shall not be permitted to file
the same, it will notify each Tax Indemnitee of such reporting requirements,
prepare such reports in such manner as shall be satisfactory to each Tax
Indemnitee and deliver the same to each Tax Indemnitee within a reasonable
period prior to the date the same is to be filed. The Lessee shall provide such
information as the Owner Participant or the Lessor may reasonably require from
the Lessee to enable the Owner Participant and the Lessor to fulfill their
respective tax filing, tax audit, and tax litigation obligations.

                    (h) Survival. In the event that, during the continuance of
this Agreement, any Indemnified Tax accrues or becomes payable or is levied or
assessed (or is attributable to the period of time during which the Lease is in
existence or prior to the return of Equipment in accordance with the provisions
of the Lease) which the Lessee is or will be obligated to pay or reimburse,
pursuant to this Section 7.1, such liability shall continue, notwithstanding the
expiration of the Lease, until all such Taxes are paid or reimbursed by the
Lessee.


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                                          Participation Agreement (TRLI 2001-1B)
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                    (i) Affiliated Group. For purposes of applying this Section
7.1 with respect to any Tax, the term "Owner Participant" shall include each
member of the affiliated group of corporations with which Grant Holdings, Inc.
(and its successors and assigns) files consolidated or combined tax returns
relating to such Imposition.

                    (j) Income Tax. For purposes of this Section 7.1, the term
"Income Tax" means any Tax based on or measured by or with respect to gross or
net income (including without limitation, capital gains taxes, personal holding
company taxes, minimum taxes and tax preferences) or gross or net receipts and
Taxes which are capital, net worth, conduct of business, franchise or excess
profits taxes and interest, additions to tax, penalties, or other charges in
respect thereof (provided, however, that Taxes that are, or are in the nature
of, sales, use, rental, value-added, excise, ad valorem, or property (whether
tangible or intangible) taxes shall not constitute an Income Tax).

                    (k) Certain Withholding. If the Indenture Trustee fails to
with hold any Tax required to be withheld with respect to any payment to a
Lender Tax Indemnitee or any claim is otherwise asserted by a taxing authority
against any Equity Tax Indemnitee for or on account of any amount required to be
withheld from any payment to a Lender Tax Indemnitee or Certificateholder, the
Lessee will indemnify each Equity Tax Indemnitee (without regard to any
exclusions in Section 7.1(c) hereof) on an After-Tax Basis against any Taxes
required to be withheld and any interest, penalties, and additions to tax with
respect thereto, along with other costs (including attorneys' fees) incurred in
connection with such claim.

         Section 7.2 General Indemnification.

                    (a) Claims Defined. For the purposes of Sections 7.2, 7.3
and 7.4, "Claims" shall mean any and all costs, expenses, liabilities,
obligations, losses, damages, penalties, actions or suits or claims of
whatsoever kind or nature (whether or not on the basis of negligence, strict or
absolute liability or liability in tort) which may be imposed on, incurred by,
suffered by, or asserted against an Indemnified Person, any Unit or any Pledged
Unit and, except as otherwise expressly provided in Section 7.2, 7.3 and 7.4,
shall include, but not be limited to, all reasonable out-of-pocket costs,
disbursements and expenses (including legal fees and expenses) paid or incurred
by an Indemnified Person in connection therewith or related thereto.

                    (b) Indemnified Person Defined. For the purposes of Sections
7.2, 7.3 and 7.4, "Indemnified Person" means the Owner Participant, the Owner
Trustee, Trust Company, the Indenture Trustee, the Pass Through Trustee, each of
their Affiliates and each of their respective directors, officers, employees,
successors and permitted assigns, agents and servants, the Trust Estate and the
Indenture Estate (the respective directors, officers, employees, successors and
permitted assigns, agents and servants of the Owner Participant, the Owner
Trustee, Trust Company, the Indenture Trustee, the Pass Through Trustee and each
of their Affiliates, as applicable, together with the Owner Participant, the
Owner Trustee, Trust Company,


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                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
the Indenture Trustee, the Pass Through Trustee and each of their Affiliates, as
the case may be, being referred to herein collectively as the "Related
Indemnitee Group" of the Owner Participant, the Indenture Trustee, the Owner
Trustee, the Pass Through Trustee and the Trust Company, respectively).

                    (c) Claims Indemnified. Whether or not any Unit is accepted
under the Lease, or the Closing occurs, and subject to the exclusions stated in
Section 7.2(d) below, Lessee agrees to indemnify, protect, defend and hold
harmless each Indemnified Person on an After-Tax Basis against Claims directly
or indirectly resulting from or arising out of or alleged to result from or
arise out of (whether or not such Indemnified Person shall be indemnified as to
such Claim by any other Person but subject to Section 7.2(g)):

                                 (i) this Agreement or any other Operative
Agreement or any of the transactions contemplated hereby and thereby or any Unit
or Pledged Unit or the ownership, lease, operation, possession, modification,
improvement, abandonment, use, non-use, maintenance, lease, sublease,
substitution, control, repair, storage, alteration, transfer or other
application or disposition, return, overhaul, testing, servicing, replacement or
registration of any Unit or Pledged Unit (including, without limitation, injury,
death or property damage of passengers, shippers or others, and environmental
control, noise and pollution regulations, or the presence, discharge, treatment,
storage, handling, generation, disposal, spillage, release, escape of or
exposure of any Person or thing to (directly or indirectly) Hazardous Sub
stances or damage to the environment (including, without limitation, costs of
investigations or assessments, clean-up costs, response costs, remediation
costs, removal costs, restoration costs, monitoring costs, costs of corrective
actions and natural resource damages)) whether or not in compliance with the
terms of the Lease or the Collateral Agency Agreement, as applicable, or by any
of the commodities, items or materials from time to time contained in any Unit
or Pledged Unit, whether or not in compliance with the terms of the Lease or the
Collateral Agency Agreement, as applicable, or by the inadequacy of any Unit or
Pledged Unit or deficiency or defect in any Unit or Pledged Unit or by any other
circumstances in connection with any Unit or Pledged Unit or by the performance
of any Unit or Pledged Unit or any risks relating thereto;

                                 (ii) the construction, manufacture, financing,
refinancing, design, purchase, acceptance, rejection, delivery, non-delivery or
condition of any Unit or any Pledged Unit (including, without limitation, latent
and other defects, whether or not discoverable, and any claim for patent,
trademark or copyright infringement);

                                 (iii) any act or omission (whether negligent or
other wise) or any breach of or failure to perform or observe, or any other
non-


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                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
compliance with, any covenant, condition or agreement to be performed by, or
other obligation of, the Lessee or any Affiliate of the Lessee under any of the
Operative Agreements, or the falsity of any representation or warranty of the
Lessee or any Affiliate of the Lessee in any of the Operative Agreements to
which it is a party or in any document or certificate delivered by the Lessee or
any Affiliate of the Lessee in connection therewith other than representations
and warranties in the Tax Indemnity Agreement;

                                 (iv) the offer, sale or delivery of any
Equipment Notes or Pass Through Certificates or any interest in the Trust Estate
or in connection with a refinancing in accordance with the terms hereof; and

                                 (v) any violation of law, rule, regulation or
order by the Lessee or any Affiliate of Lessee or any Sublessee or any Pledged
Equipment Lessee or their respective directors, officers, employees, agents or
servants.

                    (d) Claims Excluded. The following are excluded from the
Lessee's agreement to indemnify under this Section 7.2:

                                 (i) Claims with respect to any Unit to the
extent attributable to acts or events occurring after (except (A) in any case
where remedies are being exercised under Section 15 of the Lease for so long as
the Lessor shall be entitled to exercise remedies under such Section 15, or (B)
the Lessee has assumed any of the obligations with respect to the Equipment
Notes under Section 3.6 of the Indenture and the Equipment Notes remain
outstanding under the Indenture) the later to occur of (x) with respect to such
Unit, the earlier to occur of the termination of the Lease or the expiration of
the Lease Term in accordance with the terms thereof, and (y) with respect to
such Unit, the return of such Unit to the Lessor in accordance with the terms of
the Lease (it being understood that, so long as any such Unit is in storage as
provided in Section 6.1(c) of the Lease, the date of return thereof for the
purpose of this clause (i) shall be the last day of the Storage Period);

                                 (ii) Claims which are Taxes, whether or not the
Lessee is required to indemnify therefor under Section 7.1 hereof or under the
Tax Indemnity Agreement or any loss of tax benefits or increases in tax
liability whether or not the Lessee is required to indemnify a Indemnified
Person elsewhere in the Operative Agreements; provided that this clause (ii)
shall not apply to Taxes necessary to pay Claims on an After-Tax Basis;

                                 (iii) with respect to any particular
Indemnified Person, Claims to the extent resulting from (x) the gross negligence
or willful misconduct of such Indemnified Person or a Related Party, or (y) any
breach of any covenant to be performed by such Indemnified Person or a Related
Party under any of the Operative Agreements, or the falsity of any
representation or warranty of such Indemnified


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                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

Person or a Related Party in any of the Operative Agreements or in a document or
certificate delivered in connection therewith;

                                 (iv) Claims to the extent attributable to any
transfer by the Lessor of the Equipment or any portion thereof or any transfer
by the Owner Participant of all or any portion of its interest in the Trust
Estate other than (A) any transfer after a Lease Event of Default, (B) the
transfer of all or any portion of the Equipment or any Owner Participant's
interest in the Equipment to the Lessee, (C) the transfer of all or any portion
of the Equipment to a third party pursuant to Lessee's election to terminate the
Lease or (D) any transfer of all or any portion of the Equipment pursuant to
Section 6.9;

                                 (v) with respect to any particular Indemnified
Person, unless such transfer is required by the terms of the Operative
Agreements or occurs during the continuance of a Lease Event of Default, Claims
relating to any offer, sale, assignment, transfer or other disposition
(voluntary or involuntary) (a) in the case of the Owner Participant, of any of
its interest in the Beneficial Interest (other than pursuant to Section 6.9) or
(b) with respect to the Loan Participant, of all or any portion of the Loan
Participant's interest in the Equipment Notes or the collateral therefor;

                                 (vi) with respect to any particular Indemnified
Person, Claims resulting from the imposition of (x) any Lessor's Lien
attributable to such Indemnified Person or a Related Party or (y) any Lien
attributable to such Indemnified Person or a Related Party not expressly
permitted under the Operative Agreements or which such Indemnified Person is
required to remove pursuant to the terms of the Operative Agreements;

                                 (vii) with respect to any particular
Indemnified Person, Claims to the extent the risk thereof has been expressly
assumed by such Indemnified Person in connection with the exercise by such
Indemnified Person of the right of inspection granted under Section 6.2 of the
Lease, inspection or restenciling under Section 6.1(c) of the Lease or
inspection under Section 13.2 of the Lease;

                                 (viii) Claims relating to any amount that
constitutes principal of, or interest or premium on the Equipment Notes or the
Pass Through Certificates;

                                 (ix) Claims relating to the payment of any
amount which constitutes Transaction Costs which the Owner Trustee is obligated
to pay pursuant to Section 2.5(a) (other than those that the Lessee may be
required to pay under Section 2.5(c) or Section 2.5(e)) or any other amount to
the extent such Indemnified Person or a Related Party has expressly agreed to
pay such amount


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                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
without a right of reimbursement, or any Claim payable by any Indemnified Person
pursuant to any provision of any Operative Agreement that expressly states that
such Claim is not subject to indemnification or reimbursement by the Lessee, or
any Claim arising out of obligations expressly assumed by the Indemnified Person
seeking indemnification or a Related Party;

                                 (x) Claims relating to any amount that is an
ordinary and usual operating or overhead expense of any Indemnified Person (it
being understood out-of-pocket expenses payable to third parties do not
constitute "ordinary and usual operating or overhead expenses");

                                 (xi) Claims relating to an Indenture Event of
Default that is not attributable to a Lease Event of Default;

                                 (xii) with respect to the Owner Trustee in its
individual and trust capacities, and its Related Indemnitee Group, Claims
relating to a failure on the part of the Owner Trustee to distribute in
accordance with the Trust Agreement any amounts distributable by it thereunder;

                                 (xiii) with respect to the Indenture Trustee in
its individual and trust capacities, Claims relating to failure on the part of
the Indenture Trustee to distribute in accordance with the Indenture any amounts
distributable by it thereunder;

                                 (xiv) with respect to the Pass Through Trustee
in its individual and trust capacities, Claims relating to failure on the part
of the Pass Through Trustee to distribute in accordance with the Pass Through
Trust Agreement any amounts distributable by it thereunder;

                                 (xv) Claims relating to the offer, sale or
delivery of any Equipment Note or any interest in the Trust Estate;

                                 (xvi) Claims relating to any sale, transfer or
holding of the Equipment Notes or Pass Through Certificates being deemed to
result in a "prohibited transaction" under ERISA; or

                                 (xvii) without affecting Lessee's obligations
under Section 2.5(b), Claims relating to the authorization or giving or
withholding of any future amendments, supplements, waivers or consents with
respect to any of the Operative Agreements which amendments, supplements,
waivers or consents are not requested by Lessee or are not specifically required
by the Operative Agreements.

                    (e) Insured Claims. In the case of any Claim indemnified by
the Lessee hereunder which is covered by a policy of insurance maintained by the


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                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
Lessee pursuant to Section 12 of the Lease or otherwise, each Indemnified Person
agrees to provide reasonable cooperation to the insurers in the exercise of
their rights to investigate, defend, settle or compromise such Claim as may be
required to retain the benefits of such insurance with respect to such Claim.

                    (f) Claims Procedure. An Indemnified Person shall, after
obtaining knowledge thereof, promptly notify the Lessee of any Claim as to which
indemnification is sought; provided, however, that the failure to give such
notice shall not release the Lessee from any of its obligations under this
Section 7.2, except (but only if neither the Lessee nor TILC shall have actual
knowledge of such Claim) to the extent that failure to give notice of any
action, suit or proceeding against such Indemnified Person shall have a material
adverse effect on Lessee's ability to defend such Claim or recover proceeds
under any insurance policies maintained by the Lessee or to the extent Lessee's
indemnification obligations are increased as a result of such failure. The
Lessee shall, after obtaining knowledge thereof, promptly notify each
Indemnified Person of any indemnified Claim affecting such Indemnified Person.
Subject to the provisions of the following paragraph, the Lessee shall at its
sole cost and expense be entitled to control, and shall assume full
responsibility for, the defense of such claim or liability; provided that the
Lessee shall confirm to such Indemnified Person Lessee's obligations to
indemnify hereunder for such Claim, shall keep the Indemnified Person which is
the subject of such proceeding fully apprised of the status of such proceeding
and shall provide such Indemnified Person with all information with respect to
such proceeding as such Indemnified Person shall reasonably request. To the
extent that a Claim is made against Lessee pursuant to this Section 7.2 at a
time when an identical claim for indemnification arising from substantially
similar facts and circumstances is being asserted against TILC, TRMI and/or
Trinity pursuant to this Section 7 or Section 4 of the Trinity Guaranty, if
Lessee is entitled to control the defense of such Claim pursuant to this Section
7.2 and at the same time TILC, TRMI and/or Trinity, as the case may be, is
entitled to control the defense of such claim or liability pursuant to this
Section 7 or Section 4 of the Trinity Guaranty, Lessee's indemnification
obligations under this Section 7.2 shall not be reduced as a result of the
inability of Lessee to control the defense of such Claim where such inability to
control the defense of such Claim is caused by the exercise by TILC, TRMI and/or
Trinity, as applicable, of such Person's right to control the defense of such
indemnified claim as provided by this Section 7 or Section 4 of the Trinity
Guaranty.

                    Notwithstanding any of the foregoing to the contrary, the
Lessee shall not be entitled to control and assume responsibility for the
defense of any Claim if (1) a Lease Event of Default shall have occurred and be
continuing, (2) such proceeding will involve any material danger of the sale,
forfeiture or loss of, or the creation of any Lien (other than any Lien
permitted under the Operative Agreements or a Lien which is adequately bonded to
the satisfaction of such Indemnified Person) on, any Unit or Pledged Unit, (3)
in the good faith opinion of such Indemnified Person, there exists an actual or
potential conflict of interest such that it is advisable


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                                          Participation Agreement (TRLI 2001-1B)
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for such Indemnified Person to retain control of such proceeding, (4) such Claim
involves the possibility of criminal sanctions or liability to such Indemnified
Person or (5) an Equity Insufficiency Circumstance shall exist. In the
circumstances described in clauses (1) - (5), the Indemnified Person shall be
entitled to control and assume responsibility for the defense of such claim or
liability at the expense of the Lessee. In addition, any Indemnified Person may
participate in any proceeding controlled by the Lessee pursuant to this Section
7.2, but only to the extent that such Person's participation does not in the
reasonable opinion of counsel to the Lessee materially interfere with such
control, at its own expense, in respect of any such proceeding as to which the
Lessee shall have acknowledged in writing its obligation to indemnify the
Indemnified Person pursuant to this Section 7.2, and at the expense of the
Lessee in respect of any such proceeding as to which the Lessee shall not have
so acknowledged its obligation to the Indemnified Person pursuant to this
Section 7.2. The Lessee may in any event participate in all such proceedings at
its own cost. Nothing contained in this Section 7.2(f) shall be deemed to
require an Indemnified Person to contest any Claim or to assume responsibility
for or control of any judicial proceeding with respect thereto. No Indemnified
Person shall enter into any settlement or other compromise with respect to any
Claim without the prior written consent of the Lessee unless the Indemnified
Person waives its rights to indemnification hereunder.

                    (g) Subrogation. If a Claim indemnified by the Lessee under
this Section 7.2 is paid in full by the Lessee and/or an insurer under a policy
of insurance maintained by the Lessee, the Lessee and/or such insurer, as the
case may be, shall be subrogated to the extent of such payment to the rights and
remedies of the Indemnified Person (other than under insurance policies
maintained by such Indemnified Person) on whose behalf such Claim was paid with
respect to the transaction or event giving rise to such Claim. Should an
Indemnified Person receive any refund, in whole or in part, with respect to any
Claim paid by the Lessee hereunder, it shall promptly pay over the amount
refunded (but not in excess of the amount the Lessee or any of its insurers has
paid) to the Lessee; provided, however, so long as a Lease Event of Default
shall have occurred and be continuing, such amount may be held by the Collateral
Agent as security for the Lessee's obligations under the Lease and the other
Operative Agreements; provided, further, only with respect to the Owner
Participant and its Related Indemnitee Group, so long as an event referred to in
clause (5) of Section 7.2(f) hereof shall have occurred and be continuing, such
amount may be held by the Owner Trustee as security for the Lessee's obligations
with respect to the Equity Insufficiency Circumstance.

         Section 7.3 Indemnification by TILC.

                    (a) Claims Indemnified. Whether or not any Unit is accepted
under the Lease, or the Closing occurs, and subject to the exclusions stated in
Section 7.3(b) below, TILC agrees to indemnify, protect, defend and hold
harmless


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                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
each Indemnified Person on an After-Tax Basis against Claims directly or
indirectly resulting from or arising out of or alleged to result from or arise
out of (whether or not such Indemnified Person shall be indemnified as to such
Claim by any other Person but subject to Section 7.3(d)):

                                 (i) any breach of or any inaccuracy in any
representation or warranty made by TILC in this Agreement or any of the other
Operative Agreements or in any certificate delivered by TILC pursuant hereto or
thereto;

                                 (ii) any breach of or failure by TILC to
perform any covenant or obligation of TILC set out in or contemplated by this
Agreement or any of the other Operative Agreements; and

                                 (iii) any violation of law, rule, regulation or
order by TILC or its directors, officers, employees, agents or servants.

                    (b) Claims Excluded. The following are excluded from TILC's
agreement to indemnify under this Section 7.3:

                                 (i) Claims with respect to any Unit to the
extent attributable to acts or events occurring after (except (A) in any case
where remedies are being exercised under Section 15 of the Lease for so long as
the Lessor shall be entitled to exercise remedies under such Section 15, or (B)
the Lessee has assumed any of the obligations with respect to the Equipment
Notes under Section 3.6 of the Indenture and the Equipment Notes remain
outstanding under the Indenture) the later to occur of (x) with respect to such
Unit, the earlier to occur of the termination of the Lease or the expiration of
the Lease Term in accordance with the terms thereof, and (y) with respect to
such Unit, the return of such Unit to the Lessor in accordance with the terms of
the Lease (it being understood that, so long as any Unit is in storage as
provided in Section 6.1(c) of the Lease, the date of return thereof for the
purpose of this clause (i) shall be the last day of the Storage Period);

                                 (ii) Claims which are Taxes or any loss of tax
benefits or increases in tax liability; provided that this clause (ii) shall not
apply to Taxes necessary to pay Claims on an After-Tax Basis;

                                 (iii) with respect to any particular
Indemnified Person, Claims to the extent resulting from (x) the gross negligence
or willful misconduct of such Indemnified Person or a Related Party, or (y) any
breach of any covenant to be performed by such Indemnified Person or a Related
Party under any of the Operative Agreements, or the falsity of any
representation or warranty of such Indemnified Person or a Related Party in any
of the Operative Agreements or in a document or certificate delivered in
connection therewith;


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                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

                                 (iv) Claims to the extent attributable to any
transfer by the Lessor of the Equipment or any portion thereof or any transfer
by the Owner Participant of all or any portion of its interest in the Trust
Estate other than (A) any transfer after a Lease Event of Default, (B) the
transfer of all or any portion of the Equipment or any Owner Participant's
interest in the Equipment to the Lessee, (C) the transfer of all or any portion
of the Equipment to a third party pursuant to Lessee's election to terminate the
Lease or (D) any transfer of all or any portion of the Equipment pursuant to
Section 6.9;

                                 (v) with respect to any particular Indemnified
Person, unless such transfer is required by the terms of the Operative
Agreements or occurs during the continuance of a Lease Event of Default, Claims
relating to any offer, sale, assignment, transfer or other disposition
(voluntary or involuntary) (a) in the case of the Owner Participant, of any of
its interest in the Beneficial Interest (other than pursuant to Section 6.9), or
(b) with respect to the Loan Participant, of all or any portion of its interest
in the Equipment Notes or the collateral therefor;

                                 (vi) with respect to any particular Indemnified
Person, Claims resulting from the imposition of (x) any Lessor's Lien
attributable to such Indemnified Person or a Related Party or (y) any Lien
attributable to such Indemnified Person or a Related Party not expressly
permitted under the Operative Agreements or which such Indemnified Person is
required to remove pursuant to the terms of the Operative Agreements;

                                 (vii) with respect to any particular
Indemnified Person, Claims to the extent the risk thereof has been expressly
assumed by such Indemnified Person in connection with the exercise by such
Indemnified Person of the right of inspection granted under Section 6.2 of the
Lease, inspection or restenciling under Section 6.1(c) of the Lease or
inspection under Section 13.2 of the Lease;

                                 (viii) Claims relating to any amount that
constitutes principal of, or interest or premium on the Equipment Notes or the
Pass Through Certificates;

                                 (ix) Claims relating to the payment of any
amount which constitutes Transaction Costs which the Owner Trustee is obligated
to pay pursuant to Section 2.5(a) (other than those that the Lessee may be
required to pay under Section 2.5(c) or Section 2.5(e)) or any other amount to
the extent such Indemnified Person or a Related Party has expressly agreed to
pay such amount without a right of reimbursement, or any Claim payable by any
Indemnified Person pursuant to any provision of any Operative Agreement that
expressly states that such Claim is not subject to indemnification or
reimbursement by the Lessee, or any


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                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
Claim arising out of obligations expressly assumed by the Indemnified Person
seeking indemnification or a Related Party;

                                 (x) Claims relating to any amount that is an
ordinary and usual operating or overhead expense of any Indemnified Person (it
being understood out-of-pocket expenses payable to third parties do not
constitute "ordinary and usual operating or overhead expenses");

                                 (xi) Claims relating to an Indenture Event of
Default that is not attributable to a Manager Default;

                                 (xii) with respect to the Owner Trustee in its
individual and trust capacities, and its Related Indemnitee Group, Claims
relating to a failure on the part of the Owner Trustee to distribute in
accordance with the Trust Agreement any amounts distributable by it thereunder;

                                 (xiii) with respect to the Indenture Trustee in
its individual and trust capacities, Claims relating to failure on the part of
the Indenture Trustee to distribute in accordance with the Indenture any amounts
distributable by it thereunder;

                                 (xiv) with respect to the Pass Through Trustee
in its individual and trust capacities, Claims relating to failure on the part
of the Pass Through Trustee to distribute in accordance with the Pass Through
Trust Agreement any amounts distributable by it thereunder;

                                 (xv) Claims relating to the offer, sale or
delivery of any Equipment Note or any interest in the Trust Estate;

                                 (xvi) Claims relating to any sale, transfer or
holding of the Equipment Notes or Pass Through Certificates being deemed to
result in a "prohibited transaction" under ERISA; or

                                 (xvii) Claims relating to the authorization or
giving or withholding of any future amendments, supplements, waivers or consents
with respect to any of the Operative Agreements which amendments, supplements,
waivers or consents are not requested by TILC or are not specifically required
by the Operative Agreements.

                    (c) Claims Procedure. An Indemnified Person shall, after
obtaining knowledge thereof, promptly notify TILC of any Claim as to which
indemnification is sought; provided, however, that the failure to give such
notice shall not release TILC from any of its obligations under this Section
7.3, except (but only if TILC shall not have actual knowledge of such Claim) to
the extent that


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                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
failure to give notice of any action, suit or proceeding against such
Indemnified Person shall have a material adverse effect on TILC's ability to
defend such Claim or recover proceeds under any insurance policies maintained by
TILC or to the extent TILC's indemnification obligations are increased as a
result of such failure. TILC shall, after obtaining knowledge thereof, promptly
notify each Indemnified Person of any indemnified Claim affecting such
Indemnified Person. Subject to the provisions of the following paragraph, TILC
shall at its sole cost and expense be entitled to control, and shall assume full
responsibility for, the defense of such claim or liability; provided that TILC
shall confirm to such Indemnified Person TILC's obligations to indemnify
hereunder for such Claim, shall keep the Indemnified Person which is the subject
of such proceeding fully apprised of the status of such proceeding and shall
provide such Indemnified Person with all information with respect to such
proceeding as such Indemnified Person shall reasonably request. To the extent
that a Claim is made against TILC pursuant to this Section 7.3 at a time when an
identical claim for indemnification arising from substantially similar facts and
circumstances is being asserted against Lessee, TRMI and/or Trinity pursuant to
this Section 7 or Section 4 of the Trinity Guaranty, if TILC is entitled to
control the defense of such Claim pursuant to this Section 7.3 and at the same
time Lessee, TRMI and/or Trinity, as the case may be, is entitled to control the
defense of such claim or liability pursuant to this Section 7 or Section 4 of
the Trinity Guaranty, TILC's indemnification obligations under this Section 7.3
shall not be reduced as a result of the inability of TILC to control the defense
of such Claim where such inability to control the defense of such Claim is
caused by the exercise by Lessee, TRMI and/or Trinity, as applicable, of such
Person's right to control the defense of such indemnified claim as provided by
this Section 7 or Section 4 of the Trinity Guaranty.

                    Notwithstanding any of the foregoing to the contrary, TILC
shall not be entitled to control and assume responsibility for the defense of
any Claim if (1) a Lease Event of Default shall have occurred and be continuing,
(2) such proceeding will involve any material danger of the sale, forfeiture or
loss of, or the creation of any Lien (other than any Lien permitted under the
Operative Agreements or a Lien which is adequately bonded to the satisfaction of
such Indemnified Person) on, any Unit or Pledged Unit, (3) in the good faith
opinion of such Indemnified Person, there exists an actual or potential conflict
of interest such that it is advisable for such Indemnified Person to retain
control of such proceeding, (4) such Claim involves the possibility of criminal
sanctions or liability to such Indemnified Person or (5) an Equity Insufficiency
Circumstance shall exist. In the circumstances described in clauses (1) - (5),
the Indemnified Person shall be entitled to control and assume responsibility
for the defense of such claim or liability at the expense of TILC. In addition,
any Indemnified Person may participate in any proceeding controlled by TILC
pursuant to this Section 7.3, but only to the extent that such Person's
participation does not in the reasonable opinion of counsel to TILC materially
interfere with such control, at its own expense, in respect of any such


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                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
proceeding as to which TILC shall have acknowledged in writing its obligation to
indemnify the Indemnified Person pursuant to this Section 7.3, and at the
expense of TILC in respect of any such proceeding as to which TILC shall not
have so acknowledged its obligation to the Indemnified Person pursuant to this
Section 7.3. TILC may in any event participate in all such proceedings at its
own cost. Nothing contained in this Section 7.3(c) shall be deemed to require an
Indemnified Person to contest any Claim or to assume responsibility for or
control of any judicial proceeding with respect thereto. No Indemnified Person
shall enter into any settlement or other compromise with respect to any Claim
without the prior written consent of TILC unless the Indemnified Person waives
its rights to indemnification hereunder.

                    (d) Subrogation. If a Claim indemnified by TILC under this
Section 7.3 is paid in full by TILC and/or an insurer under a policy of
insurance maintained by TILC, TILC and/or such insurer, as the case may be,
shall be subrogated to the extent of such payment to the rights and remedies of
the Indemnified Person (other than under insurance policies maintained by such
Indemnified Person) on whose behalf such Claim was paid with respect to the
transaction or event giving rise to such Claim. Should an Indemnified Person
receive any refund, in whole or in part, with respect to any Claim paid by TILC
hereunder, it shall promptly pay over the amount refunded (but not in excess of
the amount TILC or any of its insurers has paid) to TILC; provided, however, so
long as a Lease Event of Default shall have occurred and be continuing, such
amount may be held by the Collateral Agent as security for TILC's obligations
under the Management Agreement and the other Operative Agreements; provided,
further, only with respect to the Owner Participant and its Related Indemnitee
Group, so long as an event referred to in clause (5) of Section 7.3(c) hereof
shall have occurred and be continuing, such amount may be held by the Owner
Trustee as security for the Lessee's obligations with respect to the Equity
Insufficiency Circumstance.

         Section 7.4 Indemnification by TRMI.

                    (a) Claims Indemnified. Whether or not any Unit is accepted
under the Lease, or the Closing occurs, and subject to the exclusions stated in
Section 7.4(b) below, TRMI agrees to indemnify, protect, defend and hold
harmless each Indemnified Person on an After-Tax Basis against Claims directly
or indirectly resulting from or arising out of or alleged to result from or
arise out of (whether or not such Indemnified Person shall be indemnified as to
such Claim by any other Person but subject to Section 7.4(d)):

                                 (i) any breach of or any inaccuracy in any
representation or warranty made by TRMI in this Agreement or any of the other
Operative Agreements or in any certificate delivered by TRMI pursuant hereto or
thereto;


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                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

                                 (ii) any breach of or failure by TRMI to
perform any covenant or obligation of TRMI set out in or contemplated by this
Agreement or any of the other Operative Agreements; and

                                 (iii) any violation of law, rule, regulation or
order by TRMI or its directors, officers, employees, agents or servants.

                    (b) Claims Excluded. The following are excluded from TRMI's
agreement to indemnify under this Section 7.4:

                                 (i) Claims with respect to any Unit to the
extent attributable to acts or events occurring after (except (A) in any case
where remedies are being exercised under Section 15 of the Lease for so long as
the Lessor shall be entitled to exercise remedies under such Section 15, or (B)
the Lessee has assumed any of the obligations with respect to the Equipment
Notes under Section 3.6 of the Indenture and the Equipment Notes remain
outstanding under the Indenture) the later to occur of (x) with respect to such
Unit, the earlier to occur of the termination of the Lease or the expiration of
the Lease Term in accordance with the terms thereof, and (y) with respect to
each Unit, the return of such Unit to the Lessor in accordance with the terms of
the Lease (it being understood that, so long as any Unit is in storage as
provided in Section 6.1(c) of the Lease, the date of return thereof for the
purpose of this clause (i) shall be the last day of the Storage Period);

                                 (ii) Claims which are Taxes or any loss of tax
benefits or increases in tax liability; provided that this clause (ii) shall not
apply to Taxes necessary to pay Claims on an After-Tax Basis;

                                 (iii) with respect to any particular
Indemnified Person, Claims to the extent resulting from (x) the gross negligence
or willful misconduct of such Indemnified Person or a Related Party, or (y) any
breach of any covenant to be performed by such Indemnified Person or a Related
Party under any of the Operative Agreements, or the falsity of any
representation or warranty of such Indemnified Person or a Related Party in any
of the Operative Agreements or in a document or certificate delivered in
connection therewith;

                                 (iv) Claims to the extent attributable to any
transfer by the Lessor of the Equipment or any portion thereof or any transfer
by the Owner Participant of all or any portion of its interest in the Trust
Estate other than (A) any transfer after a Lease Event of Default, (B) the
transfer of all or any portion of the Equipment or any Owner Participant's
interest in the Equipment to the Lessee, (C) the transfer of all or any portion
of the Equipment to a third party pursuant to Lessee's election to terminate the
Lease or (D) any transfer of all or any portion of the Equipment pursuant to
Section 6.9;


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                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

                                 (v) with respect to any particular Indemnified
Person, unless such transfer is required by the terms of the Operative
Agreements or occurs during the continuance of a Lease Event of Default, Claim
relating to any offer, sale, assignment, transfer or other disposition
(voluntary or involuntary) (a) in the case of the Owner Participant, of any of
its interest in the Beneficial Interest (other than pursuant to Section 6.9), or
(b) with respect to the Loan Participant, of all or any portion of its interest
in the Equipment Notes or the collateral therefor;

                                 (vi) with respect to any particular Indemnified
Person, Claims resulting from the imposition of (x) any Lessor's Lien
attributable to such Indemnified Person or a Related Party or (y) any Lien
attributable to such Indemnified Person or a Related Party not expressly
permitted under the Operative Agreements or which such Indemnified Person is
required to remove pursuant to the terms of the Operative Agreements;

                                 (vii) with respect to any particular
Indemnified Person, Claims to the extent the risk thereof has been expressly
assumed by such Indemnified Person in connection with the exercise by such
Indemnified Person of the right of inspection granted under Section 6.2 of the
Lease, inspection or restenciling under Section 6.1(c) of the Lease or
inspection under Section 13.2 of the Lease;

                                 (viii) Claims relating to any amount that
constitutes principal of, or interest or premium on the Equipment Notes or the
Pass Through Certificates;

                                 (ix) Claims relating to the payment of any
amount which constitutes Transaction Costs which the Owner Trustee is obligated
to pay pursuant to Section 2.5(a) (other than those that the Lessee may be
required to pay under Section 2.5(c) or Section 2.5(e)) or any other amount to
the extent such Indemnified Person or a Related Party has expressly agreed to
pay such amount without a right of reimbursement, or any Claim payable by any
Indemnified Person pursuant to any provision of any Operative Agreement that
expressly states that such Claim is not subject to indemnification or
reimbursement by the Lessee, or any Claim arising out of obligations expressly
assumed by the Indemnified Person seeking indemnification or a Related Party;

                                 (x) Claims relating to any amount that is an
ordinary and usual operating or overhead expense of any Indemnified Person (it
being understood out-of-pocket expenses payable to third parties do not
constitute "ordinary and usual operating or overhead expenses");

                                 (xi) Claims relating to an Indenture Event of
Default that is not attributable to a Manager Default;


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                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

                                 (xii) with respect to the Owner Trustee in its
individual and trust capacities, and its Related Indemnitee Group, any Claims
relating to a failure on the part of the Owner Trustee to distribute in
accordance with the Trust Agreement any amounts distributable by it thereunder;

                                 (xiii) with respect to the Indenture Trustee in
its individual and trust capacities, any Claims relating to failure on the part
of the Indenture Trustee to distribute in accordance with the Indenture any
amounts distributable by it thereunder;

                                 (xiv) with respect to the Pass Through Trustee
in its individual and trust capacities, any Claims relating to failure on the
part of the Pass Through Trustee to distribute in accordance with the Pass
Through Trust Agreement or Pass Through Trust Supplement any amounts
distributable by it thereunder;

                                 (xv) Claims relating to the offer, sale or
delivery of any Equipment Note or any interest in the Trust Estate;

                                 (xvi) Claims relating to any sale, transfer or
holding of the Equipment Notes or Pass Through Certificates being deemed to
result in a "prohibited transaction" under ERISA; or

                                 (xvii) any Claims relating to the authorization
or giving or withholding of any future amendments, supplements, waivers or
consents with respect to any of the Operative Agreements which amendments,
supplements, waivers or consents are not requested by TRMI or are not
specifically required by the Operative Agreements.

                    (c) Claims Procedure. An Indemnified Person shall, after
obtaining knowledge thereof, promptly notify TRMI of any Claim as to which
indemnification is sought; provided, however, that the failure to give such
notice shall not release TRMI from any of its obligations under this Section
7.4, except (but only if TRMI shall not have actual knowledge of such Claim) to
the extent that failure to give notice of any action, suit or proceeding against
such Indemnified Person shall have a material adverse effect on TRMI's ability
to defend such Claim or recover proceeds under any insurance policies maintained
by TRMI or to the extent TRMI's indemnification obligations are increased as a
result of such failure. TRMI shall, after obtaining knowledge thereof, promptly
notify each Indemnified Person of any indemnified Claim affecting such
Indemnified Person. Subject to the provisions of the following paragraph, TRMI
shall at its sole cost and expense be entitled to control, and shall assume full
responsibility for, the defense of such claim or liability; provided that TRMI
shall confirm to such Indemnified Person TRMI's obligations to indemnify
hereunder for such Claim, shall keep the Indemnified Person which is the subject
of such proceeding fully apprised of the status of such


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                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

proceeding and shall provide such Indemnified Person with all information with
respect to such proceeding as such Indemnified Person shall reasonably request.
To the extent that a Claim is made against TRMI pursuant to this Section 7.4 at
a time when an identical claim for indemnification arising from substantially
similar facts and circumstances is being asserted against Lessee, TILC and/or
Trinity pursuant to this Section 7 or Section 4 of the Trinity Guaranty, if TRMI
is entitled to control the defense of such Claim pursuant to this Section 7.4
and at the same time Lessee, TILC and/or Trinity, as the case may be, is
entitled to control the defense of such claim or liability pursuant to this
Section 7 or Section 4 of the Trinity Guaranty, TRMI's indemnification
obligations under this Section 7.4 shall not be reduced as a result of the
inability of TRMI to control the defense of such Claim where such inability to
control the defense of such Claim is caused by the exercise by Lessee, TILC
and/or Trinity, as applicable, of such Person's right to control the defense of
such indemnified claim as provided by this Section 7 or Section 4 of the Trinity
Guaranty.

                    Notwithstanding any of the foregoing to the contrary, TRMI
shall not be entitled to control and assume responsibility for the defense of
any Claim if (1) a Lease Event of Default shall have occurred and be continuing,
(2) such proceeding will involve any material danger of the sale, forfeiture or
loss of, or the creation of any Lien (other than any Lien permitted under the
Operative Agreements or a Lien which is adequately bonded to the satisfaction of
such Indemnified Person) on, any Unit or Pledged Unit, (3) in the good faith
opinion of such Indemnified Person, there exists an actual or potential conflict
of interest such that it is advisable for such Indemnified Person to retain
control of such proceeding, (4) such Claim involves the possibility of criminal
sanctions or liability to such Indemnified Person or (5) an Equity Insufficiency
Circumstance shall exist. In the circumstances described in clauses (1) - (5),
the Indemnified Person shall be entitled to control and assume responsibility
for the defense of such claim or liability at the expense of TRMI. In addition,
any Indemnified Person may participate in any proceeding controlled by TRMI
pursuant to this Section 7.4, but only to the extent that such Person's
participation does not in the reasonable opinion of counsel to TRMI materially
interfere with such control, at its own expense, in respect of any such
proceeding as to which TRMI shall have acknowledged in writing its obligation to
indemnify the Indemnified Person pursuant to this Section 7.4, and at the
expense of TRMI in respect of any such proceeding as to which TRMI shall not
have so acknowledged its obligation to the Indemnified Person pursuant to this
Section 7.4. TRMI may in any event participate in all such proceedings at its
own cost. Nothing contained in this Section 7.4(c) shall be deemed to require an
Indemnified Person to contest any Claim or to assume responsibility for or
control of any judicial proceeding with respect thereto. No Indemnified Person
shall enter into any settlement or other compromise with respect to any Claim
without the prior written consent of TRMI unless the Indemnified Person waives
its rights to indemnification hereunder.


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                                          Participation Agreement (TRLI 2001-1B)
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                    (d) Subrogation. If a Claim indemnified by TRMI under this
Section 7.4 is paid in full by TRMI and/or an insurer under a policy of
insurance maintained by TRMI, TRMI and/or such insurer, as the case may be,
shall be subrogated to the extent of such payment to the rights and remedies of
the Indemnified Person (other than under insurance policies maintained by such
Indemnified Person) on whose behalf such Claim was paid with respect to the
transaction or event giving rise to such Claim. Should an Indemnified Person
receive any refund, in whole or in part, with respect to any Claim paid by TRMI
hereunder, it shall promptly pay over the amount refunded (but not in excess of
the amount TRMI or any of its insurers has paid) to TRMI; provided, however, so
long as a Lease Event of Default shall have occurred and be continuing, such
amount may be held by the Collateral Agent as security for TRMI's obligations
under the Administrative Services Agreement and the other Operative Agreements;
provided, further, only with respect to the Owner Participant and its Related
Indemnitee Group, so long as an event referred to in clause (5) of Section
7.4(c) hereof shall have occurred and be continuing, such amount may be held by
the Owner Trustee as security for the Lessee's obligations with respect to the
Equity Insufficiency Circumstance.

SECTION 8. LESSEE'S RIGHT OF QUIET ENJOYMENT.

         Each party to this Agreement acknowledges notice of, and consents in
all respects to, the terms of the Lease, and expressly, severally and as to its
own actions only, agrees that, so long as no Lease Event of Default has occurred
and is continuing, it shall not take or cause to be taken any action contrary
to the Lessee's rights under the Lease, including, without limitation, the right
to possession, use and quiet enjoyment by the Lessee of the Equipment, or by any
Sublessee of the Equipment or by any Pledged Equipment Lessee of the Pledged
Equipment.

SECTION 9. SUCCESSOR INDENTURE TRUSTEE.

         In the event that the Indenture Trustee gives notice of its resignation
pursuant to Section 8.2 of the Indenture, the Owner Trustee shall promptly
appoint a successor Indenture Trustee reasonably acceptable to the Lessee.

SECTION 10. MISCELLANEOUS.

         Section 10.1 Consents. Each Participant covenants and agrees (subject,
in the case of the Loan Participant, to all of the terms and provisions of the
Indenture) that it shall not unreasonably withhold its consent to any consent
requested by the Lessee, TILC, TRMI, the Owner Trustee, the Pass Through Trustee
or the Indenture Trustee, as the case may be, under the terms of the Operative
Agreements that by its terms is not to be unreasonably withheld by the Owner
Trustee or the Indenture Trustee.


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                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

         Section 10.2 Refinancing. So long as no Lease Event of Default shall
have occurred and be continuing, the Lessee shall have the right, at any time
following the fifth anniversary of the Closing Date, and provided that Lessee is
simultaneously exercising the refinancing option provided by Section 10.2 of the
Other Participation Agreement, to request the Owner Participant and the Owner
Trustee to effect an optional prepayment of all, but not less than all, of the
Equipment Notes pursuant to Section 2.10(d) of the Indenture as part of a
refunding or refinancing operation, provided that the Lessee shall obtain the
prior consent of the Owner Participant to be granted in the sole discretion of
the Owner Participant acting in good faith if such refinancing imposes any
increased risk or liability on or otherwise adversely affects, the Owner
Participant; provided further, that the Owner Participant shall not with hold
such consent if in its sole judgment (i) any increased risk, or liability is
both remote and not material, (ii) the Lessee is at the time at least as
creditworthy as on the Closing Date and (iii) Lessee provides an indemnity, in
form and substance satisfactory to the Owner Participant, for such increased
risk or liability. As soon as practicable after receipt of such request and
consent, if required, the Owner Participant and the Lessee will enter into an
agreement, in form and substance satisfactory to the parties thereto, as to the
terms of such refunding or refinancing as follows:

                    (a) the Lessee, the Owner Participant, the Indenture
Trustee, the Owner Trustee, and any other appropriate parties will enter into a
financing or loan agreement (which may involve an underwriting agreement in
connection with a public offering), in form and substance reasonably
satisfactory to the parties thereto, providing for (i) the issuance and sale by
the Owner Trustee or such other party as may be appropriate on the date
specified in such agreement (for the purposes of this Section 10.2, the
"Refunding Date") of debt securities in an aggregate principal amount (in the
lawful currency of the United States) equal to the principal amount of the
Equipment Notes outstanding on the Refunding Date, having the same maturity date
as said Equipment Notes and having a weighted average life which is not less
than or greater than (in either case, by more than three months) the Remaining
Weighted Average Life of said Equipment Notes, (ii) the application of the
proceeds of the sale of such debt securities to the prepayment of all such
Equipment Notes on the Refunding Date, and (iii) payment by Lessee to the Person
or Persons entitled thereto of all other amounts, in respect of accrued
interest, any Make Whole Amount or other premium, if any, payable on such
Refunding Date;

                    (b) the Lessee and the Owner Trustee will amend the Lease in
a manner such that (i) if the Refunding Date is not a Rent Payment Date and the
accrued and unpaid interest on the Equipment Notes is not otherwise paid
pursuant to Section 10.2(a), the Lessee shall on the Refunding Date prepay that
portion of the next succeeding installment of Basic Rent as shall equal the
aggregate interest accrued on the Equipment Notes outstanding to the Refunding
Date, (ii) Basic Rent payable in respect of the period from and after the
Refunding Date shall be


                                       82

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
recalculated to preserve the Net Economic Return which the Owner Participant
would have realized had such refunding not occurred, provided that the net
present value of Basic Rent shall be minimized to the extent consistent
therewith, and (iii) amounts payable in respect of Stipulated Loss Value,
Stipulated Loss Amount, Early Purchase Price, Termination Value and Termination
Amount from and after the Refunding Date shall be appropriately recalculated to
preserve the Net Economic Return which the Owner Participant would have realized
had such refunding not occurred (it being agreed that any recalculations
pursuant to subclauses (ii) and (iii) of this clause (b) shall be performed in
accordance with the requirements of Section 2.6 hereof);

                    (c) the Owner Trustee will enter into an agreement to
provide for the securing thereunder of the debt securities issued by the Owner
Trustee pursuant to clause (a) of this Section 10.2 in like manner as the
Equipment Notes and/or will enter into such amendments and supplements to the
Indenture as may be necessary to effect such refunding or refinancing, which
agreements, amendments and/or supplements shall be reasonably satisfactory in
form and substance to the Owner Participant; provided that, no such agreement
or amendment shall provide for any increase in the security for the new debt
securities; and provided further that, notwithstanding the foregoing (but
subject to the provisions of clauses (a) and (b) and the lead in paragraph of
this Section 10.2 above), the Lessee reserves the right to set the economic
terms and other terms not customarily negotiated between an owner participant
and a lender of the refunding or refinancing transaction except to the extent
adversely affecting cash flow, coverage ratios and reserve accounts as to the
Owner Participant to be so offered to the extent that they are passed through to
the Lessee in, or define rights or obligations of the Lessee under, the
Operative Agreements; provided, further, that no such amendment or supplement
will in the sole judgment of the Owner Participant increase its obligations or
impair its rights under the Operative Agreements or otherwise adversely affect
it without the consent of the Owner Participant;

                    (d) (i) in the case of a refunding or refinancing involving
a public offering of debt securities, neither the Owner Trustee nor the Owner
Participant shall be an "issuer" for securities law purposes or an "obligor"
within the meaning of the Trust Indenture Act of 1939, as amended, the offering
materials (including any registration statement) for the refunding or
refinancing transaction shall be reason ably satisfactory to the Owner
Participant and (ii) the Lessee shall provide satisfactory indemnity to the
Owner Trustee and Owner Participant with respect to the refunding or
refinancing;

                    (e) unless otherwise agreed by the Owner Participant, the
Lessee shall pay to the Owner Trustee as Supplemental Rent an amount, on an
After-Tax Basis, equal to any Make-Whole Amount, Late Payment Premium, if any,
payable in respect of Equipment Notes outstanding on the Refunding Date pursuant
to the Indenture, all interest which is accrued and unpaid in respect of late
payments of


                                       83

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
Basic Rent or any part thereof, all reasonable fees, costs, expenses of such
refunding or refinancing and of the parties hereto incurred in connection with
such refunding or refinancing (including all reasonable out-of-pocket legal fees
and expenses and the reasonable fees of any financial advisors);

                    (f) the Lessee shall give the Indenture Trustee, the Pass
Through Trustee and the Owner Participant not less than 25 days prior written
notice of the Refunding Date;

                    (g) the Owner Participant, the Owner Trustee, the Pass
Through Trustee and the Indenture Trustee shall have received (i) such opinions
of counsel as they may reasonably request concerning compliance with the
Securities Act of 1933, as amended, and any other applicable law relating to the
sale of securities and (ii) such other opinions of counsel and such certificates
and other documents, each in form and substance reasonably satisfactory to them,
as they may reasonably request in connection with compliance with the terms and
conditions of this Section 10.2; and

                    (h) all necessary authorizations, approvals and consents
shall have been obtained and shall be in full force and effect.

                    The Lessee shall pay to or reimburse the Participants, the
Owner Trustee and the Indenture Trustee for all costs and expenses (including
reasonable attorneys' and accountants' fees) paid or incurred by them in
connection with such refunding or refinancing.

         Section 10.3 Amendments and Waivers. Except as otherwise provided in
the Indenture, no term, covenant, agreement or condition of this Agreement may
be terminated, amended or compliance therewith waived (either generally or in a
particular instance, retroactively or prospectively) except by an instrument or
instruments in writing executed by each party against which enforcement of the
termination, amendment or waiver is sought.

         Section 10.4 Notices. Unless otherwise expressly specified or permitted
by the terms hereof, all communications and notices provided for herein shall be
in writing or by facsimile, and any such notice shall become effective (i) upon
personal delivery thereof, including, without limitation, by reputable overnight
courier, or (ii) in the case of notice by facsimile, upon confirmation of
receipt thereof, provided such transmission is promptly further confirmed by any
of the methods set forth in clause (i) above, in each case addressed to each
party hereto at its address set forth below or, in the case of any such party
hereto, at such other address as such party may from time to time designate by
written notice to the other parties hereto:

                    If to the Lessee:


                                       84

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

                                        Trinity Rail Leasing I L.P.
                                        2525 Stemmons Freeway
                                        Dallas, TX 75207
                                        Attention: Vice President Leasing
                                        Operations
                                        Re:  (TRLI 2001-1B)
                                        Fax No.:  (214) 589-8271
                                        Confirmation No.:  (214) 631-4420

                                If to TILC:

                                        Trinity Industries Leasing Company
                                        2525 Stemmons Freeway
                                        Dallas, TX 75207
                                        Attention: Vice President Leasing
                                        Operations
                                        Re:  (TRLI 2001-1B)
                                        Fax No.:  (214) 589-8271
                                        Confirmation No.:  (214) 631-4420

                                If to TRMI:

                                        Trinity Rail Management, Inc.
                                        2525 Stemmons Freeway
                                        Dallas, TX 75207
                                        Attention: Vice President Leasing
                                        Operations
                                        Re:  (TRLI 2001-1B)
                                        Fax No.:  (214) 589-8271
                                        Confirmation No.:  (214) 631-4420

                                If to the Owner Trustee:

                                        TRLI 2001-1B Railcar Statutory Trust
                                        c/o State Street Bank and Trust Company
                                        of Connecticut,
                                        National Association
                                        225 Asylum Street, Goodwin Square,
                                        Hartford, CT 06103
                                        Attention:  Corporate Trust
                                        Administration
                                        Facsimile No.:  (860) 244-1889
                                        Confirmation No.: (860) 244-1800

                                with a copy to:

                                        the Owner Participant at the
                                        address set forth below


                                       85

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

                                If to the Owner Participant:

                                        Trimaran Leasing, L.P.
                                        c/o Philip Morris Capital Corporation
                                        225 High Ridge Road, Suite 300
                                        Stamford, CT 06905
                                        Attention: Vice President, Structured
                                        Finance
                                        Fax No.: (914) 335-8297
                                        Confirmation No.: (914) 335-8204

                                If to the Indenture Trustee:

                                        LaSalle Bank National Association
                                        135 South LaSalle Street
                                        Suite 1960
                                        Chicago, IL  60603
                                        Attention:  Kristine Schossow,
                                        Corporate Trust Services Division
                                        Facsimile No.:  (312) 904-2236
                                        Confirmation No.: (312) 904-2571

                                If to the Pass Through Trustee:

                                        LaSalle Bank National Association
                                        135 South LaSalle Street
                                        Suite 1960
                                        Chicago, IL  60603
                                        Attention:  Kristine Schossow,
                                        Corporate Trust Services Division
                                        Facsimile No.:  (312) 904-2236
                                        Confirmation No.: (312) 904-2571

                                If to the Rating Agency:

                                        Standard & Poor's Corporation
                                        25 Broadway
                                        New York, New York 10004
                                        Attention:  Stephen F. Rooney
                                        Facsimile No.:  (212) 438-2646
                                        Confirmation No.:  (212) 438-2591

         Section 10.5 Survival. All warranties, representations, indemnities and
covenants made by any party hereto, herein or in any certificate or other
instrument delivered by any such party or on the behalf of any such party under
this Agreement,


                                       86

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
shall be considered to have been relied upon by each other party hereto and
shall survive the consummation of the transactions contemplated hereby on the
Closing Date regardless of any investigation made by any such party or on behalf
of any such party.

         Section 10.6 No Guarantee of Residual Value or Debt. Nothing contained
herein or in the Lease, the Indenture, the Trust Agreement or the Tax Indemnity
Agreement or in any certificate or other statement delivered by the Lessee in
connection with the transactions contemplated hereby shall be deemed to be (i) a
guarantee by the Lessee, TILC or TRMI to the Owner Trustee, the Owner
Participant, the Indenture Trustee, the Pass Through Trustee or the Loan
Participant that the Equipment will have any residual value or useful life, or
(ii) a guarantee by the Indenture Trustee, the Owner Trustee, the Owner
Participant, the Lessee, TILC or TRMI of payment of the principal of, premium,
if any, or interest on the Equipment Notes.

         Section 10.7 Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of, and shall be enforceable by, the parties
hereto and their respective successors and assigns as permitted by and in
accordance with the terms hereof, including each successive holder of the
Beneficial Interest permitted under Section 6.1 hereof and each successive
holder of any Equipment Note permitted under the Indenture issued and delivered
pursuant to this Agreement or the Indenture. The parties hereto agree that the
Collateral Agent shall be a third party beneficiary of this Agreement. Except as
expressly provided herein or in the other Operative Agreements, no party hereto
may assign their interests herein without the consent of the parties hereto.

         Section 10.8 Business Day. Notwithstanding anything herein or in any
other Operative Agreement to the contrary, if the date on which any payment is
to be made pursuant to this Agreement or any other Operative Agreement is not a
Business Day, the payment otherwise payable on such date shall be payable on
the next succeeding Business Day with the same force and effect as if made on
such succeeding Business Day and (provided such payment is made on such
succeeding Business Day) no interest shall accrue on the amount of such payment
from and after such scheduled date to the time of such payment on such next
succeeding Business Day.

         SECTION 10.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES (OTHER THAN SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW).


                                       87

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

         Section 10.10 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

         Section 10.11 Counterparts. This Agreement may be executed in any
number of counterparts, each executed counterpart constituting an original but
all together only one Agreement.

         Section 10.12 Headings and Table of Contents. The headings of the
Sections of this Agreement and the Table of Contents are inserted for purposes
of convenience only and shall not be construed to affect the meaning or
construction of any of the provisions hereof.

         Section 10.13 Limitations of Liability; Extent of Interest.

                    (a) Liabilities of Participants. Neither the Indenture
Trustee, the Owner Trustee nor any Participant shall have any obligation or duty
to the Lessee, to TILC, TRMI, to any other Participant or to others with respect
to the transactions contemplated hereby, except those obligations or duties of
such Participant expressly set forth in this Agreement and the other Operative
Agreements, and neither the Indenture Trustee nor any Participant shall be
liable for performance by any other party hereto of such other party's
obligations or duties hereunder. Without limitation of the generality of the
foregoing, under no circumstances whatsoever shall the Indenture Trustee or any
Participant be liable to the Lessee, TILC or TRMI for any action or inaction on
the part of the Owner Trustee in connection with the transactions contemplated
herein, whether or not such action or inaction is caused by willful misconduct
or gross negligence of the Owner Trustee, unless such action or inaction is at
the direction of the Indenture Trustee or any Participant, as the case may be,
and such action or inaction is expressly prohibited hereby.

                    (b) No Recourse to the Owner Trustee. It is expressly
understood and agreed by and between Trust Company, the Owner Trustee, the
Lessee, the Owner Participant, the Indenture Trustee, and the Loan Participant,
and their respective successors and permitted assigns that, subject to the
proviso contained in this Section 10.13(b), all representations, warranties and
undertakings of the Owner Trustee hereunder shall be binding upon the Owner
Trustee only in its capacity as Owner Trustee under the Trust Agreement, and
(except as expressly provided herein) Trust Company shall not be liable for any
breach thereof, except for its gross negligence or willful misconduct, or for
breach of its covenants, representations and warranties contained herein, except
to the extent covenanted or made in its individual capacity; provided, however,
that nothing in this Section 10.13(b) shall be


                                       88

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
construed to limit in scope or substance those representations and warranties of
Trust Company made expressly in its individual capacity set forth herein. The
term "Owner Trustee" as used in this Agreement shall include any successor
trustee under the Trust Agreement, or the Owner Participant if the trust created
thereby is revoked.

                    (c) Extent of Interest of Holders of Equipment Notes. No
holder of an Equipment Note shall have any further interest in, or other right
with respect to, the mortgage and security interests created by the Indenture
when and if the principal of and interest on all Equipment Notes held by such
holder and all other sums payable to such holder hereunder, under the Indenture
and under such Equipment Notes shall have been paid in full. Each holder of the
Equipment Notes by its acceptance of an Equipment Note, agrees that it will look
solely to the income and proceeds from the Indenture Estate to the extent
available for distribution to such holder as provided in Article III of the
Indenture and that neither TILC, TRMI, the Lessee, the Owner Participant, the
Indenture Trustee nor the Owner Trustee shall be personally liable to any holder
of the Equipment Notes for any amounts payable under the Equipment Notes, the
Indenture or hereunder, except as expressly provided in the Operative
Agreements.

                    (d) Loan Participant's Source of Funds. It is expressly
understood and agreed by and between the Owner Trustee, the Lessee, the Owner
Participant, the Indenture Trustee and the Loan Participant, and their
respective successors and permitted assigns that, subject to the proviso
contained in this Section 10.13(d), the undertakings of the Loan Participant
hereunder are limited to the application of the proceeds of the sale of the Pass
Through Certificates to the purchase by the Pass Through Trustee of the
Equipment Notes; provided, however, that nothing in this Section 10.13(d) shall
be construed to limit in scope or substance those representations and
warranties of the Loan Participant made expressly in its individual capacity set
forth herein.

         Section 10.14 Maintenance of Non-Recourse Debt. The parties hereto
agree that if the Owner Trustee becomes a debtor subject to the reorganization
provisions of the Bankruptcy Code, 11 U.S.C. Section 101 et seq. (the
"Bankruptcy Code") or any successor provision, the parties hereto will make an
election under 1111(b)(1)(A)(i) of the Bankruptcy Code. If (a) the Owner Trustee
becomes a debtor subject to the reorganization provisions of the Bankruptcy Code
or any successor provision, (b) pursuant to such reorganization provisions the
Owner Trustee is required, by reason of the Owner Trustee being held to have
recourse liability to the Pass Through Trustee or the Indenture Trustee,
directly or indirectly, to make payment on account of any amount payable under
the Equipment Notes or any of the other Operative Agreements and (c) the
Indenture Trustee and/or the Pass Through Trustee actually receives any Excess
Amount (as hereinafter defined) which reflects any payment by the Owner Trustee
on account of (b) above, then the Indenture Trustee and/or the Pass Through
Trustee, as the case may be, shall promptly refund to the Owner Trustee such
Excess Amount. For purposes of this Section 10.14, "Excess Amount"


                                       89

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
means the amount by which such payment exceeds the amount which would have been
received by the Indenture Trustee or the Pass Through Trustee if the Owner
Trustee had not become subject to the recourse liability referred to in (b)
above.

         Section 10.15 Ownership of and Rights in Units. The sale of the Units
described on Schedule 1 hereto and the Existing Equipment Subleases by TILC
contemplated hereby is intended for all purposes to be a true sale of all of
TILC's right, title and interest in and to such Units, the Existing Equipment
Subleases to the Lessee, which shall be the legal owner thereof upon such sale.
Upon consummation of the sale and leaseback transactions contemplated hereby,
the Lessee's interest in such Units is intended to be that of a lessee only. It
is intended that for federal and state income tax purposes the Owner Participant
will be the owner of such Units. The rights of the Indenture Trustee in and to
such Units pursuant to the Indenture is intended to be that of a secured party
holding a security interest, subject to the Lease and the rights of the Lessee
thereunder. No holder of an Equipment Note is intended to have any right, title
or interest in or to such Units except as a beneficiary of the Lien granted by
the Owner Trustee to the Indenture Trustee pursuant to the Indenture in trust
for the equal and ratable benefit of the holders from time to time of the
Equipment Notes.

         Section 10.16 No Petition. Each party hereto agrees that, prior to the
date which is one year and one day after payment in full of all outstanding
Equipment Notes and all obligations of the Lessee under the Operative Agreements
and release of all Collateral held under the Collateral Agency Agreement (i) no
party hereto shall authorize the Lessee to commence a voluntary winding-up or
other voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to the Lessee or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect in any jurisdiction
or seeking the appointment of an administrator, a trustee, receiver, liquidator,
custodian or other similar official of the Lessee or any substantial part of its
property or to consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
commenced against the Lessee, or to make a general assignment for the benefit of
any party hereto or any other creditor of the Lessee, and (ii) none of the
parties hereto shall commence or join with any other Person in commencing any
proceeding against the Lessee under any bankruptcy, reorganization, liquidation
or insolvency law or statute now or hereafter in effect in any jurisdiction.
Each of the parties hereto agrees that, prior to the date which is one year and
one day after the payment in full of all outstanding Equipment Notes and all
obligations of the Lessee under the Operative Agreements and release of all
Collateral held under the Collateral Agency Agreement, it will not institute
against, or join any other Person in instituting against, Lessee an action in
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or similar proceeding under the laws of the United States or any state of the
United States.


                                       90

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

         Section 10.17 Consent To Jurisdiction. Each of the parties hereto
hereby irrevocably and unconditionally:

                                 (i) submits for itself and its property in any
legal action or proceeding relating to this Agreement or any other Operative
Agreement or for recognition and enforcement of any judgment in respect hereof
or thereof, to the nonexclusive general jurisdiction of the courts of the State
of New York, the courts of the United States of America for the Southern
District of New York, and the appellate courts from any thereof;

                                 (ii) consents that any such action or
proceeding may be brought in such courts, and waives any objection that it may
now or hereafter have to the venue of any such action or proceeding in any such
court or that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;

                                 (iii) agrees that service of process in any
such action or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form and mail),
postage prepaid, to each party hereto at its address set forth in Section 10.4
hereof, or at such other address of which the other parties shall have been
notified pursuant thereto; and

                                 (iv) agrees that nothing herein shall affect
the right to effect service of process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction.

         SECTION 10.18 WAIVER OF JURY TRIAL. EACH PARTY TO THIS AGREEMENT HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, SUIT OR COUNTERCLAIM ARISING IN CONNECTION WITH THIS AGREEMENT.


                                      * * *


                                       91

                                          Participation Agreement (TRLI 2001-1B)
<PAGE>
         IN WITNESS WHEREOF, the parties hereto have caused this Participation
Agreement to be executed and delivered, all as of the date first above written.

                                        Lessee:

                                        TRINITY RAIL LEASING I L.P.

                                        By TILX GP I, LLC
                                           its General Partner

                                           By:
                                               -----------------------------
                                           Name:  Eric Marchetto
                                           Title:  Vice President


                                        TILC:

                                        TRINITY INDUSTRIES LEASING
                                        COMPANY


                                        By:
                                            -----------------------------------
                                        Name:  Eric Marchetto
                                        Title:  Vice President


                                        TRMI:

                                        TRINITY RAIL MANAGEMENT, INC.


                                        By:
                                            -----------------------------------
                                        Name:  Eric Marchetto
                                        Title:  Vice President


                                        Owner Trustee:

                                        TRLI 2001-1B RAILCAR STATUTORY TRUST,
                                        By: State Street Bank and Trust Company
                                            of Connecticut, National
                                            Association, not in its individual
                                            capacity except as expressly
                                            provided herein but solely as
                                            Owner Trustee

                                        By:
                                           ------------------------------------
                                        Name:
                                             ----------------------------------
                                        Title:
                                              ---------------------------------


                                          Participation Agreement (TRLI 2001-1B)
<PAGE>

                                        Owner Participant:

                                        TRIMARAN LEASING, L.P.

                                        By: Trimaran Leasing Investors,
                                            L.L.C.-I, its General Partner

                                            By:  Grant Holdings, Inc.,
                                                 its sole member

                                        By:
                                           ------------------------------------
                                        Name:
                                             ----------------------------------
                                        Title:
                                              ---------------------------------

                                        Indenture Trustee:

                                        LASALLE BANK NATIONAL ASSOCIATION, not
                                        in its individual capacity except as
                                        expressly provided herein but solely
                                        as Indenture Trustee


                                        By:
                                           ------------------------------------
                                        Name:  Sarah H. Webb
                                        Title:  Senior Vice President

                                        Pass Through Trustee:

                                        LASALLE BANK NATIONAL ASSOCIATION,
                                        not in its individual capacity except
                                        as expressly provided herein but
                                        solely as Pass Through Trustee

                                        By:
                                           ------------------------------------
                                        Name:  Sarah H. Webb
                                        Title:  Senior Vice President


                                          Participation Agreement (TRLI 2001-1B)


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.16.4
<SEQUENCE>11
<FILENAME>d94851ex10-16_4.txt
<DESCRIPTION>EQUIPMENT LEASE AGREEMENT (TRL 1 2001-1C)
<TEXT>
<PAGE>
                                                                 EXHIBIT 10.16.4


                        ---------------------------------

                            EQUIPMENT LEASE AGREEMENT
                                 (TRLI 2001-1C)
                          Dated as of December 28, 2001

                                     between

                      TRLI 2001-1C RAILCAR STATUTORY TRUST,
  By: State Street Bank and Trust Company of Connecticut, National Association,
                    not in its individual capacity except as
             expressly provided herein but solely as Owner Trustee,
                                     Lessor

                                       and

                          TRINITY RAIL LEASING I L.P.,
                                     Lessee

                        Tank Cars and Covered Hopper Cars

                        ---------------------------------


CERTAIN OF THE RIGHT, TITLE AND INTEREST OF LESSOR IN AND TO THIS LEASE, THE
EQUIPMENT COVERED HEREBY AND THE RENT DUE AND TO BECOME DUE HEREUNDER HAVE BEEN
ASSIGNED AS COLLATERAL SECURITY TO, AND ARE SUBJECT TO A SECURITY INTEREST IN
FAVOR OF, LASALLE BANK NATIONAL ASSOCIATION, NOT IN ITS INDIVIDUAL CAPACITY BUT
SOLELY AS INDENTURE TRUSTEE UNDER A TRUST INDENTURE AND SECURITY AGREEMENT (TRLI
2001-1C), DATED AS OF DECEMBER 28, 2001 BETWEEN SAID INDENTURE TRUSTEE, AS
SECURED PARTY, AND LESSOR, AS DEBTOR. INFORMATION CONCERNING SUCH SECURITY
INTEREST MAY BE OBTAINED FROM THE INDENTURE TRUSTEE AT ITS ADDRESS SET FORTH IN
SECTION 20 OF THIS LEASE. SEE SECTION 25.2 FOR INFORMATION CONCERNING THE RIGHTS
OF THE ORIGINAL HOLDER AND HOLDERS OF, THE VARIOUS COUNTERPARTS HEREOF

                        ---------------------------------


<PAGE>


                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                             Page
                                                                             ----
<S>                                                                          <C>
SECTION 1.  Definitions                                                         1

SECTION 2.  Acceptance and Leasing of Equipment                                 1

SECTION 3.  Term and Rent                                                       1
               Section 3.1   Lease Term                                         1
               Section 3.2   Basic Rent                                         2
               Section 3.3   Supplemental Rent                                  3
               Section 3.4   Adjustment of Rent                                 3
               Section 3.5   Manner of Payments                                 3

SECTION 4.  Ownership and Marking of Equipment                                  4
               Section 4.1   Retention of Title                                 4
               Section 4.2   Duty to Number and Mark Equipment                  4
               Section 4.3   Prohibition Against Certain Designations           5

SECTION 5.  Disclaimer of Warranties                                            6
               Section 5.1   Disclaimer of Warranties                           6
               Section 5.2   Rights Under Existing Equipment Subleases          7

SECTION 6.  Return of Equipment; Storage                                        7
               Section 6.1   Return; Holdover Rent                              7
               Section 6.2   Condition of Equipment                            10

SECTION 7.  Liens                                                              11

SECTION 8.  Maintenance; Possession; Compliance with Laws                      11
               Section 8.1   Maintenance and Operation                         11
               Section 8.2   Possession and Use                                13
               Section 8.3   Sublease                                          13

SECTION 9.  Modifications                                                      16
               Section 9.1   Required Modifications                            16
               Section 9.2   Optional Modifications                            17
               Section 9.3   Removal of Property; Replacements                 17
</TABLE>


<PAGE>

<TABLE>
<CAPTION>
                                                                             Page
                                                                             ----
<S>                                                                          <C>
SECTION 10. Voluntary Termination                                              18
               Section 10.1  Right of Termination                              18
               Section 10.2  Sale of Equipment                                 19
               Section 10.3  Retention of Equipment by Lessor                  21
               Section 10.4  Termination of Lease                              22
               Section 10.5  Funding of Accounts on Termination                22

SECTION 11. Loss, Destruction Requisition, Etc                                 23
               Section 11.1  Event of Loss                                     23
               Section 11.2  Replacement or Payment upon Event of Loss         23
               Section 11.3  Rent Termination                                  25
               Section 11.4  Disposition of Equipment; Replacement of Unit     26
               Section 11.5  Eminent Domain                                    28

SECTION 12. Insurance                                                          28
               Section 12.1  Insurance                                         28
               Section 12.2  Physical Damage Insurance                         30
               Section 12.3  Public Liability Insurance                        31
               Section 12.4  Certificate of Insurance                          32
               Section 12.5  Additional Insurance                              33
               Section 12.6  Post-Lease Term Insurance                         34

SECTION 13. Reports; Inspection                                                34
               Section 13.1  Duty of Lessee to Furnish                         34
               Section 13.2  Lessor's Inspection Rights                        35

SECTION 14. Lease Events of Default                                            35

SECTION 15. Remedies                                                           39
               Section 15.1  Remedies                                          39
               Section 15.2  Cumulative Remedies                               42
               Section 15.3  No Waiver                                         43
               Section 15.4  Notice of Lease Default                           43
               Section 15.5  Lessee's Duty to Return Equipment Upon Default    43
               Section 15.6  Specific Performance; Lessor Appointed
                             Lessee's Agent                                    44

SECTION 16. Filings; Further Assurances                                        45
</TABLE>

                                       ii
<PAGE>

<TABLE>
<CAPTION>
                                                                             Page
                                                                             ----
<S>                                                                          <C>
               Section 16.1  Filings                                           45
               Section 16.2  Further Assurances                                45
               Section 16.3  Other Filings                                     46
               Section 16.4  Expenses                                          46

SECTION 17. Lessor's Right to Perform                                          46

SECTION 18. Assignment                                                         47
               Section 18.1  Assignment by Lessor                              47
               Section 18.2  Assignment by Lessee                              47
               Section 18.3  Sublessee's or Others Performance and Rights      47

SECTION 19. Net Lease, Etc                                                     48

SECTION 20. Notices                                                            49

SECTION 21. Concerning the Indenture Trustee                                   51
               Section 21.1  Limitation of the Indenture Trustee's
                             Liabilities                                       51
               Section 21.2  Right, Title and Interest of the Indenture
                             Trustee Under Lease                               51

SECTION 22. Purchase Options; Renewal Options                                  51
               Section 22.1  Early Purchase Option                             51
               Section 22.2  Election to Retain or Return Equipment at
                             End of Basic or Renewal Term                      54
               Section 22.3  Purchase Option                                   54
               Section 22.4  Renewal Option                                    55
               Section 22.5  Rent Appraisal; Outside Renewal Date              56
               Section 22.6  Stipulated Loss Amount and Termination Amount
                             During Renewal Term                               57
               Section 22.7  Deemed Renewals                                   57
               Section 22.8  Funding of Accounts on Purchase                   58

SECTION 23. Limitation of Lessor's Liability                                   58

SECTION 24. Investment of Security Funds                                       58

SECTION 25. Miscellaneous                                                      59
</TABLE>

                                      iii
<PAGE>

<TABLE>
<CAPTION>
                                                                             Page
                                                                             ----
<S>                                                                          <C>
               Section 25.1  Governing Law; Severability                       59
               Section 25.2  Execution in Counterparts                         59
               Section 25.3  Headings and Table of Contents; Section
                             References                                        59
               Section 25.4  Successors and Assigns                            59
               Section 25.5  True Lease                                        59
               Section 25.6  Amendments and Waivers                            60
               Section 25.7  Survival                                          60
               Section 25.8  Business Days                                     60
               Section 25.9  Directly or Indirectly; Performance by Managers   61
               Section 25.10 Incorporation by Reference                        61
</TABLE>

                                       iv
<PAGE>



                             APPENDICES AND EXHIBITS

Exhibit A      -      Form of Lease Supplement
Exhibit B-1    -      Form of Net Sublease
Exhibit B-2    -      Form of Full Service Sublease
Appendix A     -      Definitions



                                       v
<PAGE>


                           EQUIPMENT LEASE AGREEMENT
                                 (TRLI 2001-1C)

               This Equipment Lease Agreement (TRLI 2001-1C), dated as of
December 28, 2001 (this "Lease"), is by and between TRLI 2001-1C Railcar
Statutory Trust, a Connecticut statutory trust, by State Street Bank and Trust
Company of Connecticut, National Association, not in its individual capacity
except as expressly provided herein, but solely as trustee under the Trust
Agreement, as Lessor, and Trinity Rail Leasing I L.P., a Texas limited
partnership, as Lessee.

               In consideration of the mutual agreements herein contained and
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto agree as follows:


SECTION 1.     Definitions.


        Unless otherwise defined herein or required by the context, all
capitalized terms used herein shall have the respective meanings assigned to
such terms in Appendix A hereto for all purposes of this Lease.


SECTION 2.     Acceptance and Leasing of Equipment.


        Subject to Section 4 of the Participation Agreement, Lessor hereby
agrees to accept delivery of each Unit from Lessee and to lease such Unit to
Lessee hereunder, and Lessee hereby agrees, immediately following such
acceptance by Lessor, to lease from Lessor hereunder such Unit, such acceptance
by Lessor and lease by Lessee to be evidenced by the execution and delivery by
Lessee and Lessor of a Lease Supplement covering such Unit, all in accordance
with Section 2.3(b) of the Participation Agreement. Lessee hereby agrees that
its execution and delivery of a Lease Supplement covering any Unit shall,
without further act, irrevocably constitute acceptance by Lessee of such Unit
for all purposes of this Lease.


SECTION 3.     Term and Rent.


               Section 3.1. Lease Term. The basic term of this Lease (the "Basic
Term") shall commence on the Basic Term Commencement Date and, subject to
earlier termination pursuant to Section 10, 11, 15 or 22.1, shall expire at
11:59 p.m. (Chicago, Illinois time) on the Basic Term Expiration Date. Subject
and pursuant to Section 22.4, Lessee may elect one or more Renewal Terms and, as
provided in

<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


Section 22.7 hereof, in certain circumstances a Renewal Term shall be deemed to
have occurred with respect to some or all of the Units.



               Section 3.2 Basic Rent. Lessee hereby agrees to pay Lessor Basic
Rent for each Unit throughout the Basic Term applicable thereto in consecutive
monthly installments payable on each Rent Payment Date. Each such monthly
payment of Basic Rent shall be in an amount equal to the product of the
Equipment Cost for such Unit multiplied by the Basic Rent percentage set forth
opposite such Rent Payment Date on Schedule 3-A to the Participation Agreement
(as such Schedule 3-A shall be adjusted pursuant to Section 2.6 of the
Participation Agreement). Schedule 3-B to the Participation Agreement sets forth
the Basic Rent allocated for Federal income tax purposes to each lease period
and calendar year throughout the Basic Term and in addition, sets forth that for
certain months, amounts of Basic Rent shall be allocated to the following and/or
preceding calendar year. Schedule 3-B to the Participation Agreement also sets
forth the application of Basic Rent payments to the calendar year to which such
payments relate. It is the intention of Lessor and Lessee that the allocations
of Basic Rent set forth on Schedule 3-B to the Participation Agreement
constitute specific allocations of fixed rent within the meaning of Treas. Reg.
Section 1.467-1(c)(2)(ii). Stipulated Loss Amounts and Termination Amounts have
been calculated on the basis that (i) any Basic Rents actually due on the date
of such calculation shall not be paid and (ii) any Basic Rents scheduled to have
been paid prior to the date of such calculation are assumed to have been paid
and have been appropriately reflected in such calculations. Lessor and Lessee
agree to include in income and deduct the Basic Rents allocated to each lease
period and calendar year according to Schedule 3-B of the Participation
Agreement. In addition, Lessor and Lessee intend that under no circumstances are
any Basic Rents to be considered related to (i) any period after the calendar
year succeeding the calendar year in which such Basic Rents are payable or any
period before the calendar year preceding the calendar year in which such Basic
Rents are payable or (ii) the period beginning on the Closing Date and ending on
(but not including) March 28, 2002 (the "Basic Rent Holiday").

               Notwithstanding anything to the contrary contained herein or in
the Participation Agreement, each installment of Basic Rent (both before and
after any adjustment pursuant to Section 2.6 of the Participation Agreement)
shall be, under any circumstances and in any event, in an amount at least
sufficient for Lessor to pay in full as of the due date of such installment, any
payment of principal of and interest

                                       2
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


on the Equipment Notes required to be paid by Lessor pursuant to the Indenture
on such due date in accordance with the Scheduled Amortization.


               Section 3.3 Supplemental Rent. Lessee also agrees to pay to
Lessor, or to whosoever shall be entitled thereto, any and all Supplemental
Rent, promptly as the same shall become due and owing, or where no due date is
specified, promptly after demand by the Person entitled thereto, and in the
event of any failure on the part of Lessee to pay any Supplemental Rent, Lessor
shall have all rights, powers and remedies provided for herein or by law or
equity or otherwise as in the case of nonpayment of Basic Rent. Lessee will also
pay, as Supplemental Rent, (i) on demand, to the extent permitted by applicable
law, an amount equal to Late Payment Interest on any part of any installment of
Basic Rent not paid when due for any period for which the same shall be overdue
and on any payment of Supplemental Rent not paid when due or promptly after
demanded for the period from such due date or demand date, as applicable, until
the same shall be paid and (ii) as and when due in accordance with the Trust
Indenture or the Participation Agreement, any Make-Whole Amount payable with
respect to any Equipment Note, including, without limitation, amounts of
Make-Whole Amount due in the case of the termination of this Lease with respect
to any Unit pursuant to Section 10, in the case of the purchase of any Unit (but
not in the case of a purchase of the Beneficial Interest or if the Equipment
Notes are assumed in accordance with the Operative Agreements) pursuant to
Section 22.1 or Section 6.9 of the Participation Agreement, and in the case of
any refinancing of the Equipment Notes pursuant to Section 10.2 of the
Participation Agreement. All Supplemental Rent to be paid pursuant to this
Section 3.3 shall be payable in the type of funds and in the manner set forth in
Section 3.5.


               Section 3.4 Adjustment of Rent. Lessee and Lessor agree that the
Basic Rent, Stipulated Loss Values, Stipulated Loss Amounts, Termination Values
and Termination Amount percentages and the Early Purchase Price shall be
adjusted to the extent provided in Section 2.6 of the Participation Agreement.


               Section 3.5 Manner of Payments. All Rent (other than Supplemental
Rent payable to Persons other than Lessor, which shall be payable to such other
Persons in accordance with written instructions furnished to Lessee by such
Persons, as otherwise provided in any of the Operative Agreements or as required
by law) shall be paid by Lessee to Lessor at its office at 225 Asylum Street,
Goodwin Square, Hartford, CT, 06103, Attention: Corporate Trust Administration,
provided, that so



                                       3
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


long as the Indenture shall not have been discharged pursuant to the terms
thereof, Lessor hereby directs, and Lessee hereby agrees, that all Rent
(excluding Excepted Property) payable to Lessor shall be paid into the Payment
Account directly to the Indenture Trustee at the times and in funds of the type
specified in this Section 3.5 at the office of the Indenture Trustee at 135 S.
LaSalle Street, Suite 1960, Chicago, IL 60603, ABA No. 071000505, Account No.
2090067, Ref: 608775318 TRLI, Attn: Kristine Schossow, Corporate Trust Services
Division, Trust TRLI 2001-1C, or at such other location in the United States of
America as the Indenture Trustee may otherwise direct. All Rent shall be paid by
Lessee to the recipient not later than 11:00 a.m. Chicago, Illinois time on the
date of such payment in funds consisting of lawful currency of the United States
of America, which shall be immediately available. Notwithstanding anything
contained in this Lease to the contrary, any amounts received pursuant to
distribution from any of the Accounts (as such term is defined in the Collateral
Agency Agreement) shall for all purposes hereof be deemed payment in
satisfaction of the related obligation hereunder to which such distribution
relates and any failure by Lessor, the Indenture Trustee or any Indemnified
Party to receive from the Collateral Agent the full amount of any such
distribution measured by reference to Basic Rent, Supplemental Rent or any
component thereof shall be deemed a failure by Lessee to pay such Basic Rent or
Supplemental Rent hereunder, as the case may be.


SECTION 4.     Ownership and Marking of Equipment.


               Section 4.1 Retention of Title. Lessor shall and hereby does
retain full legal title to and beneficial ownership of each Unit notwithstanding
the delivery to and possession and use of such Unit by Lessee hereunder or any
Sublessee under any sublease permitted hereby.


               Section 4.2 Duty to Number and Mark Equipment. With respect to
the Units to be delivered on the Closing Date, Lessee represents that Manager
has caused, and as soon as practicable after the date on which a Lease
Supplement is executed and delivered in respect of a Replacement Unit pursuant
to Section 11.4(b), Lessee will cause, each Unit to be numbered with its
reporting mark shown on the Lease Supplement dated the date on which such Unit
was delivered and covering such Unit, and will from and after such date keep and
maintain, plainly, distinctly, permanently and conspicuously marked by a plate
or stencil printed in contrasting colors upon each side of each Unit, in letters
not less than one inch in height, a legend substantially as follows:



                                       4
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


                   "OWNERSHIP SUBJECT TO A SECURITY AGREEMENT
                  FILED WITH THE SURFACE TRANSPORTATION BOARD"

with appropriate changes thereof and additions thereto as from time to time may
be required by law in order to protect Lessor's right, title and interest in and
to such Unit, its rights under this Lease and the rights of the Indenture
Trustee. Except as provided hereinabove, Lessee will not place any such Units in
operation or exercise any control or dominion over the same until the required
legend shall have been so marked on both sides thereof, and will replace
promptly any such word or words in such legend which may be removed, defaced,
obliterated or destroyed. In the event of a change in the reporting mark of any
Unit, within 60 days after a Responsible Officer of the Manager has received
notice of any such changed mark, a statement of the new reporting mark to be
substituted therefor shall be delivered by Lessee to Lessor and, so long as the
Indenture shall not have been discharged pursuant to its terms, to the Indenture
Trustee. As soon as practicable after the delivery of such statement a
supplement to this Lease and, if not so discharged, the Indenture, with respect
to such new reporting marks, shall be filed or recorded in all public offices
where this Lease and the Indenture shall have been filed or recorded and in such
other places, if any, where Lessor and, so long as the Indenture shall not have
been discharged pursuant to its terms, the Indenture Trustee may reasonably
request in order to protect, preserve and maintain its right, title and interest
in the Units. The costs and expenses of all such supplements, filings and
recordings shall be borne by Lessee.


               Section 4.3 Prohibition Against Certain Designations. Except as
above provided, Lessee will not allow the name of any Person to be placed on any
Unit as a designation that might reasonably be interpreted as a claim of
ownership; provided, however, that, subject to the delivery of the statement of
new reporting marks specified in Section 4.2, Lessee may cause any Unit to be
lettered with the names or initials or other insignia customarily used by Lessee
or any Sublessee or any of their respective Affiliates on railroad equipment
used by it of the same or a similar type for convenience of identification of
the right of Lessee to use such Unit hereunder or any Sublessee to use such Unit
pursuant to a Permitted Sublease.




                                       5
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)



SECTION 5.     Disclaimer of Warranties.


               Section 5.1 Disclaimer of Warranties. Without waiving any claim
Lessee may have against any seller, supplier or manufacturer, LESSEE
ACKNOWLEDGES AND AGREES THAT (i) EACH UNIT IS OF A SIZE, DESIGN, CAPACITY AND
MANUFACTURE SELECTED BY AND ACCEPTABLE TO LESSEE, (ii) LESSEE IS SATISFIED THAT
EACH UNIT IS SUITABLE FOR ITS PURPOSES AND LESSEE HAS ACCEPTED EACH UNIT, (iii)
NEITHER LESSOR NOR OWNER PARTICIPANT IS A MANUFACTURER OR A DEALER IN PROPERTY
OF SUCH KIND OR HAS INSPECTED THE UNITS PRIOR TO DELIVERY TO AND ACCEPTANCE BY
LESSEE, (iv) EACH UNIT IS LEASED HEREUNDER SUBJECT TO ALL APPLICABLE LAWS AND
GOVERNMENTAL REGULATIONS NOW IN EFFECT OR HEREAFTER ADOPTED AND (v) LESSOR
LEASES AND LESSEE TAKES EACH UNIT "AS-IS", "WHERE-IS" AND "WITH ALL FAULTS", IN
WHATEVER CONDITION IT MAY BE, AND LESSEE ACKNOWLEDGES THAT NEITHER LESSOR, AS
LESSOR OR IN ITS INDIVIDUAL CAPACITY, NOR OWNER PARTICIPANT MAKES NOR SHALL BE
DEEMED TO HAVE MADE, AND EACH EXPRESSLY DISCLAIMS, ANY AND ALL RIGHTS, CLAIMS,
WARRANTIES OR REPRESENTATIONS EITHER EXPRESS OR IMPLIED, AS TO THE VALUE,
CONDITION, FITNESS FOR ANY PARTICULAR PURPOSE, DESIGN, OPERATION,
MERCHANTABILITY THEREOF OR AS TO THE TITLE OF ANY UNIT, THE QUALITY OF THE
MATERIAL OR WORKMANSHIP THEREOF OR CONFORMITY THEREOF TO SPECIFICATIONS, FREEDOM
FROM PATENT, COPYRIGHT OR TRADEMARK INFRINGEMENT, THE ABSENCE OF ANY LATENT OR
OTHER DEFECT, WHETHER OR NOT DISCOVERABLE, OR AS TO THE ABSENCE OF ANY
OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER EXPRESS OR IMPLIED
REPRESENTATION OR WARRANTY WHATSOEVER WITH RESPECT THERETO AND EACH OF LESSOR
AND OWNER PARTICIPANT EXPRESSLY DISCLAIMS SELECTION OF THE UNITS, except that
Lessor, in its individual capacity, represents and warrants that on the Closing
Date, Lessor shall have received whatever title to each Unit as was conveyed to
Lessor by Lessee and each Unit will be free of Lessor's Liens attributable to
Lessor and provided that the foregoing disclaimer in clause (v) shall not extend
to Owner Participant's representation and warranty contained in Section 3.5(e)
of the Participation Agreement. Lessor hereby appoints and constitutes Lessee
its agent and attorney-in-fact during the Lease Term to assert and enforce,



                                       6
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


from time to time, in the name and for the account of Lessor and Lessee, as
their interests may appear, but in all cases at the sole cost and expense of
Lessee, whatever claims and rights Lessor may have as owner of each Unit against
the manufacturers or any prior owner thereof; provided, however, that if at any
time a Lease Event of Default shall have occurred and be continuing, at Lessor's
option, such power of attorney shall terminate, and Lessor may assert and
enforce, at Lessee's sole cost and expense, such claims and rights. Lessee's
delivery of a Lease Supplement shall be conclusive evidence as between Lessee
and Lessor that all Units described therein are in all the foregoing respects
satisfactory to Lessee, and Lessee will not assert any claim of any nature
whatsoever against Lessor based on any of the foregoing matters.


               Section 5.2 Rights Under Existing Equipment Subleases. Unless a
Lease Event of Default shall have occurred and be continuing under Section 14
and Lessor shall have given written notice to Lessee, Lessor agrees to make
available to Lessee such rights as Lessor may have, and Lessee shall be entitled
to exercise all rights of Lessor under, each Sublease.


SECTION 6.     Return of Equipment; Storage.


               Section 6.1 Return; Holdover Rent. (a) Not less than 180 days
prior to the end of the Basic Term or the end of any Renewal Term, if Lessee has
elected to return the Units under Section 22.2, Lessee will provide Lessor with
a list of not less than ten (10) alternative storage locations ("Storage
Locations") used for the storage of rolling stock within the Contiguous United
States sufficient to store the Units and the available storage capacities of
such locations. Unless Lessee shall have purchased the Units pursuant to Section
22 of this Lease or pursuant to Section 6.9 of the Participation Agreement, not
less than 90 days prior to the end of the Lease Term, Lessor will give Lessee
irrevocable notice of its decision either to take possession of or store the
Units. If Lessor shall have decided to take possession of the Units, the terms
of Section 6.1(b) will apply. If Lessor shall have decided to store the Units,
the terms of Section 6.1(c) will apply.

               (b)     Unless Lessee shall have purchased the Units pursuant to
Section 22 of this Lease or pursuant to Section 6.9 of the Participation
Agreement, if Lessor shall have decided to take possession of the Units, Lessee
will, at its sole risk and expense, deliver possession of the Units at any
storage location, f.o.b. such location, (i) as may be agreed upon by Lessor and
Lessee in writing or (ii) in the absence of such agreement as Lessor may
reasonably select by written notice to



                                       7
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


Lessee on or before the 90th day before the end of the Lease Term; provided,
that (x) with respect to all Units being so delivered, there shall be no more
than ten (10) locations (each of which shall be located within the Contiguous
United States and shall have adequate storage capacities) and (y) Lessor's
notice shall specify the total number and type of Units to be delivered to each
location.

               (c)     (i) Unless Lessee shall have purchased the Units pursuant
to Section 22 of this Lease or pursuant to Section 6.9 of the Participation
Agreement, if Lessor shall have elected to store the Units upon the expiration
of the Lease Term with respect thereto, Lessee shall store the Units free of
charge and at the risk and expense of Lessee for a period (the "Storage Period")
beginning, for any particular Storage Location, on the expiration of the Lease
Term for such Units (the "Storage Period Commencement Date") and ending not more
than 60 days thereafter. On or before the 90th day before the end of the Lease
Term, Lessor shall provide Lessee with written notice designating its choices
from among the Storage Locations provided by Lessee pursuant to Section 6.1(a).
Any storage provided by Lessee during the Storage Period shall be at the sole
risk and expense of Lessee, and Lessee shall maintain the insurance required by
Section 12.1 with respect to all stored Units. During the Storage Period, Lessee
will permit Lessor or any Persons designated by it, including the authorized
representative or representatives of any prospective purchaser or user of such
Units, to restencil the marks on such Units and to inspect the same during
Lessee's normal business hours upon at least three Business Days' prior written
or telephonic notice; provided, however, that such inspection and restenciling
shall not interfere with the normal conduct of Lessee's business; and provided,
further, that (x) such inspection and restenciling shall be at such Person's own
risk and expense, (y) Lessee shall be indemnified by Lessor against any loss or
damage incurred by it in connection with any such inspection or restenciling by
such Person and (z) Lessee (except in the case of Lessee's gross negligence or
wilful misconduct) shall not be liable for any injury to, or the death of, any
person exercising, either on behalf of Lessor or any prospective purchaser or
user, the rights of inspection and restenciling granted pursuant hereto. Lessee
shall not be required to store any Unit after the Storage Period. If Lessee does
store any Unit after the expiration of the Storage Period, such storage shall be
at the sole risk and expense of Lessor.

                       (ii) Upon the request and direction of Lessor (and at
Lessor's sole risk and expense), on not more than one occasion with respect to
each stored Unit and upon not less than 15 days' prior written notice from
Lessor to Lessee, Lessee



                                       8
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


will, on or before the expiration of the Storage Period, transport such Unit to
any railroad interchange point or points within the Contiguous United States on
any railroad lines or to any connecting carrier for shipment (with appropriate
instructions to cause such Unit to be transported to such locations in the
Contiguous United States as Lessor shall direct), whereupon Lessee shall have no
further liability or obligation with respect to such Unit.

                       (iii) Upon receipt of Lessor's written notice designating
its choices from among the alternative Storage Locations provided by Lessee
under Section 6.1(a), Lessee shall have the option to store such Units at such
Storage Locations as it shall choose in which case the Storage Period shall be
at the sole risk and expense of Lessee for a period of 60 days, during which
period Lessee shall be obligated to insure such Units as provided in Section 12.
Upon receipt of such notice, Lessee will promptly give notice to Lessor of the
locations at which Lessee will store such Units. If Lessee shall exercise such
option, Lessee shall on or before the expiration of the Storage Period transport
the Units to any railroad interchange point or points within the Contiguous
United States on any railroad lines or to any connecting carrier for shipment
(with appropriate instructions to cause such Units to be transported to such
locations (provided that such Units shall be transported to no more than ten
(10) locations, each having adequate storage capacity) designated by Lessor upon
not less than 15 days' prior written notice). The movement of any Unit from such
Unit's location as designated by Lessee pursuant to this Section 6.1(c)(iii) to
an interchange point thereafter designated by Lessor in accordance with the
foregoing sentence will be at the risk and expense of Lessor; provided, however,
that any incremental costs associated with movement from the storage facility
designated by Lessee pursuant to this clause (iii) over the costs that would be
incurred in movement from the storage facility designated by Lessor pursuant to
Section 6.1 (a) shall be for the account of Lessee. During any Storage Period,
Lessee shall store the Units in such manner as the Manager normally stores
similar units of railroad equipment owned or managed by it.

               (d)     Upon the latest of (i) expiration of the Lease Term with
respect to a Unit, (ii) tender of such Unit at the location determined in
accordance with Section 6.1(b) or, as applicable, the tender of such Unit for
storage in accordance with Section 6.1(c) and (iii) compliance by such Unit with
Section 6.2, this Lease and the obligation to pay Basic Rent for such Unit
accruing subsequent to the expiration of the Lease Term with respect to such
Unit shall terminate.



                                       9
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


               (e)     In the event any Unit is not (i) returned to Lessor in
accordance with the provisions of Section 6.1(b) on the last day of the Lease
Term with respect thereto, or, if requested by Lessor pursuant to Section
6.1(c), delivered and stored on such last day of the Lease Term, and, in either
case, in the condition specified in Section 6.2 or (ii) deemed automatically
renewed in accordance with the provisions of Section 22.7, the Lease with
respect to such Unit shall continue in effect and Lessee shall pay to Lessor for
each such day from the scheduled expiration of the Lease Term with respect to
such Unit until the date on which such Unit is returned to Lessor in accordance
with the provisions of Section 6.1(b) and in the condition specified in Section
6.2, an amount equal to the daily equivalent of the average Basic Rent for the
Basic Term or the Renewal Term, as applicable, to such Unit. Notwithstanding the
foregoing, nothing in this Section 6.1(e) shall be construed as permitting or
authorizing Lessee to fail to meet, or be construed as Lessor consenting to or
waiving any failure by Lessee to perform, Lessee's obligation to return the
Units in accordance with the requirements of this Lease. Nothing herein shall be
in abrogation of Lessor's right to terminate this Lease under Section 15 as a
result of such failure or to have such Unit returned to it for possession or
storage.


               Section 6.2 Condition of Equipment. Each Unit when returned to
Lessor pursuant to Section 6.1 shall be (i) capable of performing the functions
for which it was designed, with all loading and unloading components operating
in good working order with allowance for normal wear and tear, (ii) suitable for
continued commercial use in the commodity last carried immediately prior to such
return, (iii) suitable for use in interchange in accordance with then applicable
Federal regulations, the Field Manual of the AAR, the Interchange Rules and FRA
rules and regulations, (iv) in all material respects in the condition required
by Section 8.1, (v) in conformance with any requirement pertaining to warranties
of the manufacturer of the Units during the warranty period, (vi) empty, (vii)
unless industry custom or practice indicates to the contrary, steam cleaned or
otherwise cleaned in a comparable commercially acceptable manner and (viii) free
and clear of all Liens except Lessor's Liens. All logs, records, books and other
materials, or appropriate copies of any thereof, relating to the maintenance of
such Unit shall, upon Lessor's request, be delivered to Lessor or its designee
upon the return of such Unit. Lessor shall have the right to inspect any Unit
that is returned pursuant to Section 6.1 to ensure that such Unit is in
compliance with the conditions set forth in this Section 6.2, at Lessor's sole
cost, expense and risk (including, without limitation, the risk of personal
injury or death), by its authorized representatives, during Lessee's normal
business hours and upon reasonable prior notice to Lessee; provided, however,
that



                                       10
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


Lessee shall not be liable for any injury to, or the death of, any Person
exercising, on behalf of Lessor, the rights of inspection granted under this
Section 6.2 unless caused by Lessee's gross negligence or wilful misconduct; and
further provided, that if such Unit is not in compliance with the conditions set
forth in this Section 6.2, then Lessee will (i) promptly take such steps as are
necessary to bring such Unit in compliance with the conditions set forth in this
Section 6.2 and (ii) pay the reasonable cost and expense of the original
inspection of such Unit and any reinspection of such Unit conducted by Lessor
required because of such non-compliance with Section 6.2. No inspection pursuant
to this Section 6.2 shall interfere with the normal conduct of Lessee's business
or the normal conduct of any Sublessee's business, and Lessee shall not be
required to undertake or incur any additional liabilities in connection
therewith. A Unit shall not be deemed to have been returned to Lessor for
purposes of this Lease unless and until it is in compliance with the conditions
set forth in this Section 6.2.


SECTION 7.      Liens.

               Lessee will not directly or indirectly create, incur, assume,
permit or suffer to exist any Lien on or with respect to any Unit or Lessee's
leasehold interest therein under this Lease, except Permitted Liens, Lessor's
Liens and Liens described in Section 6.4(a) and 6.4(b) of the Participation
Agreement. Lessee shall promptly, at its own expense, take such action or cause
such action to be taken as may be necessary to duly discharge (or bond to the
reasonable satisfaction of Lessor and Indenture Trustee) any such Lien not
excepted above if the same shall arise at any time.


SECTION 8.      Maintenance; Possession; Compliance with Laws.


               Section 8.1 Maintenance and Operation. (a) Lessee, at its own
cost and expense, shall maintain, repair and keep each Unit, or cause the
Manager under the Management Agreement to maintain, repair and keep each Unit,
(i) according to prudent industry practice and in all material respects, in good
working order, and in good physical condition for railcars of a similar age and
usage, normal wear and tear excepted, (ii) in a manner in all material respects
consistent with maintenance practices used by the Manager or, with respect to
any Equipment subject to an Existing Equipment Sublease that is a Net Sublease,



                                       11
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


the applicable Sublessee, as applicable, in respect of railcars owned or managed
by the Manager or, with respect to any Equipment subject to an Existing
Equipment Sublease that is a Net Sublease, the applicable Sublessee, as
applicable, similar in type to such Unit, (iii) in accordance in all material
respects with all manufacturer's warranties in effect and in accordance with all
applicable provisions, if any, of insurance policies required to be maintained
pursuant to Section 12 and (iv) in compliance in all material respects with any
applicable laws and regulations from time to time in effect, including, without
limitation, the Field Manual of the AAR, FRA rules and regulations and
Interchange Rules as they apply to the maintenance and operation of the Units in
interchange regardless of upon whom such applicable laws and regulations are
nominally imposed; provided, however, that, so long as the Manager or, with
respect to any Equipment subject to an Existing Equipment Sublease, the
applicable Sublessee, as applicable, is similarly contesting such law or
regulation with respect to all other similar equipment owned or operated by
Manager or, with respect to any Equipment subject to an Existing Equipment
Sublease, the applicable Sublessee, as applicable, Lessee may, in good faith and
by appropriate proceedings diligently conducted, contest the validity or
application of any such standard, rule or regulation in any reasonable manner
which does not materially interfere with the use, possession, operation or
return of any of the Units or materially adversely affect the rights or
interests of Lessor and the Indenture Trustee in the Units or hereunder or
otherwise expose Lessor, the Indenture Trustee or any Participant to criminal
sanctions or release Lessee from the obligation to return the Units in
compliance with the provisions of Section 6.2; provided further, that Lessee
shall promptly notify Lessor and Indenture Trustee in reasonable detail of any
such contest. In no event shall Lessee discriminate in any material respect as
to the use or maintenance of any Unit (including the periodicity of maintenance
or recordkeeping in respect of such Unit) as compared to equipment of a similar
nature which the Manager owns or manages. Lessee will maintain in all material
respects all records, logs and other materials required by relevant industry
standards or any governmental authority having jurisdiction over the Units
required to be maintained in respect of any Unit, all as if Lessee were the
owner of such Units, regardless of whether any such requirements, by their
terms, are nominally imposed on Lessee, Lessor or Owner Participant.

               (b)     Without the written waiver or consent of Lessor (which
waiver or consent will not be unreasonably withheld), Lessee shall not change,
or permit any Sublessee to change, a DOT/AAR classification (as provided for in
49 C.F.R. Part 179 or any successor thereto), or permit any Sublessee to operate
any Unit under a different DOT/AAR classification, from that classification in
effect for such Unit on the Closing Date, except for any change in tank test
pressure rating provided such



                                       12
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


change does not increase the pressure rating of the Unit above the tank test
pressure to which the Unit was manufactured; provided however, that in the event
Lessor shall not have provided Lessee with a written waiver or consent to such a
reclassification or operation of any Unit within 10 Business Days after receipt
of Lessee's written request therefor (or Lessor expressly rejects such a request
by Lessee), Lessee may elect to replace such Unit in accordance with and subject
to the provisions of Sections 11.2(i), 11.3 and 11.4.


               Section 8.2 Possession and Use. Lessee shall be entitled to the
possession of the Units and to the use of the Units by it or any Affiliate in
the United States and, subject to the remaining provisions of this Section 8.2
and Section 8.3, Canada and Mexico, only in the manner for which it was designed
and intended and so as to subject it only to ordinary wear and tear. In no event
shall Lessee use, store or permit the use or storage of any Unit in any
jurisdiction not included in the insurance coverage required by Section 12. The
Units shall be used primarily on domestic routes in the United States, and in no
event shall more than forty percent (40%) of the Units and the Other Units (as
determined by mileage records and measured annually on a calendar year basis) be
used outside the Contiguous United States at the same time. Nothing in this
Section 8.2 shall be deemed to constitute permission by Lessor to any Person
that acquires possession of any Unit to take any action inconsistent with the
terms and provisions of this Lease or any of the other Operative Agreements.


               Section 8.3 Sublease. Lessee shall be entitled, without the
prior approval of Lessor, to enter into a sublease, car contract or other
contract granting permission for the use of a Unit to:

               (i) a railroad company or companies (that is not a Credit
Bankrupt, Trinity or any Affiliate of Trinity) organized under the laws of the
United States of America or any state thereof or the District of Columbia,
Canada or any province thereof, or Mexico or any state thereof, upon lines of
railroad owned or operated by such railroad company or companies or over which
such railroad company or companies have trackage rights or rights for operation
of their trains, and upon connecting and other carriers in the usual interchange
of traffic;

               (ii) responsible companies (i.e., a company with which the
Manager would do business in the ordinary course of its business with respect to
railcars



                                       13
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


which it owns or manages) (other than railroad companies, Trinity, Affiliates of
Trinity or Credit Bankrupts) for use in their business; or

               (iii) wholly-owned Subsidiaries of Trinity organized under the
laws of (x) Canada or any political subdivision thereof (each a "Canadian
Affiliate") or (y) Mexico or any political subdivision thereof (each a "Mexican
Affiliate") (subleases to any of such sublessees referred to in clauses (i),
(ii) or (iii) of this Section 8.3 being herein referred to as "Permitted
Subleases");

provided, however, that Lessee shall not (A) sublease to a sublessee organized
under the laws of Mexico or any state thereof (a "Mexican Sublessee") if, after
giving effect to such sublease, the percentage of Units, Other Units and Pledged
Units in the aggregate (as measured by number of Units, Other Units and Pledged
Units and not mileage records) subleased to Mexican Sublessees exceeds the
lesser of (I) 7% (or, with Rating Agency Confirmation, 20%) of the Units, Other
Units and the Pledged Units in the aggregate, or (II) the percentage of railcars
leased or subleased to Mexican Sublessees in the Total Managed Fleet, and (B)
sublease more than 50 Units and Other Units to any single Mexican Sublessee
(other than (x) with Rating Agency Confirmation, to a Mexican Affiliate or (y) a
Mexican Sublessee (I) with a credit rating of at least BBB and Baa2 as
determined by S&P and Moody's, respectively (or, in the event that either S&P or
Moody's shall not or cease to provide a credit rating for such entity, a credit
rating of at least BBB or Baa2 by S&P or Moody's, as the case may be) or (II)
with a full, unconditional irrevocable guaranty from such Mexican Sublessee's
parent with a credit rating at least BBB and Baa2 as determined by S&P and
Moody's, respectively, or (III) with a letter of credit from a provider with a
credit rating at least A+ or A1 as determined by S&P and Moody's, respectively),
provided, further, that Lessee shall not at any time sublease more than 20% (or,
with Rating Agency Confirmation, 30%) of the Units and the Other Units (as
measured by number of Units and Other Units and not mileage records) in the
aggregate to Canadian Affiliates, provided, further, that any Unit subleased to
a Canadian Affiliate or a Mexican Affiliate shall be sub-subleased to Persons of
the type described in clause (i) or (ii) above pursuant to a sub-sublease
containing terms and conditions similar in all material respects to the
applicable sublease between Lessee and the applicable Canadian Affiliate or
Mexican Affiliate and, provided, further, that no sub-sublease may provide
greater rights to the sub-sublessee than those provided to the sublessee in the
related sublease.



                                       14
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


               Each Sublease (and to the extent permitted, sub-sublease) other
than Existing Equipment Subleases shall include appropriate provisions so that
such sublease (i) shall require the payment of rent (x) in dollars (y) at Fair
Market Rental Value and (z) not disproportionately in the earlier term of the
sublease compared to in the later term of the sublease; (ii) shall not permit
any sub-subleasing (or in the case of any sub-sublease, any subleasing), other
than (A) sub-subleases by Canadian Affiliates or Mexican Affiliates to Persons
of the type described in clauses (i) or (ii) of the immediately preceding
paragraph containing terms and conditions similar in all material respects to
the applicable sublease between Lessee and the applicable Canadian Affiliate or
Mexican Affiliate, (B) "single trip" subleases or (C) sub-subleases by Permitted
Sublessees so long as such sub-sublease is (X) of a term of not more than one
year, (Y) subject and subordinate to the Sublease and (Z) to a sub-sublessee and
on terms such that it would be a Permitted Sublease if it were entered into
directly by the Partnership and shall not permit any sub-sub-sub leasing, (iii)
provide that the rights of the Sublessee to offset or otherwise set-off against
amounts due to Lessee from any such Sublessee under the applicable Sublease be
limited to matters arising under the Sublease (except that the Sublessee may
offset or otherwise set off amounts due to the Marks Company Trustee under the
Sublease), (iv) without regard to the payment of Basic Rent or the Lease Term,
shall not include any term or provision which is inconsistent with the terms and
conditions of this Lease or which could reasonably be expected to result in
material adverse consequences to Lessor, any Participant or the Indenture
Trustee (it being agreed that a sublease substantially in the form attached as
Exhibit B-1 or Exhibit B-2 satisfies the provisions of this sentence) and (v)
does not have a term which extends three years beyond the later of (i) the Basic
Term Expiration Date or (ii) if applicable, the end of any Renewal Term then in
effect.

               Lessee will use commercially reasonable efforts to have each
Sublease other than Existing Equipment Subleases (i) provide that such Sublease
and all rights of the Sublessee (and of any other person claiming or who may
hereafter claim under or through the Sublessee) under such Sublease, including
any purchase options of the Sublessee thereunder, be made subject and
subordinate to the terms of this Lease and (ii) be substantially in the form
attached as Exhibit B-1 or Exhibit B-2.

               Notwithstanding the foregoing, in no event shall Lessee or any of
its Affiliates be required to take any action to perfect any security interest
which any Person may have in any Sublease, other than the filing of a UCC-1
Financing Statement against the Partnership in the jurisdiction in which the
Partnership's chief



                                       15
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


executive office is located and in the Partnership's jurisdiction of formation
covering all Subleases generally.

               No sublease entered into by Lessee hereunder shall relieve Lessee
of any liability or obligation hereunder, which shall be and remain those of a
principal and not a surety. Nothing in this Section 8.3 shall be deemed to
constitute permission to any Person in possession of any Unit pursuant to any
such sublease to take any action inconsistent with the terms and provisions of
this Lease or any of the other Operative Agreements. As used in this Section
8.3, "sublease" as a noun means a sublease, car contract or other contract
granting permission for the use of a Unit and "sublease" as a verb means to
enter into any of the foregoing.


SECTION 9.     Modifications.


               Section 9.1 Required Modifications. In the event a Required
Modification to a Unit is required, Lessee agrees to make such Required
Modification at its own expense; provided, however, that Lessee may, in good
faith and by appropriate proceedings diligently conducted, contest the validity
or application of any such law, regulation, requirement or rule in any
reasonable manner which does not materially interfere with the use, possession,
operation or return of any Unit or materially adversely affect the rights or
interests of Lessor or the Indenture Trustee in the Units or hereunder or
otherwise expose Lessor, the Indenture Trustee or any Participant to criminal
sanctions or relieve Lessee of the obligation to return the Units in compliance
with the provisions of Section 6.2; provided, further, that, with respect to a
Unit subject to a Full Service Sublease, the Manager, and with respect to a Unit
subject to a Net Sublease, the Sublessee, as applicable, is similarly contesting
such law, regulation, requirement or rule with respect to all other similar
equipment owned or operated by the Manager or the Sublessee, as applicable.
Title to any Required Modification shall immediately vest in Lessor.
Notwithstanding anything herein to the contrary, if Lessee, on a
non-discriminatory basis, determines in its reasonable judgment (as evidenced by
an Officer's Certificate of Lessee to such effect, confirmed by an Officer's
Certificate of the Manager) that any Required Modification to a Unit would be
economically impractical and the Manager certifies that it has made a similar
determination with respect to similar railcars in similar circumstances which
are part of the Manager's Fleet, in lieu of making the Required Modification as
provided above, Lessee may provide written notice of such determination to
Lessor in such Officer's Certificate and treat such Unit as if an Event of Loss
had occurred as of the date of such written notice with respect to such



                                       16
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


Unit and in such event the provisions of Sections 11.2(ii), 11.3 and 11.4 shall
apply with respect to such Unit except that the amount payable under Section
11.2(ii)(a) as a result of such determination shall be an amount equal to the
greater of the Fair Market Sales Value or Stipulated Loss Amount of such Unit;
provided that there shall also be included in such Officer's Certificate a
statement of how Lessee intends to meet the financial obligations imposed under
said Sections 11.2, 11.3 and 11.4 with respect to such Units.


               Section 9.2 Optional Modifications. Lessee at any time may or may
permit a Sublessee to, in its discretion and at its own or such Sublessee's cost
and expense, modify, alter or improve any Unit in a manner which is not required
by Section 9.1 (a "Modification"); provided that no Modification shall diminish
the fair market value, utility, capacity, residual value or remaining economic
useful life of such Unit below the fair market value, utility, capacity,
residual value or remaining economic useful life thereof immediately prior to
such Modification, in more than a de minimis respect, assuming such Unit was
then at least in the condition required to be maintained by the terms of this
Lease. Title to any Non-Severable Modification shall be immediately vested in
Lessor. Title to any Severable Modification (other than Required Modifications)
shall remain with Lessee or the Sublessee as applicable. If Lessee shall at its
cost cause such Severable Modifications (other than Required Modifications) to
be made to any Unit, Lessor shall have the right, upon 90 days prior written
notice in the case of the return of such Unit pursuant to Section 6.1, to
purchase any such Severable Modifications (other than Severable Modifications
consisting of proprietary or communications equipment) title to which is held by
Lessee at their then Fair Market Sales Value (taking into account their actual
condition). If Lessor does not so elect to purchase such Severable
Modifications, Lessee may remove such Severable Modifications at Lessee's cost
and expense, and if requested (which request shall be made by not less than 90
days prior written notice in the case of a return other than pursuant to Section
15.6) by Lessor will so remove such Severable Modifications at Lessee's cost and
expense, and Lessee shall, at its expense, repair any damage resulting from the
removal of any such Severable Modifications in a manner consistent with Section
8.1. If Lessee has not removed any Severable Modification prior to the return of
the related Unit as provided herein, title to such Severable Modification shall
pass to Lessor as of the date of such return.


               Section 9.3 Removal of Property; Replacements. Lessee may, in the
ordinary course of maintenance or repair of any Unit, remove any item of
property



                                       17
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


constituting a part of such Unit, and unless the removal of such item is
required by Section 9.1 hereof, Lessee shall replace such item as promptly as
practicable by an item of property that is free and clear of all Liens (other
than Permitted Liens) and in as good operating condition as, and with a fair
market value, utility, capacity, residual value and remaining economic useful
life at least equal to, the item of property being replaced, assuming that such
replaced item was in the condition required to be maintained by the terms of
this Lease. Any item of property removed from such Unit in the ordinary course
of maintenance and repair as provided in the preceding sentence shall remain the
property of Lessor until replaced in accordance with the terms of such sentence,
but shall then, without further act, become the property of Lessee. Any
replacement property which is incorporated into a Unit in the ordinary course of
maintenance and repair shall, without further act, become the property of Lessor
and be deemed part of such Unit for all purposes hereof.


SECTION 10.    Voluntary Termination.


               Section 10.1 Right of Termination. Lessee shall have the right,
at its option at any time or from time to time during the Basic Term on or after
the seventh anniversary of the Basic Term Commencement Date (as defined under
the Lease Agreement TRLI 2001-1A) to terminate the Lease with respect to any or
all of the Units (provided that, if such termination is for less than all Units
in a Functional Group across the Partnership Fleet, Lessee shall exercise such
termination hereunder and under the comparable provisions contained in the Other
Leases (i) with respect to at least 50 railcars in the aggregate of the type
included in such Functional Group, (ii) no fewer than 25 railcars of the type
included in such Functional Group shall in the aggregate remain subject to this
Lease and the Other Leases, (iii) such termination shall be made hereunder and
under the Other Leases pro rata in accordance with the number of units in such
Functional Group subject to each such lease and (iv) the determination as to
which Units are subject to termination shall otherwise be made by Lessee on a
random basis without discrimination based on maintenance status, operating
condition of the Units in question or otherwise) (the "Terminated Units") if (x)
Lessee determines in good faith (as evidenced by a certified copy of a
resolution adopted by the General Partner's Board of Managers and a certificate
executed by the Chief Financial Officer of the General Partner and the Chief
Financial Officer of the Manager) that such Units have become obsolete or
surplus to Lessee's requirements, (y) Lessor has received an Officer's
Certificate from each of Lessee and the Manager to the effect that there has
been no discrimination in the selection of the Terminated Units when measured
against the other Units and the Manager's Fleet, and that,



                                       18
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


following the termination of this Lease with respect to the Terminated Units,
the Units remaining subject to this Lease will constitute a pool of Units which
is of a sufficient quantity and quality to sustain over the remaining Basic Term
the Coverage Ratios applicable at the time of such termination and (z) Lessee
delivers at least 120 days' prior notice to Lessor and the Indenture Trustee (i)
specifying a proposed date of termination for such Units (the "Termination
Date"), which date shall be a Rent Payment Date, any such termination to be
effective on the Termination Date upon Lessee's compliance with this Section 10,
and (ii) if some but less than all of the Units in a Functional Group are
designated as Terminated Units, describing in such Officer's Certificate the
nondiscriminatory manner in which Lessee proposes to determine which Units in
that Functional Group are to be Terminated Units. Notwithstanding anything
herein contained to the contrary, there shall be no determination that a Unit is
surplus or obsolete for purposes of this Lease if, on the Termination Date, such
Unit is subject to a Sublease. Except as expressly provided otherwise herein,
there will be no conditions to Lessee's right to terminate this Lease with
respect to the Terminated Units pursuant to this Section 10.1. So long as (a)
Lessor shall not have given Lessee a notice of election to retain the Terminated
Units in accordance with Section 10.3 or (b) notice of prepayment of the
Equipment Notes shall not have been given pursuant to Section 2.10 of the
Indenture, Lessee may withdraw the termination notice referred to above at any
time prior to the 60th day prior to the scheduled Termination Date, whereupon
this Lease shall continue in full force and effect; provided that Lessee may not
exercise its right to withdraw a termination notice more than once annually or
more than four times during the Basic Term (irrespective of which Units are
covered thereby). Lessee agrees that whether or not it withdraws a termination
notice it will reimburse Lessor, each Participant and the Indenture Trustee on
an After Tax Basis for all reasonable out-of-pocket costs and expenses
(including reasonable legal fees and expenses) incurred by any thereof in
connection with such termination or proposed termination.


               Section 10.2 Sale of Equipment. During the period from the date
of such notice given pursuant to Section 10.1 to the Termination Date, Lessee,
as non-exclusive agent for Lessor and, except as provided in Section 10.3, at
Lessee's sole cost and expense, shall use reasonable best efforts to obtain bids
from Persons other than Lessee or Affiliates thereof for the cash purchase of
the Terminated Units, and Lessee shall promptly, and in any event at least five
Business Days prior to the proposed date of sale, certify to Lessor in writing
the amount and terms of each such bid, the proposed date of such sale and the
name and address of the party submitting such bid. Unless Lessor shall have
elected to retain the Terminated Units in



                                       19
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


accordance with Section 10.3, on the Termination Date: (i) Lessee shall deliver
the Terminated Units (excluding any optional Severable Modifications removed by
Lessee pursuant to Section 9.2) to the bidder (which shall not be Lessee or an
Affiliate of Lessee (for the avoidance of doubt the bidder may be a Customer, or
a customer of the Manager, and neither the Manager nor any Affiliate shall be
prohibited from managing the Units for such bidder after the purchase by such
bidder)), which shall have submitted the highest cash bid prior to such date (or
to such other bidder as Lessee and Lessor shall agree) and (ii) subject to the
prior or concurrent receipt (x) by Lessor of all amounts owing to Lessor
pursuant to the next sentence and (y) by the Persons entitled thereto of all
unpaid Supplemental Rent due on or before the Termination Date, Lessor shall,
without recourse or warranty (except as to the absence of any Lessor's Lien)
simultaneously therewith transfer all of its right, title and interest in and to
the Terminated Units to such bidder. The net proceeds of sale realized at such
sale shall be paid to and retained by Lessor and, in addition, on the
Termination Date, Lessee shall pay to Lessor (A) all Basic Rent with respect to
such Terminated Units due and payable prior to the Termination Date (exclusive
of any Basic Rent due on such date), (B) the excess, if any, of (1) the
Termination Amount for the Terminated Units computed as of the Termination Date
over (2) the net cash sales proceeds (after the deduction of all reasonable
costs and expenses (including any applicable sales, transfer or similar taxes)
of Lessor and Owner Participant in connection with such sale) of the Terminated
Units, (C) an amount equal to the Make-Whole Amount and any unpaid Late Payment
Premium in respect of the principal amount of the Equipment Notes to be prepaid
in accordance with Section 2.10(a) of the Indenture and (D) all other Rent
(exclusive of any Basic Rent due on such date) then due and payable hereunder
(which shall include, without limitation, the Accumulated Equity Deficiency
Amount (without duplication of amounts calculated above) and Late Payment
Interest related thereto), so that, after receipt and application of all such
payments, but without withdrawal from any Reserve Account, Owner Participant
shall be entitled under the terms of the Collateral Agency Agreement to receive,
and does receive, taking into account all payments of Basic Rent, in respect of
all such Units, the sum of the Accumulated Equity Deficiency Amount and Late
Payment Interest related thereto and any other amounts then due to Owner
Participant. If no sale shall have occurred, whether as a result of Lessee's
failure to pay all of the amounts hereinabove required or otherwise, this Lease
shall continue in full force and effect with respect to such Units and Lessee
agrees to reimburse Lessor, each Participant and the Indenture Trustee for all
reasonable costs and expenses (including reasonable legal fees and expenses)
incurred by any thereof in connection therewith; provided that if such sale
shall not



                                       20
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


have occurred solely because of Lessee's failure to pay the amounts hereinabove
required, Lessee shall have no further right to terminate this Lease with
respect to such Units. Lessee, in acting as agent for Lessor, shall have no
liability to Lessor for failure to obtain the best price, shall act in its sole
discretion and shall be under no duty to solicit bids publicly or in any
particular market. Lessee's sole interest in acting as agent shall be to use its
reasonable best efforts to sell the Units at the highest price then obtainable
consistent with the terms of this Lease. Owner Participant shall have the right,
but not the obligation, to obtain bids either directly or through agents other
than Lessee.


               Section 10.3 Retention of Equipment by Lessor. Notwithstanding
the provisions of Sections 10.1 and 10.2, Lessor may irrevocably elect by
written notice to Lessee, not later than 60 days after receipt of Lessee's
notice of termination, not to sell the Terminated Units on the Termination Date,
whereupon Lessee shall (i) deliver the Terminated Units to Lessor in the same
manner and condition as if delivery were made to Lessor pursuant to Section
6.1(b) and Section 6.2, and shall extend storage rights to the same extent as
provided in Section 6.1(c), treating the Termination Date as the termination
date of the Lease Term with respect to the Terminated Units and (ii) pay to
Lessor, or to the Persons entitled thereto, all Basic Rent and all Supplemental
Rent due and owing on the Termination Date and unpaid (exclusive of any Basic
Rent due on such date in respect of the Terminated Units, but inclusive of any
Supplemental Rent measured by the Make-Whole Amount and any unpaid Late Payment
Interest in respect of the Terminated Units), so that, after receipt and
application of all such payments, but without withdrawal from any Reserve
Account, Owner Participant shall be entitled under the terms of the Collateral
Agency Agreement to receive, and does receive, taking into account all payments
of Basic Rent, in respect of all such Units, the sum of the Accumulated Equity
Deficiency Amount and Late Payment Interest related thereto and any other
amounts then due to Owner Participant. On any Termination Date where Lessee is
required to make payments pursuant to the preceding sentence, Lessee shall pay
as additional Basic Rent (or Lessor shall pay as a refund of Basic Rent) an
amount equal to the Basic Rent Adjustment (or the absolute value of the negative
Basic Rent Adjustment) set forth on Schedule 4-B to the Participation Agreement
for the relevant Rent Payment Date. If Lessor elects not to sell the Terminated
Units as provided in this Section 10.3, then Lessor shall pay, or cause to be
paid, to the Indenture Trustee an amount equal to the product obtained by
multiplying the unpaid principal amount of the Equipment Notes outstanding on
such date (after deducting therefrom the principal installment, if any, to be
paid on such date) by a fraction, the



                                       21
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


numerator of which shall be the Equipment Cost of the Terminated Units and the
denominator of which shall be the aggregate Equipment Costs of all Units then
subject to this Lease. Upon payment by Lessor of the foregoing, Lessee shall pay
to Lessor an amount of rent equal to the Make-Whole Amount and any unpaid Late
Payment Interest in respect of the principal amount of the Equipment Notes to be
prepaid together with all Basic Rent (including Basic Rent due on the
Termination Date) and Supplemental Rent due and owing; provided that unless all
such amounts shall have been paid to the Indenture Trustee on the Termination
Date, this Lease shall continue in full force and effect. If after giving the
notice referred to above Lessor shall fail to pay the amounts required pursuant
to the third sentence of this Section 10.3 and as a result thereof this Lease
shall not be terminated with respect to the Terminated Units on a proposed
Termination Date, Lessor shall (x) thereafter no longer be entitled to exercise
its election to retain such Terminated Units and (y) reimburse Lessee for any
reasonable out-of-pocket expenses (including reasonable legal fees and expenses)
incurred by it in attempting to sell the Terminated Units pursuant to Section
10.2 immediately prior to Lessor's exercise of such preemptive election, and
Lessee may at its option at any time thereafter prior to the immediately
following Rent Payment Date submit a new termination notice pursuant to Section
10.1 with respect to such Terminated Units specifying a proposed Termination
Date occurring on a Determination Date occurring not earlier than 25 days from
the date of such notice.


               Section 10.4 Termination of Lease. In the event of either (x) any
such sale and receipt by Lessor and the Indenture Trustee of all of the amounts
provided in Section 10.2 in respect of the Terminated Units or (y) retention of
the Terminated Units and full performance by Lessor and Lessee of their
respective payment obligations in compliance with Section 10.3, and upon
compliance by Lessee with the other provisions of this Section 10, the
obligation of Lessee to pay Basic Rent hereunder for such Terminated Units shall
cease and the Lease Term for the Terminated Units shall end.


               Section 10.5 Funding of Accounts on Termination. Lessee will not
exercise a termination option under this Section 10 with respect to all of the
Units unless either (a) the full amount required to fund the Post Lease Term
Reserve Account is (upon consummation of such purchase and distribution of all
amounts required to be distributed by the Collateral Agent under the Collateral
Agency Agreement) and will be then available to the Collateral Agent to fund
such Post



                                       22
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


Lease Term Reserve Account or (b) an indemnity pursuant to Section 3.13 of the
Collateral Agency Agreement has been provided.


SECTION 11.    Loss, Destruction Requisition, Etc.


               Section 11.1 Event of Loss. In the event that any Unit (i) shall
suffer damage or contamination which, in Lessee's reasonable judgment (as
evidenced by an Officer's Certificate of Lessee to such effect, confirmed by an
Officer's Certificate of the Manager), makes repair uneconomic or renders such
Unit unfit for commercial use, (ii) shall suffer destruction which constitutes a
total loss, or shall suffer theft or disappearance (after reasonable efforts by
Lessee to locate the same) for a period exceeding 6 months (or, if earlier, the
end of the Basic Term or Renewal Term then in effect), (iii) shall be
permanently returned to the manufacturer pursuant to any patent indemnity
provisions, (iv) shall have title thereto taken or appropriated by any
governmental authority, agency or instrumentality under the power of eminent
domain or otherwise or (v) shall be taken or requisitioned for use by any
governmental authority or any agency or instrumentality thereof under the power
of eminent domain or otherwise, and such taking or requisition is for a period
that exceeds the remaining Basic Term or any Renewal Term then in effect (unless
such taking or requisition is by any governmental authority, agency or
instrumentality of Mexico or any state thereof in which case such period shall
be the lesser of the period as aforesaid or 365 days) (any such occurrence being
hereinafter called an "Event of Loss"), Lessee, in accordance with the terms of
Section 11.2, shall promptly and fully inform Lessor and the Indenture Trustee
of such Event of Loss.


               Section 11.2 Replacement or Payment upon Event of Loss. Upon the
occurrence of an Event of Loss or the deemed occurrence of an Event of Loss
pursuant to Section 9.1 or an election to replace pursuant to Section 8.1(b),
Lessee shall as soon as reasonably practical and in any event within 60 days
after a Responsible Officer of the Manager shall have actual knowledge of the
occurrence of such Event of Loss or election to replace give Lessor and the
Indenture Trustee notice thereof (which initial notice shall identify the Unit
involved). Thereafter, within the 60-day period following such initial notice,
Lessee shall give Lessor and the Indenture Trustee a second notice as to which
of the following options Lessee shall elect to perform (it being agreed that,
except in the case of an election to replace pursuant to Section 8.1(b) (in
which case Lessee will comply with the provisions of Section 8.1(b)), if Lessee
shall fail to give such second notice, Lessee shall be deemed to have elected to
perform the option set forth in Section 11.2(ii)):



                                       23
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


               (i)     Upon Lessee's election to perform under this clause (i)
pursuant to the above-mentioned second notice (or in the circumstances of an
election described in Section 8.1(b) with respect to any Unit), as promptly as
practicable following such election, and in any event on or before the 60th day
following such second notice (or Section 8.1(b) election), Lessee shall comply
with Section 11.4(b) and shall convey or cause to be conveyed to Lessor a
replacement unit ("Replacement Unit") to be leased to Lessee hereunder, such
Replacement Unit to be of the same car type of the same or newer model year (or
otherwise approved by Lessor, which approval shall not be unreasonably
withheld), and free and clear of all Liens (other than Permitted Liens of the
type described in clause (ii) with respect to Permitted Subleases, and in
clauses (iv) and (vii) of the definition thereof) and to have a fair market
value, utility, residual value, remaining economic useful life and condition at
least equal to the Unit so replaced (assuming such Unit was in the condition
required to be maintained by the terms of this Lease) and to be (as of the date
of conveyance) then subject to a currently effective Permitted Sublease having a
remaining term of not less than one year; provided, that, if only railcars of
newer age or greater value are available for such replacement, Lessee may on one
occasion re-substitute a railcar with a value closer to or equal to that of the
Unit which originally suffered the Event of Loss or was replaced (which
re-substitution shall occur within twenty-four months of the original
replacement (but in no event within the three year period immediately preceding
the Basic Term Expiration Date) and shall comply with this Section 11 as if an
Event of Loss had occurred); provided also that, if Lessee shall elect the
option under this clause (i) but shall fail to perform its obligation to effect
such replacement under this clause (i) within the 60-day period hereinabove
provided for, then (except in the case of a failure to perform an election to
replace pursuant to Section 8.1(b)) at the end of such 60-day period Lessee
shall immediately give Lessor and the Indenture Trustee notice of such failure
and specify that Lessee shall pay to Lessor on the next succeeding Rent Payment
Date that is at least 25 days after the end of such 60-day period, or in the
case of Supplemental Rent, to the Person entitled thereto, the amounts specified
in clause (ii) below as of such next succeeding Rent Payment Date, and Lessee
shall pay such amounts on such Rent Payment Date; provided further that Lessee
shall have no right to elect replacement or re-substitution under this clause
(i) if, at the time of the notice of the Event of Loss under Section 11.2 above
or at the time such replacement or re-substitution is to occur, either (A), a
Lease Default pursuant to Section 14(a), 14(b), 14(g) or 14(h) or a Lease Event
of Default shall have occurred and be continuing or (B) sufficient cash amounts
shall not have been made available to the



                                       24
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


Collateral Agent such that all amounts then required to be applied under Section
3.4 of the Collateral Agency Agreement in order to satisfy the amounts referred
to in clauses (1) through (11) thereof, inclusive shall have been distributed as
specified thereby; or

               (ii)    on the Rent Payment Date which is not less than 25 days
nor more than 60 days following the date of notice of Lessee's election to
perform under this clause (ii), Lessee shall pay or cause to be paid to Lessor
(or in the case of Supplemental Rent, to the Persons entitled thereto) in funds
of the type specified in Section 3.5, (a) an amount equal to the Stipulated Loss
Amount of each such Unit suffering an Event of Loss or deemed Event of Loss
determined as of such Rent Payment Date, (b) all Basic Rent payable on such date
in respect of such Unit (exclusive of any Basic Rent due on such date in respect
of the Unit or Units suffering the Event of Loss), (c) any unpaid Late Payment
Premium in respect of the principal amount of the Equipment Notes to be prepaid
in accordance with Section 2.10(b) of the Indenture and (d) all other Rent
(exclusive of any Basic Rent due on such date in respect of the Unit or Units
suffering the Event of Loss) then due and payable hereunder (including, without
limitation, the Accumulated Equity Deficiency Amount (without duplication of
amounts calculated above) and Late Payment Interest related thereto) so that,
after receipt and application of all such payments, but without withdrawal from
any Reserve Account, Owner Participant shall be entitled under the terms of the
Collateral Agency Agreement to receive, and does receive, taking into account
all payments of Basic Rent in respect of such Unit, the sum of the Accumulated
Equity Deficiency Amount and Late Payment Interest related thereto and any other
amounts then due to Owner Participant, it being understood that until such
Stipulated Loss Amount and such other sums are paid, there shall be no abatement
or reduction of Basic Rent on account of such Event of Loss.


               Section 11.3 Rent Termination. Upon the replacement of any Unit
or Units in compliance with Sections 11.2(i) and 11.4(b) (but only as to
replaced Units and not any Replacement Unit) or upon the payment of all sums
required to be paid pursuant to Section 11.2 in respect of any Unit or Units,
the Lease Term with respect to such Unit or Units and the obligation to pay
Basic Rent for such Unit or Units accruing subsequent to the date of payment of
Stipulated Loss Amount or date of conveyance of such Replacement Unit or Units
pursuant to Section 11.2 shall terminate; provided that Lessee shall be
obligated to pay all Rent in respect of such Unit or Units which is payable
under Section 11.2 with respect to such payment of



                                       25
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


Stipulated Loss Amount or such replacement of such Unit or Units and in respect
of all other Units then continuing to remain subject to this Lease.


               Section 11.4 Disposition of Equipment; Replacement of Unit. (a)
Upon the payment of all sums required to be paid pursuant to Section 11.2 in
respect of any Unit or Units, Lessor will convey to Lessee or its designee all
right, title and interest of Lessor in and to such Unit or Units, "as is",
"where is", without recourse or warranty, except for a warranty as to the
absence of Lessor's Liens, and shall execute and deliver to Lessee or its
designee, at Lessee's cost and expense, such bills of sale and other documents
and instruments as Lessee or its designee may reasonably request to evidence
such conveyance. As to each separate Unit so disposed of, so long as no Lease
Event of Default shall have occurred and be continuing, Lessee or its designee
shall (subject to any insurer's right of subrogation, if any) be entitled to any
amounts arising from such disposition, plus any awards, insurance or other
proceeds and damages received by Lessee, Lessor or the Indenture Trustee by
reason of such Event of Loss up to the Stipulated Loss Amount attributable
thereto and any remainder shall be divided between Lessee and Lessor, as their
respective interests may appear.

               (b)     At the time of or prior to any replacement of any Unit or
Replacement Unit, Lessee, at its own expense, will (A) furnish Lessor with a
Bill of Sale with respect to the Replacement Unit substantially in the form
delivered pursuant to Section 4.1(g) of the Participation Agreement, (B) cause a
Lease Supplement substantially in the form of Exhibit A hereto, subjecting such
Replacement Unit to this Lease, and duly executed by Lessee, to be delivered to
Lessor for execution by the appropriate parties, it being understood that upon
such execution (x) Lessee will cause such Lease Supplement to be filed for
recordation in the same manner as provided for the original Lease Supplement in
Section 16.1 and (y) to the extent that the Indenture has not been satisfied and
discharged, Lessor shall deliver possession of the "original" counterpart of
such Lease Supplement to the Indenture Trustee, (C) so long as the Indenture
shall not have been satisfied and discharged, cause an Indenture Supplement
substantially in the form of Exhibit A to the Indenture for such Replacement
Unit, to be delivered to Lessor and to the Indenture Trustee for execution and,
upon such execution, to be filed for recordation in the same manner and within
the same time periods as provided for the original Indenture Supplement in
Section 16.1, (D) furnish Lessor with an opinion of Lessee's counsel (which may
be the General Counsel or Assistant General Counsel of Trinity), (x) to the
effect that the Bill of Sale referred to in clause (A) above constitutes an



                                       26
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


effective instrument for the conveyance of title to the Replacement Unit to
Lessor, and that legal and beneficial title to the Replacement Unit has been
delivered to Lessor and (y) describing all filings and recordings required
pursuant to Section 16 with respect to the Replacement Units, (E) furnish to
Owner Participant (and its applicable Affiliates) an agreement of Lessee to
indemnify Owner Participant (and its applicable Affiliates) against any adverse
tax consequences suffered as a result of such replacement that are not otherwise
indemnified under the Tax Indemnity Agreement, (F) furnish Lessor with an
engineer's certificate (which may be from an employee of the Manager) certifying
as to the utility, condition, model year and remaining useful life required
under clause (i) of Section 11.2, (G) furnish to Lessor and the Indenture
Trustee an Officer's Certificate certifying that the Replacement Unit has a fair
market value, utility, residual value, model year and remaining economic useful
life and condition at least equal to the Unit being replaced and is free and
clear of all Liens (other than Permitted Liens of the type described in clause
(ii) with respect to Permitted Subleases, and in clauses (iv) and (vii) of the
definition thereof), (H) furnish Lessor with an opinion from independent tax
counsel reasonably acceptable to Owner Participant to the effect that Owner
Participant should not suffer any adverse consequence as a result of such
replacement, (I) furnish Lessor with an opinion of independent transportation
counsel or in-house counsel for Manager as to the absence of Liens of record
with the STB and as to the completion of all necessary STB filings and deposits
with the Registrar General of Canada described in Section 16.1 hereof with
respect to such Replacement Unit and (J) furnish such other documents and
evidence as any Participant, Lessor or the Indenture Trustee, or their
respective counsel, may reasonably request in order to establish the
consummation of the transactions contemplated by this Section 11.4. For all
purposes hereof, (i) Lessee shall be deemed to have complied with the
requirements of this Section 11.4(b) as of the date of its delivery to Lessor,
the Participants and the Indenture Trustee of the documents and instruments
referred to in the foregoing clauses (A) through (J), signed by Lessee or its
counsel, as applicable, in due form for any required filing or recording, and
such filing or recording shall have been made if such documents and instruments
have been executed and delivered by Lessor or Indenture Trustee or both of them
in a timely manner, (ii) title to the Replacement Unit shall be deemed to have
been transferred to Lessor as of such date and (iii) upon such passage of title
thereto to Lessor the Replacement Unit shall be deemed part of the property
leased hereunder and the Replacement Unit shall be deemed a "Unit" as defined
herein. Upon such passage of title, Lessor will transfer to Lessee, "as is" and
"where is" and without recourse or warranty (except as to Lessor's Liens), all
Lessor's right, title and interest in and to the replaced Unit, and upon such
transfer, Lessor will request in



                                       27
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


writing that the Indenture Trustee execute and deliver to Lessee an appropriate
instrument releasing such replaced Unit from the lien of the Indenture. Lessee
shall pay all reasonable out-of-pocket costs and expenses (including reasonable
legal fees and expenses) incurred by Lessor, any Participant or the Indenture
Trustee in connection with any replacement pursuant to this Section 11.4. Lessee
further agrees that, upon receipt of fully signed counterparts of the Lease
Supplement and Indenture Supplement referred to in clauses (B) and, if
applicable, (C) of the first sentence of this Section 11.4(b), it will, at its
sole cost and expense, cause such documents to be filed or recorded in the
manner contemplated by Section 16.1.


               Section 11.5 Eminent Domain. In the event that during the Lease
Term the use of any Unit is requisitioned or taken by any governmental authority
under the power of eminent domain or otherwise for a period which does not
constitute an Event of Loss, all of Lessee's obligations under the Operative
Agreements, including without limitation, Lessee's obligation to pay all
installments of Basic Rent, shall continue for the duration of such
requisitioning or taking. Any amount referred to in Section 11.4(a) or in
Section 12 which is payable to Lessor shall be deposited in the related
Non-Shared Payments Account established under the Collateral Agency Agreement.


SECTION 12.    Insurance.


               Section 12.1 Insurance. Lessee will at all times after delivery
and acceptance of each Unit, at its own expense, keep or cause the Insurance
Manager under the Insurance Agreement to keep such Unit insured with insurers of
recognized responsibility with a rating of at least A- by A.M. Best Company (or
a comparable rating by a nationally or internationally recognized rating group
of comparable stature) or by other insurers approved in writing by Lessor, which
approval shall not be unreasonably withheld, in amounts and against risks and
with deductibles and terms and conditions not less than the insurance, if any,
maintained by the Manager with respect to similar equipment which it owns or
leases, but in no event shall such coverage be for amounts or against risks less
than the prudent industry standard for companies engaged in leasing of railcars.
Without limiting the foregoing, Lessee will in any event:

               (a)     keep each Unit insured against physical damage (which may
be accomplished pursuant to a contingent physical damage policy) in an amount
not less than the Stipulated Loss Amount attributable thereto as shown on
Schedule 4 to



                                       28
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


the Participation Agreement, subject to an aggregate limit for all Units of not
less than $1,500,000 per occurrence, provided that such coverage may provide for
deductible amounts of not more than $50,000 per occurrence; and

               (b)     maintain public liability insurance naming Owner
Participant, Lessor, the Trust Company, the Indenture Trustee, the Collateral
Agent and Loan Participant as additional insureds (but only with respect to
liability arising out of or related to the Operative Agreements and the Units)
against bodily injury, death or property damage arising out of the use or
operation of the Units with general and excess liability limits of not less than
$100,000,000 per occurrence or in the aggregate, provided that such coverage may
provide for deductible amounts not exceeding the lesser of (w) $10,000,000 or
(x) the difference (not less than zero (0)) between (i) the level of the then
current deductible maintained by Manager for the Manager's Fleet (or if Manager,
its successors and assigns is no longer engaged in the railcar leasing business,
the average level of the then current deductible amounts maintained by the three
largest companies engaged in such business in the United States) and (ii) such
amount of additional coverage as may be obtained by Lessee in reduction of the
then current deductible maintained by Manager for an additional incremental
annual premium payable by Lessee in the aggregate in respect of the entire
Partnership Fleet of up to $100,000 as adjusted by the Inflation Factor;
provided, further, that such policies which are carried on a "claims made" basis
shall provide for a retroactive date not more recent than either (y) the Closing
Date, or (z) a date seven years prior to the effective date of the policy.

               (c)     It is understood and agreed that the insurance required
under this Section 12.1 may be part of a company-wide insurance program of the
Insurance Manager or its Affiliates, including risk-retention and
self-insurance. Any policy of insurance maintained in accordance with this
Section 12.1 and any policy purchased in substitution or replacement for any of
such policies shall provide that if any such insurance lapses or is cancelled or
terminated for any reason whatever (other than upon normal policy expiration),
Lessor, the Indenture Trustee, the Collateral Agent, Loan Participant and Owner
Participant shall receive 30 days' prior written notice of such lapse,
cancellation or termination.

               (d)     If Lessee or the Insurance Manager shall maintain any
liability coverages for the benefit of Lessee in excess of the coverages
required hereunder (whether or not such excess coverage complies with the
requirements under this Section 12), Lessee will cause all such coverages to
name Owner Participant, Lessor,



                                       29
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


the Trust Company, the Indenture Trustee and Loan Participant as additional
insureds (but only with respect to liability arising out of or related to the
Operative Agreements or the Units), provided, however, that, the requirements of
this Section 12 shall not otherwise apply to such coverages.


               Section 12.2 Physical Damage Insurance. (a) The insurance
maintained pursuant to Section 12.1(a) shall provide that (i) so long as the
Equipment Notes remain outstanding, the proceeds up to the Stipulated Loss
Amount for any loss or damage to any Unit shall be paid to the Indenture Trustee
under a standard loss payable clause, and thereafter to Lessor and (ii) so long
as no Lease Event of Default shall have occurred and be continuing, Lessee will
be entitled, at its own expense, to make all proofs of loss and/or take all
other steps necessary to collect the proceeds of such insurance.

               (b)     In lieu of maintaining the physical damage insurance
required by Section 12.1(a), Lessee may self-insure with respect to the Units
for such amounts and against such risks as shall be consented to by Lessor and
the Indenture Trustee, which consent shall be based upon reasonable practices
then in effect in the railcar leasing and insurance industries and upon the
financial condition of Lessee taking into account Lessee's capital structure and
that Lessee is a special purpose corporation.

               (c)     The entire proceeds of any property insurance or third
party payments for damages to any Unit received by Lessor or the Indenture
Trustee shall be held by such party until, with respect to such Unit, the
repairs referred to in clause (i) below are made as specified therein or payment
of the Stipulated Loss Amount is made, and such entire proceeds will be paid, so
long as no Lease Event of Default shall have occurred and be continuing, either:

                       (i) to Lessee promptly following receipt by the Indenture
        Trustee or Lessor, as the case may be, of a written application signed
        by Lessee for payment to Lessee for repairing or restoring the Units
        which have been damaged so long as (1) Lessee shall have complied with
        the applicable provisions of this Lease, and (2) Lessee shall have
        certified that any damage to such Units shall have been fully repaired
        or restored; or

                       (ii) if this Lease is terminated with respect to such
        Unit because of an Event of Loss and Lessee has paid the Stipulated Loss
        Amount



                                       30
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


        and all other amounts due as a result thereof, such proceeds shall be
        promptly paid over to, or retained by, Lessee.


               Section 12.3 Public Liability Insurance. (a) The public liability
insurance referred to in paragraph 12.1(b) shall (i) provide that in as much as
such policies cover more than one insured, all terms, conditions, insuring
agreements and endorsements, with the exception of limits of liability,
deductibles or retentions and liability for premiums, commissions, assessments
or calls (which shall be solely a liability of Lessee), shall operate in the
same manner as if there were a separate policy or policies covering each
insured, (ii) waive any rights of subrogation of the insurers against Owner
Participant, Lessor, the Trust Company, the Indenture Trustee, and Loan
Participant (iii) provide that neither Owner Participant, Lessor, the Trust
Company, the Indenture Trustee nor Loan Participant shall have any
responsibility for any insurance premiums, whether for coverage before or after
cancellation or termination of any such policies as to Lessee and (iv) be
primary without contribution from any similar insurance maintained by Owner
Participant, Lessor, the Trust Company, the Indenture Trustee or Loan
Participant.

               (b)     Lessee shall use its reasonable efforts to obtain public
liability insurance policies which stipulate that coverage thereunder will not
be invalidated (as to Owner Participant, Loan Participant, Lessor, as Lessor of
the Units and in its individual capacity, and the Indenture Trustee) by any act
or neglect of Lessee, or any breach or violation by Lessee of any warranties,
declarations or conditions contained in such policies, but shall be under no
obligation to obtain such policies containing such stipulations if they are not
available to Lessee at commercially reasonable rates in the markets in which
Lessee has then placed its insurance program.

               (c)     In the event any public liability insurance policy or
coverage thereunder which are required to be maintained under Section 12.1(b)
shall not be available to Lessee in the commercial insurance market on
commercially reasonable terms, Lessor shall not unreasonably withhold its
agreement to waive such requirement. Lessee shall make written request for any
such waiver in writing, accompanied by written reports prepared, at Lessee's
option, either by (i) one independent insurance advisor chosen by Lessee and
Lessor or (ii) three independent insurance advisors, one chosen by Lessor, one
chosen by Lessee and one chosen by the other two advisors (one of which may be
the regular insurance broker or brokers of Lessee). The fees and expenses of all
such advisors shall be paid by Lessee. The written reports required hereunder
shall (x) state that such insurance (or the required



                                       31
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


coverage thereunder) is not reasonably available to Lessee at commercially
reasonable premiums in the commercial insurance markets within which Lessee or
the Manager normally purchases its insurance from insurers, acceptable to
Lessee, with a Best's rating of A- or better for railcars of similar type and
capacity and (y) explain in detail the basis for such conclusions. Upon the
granting of any such waiver, Lessee shall within 15 days thereafter certify to
Lessor in writing the cost (on the basis of the Manager's Fleet) of liability
insurance premiums for the coverage required by Section 12.1 (b) for the
immediately preceding fiscal year; and in the event that any such certificate is
not received by Lessor within such 15-day period, any such waiver shall be
deemed revoked. At any time after the granting of such waiver, but not more
often than once a year, Lessor may make a written request for a supplemental
report (in form reasonably acceptable to Lessor) from such insurance advisor(s)
updating the prior report and reaffirming the conclusions set forth therein.
Lessee shall provide any such required supplemental report within 60 days after
receipt of the written request therefor. Any such waiver shall be effective for
only as long as such insurance is not reasonably available to Lessee in the
commercial markets in which Lessee normally purchases its insurance at
commercially reasonable rates, it being understood that the failure of Lessee to
furnish timely any such supplemental report shall be conclusive evidence that
such condition no longer exists. If such supplemental report shows that such
coverage is available, Lessee shall within 90 days of such report obtain such
insurance coverage. During any period with respect to which such waiver has been
granted and remains in effect under this Section 12.3(c), Lessee shall obtain
public liability insurance as set forth in Section 12.1(b) from such carriers,
in such amounts and with coverage limits and deductibles as may be reasonable in
its judgment under the circumstances, but in any event (i) no less than prudent
industry standards and (ii) in an amount that may be purchased for a premium
equal to 200% of Lessee's cost (on a fleet-wide basis) of public liability
insurance premiums for the coverage on a fleet-wide basis required by Section
12.1(b) for the final year immediately preceding the fiscal year in which such
waiver first was granted.


               Section 12.4 Certificate of Insurance. (a) Lessee shall, prior
to the Closing Date and when the renewal certificate referred to below is sent
(but in any event not less than annually), furnish (or, in the case of (iii)
below, use reasonable efforts to furnish) Lessor, the Indenture Trustee, Owner
Participant and the Loan Participant with a certificate signed by the insurer or
an independent insurance broker (i) showing the insurance then maintained by
Lessee pursuant to Section 12.1, (ii) stating that, except as noted in such
certificate, such insurance complies with the



                                       32
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


requirements contained in Exhibit B-1 (as to public liability insurance) and/or
B-2 (as to physical/damage insurance) to the Participation Agreement, (iii)
stating that, except as noted in such certificate, such insurance complies with
the requirements contained in this Section 12 and (iv) to the extent that any
provision that Lessee is required to use reasonable efforts to obtain is not
contained in such insurance, such certificate shall so state and shall confirm
that, in such broker's opinion, such provision is not reasonably obtainable.
Lessor shall be entitled at its expense to review copies of all applicable
insurance policies. With respect to any renewal policy or policies, certificates
or binders evidencing such renewal shall be furnished as soon as practicable,
but in no event later than 30 days after the earlier of the date such renewal is
effected or the expiration date of the original policy or policies.
Simultaneously, with the furnishing of such certificate, Lessee will provide
appropriate evidence, reasonably satisfactory to Lessor and the Indenture
Trustee, that all premiums due on such insurance have been paid.

             (b)       Lessee agrees to use reasonable efforts to cause each of
its insurers to agree that, with respect to any policy of insurance maintained
pursuant to Section 12.1, such insurer will provide not less than 30 days' prior
written notice to Lessor, the Indenture Trustee, Loan Participant and Owner
Participant of any non-renewal or material adverse change with respect to such
policy. For purposes of this Section 12.4(b), "material adverse change" shall
mean a material adverse change in policy limits, exclusions or deductibles or
any material adverse change in policy coverage inconsistent with the
requirements of Section 12.1(b). If any of Lessee's insurers delivers such
notice of non-renewal, Owner Participant may attempt to obtain and provide
satisfactory insurance and Lessee shall reimburse Owner Participant for
reasonable and prudent expenses incurred (i) during the period 10 days prior to
expiration of existing insurance policies, for all Owner Participant's expenses
excluding broker fees and commissions and insurance premiums, and (ii) on and
after the expiration of existing insurance policies, for all Owner Participant's
expenses including broker fees and commissions and insurance premiums.


               Section 12.5 Additional Insurance. In the event that Lessee shall
fail to maintain insurance as herein provided in Section 12.1 or, if applicable,
Section 12.3, Lessor may at its option, upon prior written notice to Lessee,
provide such insurance and, in such event, Lessee shall, upon demand from time
to time reimburse Lessor for the cost thereof together with interest from the
date of payment thereof at the Late Rate, on the amount of the cost to Lessor of
such insurance which Lessee shall have failed to maintain. If after Lessor has
provided such insurance, Lessee then obtains



                                       33
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


the coverage provided for in Section 12.1 which was replaced by the insurance
provided by Lessor, and Lessee provides Lessor with evidence of such coverage
reasonably satisfactory to Lessor, Lessor shall cancel the insurance it has
provided pursuant to the first sentence of this Section 12.5. In such event,
Lessee shall reimburse Lessor for all costs to Lessor of cancellation, including
without limitation any short rate penalty, together with interest from the date
of Lessor's payment thereof at the Late Rate. In addition, at any time Lessor
(either directly or in the name of Owner Participant) may at its own expense
carry insurance with respect to its interest in the Units, provided that such
insurance does not interfere with Lessee's ability to insure the Units as
required by this Section 12 or adversely affect Lessee's insurance or the cost
thereof, it being understood that all salvage rights to each Unit shall remain
with Lessee's insurers at all times. Any insurance payments received from
policies maintained by Lessor pursuant to the previous sentence shall be
retained by Lessor without reducing or otherwise affecting Lessee's obligations
hereunder, other than with respect to Unit(s) with respect to which such
payments have been made.


               Section 12.6 Post-Lease Term Insurance. Lessee agrees that upon
the expiration or earlier termination of the Lease Term, Lessee will, with
respect to the public liability insurance otherwise required to be carried under
this Section 12, either: (A) purchase a seven year extended reporting period for
Owner Participant, Lessor and Owner Trustee, or (B) obtain the written agreement
of the Manager in form and substance satisfactory to Owner Participant to carry
or cause to be carried for such seven year period public liability insurance
which satisfies the requirements of this Section 12 and which names Owner
Participant, Lessor, the Collateral Agent and Owner Trustee as additional
insureds.


SECTION 13.    Reports; Inspection.


               Section 13.1 Duty of Lessee to Furnish. On or before April 30,
2002, and on or before each April 30 thereafter, Lessee will furnish (or cause
the Manager under the Management Agreement to furnish) to Lessor, Owner
Participant, Loan Participant, the Indenture Trustee and the Rating Agency an
accurate statement, as of the preceding December 31, (a) showing the amount,
description and reporting marks of the Units then leased hereunder, the amount,
description and reporting marks of all Units that may have suffered an Event of
Loss during the 12 months ending on such December 31 (or since the Closing Date,
in the case of the first such statement), and such other information regarding
the condition or repair of the Units as Lessor may



                                       34
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


reasonably request, (b) stating that, in the case of all Units repainted during
the period covered by such statement, the markings required by Section 4.2
hereof shall have been preserved or replaced, (c) showing the percentage of use
in the United States and in each of Canada and Mexico based on the total mileage
traveled by all railcars in the Total Managed Fleet (or by the Units, if and to
the extent generally made available to the Manager in the ordinary course with
respect to railcars in general interchange service similar to the Units) for the
prior calendar year as reported to the Manager by railroads (provided, that
Lessee shall cooperate with Owner Participant and Lessor and shall provide such
additional information on such matters as Owner Participant or Lessor may
reasonably request to enable Owner Participant and Lessor to pursue or fulfill
their respective tax audit and tax litigation rights and obligations) and (d)
stating that Lessee is not aware of any condition of any Unit which would cause
such Unit not to comply in any material respect with the rules and regulations
of the FRA and the interchange rules of the Field Manual of the AAR as they
apply to the maintenance and operation of the Units in interchange and any other
requirements hereunder.


               Section 13.2 Lessor's Inspection Rights. Lessor, Owner
Participant and the Indenture Trustee each shall have the right, but not the
obligation, at their respective sole cost and expense, unless a Lease Event of
Default shall have occurred and be continuing, by their respective authorized
representatives, to inspect the Units, all subleases thereof and Lessee's
records with respect thereto. All inspections shall be conducted during Lessee's
normal business hours, on the Manager's premises or in areas that are not the
premises of a Sublessee to which Lessee has reasonable access, and upon
reasonable prior notice to Lessee. Lessee shall not be liable for any injury to,
or the death of, any Person exercising, either on behalf of Lessor, Owner
Participant, the Indenture Trustee or any prospective user, the rights of
inspection granted under this Section 13.2 unless caused by Lessee's gross
negligence or wilful misconduct. Except following the occurrence and continuance
of a Lease Event of Default, no inspection pursuant to this Section 13.2 shall
interfere with the use, operation or maintenance of the Units or the ordinary
course of Lessee's or any Sublessee's business, and except as provided herein,
Lessee shall not be required to undertake or incur any additional liabilities in
connection therewith.


SECTION 14.    Lease Events of Default.

               The following events shall constitute Lease Events of Default
hereunder (whether any such event shall be voluntary or involuntary or come
about



                                       35
<PAGE>
                                                  Lease Agreement (TRLI 2001-1C)


or be effected by operation of law or pursuant to or in compliance with any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body) and each such Lease Event of Default shall
be deemed to exist and continue so long as, but only as long as, it shall not
have been remedied:

               (a)     Lessee shall fail to (i) make or (ii) be deemed by virtue
of the last sentence of Section 3.5 hereof to have made any payment of Basic
Rent, Early Purchase Price, any other purchase price to be paid by Lessee for
any Units pursuant to this Lease or the Participation Agreement, Stipulated Loss
Amount or Termination Amount within 10 Business Days after the same shall have
become due; provided, however, that so long as any Equipment Notes remain
outstanding, failure to make (or be deemed to have made) any portion of Basic
Rent on any Rent Payment Date shall not be a Lease Event of Default so long as
the amounts applied under Section 3.4, clause (4), of the Collateral Agency
Agreement are sufficient to make the distributions required under such clause
(4) with respect to the obligations owed under this Lease; or

               (b)     Lessee shall fail to (i) make or (ii) be deemed by virtue
of payments made by the Collateral Agent to have made any payment of
Supplemental Rent; including indemnity or tax indemnity payments, but not
including Stipulated Loss Amount, Termination Amount, Early Purchase Price, or
any other purchase price to be paid by Lessee for any Units pursuant to this
Lease or the Participation Agreement after the same shall have become due and
such failure shall continue unremedied for 10 Business Days after receipt by
Lessee of written notice of such failure from Lessor, Owner Participant or the
Indenture Trustee; provided, however, that so long as any Equipment Notes remain
outstanding, failure to make (or be deemed to have made) payment of any of the
amounts referred to in or to be applied pursuant to clauses (5) through (14) of
Section 3.4 of the Collateral Agency Agreement shall not be a Lease Event of
Default; or

               (c)     Lessee shall fail to maintain in effect the insurance
required by Section 12 or Section 6.4 of the Collateral Agency Agreement and
such failure shall not have been waived as provided for therein; or

               (d)     Lessee shall use or permit the use of the Units or the
Pledged Units or any portion thereof in a way which is not permitted by this
Lease (with respect to the Units) or the Collateral Agency Agreement (with
respect to the Pledged Units), provided that such unauthorized use shall not
constitute a Lease Event of



                                       36


<PAGE>
                                                 Lease Agreement (TRLI2001-1C)

Default for a period of 45 days after the occurrence thereof so long as (i)
such unauthorized use is not the result of any willful action of Lessee and
(ii) such unauthorized use is capable of being cured and Lessee diligently
pursues such cure throughout such 45-day period; or Lessee shall make or
permit any unauthorized assignment or transfer of this Lease in violation of
Section 18.2; or

       (e)     Lessee shall fail to observe or perform in any material respect
any of the covenants or agreements to be observed or performed by Lessee in
Section 6.2 or 6.3 of the Collateral Agency Agreement; or

       (f)     Any representation or warranty made by Lessee in any Lessee
Agreement or any representation or warranty made by TILC or TRMI in any
Operative Agreement to which any such Person is a party is untrue or incorrect
in any material respect as of the date of making thereof and such untruth or
incorrectness shall continue to be material and unremedied; provided that, if
such untruth or incorrectness is capable of being remedied, no such untruth or
incorrectness shall constitute a Lease Event of Default hereunder for a period
of 30 days after receipt of notice from Lessor, Owner Participant or the
Indenture Trustee so long as Lessee, TILC or TRMI, as the case may be, is
diligently proceeding to remedy such untruth or incorrectness and shall in
fact remedy such untruth or incorrectness within such period; provided that
such untrue or incorrect representation or warranty shall be deemed to be
remediable or remedied only after all adverse consequences thereof, if any,
can be and have been remedied as applicable; or

       (g)     Lessee or the General Partner shall (i) commence a voluntary
case or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect, or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or
any substantial part of its property, or (ii) consent to any such relief or to
the appointment of or taking possession by any such official in any voluntary
case or other proceeding commenced against it, or (iii) admit in writing its
inability to pay its debts generally as they come due, or (iv) make a general
assignment for the benefit of creditors, or (v) take any corporate action to
authorize any of the foregoing; or

       (h)     An involuntary case or other proceeding shall be commenced
against Lessee or the General Partner seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy, insolvency
or other similar





                                      37
<PAGE>

                                                 Lease Agreement (TRLI2001-1C)




law now or hereafter in effect, or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of 60 days; or

       (i)     Lessee shall fail to observe or perform any other of the
covenants or agreements to be observed or performed by Lessee under any Lessee
Agreement or any certificate and such failure shall continue unremedied for 30
days after notice from Lessor, Owner Participant or the Indenture Trustee to
Lessee, specifying the failure and demanding the same to be remedied; provided
that, if such failure is capable of being remedied, and the remedy requires an
action other than, or in addition to, the payment of money, no such failure
(other than one relating to the payment of such money) shall constitute a
Lease Event of Default hereunder for a period of 90 days after receipt of such
notice so long as Lessee is diligently proceeding to remedy such failure and
shall in fact remedy such failure within such period; or

       (j)     A Manager Default shall have occurred and be continuing under
the Management Agreement, and Lessee shall have failed to exercise its rights
under the Management Agreement in respect of such Manager Default for a period
of 30 days after receipt by Lessee of written notice from Lessor, Owner
Participant or the Indenture Trustee demanding that such action be taken; or

       (k)     An Insurance Manager Default shall have occurred and be
continuing under the Insurance Agreement, and Lessee shall have failed to
exercise its rights under the Insurance Agreement in respect of such Insurance
Manager Default for a period of 30 days after receipt by Lessee of written
notice from Lessor, Owner Participant or the Indenture Trustee demanding that
such action be taken;

       (l)     The Administrator shall have defaulted in any material respect
in the performance of any of its obligations under the Administrative Services
Agreement, and Lessee shall have failed to exercise its rights under the
Administrative Services Agreement in respect of such default for a period of
30 days after receipt by Lessee of written notice from Lessor, Owner
Participant or the Indenture Trustee , demanding that such action be taken; or

       (m)     A "Lease Event of Default" (as defined in the applicable Other
Lease) shall have occurred and be continuing with respect to any Other Lease.



                                      38
<PAGE>
                                                 Lease Agreement (TRLI2001-1C)


       Notwithstanding anything to the contrary contained in this Lease, any
failure of Lessee to perform or observe any covenant or agreement herein shall
not constitute a Lease Event of Default if such failure is caused solely by
reason of an event which constitutes an "Event of Loss" so long as Lessee is
continuing to comply with the applicable terms of Section 11.


SECTION 15.  Remedies.


       Section 15.1  Remedies. Upon the occurrence of any Lease Event of
Default and at any time thereafter so long as the same shall be continuing,
Lessor may, at its option, declare this Lease to be in default by a written
notice to Lessee (except that this Lease shall, without any action on the part
of Lessor, be automatically deemed to have been declared in default upon the
occurrence of a Lease Event of Default described in Section 14(g) or (h)); and
at any time thereafter, unless Lessee shall have remedied all outstanding
Lease Events of Default prior to the commencement of the exercise by Lessor of
any of its remedies hereunder, Lessor may do one or more of the following as
lessor in its sole discretion shall elect, to the extent permitted by, and
subject to compliance with any mandatory requirements of, applicable law then
in effect:

       (a)     proceed by appropriate court action or actions, either at law
or in equity, to enforce performance by Lessee of the applicable covenants of
this Lease or to recover damages for the breach thereof;

       (b)     by notice in writing to Lessee, Lessor may demand that Lessee,
and Lessee shall, upon written demand of Lessor and at Lessee's expense (but
subject to the rights of any Sublessee which has been granted the right of
quiet enjoyment of the Unit by Lessee pursuant to a Sublease, so long as no
event of default by the Sublessee shall have occurred and be continuing under
the relevant Sublease), (i) forthwith return all or any part of the Units so
demanded to Lessor or its order in the manner and condition required by, and
otherwise in accordance with all of the provisions of, Section 15.5; or Lessor
with or without notice or judicial process may by its agents enter upon the
premises of Lessee or other premises where any of the Units may be located and
take possession of and remove all or any of the Units , and Lessor may use and
employ in connection with such removal any services, aids, equipment, trackage
and other facilities of Lessee as is reasonably required to remove such Units
and thenceforth hold, possess and enjoy the same free from any right of




                                      39
<PAGE>
                                                 Lease Agreement (TRLI2001-1C)


Lessee, or its successor or assigns, to use such Units for any purpose
whatever and (ii) with respect to any Unit which is then subject to a
Sublease, assign all of Lessee's right, title and interest in such Sublease to
Lessor;

       (c)     sell any Unit and/or assign any Sublease at public or private
sale in such manner as Lessor may determine, free and clear of any rights of
Lessee (but subject to the rights of any Sublessee which has been granted the
right of quiet enjoyment of the Unit by Lessee pursuant to a Sublease, so long
as no event of default by the Sublessee shall have occurred and be continuing
under the relevant Sublease) and without any duty to account to Lessee or any
Sublessee with respect to such sale or for the proceeds thereof (except to the
extent required by paragraph (f) below if Lessor elects to exercise its rights
under said paragraph), in which event Lessee's obligation to pay Basic Rent
with respect to such Unit hereunder due for any periods subsequent to the date
of such sale shall terminate (except to the extent that Basic Rent is to be
included in computations under paragraph (e) or (f) below if Lessor elects to
exercise its rights under either of said paragraphs);

       (d)     hold, keep idle or lease to others any Unit not then subject to
a Sublease as Lessor in its sole discretion may determine, free and clear of
any rights of Lessee and without any duty to account to Lessee or any
Sublessee with respect to such action or inaction or for any proceeds with
respect thereto, except that Lessee's obligation to pay Basic Rent with
respect to such Unit due for any periods subsequent to the date upon which
Lessee shall have been deprived of possession and use of such Unit pursuant to
this Section 15 shall be reduced by the net proceeds, if any, received by
Lessor from leasing such Unit to any Person other than Lessee;

       (e)     whether or not Lessor shall have exercised, or shall thereafter
at any time exercise, any of its rights under paragraph (a), (b), (c) or (d)
above with respect to any Unit, Lessor, by written notice to Lessee specifying
a payment date (which date shall be a Determination Date for the purposes of
computing Stipulated Loss Amount) which shall be not less than 10 days after
the date of such notice, may demand that Lessee pay to Lessor, and Lessee
shall pay to Lessor, on the payment date specified in such notice, as
liquidated damages for loss of a bargain and not as a penalty (in lieu of the
Basic Rent for such Unit due after the payment date specified in such notice),
all Rent, other than Stipulated Loss Amount and Termination Amount or amounts
calculated by reference thereto, due and payable, or accrued, in respect of
such Unit as of the payment date specified in such notice (exclusive of any
Basic Rent due on such date) plus whichever of the following amounts Lessor,
in its




                                      40
<PAGE>
                                                 Lease Agreement (TRLI2001-1C)


sole discretion, shall specify in such notice: (i) an amount with respect to
each such Unit which represents the excess of the present value, as of such
payment date, of all rentals for such Unit which would otherwise have accrued
hereunder from such payment date for the remainder of the Basic Term or any
Renewal Term then in effect over the then present value of the then Fair
Market Rental Value of such Unit (taking into account its actual condition)
for such period discounted from the end of such Term to such payment date,
such present value to be computed in each case using a per annum discount rate
equal to the Debt Rate, compounded monthly from the respective dates upon
which rentals would have been payable hereunder had this Lease not been
terminated; or (ii) an amount equal to the excess, if any, of the Stipulated
Loss Amount for such Unit computed as of the payment date specified in such
notice over the Fair Market Sales Value of such Unit (taking into account its
actual condition) as of the payment date specified in such notice; or (iii) if
Lessor shall not have sold such Unit pursuant to the exercise of its rights
under paragraph (c) above with respect to such Unit, an amount equal to the
higher of Stipulated Loss Amount for such Unit computed as of the payment date
specified in such notice or the Fair Market Sales Value of such Unit (assuming
it is in the condition required by this Lease) as of the payment date
specified in such notice; and upon payment by Lessee pursuant to said clause
(iii) of such Stipulated Loss Amount or Fair Market Sales Value, as the case
may be, any Late Payment Premium and of all other amounts (other than Basic
Rent due on such date) payable by Lessee under this Lease and under the other
Operative Agreements in respect of such Unit, Lessor shall transfer "as is"
and "where is" and without recourse or warranty all right, title and interest
of Lessor in and to such Unit to Lessee or as it may direct, and Lessor shall
execute and deliver such documents evidencing such transfer as Lessee shall
reasonably request;

       (f)     if Lessor shall have sold any Unit pursuant to paragraph (c)
above, Lessor, in lieu of exercising its rights under paragraph (e) above with
respect to such Unit may, if it shall so elect, demand that Lessee pay to
Lessor, and Lessee shall pay to Lessor, as liquidated damages for loss of a
bargain and not as a penalty (in lieu of the Basic Rent for such Unit due
subsequent to the Rent Payment Date next preceding such sale), any accrued and
unpaid Rent for such Unit as of the date of such sale (Basic Rent for this
purpose accruing at a per diem rate equal to the monthly amount due on the
next following Rent Payment Date divided by 30) (exclusive of any Basic Rent
due on such date), plus the amount, if any, by which the Stipulated Loss
Amount of such Unit computed as of the Rent Payment Date next preceding the
date of such sale or, if such sale occurs on a Rent Payment Date, then
computed as of such Rent Payment Date, plus the amount of any Late Payment





                                      41
<PAGE>
                                                 Lease Agreement (TRLI2001-1C)


Premium, exceeds the net proceeds of such sale (taking into account for this
purpose all costs and expenses, including legal fees and expenses, incurred by
Lessor in connection with such sale or otherwise exercising remedies
hereunder) plus interest on such excess from the date of such sale to the date
of payment at the Late Rate; and

       (g)     Lessor may terminate the leasing of any or all Units under this
Lease and/or any Sublease (except with respect to a Sublease which grants the
Sublessee thereunder the right of quiet enjoyment with respect to the Unit, so
long as no event of default by the Sublessee shall have occurred and be
continuing under the relevant Sublease) or may exercise any other right or
remedy that may be available to it under applicable law.

       In addition, Lessee shall be liable, except as otherwise provided
above, for any and all unpaid Rent due hereunder before or during the exercise
of any of the foregoing remedies (including, without limitation, Late Payment
Interest, but exclusive of any Basic Rent due on such date), and for legal
fees and other costs and expenses incurred by reason of the occurrence of any
Lease Event of Default or the exercise of Lessor's remedies with respect
thereto, including without limitation the repayment in full of any costs and
expenses necessary to be expended in repairing any Unit in order to cause it
to be in compliance with all maintenance and regulatory standards imposed by
this Lease.

       In the event Lessor terminates this Lease pursuant to any provision of
this Section 15.1, and the Stipulated Loss Amount is not payable, the amounts
otherwise payable by Lessee hereunder shall be increased by any positive
amount (as a payment for accrued but unpaid Basic Rent) of the Basic Rent
Adjustment set forth on Schedule 4-A of the Participation Agreement opposite
the relevant Rent Payment Date or decreased by the absolute value of any
negative amount (as a rebate of prepaid Basic Rent) of the Basic Rent
Adjustment set forth on Schedule 4-A of the Participation Agreement opposite
the relevant Rent Payment Date; provided, however, that to the extent that
such payment or refund does not precisely reflect the difference between Basic
Rent allocated and Basic Rent paid as of the date Basic Rent ceases to accrue,
the amounts due hereunder shall be further adjusted to ensure that the
aggregate amount of Basic Rent paid equals the aggregate amount of Basic Rent
allocated as of the date Basic Rent ceases to accrue.


             Section 15.2   Cumulative Remedies. The remedies in this Lease
provided in favor of Lessor shall not be deemed exclusive, but shall be
cumulative



                                      42
<PAGE>
                                                 Lease Agreement (TRLI2001-1C)



and shall be in addition to all other remedies in its favor existing at law or
in equity. Lessee hereby waives any mandatory requirements of law, now or
hereafter in effect, which might limit or modify any of the remedies herein
provided, to the extent that such waiver is permitted by law. Except to the
extent provided in the operative agreements, Lessee hereby waives any and all
existing or future claims of any right to assert any offset or counterclaim
against the rent payments due hereunder, and agrees to make the rent payments
regardless of any offset or counterclaim or claim which may be asserted by
lessee on its behalf in connection with the lease of the Units. Lessee further
agrees that Lessee's obligations to pay all rent (including, without
limitation, all basic rent and supplemental rent) and its obligations to
maintain the Units pursuant to Section 8 hereof and to maintain the insurance
pursuant to Section 12 hereof shall constitute monetary obligations of lessee
for all purposes of section 365 of the bankruptcy code. To the extent
permitted by applicable law, Lessee hereby waives any rights now or hereafter
conferred by statute or otherwise that may require lessor to sell, lease or
otherwise use the units in mitigation of Lessor's damages as set forth in
Section 15.1 or that may otherwise limit or modify any of Lessor' rights and
remedies provided in this Section 15.


       Section 15.3    No waiver. No delay or omission to exercise any right,
power or remedy accruing to Lessor upon any breach or default by Lessee under
this Lease shall impair any such right, power or remedy of Lessor, nor shall
any such delay or omission be construed as a waiver of any breach or default,
or of any similar breach or default hereafter occurring; nor shall any waiver
of a single breach or default be deemed a waiver of any subsequent breach or
default.


       Section 15.4    Notice of Lease Default. Lessee agrees to furnish to
Lessor, owner participant and the indenture trustee, promptly upon any officer
acquiring actual knowledge of any condition which constituted or constitutes a
Lease Default under this Lease, written notice specifying such condition and
the nature and status thereof.


       Section 15.5    Lessee's Duty to Return Equipment Upon Default. If
Lessor or any assignee of Lessor shall terminate this Lease pursuant to this
Section 15 and shall have provided to Lessee the written demand specified in
Section 15.1(b), Lessee shall forthwith deliver possession of the units not
then subject to a Sublease to Lessor (except where Lessor has received all
amounts payable by Lessee pursuant to any notice provided by Lessor under
Section 15.1(e)(iii)). For the purpose of delivering possession of any unit
not then subject to a Sublease to Lessor





                                      43
<PAGE>
                                                 Lease Agreement (TRLI2001-1C)


as above required, Lessee shall at its own cost, expense and risk (except as
hereinafter stated):

       (a)     forthwith place such Units upon such storage tracks of Lessee
or any of its Affiliates or, at the expense of Lessee, on any other storage
tracks, as Lessor may designate or, in the absence of such designation, as
Lessee may select;

       (b)     permit Lessor to store such Units on such tracks without charge
for insurance, rent or storage until such Units have been sold, leased or
otherwise disposed of by Lessor and during such period of storage Lessee shall
continue to maintain all insurance required by Section 12.1 hereof; and

       (c)     transport the Units to any place on any lines of railroad or to
any connection carrier for shipment, all as Lessor may direct in writing. All
such Units not then subject to a Sublease returned shall be in the condition
required by Section 6.2 hereof.

       All amounts earned in respect of the Units after the date of
termination of this Lease pursuant to this Section 15, but not exceeding
amounts actually received therefor, shall be paid to Lessor or, so long as the
Indenture shall not have been discharged pursuant to its terms, the Indenture
Trustee, and, if received by Lessee, shall be promptly turned over to Lessor
or the Indenture Trustee as aforesaid. In the event any Unit not then subject
to a Sublease is not assembled, delivered and stored as hereinabove provided
within 15 days after the termination of the leasing of such Unit pursuant to
Section 15, Lessee shall, in addition, pay to Lessor or the Indenture Trustee
as aforesaid as liquidated damages and not as a penalty, for each day
thereafter an amount equal to the amount, if any, by which the daily
equivalent of the average Basic Rent for the term in effect immediately prior
to the expiration of the Lease for such Unit exceeds the amount, if any,
received by Lessor or the Indenture Trustee as aforesaid (either directly or
from Lessee) for such day for such Unit pursuant to the preceding sentence.


       Section 15.6    Specific Performance; Lessor Appointed Lessee's Agent.
The assembling, delivery, storage and transporting of the Units not then
subject to a Sublease as provided in Section 15.5 are of the essence of this
Lease, and upon application to any court of equity having jurisdiction in the
premises, Lessor shall be entitled to a decree against Lessee requiring
specific performance of the covenants of Lessee so to assemble, deliver, store
and transport the Units not then subject to a


                                      44
<PAGE>
                                                 Lease Agreement (TRLI2001-1C)

Sublease. Without in any way limiting the obligation of Lessee under the
provisions of Section 15.5, Lessee hereby irrevocably appoints Lessor as the
agent and attorney of Lessee, with full power and authority, at any time while
Lessee is obligated to deliver possession of any Units not then subject to a
Sublease to Lessor pursuant to this Section 15, to demand and take possession
of such Unit in the name and on behalf of Lessee from whosoever shall be at
the time in possession of such Unit.




SECTION 16.  Filings; Further Assurances.


       Section 16.1    Filings. This Lease or a counterpart or copy hereof or
evidence hereof may be filed or recorded in any public office in the United
States as may be necessary or appropriate to protect the interest of Lessor,
Owner Participant or the Indenture Trustee herein or in the Units. On or prior
to the Closing Date Lessee will (i) cause each of (A) a memorandum of this
Lease and the Lease Supplements dated the Closing Date, (B) a memorandum of
the Indenture and the Indenture Supplements dated the Closing Date, (C) a
memorandum of the Collateral Agency Agreement, (D) the TILC Bill of Sale, (E)
the Bill of Sale, (F) the TILC Assignment and (G) the Assignment (x) to be
duly filed and recorded with the STB in accordance with 49 U.S.C. Section
11301 and (y) to be deposited with the Registrar General of Canada pursuant to
Section 105 of the Canada Transportation Act (and all necessary actions shall
have been taken for publication of such deposit in the Canada Gazette in
accordance with said Section 105), (ii) cause precautionary UCC-1 financing
statements to be filed in appropriate jurisdictions as reasonably requested by
Lessor naming Lessor as "lessor" and Lessee as "lessee" of the Equipment and
(iii) will furnish Lessor, the Indenture Trustee and Owner Participant proof
thereof. Notwithstanding the foregoing, in no event shall Lessee or any of its
Affiliates be required to take any action to perfect any security interest
which any Person may have in any Sublease, other than the filing of a UCC-1
Financing Statement against the Partnership in the jurisdiction in which the
Partnership's chief executive office is located and in the Partnership's
jurisdiction of formation covering all Subleases generally.


       Section 16.2    Further Assurances. Lessee will duly execute and
deliver to Lessor such further documents and assurances and take such further
action as Lessor may from time to time reasonably request or as may be
required by applicable law or regulation in order to effectively carry out the
intent and purpose of this Lease and to establish and protect the rights and
remedies created or intended to be created in favor of Lessor, the
Participants and the Indenture Trustee hereunder, including,






                                      45
<PAGE>

                                                Lease Agreement (TRLI 2001-1C)

without limitation, the execution and delivery of supplements or amendments
hereto, in recordable form, subjecting to this Lease any Replacement Unit and
the recording or filing of counterparts hereof or thereof or Uniform
Commercial Code financing statements in accordance with the laws of such
jurisdiction as Lessor may from time to time deem advisable; provided, that in
no event shall Lessee or any of its Affiliates be required to take any action
to perfect any security interest which any Person may have in any Sublease,
other than the filing of a UCC-1 Financing Statement against the Partnership
in the jurisdiction in which the Partnership's chief executive office is
located and in the Partnership's jurisdiction of formation covering all
Subleases generally.


       Section 16.3    Other Filings. If, at any time after the Closing Date
and during the Lease Term, Mexico, or one or more states in Mexico,
establishes a state or other system for filing and perfecting the ownership
and/or security interests of entities such as Lessor and/or the Indenture
Trustee, at the time that Lessee or the Manager takes such action with respect
to other equipment similar to the Units (whether owned or leased by Lessee)
and also upon the request of Lessor, any Participant, or the Indenture
Trustee, Lessee shall cause any and all of the Operative Agreements to be
recorded with or under such system and shall cause all other filings and
recordings and all such other action required under such system to be effected
and taken, in order to perfect and protect the respective right, title and
interests of Lessor, Owner Participant, Loan Participant and the Indenture
Trustee; provided, that in no event shall Lessee or any of its Affiliates be
required to take any action to perfect any security interest which any Person
may have in any Sublease.


       Section 16.4    Expenses. Lessee will pay all costs, charges and
expenses (including reasonable attorneys fees) incident to any such filing,
refiling, recording and rerecording or depositing and re-depositing of any
such instruments or incident to the taking of such action.


SECTION 17.  Lessor's Right to Perform.

       If Lessee fails to make any payment required to be made by it hereunder
or fails to perform or comply with any of its other agreements contained
herein, Lessor may itself make such payment or perform or comply with such
agreement, after giving not less than five Business Days' prior notice thereof
to Lessee (except in the event that an Indenture Default resulting from a
Lease Default or a Lease Event of Default shall have occurred and be
continuing, in which event Lessor may effect






                                      46
<PAGE>
                                                Lease Agreement (TRLI 2001-1C)

such payment, performance or compliance to the extent necessary to cure such
Indenture Default with notice given concurrently with such payment,
performance or compliance), but shall not be obligated hereunder to do so, and
the amount of such payment and of the reasonable expenses of Lessor incurred
in connection with such payment or the performance of or compliance with such
agreement, as the case may be, together with interest thereon at the Late Rate
from such date of payment, to the extent permitted by applicable law, shall be
deemed to be Supplemental Rent, payable by Lessee to Lessor on demand.

SECTION 18.  Assignment.


       Section 18.1    Assignment by Lessor. Lessee and Lessor hereby confirm
that concurrently with the execution and delivery of this Lease, Lessor has
executed and delivered to the Indenture Trustee the Indenture, which assigns
as collateral security and grants a security interest in favor of the
Indenture Trustee in, to and under this Lease and certain of the Rent payable
hereunder (excluding Excepted Property), all as more explicitly set forth in
the Indenture. Lessor agrees that it shall not otherwise assign or convey its
right, title and interest in and to this Lease or any Unit, except as
expressly permitted by and subject to the provisions of the Participation
Agreement, the Trust Agreement and the Indenture.


       Section 18.2    Assignment by Lessee. Except in the case of any
requisition for use by any governmental authority or any agency or
instrumentality thereof referred to in Section 11.1, Lessee will not, except
as expressly permitted in the Operative Agreements, without the prior written
consent of Lessor and the Indenture Trustee, assign any of its rights
hereunder.


       Section 18.3    Sublessee's or Others Performance and Rights. Any
obligation imposed on Lessee in this Lease shall require only that Lessee
perform or cause to be performed such obligation, even if stated herein as a
direct obligation, and the performance of any such obligation by the Manager
under the Management Agreement, the Insurance Manager under the Insurance
Agreement or any Sublessee under a Sublease then in effect and permitted by
the terms of this Lease shall constitute performance by Lessee and discharge
such obligation by Lessee. Except as otherwise expressly provided herein, any
right granted to Lessee in this Lease shall grant Lessee the right to (a)
exercise such right or permit such right to be exercised by the Manager or the
Insurance Manager or (b) in Lessee's capacity as sublessor pursuant to any
Permitted Sublease permit any Sublessee to exercise substantially





                                      47
<PAGE>
                                                Lease Agreement (TRLI 2001-1C)

equivalent rights under any such sublease as are granted to Lessee under this
Lease; provided, however, that Lessee's right to terminate this Lease pursuant
to Section 10 and Lessee's purchase and renewal options set forth in Section
22 may be exercised only by Lessee; provided, further, that nothing in this
Section 18.3 shall or shall be deemed to (i) create any privity of contract
between any such Sublessee, on the one hand, and any of Lessor, Owner
Participant or any subsequent transferee or Affiliate of any such Person, on
the other hand, (ii) create any duty or other liability of any nature
whatsoever on the part of any of Lessor, Owner Participant or any subsequent
transferee or Affiliate of any such Person, to any such Sublessee or any
Affiliate thereof or (iii) modify or waive any term or provision of Section
8.3 hereof, which Section 8.3 shall control if any conflict arises between any
of the provisions thereof and this Section 18.3. The inclusion of specific
references to obligations or rights of any such Sublessee in certain
provisions of this Lease shall not in any way prevent or diminish the
application of the provisions of the two sentences immediately preceding with
respect to obligations or rights in respect of which specific reference to any
such Sublessee has not been made in this Lease.


SECTION 19.  Net Lease, Etc.

       This Lease is a net lease and Lessee's obligation to pay all Rent
payable hereunder shall be absolute, unconditional and irrevocable and shall
not be affected by any circumstance of any character including, without
limitation, (i) any set-off, abatement, counterclaim, suspension, recoupment,
reduction, rescission, defense or other right that Lessee may have against
Lessor, Owner Participant, the Indenture Trustee or any holder of an Equipment
Note or Pass Through Certificate, any vendor or manufacturer of any Unit, or
any other Person for any reason whatsoever, (ii) any defect in or failure of
title, merchantability, condition, design, compliance with specifications,
operation or fitness for use of all or any part of any Unit, (iii) any damage
to, or removal, abandonment, requisition, taking, condemnation, loss, theft or
destruction of all or any part of any Unit or any interference, interruption,
restriction, curtailment or cessation in the use or possession of any Unit by
Lessee or any other Person for any reason whatsoever or of whatever duration,
(iv) any insolvency, bankruptcy, reorganization or similar proceeding by or
against Lessee, Lessor, Owner Participant, the Indenture Trustee, Loan
Participant, any holder of an Equipment Note or Pass Through Certificate or
any other Person, (v) the invalidity, illegality or unenforceability of this
Lease, any other Operative Agreement, or any other instrument referred to
herein or therein or any other infirmity herein or therein or any lack of
right, power or authority of Lessee, Lessor, Owner Participant, the





                                      48
<PAGE>
                                                Lease Agreement (TRLI 2001-1C)

Indenture Trustee, any holder of an Equipment Note or Pass Through Certificate
or any other Person to enter into this Lease or any other Operative Agreement
or to perform the obligations hereunder or thereunder or consummate the
transactions contemplated hereby or thereby or any doctrine of force majeure,
impossibility, frustration or failure of consideration, (vi) the breach or
failure of any warranty or representation made in this Lease or any other
Operative Agreement by Lessee, Lessor, Owner Participant, Loan Participant,
the Indenture Trustee, any holder of an Equipment Note or Pass Through
Certificate or any other Person, (vii) the requisitioning, seizure or other
taking of title to or use of such Unit by any government or governmental
authority or otherwise, whether or not by reason of any act or omission of
Lessor, Lessee or the Indenture Trustee, or any other deprivation or
limitation of use of such Unit in any respect or for any length of time,
whether or not resulting from accident and whether or not without fault on the
part of Lessee or (viii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing. To the extent permitted by
applicable law, Lessee hereby waives any and all rights which it may now have
or which at any time hereafter may be conferred upon it, by statute or
otherwise, to terminate, cancel, quit or surrender this Lease with respect to
any Unit, except in accordance with the express terms hereof. If for any
reason whatsoever this Lease shall be terminated in whole or in part by
operation of law or otherwise, except as specifically provided herein, Lessee
nonetheless agrees, to the maximum extent permitted by law, to pay to Lessor
or to the Indenture Trustee, as the case may be, an amount equal to each
installment of Basic Rent and all Supplemental Rent due and owing, at the time
such payment would have become due and payable in accordance with the terms
hereof had this Lease not been terminated in whole or in part. Each payment of
Rent made by Lessee hereunder shall be final and Lessee shall not seek or have
any right to recover all or any part of such payment from Lessor or any Person
for any reason whatsoever. Nothing contained herein shall be construed to
waive any claim which Lessee might have under any of the Operative Agreements
or otherwise or to limit the right of Lessee to make any claim it might have
against Lessor or any other Person or to pursue such claim in such manner as
Lessee shall deem appropriate.


SECTION 20.  Notices.

       Unless otherwise expressly specified or permitted by the terms hereof,
all communications and notices provided for herein shall be in writing or by
facsimile capable of creating a written record, and any such notice shall
become effective (i) upon personal delivery thereof, including, without
limitation, by



                                      49
<PAGE>
                                                Lease Agreement (TRLI 2001-1C)

reputable overnight courier or (ii) in the case of notice by facsimile, upon
confirmation of receipt thereof, provided such transmission is promptly
further confirmed in writing by the method set forth in clause (i) addressed
to the following Person at its respective address set forth below or at such
other address as such Person may from time to time designate by written notice
to the other Persons listed below:

<TABLE>
<S>                              <C>
             If to Lessor:.        TRLI 2001-1C Railcar Statutory Trust
                          .        c/o State Street Bank and Trust Company of
                          .        Connecticut, National Association
                          .        225 Asylum Street
                          .        Goodwin Square
                          .        Hartford, CT 06103
                          .        Attention:  Corporate Trust Administration
                          .        Fax No.:    (617) 662-1465
                          .        Confirmation No.: (617) 662-1680

                          .        With copies to Owner Participant.

      If to Owner Participant:     Trimaran Leasing, L.P.
                          .        c/o Philip Morris Capital Corporation
                          .        225 High Ridge Road, Suite 300
                          .        Stamford, CT 06905
                                   Attention: Vice
                                   President, Structured Finance
                          .        Fax No.: (914) 335-8297
                          .        Confirmation No.: (914) 335-8204

      If to the Indenture Trustee: LaSalle Bank National Association
                                   135 S. LaSalle Street, Suite 1960
                          .        Chicago, IL 60603
                                   Attention:  Kristine Schossow
                                   Fax No.: (312) 904-2236
                                   Confirmation No.: (312) 904-2571

      If to Lessee:       .        Trinity Rail Leasing I L.P.
                          .        2525 Stemmons Freeway
                          .        Dallas, TX 75207
                          .        Attention: Vice President Leasing Operations
</TABLE>

                                      50
<PAGE>
                                                Lease Agreement (TRLI 2001-1C)


                          .        Re:  TRLI 2001-1C
                          .        Fax No.:  (214) 589-8271
                          .        Confirmation
                                   No.: (214) 631-4420


SECTION 21.  Concerning the Indenture Trustee.


       Section 21.1   Limitation of the Indenture Trustee's Liabilities.
Notwithstanding any provision to the contrary contained herein or in any of
the Operative Agreements, the Indenture Trustee's obligation to take or
refrain from taking any actions, or to use its discretion (including, but not
limited to, the giving or withholding of consent or approval and the exercise
of any rights or remedies under such Operative Agreements), and any liability
therefor, shall, in addition to any other limitations provided herein or in
the other Operative Agreements, be limited by the provisions of the Indenture,
including, but not limited to, Article VI thereof.


       Section 21.2    Right, Title and Interest of the Indenture Trustee
Under Lease. It is understood and agreed that the right, title and interest of
the Indenture Trustee in, to and under this Lease and the Rent due and to
become due hereunder shall by the express terms granting and conveying the
same be subject to the interest of Lessee in and to the Units as created
pursuant to and governed by the terms of this Lease.


SECTION 22.  Purchase Options; Renewal Options.


       Section 22.1    Early Purchase Option. In addition to the option
granted Lessee pursuant to Section 6.9 of the Participation Agreement and
provided that Lessee shall have duly given the notice required by the next
succeeding sentence and the corresponding notices under the Other Leases and
shall concurrently purchase all (but not less than all) of the Other Units
then subject to the Other Leases, Lessee shall have the right and, upon the
giving of such notices, the obligation to purchase all (but not less than all)
of the Units leased hereunder (as specified in such notice) on the Early
Purchase Date for such Units at a price equal to the Early Purchase Price of
such Units plus the other amounts specified below. Lessee shall give Lessor
written notice not less than 90 days and not more than 180 days prior to the
Early Purchase Date of its election to exercise the purchase option provided
for in this Section 22.1, which notice shall be irrevocable. Payment of the
Early Purchase Price, together with (w) all unpaid Basic Rent therefor due and
payable, or accrued, prior to the Early Purchase Date, (x) any Make-Whole
Amount and Late Payment





                                      51
<PAGE>

                                                Lease Agreement (TRLI 2001-1C)

Interest with respect to the Equipment Notes then being prepaid, (y) the
Accumulated Equity Deficiency Amount (without duplication of amounts
calculated above) and any Late Payment Interest related thereto and (z) any
other Supplemental Rent due and owing by Lessee under the Operative Agreements
(so that, after receipt and application of all such payments, but without
withdrawal from any Reserve Account, Owner Participant shall be entitled under
the terms of the Collateral Agency Agreement to receive, and does receive,
taking into account all payments of Basic Rent in respect of the Units, the
sum of the Accumulated Equity Deficiency Amount and Late Payment Interest
related thereto and any other amounts then due to Owner Participant) shall be
made on the Early Purchase Date at the place of payment specified in Section
3.5 hereof in immediately available funds against delivery of a bill of sale
transferring and assigning to Lessee all right, title and interest of Lessor
in and to such Units on an "as-is" "where-is" basis and containing a warranty
as to the absence of Lessor's Liens. Lessor shall not be required to make any
other representation or warranty as to the condition of such Units or any
other matters, and may specifically disclaim any such representations or
warranties. The costs of preparing the bill of sale and all other
documentation relating to any purchase by Lessee pursuant to this Section 22.1
and the costs of all necessary filings relating to such purchase will be borne
by Lessee. In the event of any such purchase and receipt by Lessor of all of
the amounts provided in this Section 22.1, the obligation of Lessee to pay
Basic Rent hereunder shall cease and the Lease Term shall end.

       If Lessee elects to exercise the purchase option provided for in this
Section 22.1, Lessee shall, as the purchase price therefor, in the sole
discretion of Lessee, either (i) pay the Early Purchase Price, together with
all other amounts due and owing by Lessee under the Operative Agreements, as
specified in the paragraph above or (ii) pay the difference between the amount
specified in clause (i) and the outstanding principal amount of the Equipment
Notes as of the Early Purchase Date and assume on a full recourse basis all of
the Owner Trustee's obligations under the Indenture in respect of the
indebtedness evidenced by such Equipment Notes related to such Units as
provided in Section 3.6 of the Indenture; provided, that, following such
assumption, the purchased Units shall remain subject to the Lien of a separate
indenture similar to the Indenture pursuant to Section 3.6 of the Indenture.
Lessee will make the payments required by foregoing clause (i) or assume the
indebtedness evidenced by the Equipment Notes as provided in foregoing clause
(ii) on the Early Purchase Date in immediately available funds against
delivery of a bill of sale transferring and assigning to Lessee all right,
title and interest of Lessor in and to the Units on an "as-is" "where-is"
basis and containing a warranty as to the absence of






                                      52
<PAGE>
                                                Lease Agreement (TRLI 2001-1C)

Lessor's Liens; provided, however, that Lessee shall have the option of
specifying in such notice under this Section 22.1 its election to defer
payment of a portion of the Early Purchase Price for such Units in four (4)
installments in the amounts and on the dates set forth on Schedule 6 to the
Participation Agreement so long as the portion of the Early Purchase Price
payable by Lessee on the Early Purchase Date in the event of any such election
by Lessee, under any circumstances and in any event, together with other
amounts of Supplemental Rent payable by Lessee on such date, will be at least
sufficient to pay in full, as of the date of payment thereof, the aggregate
unpaid principal and accrued interest of the Equipment Notes together with any
Make Whole Amount, Late Payment Interest and all other amounts owed to the
holders of the Equipment Notes under the Operative Agreements; and provided
further, that such deferred portion (i) may be prepaid by Lessee at any time
in whole and (ii) will be secured in favor of Lessor by a letter of credit by
a bank or financial institution acceptable to Owner Participant in its sole
discretion or if acceptable to Owner Participant in its sole discretion a
guaranty of Trinity in form and substance reasonably satisfactory to Lessor.
If Lessee shall fail to fulfill its obligations under this second paragraph of
Section 22.1, all of Lessee's obligations under this Lease and the Operative
Agreements, including, without limitation, Lessee's obligation to pay
installments of Rent, shall continue and Lessee shall be obligated to pay all
costs and expenses, including legal fees and expenses, incurred by Lessor,
Owner Participant and Indenture Trustee as a result of the notice given by
Lessee pursuant to this Section.

       Listed on Schedule 6 to the Participation Agreement as the Basic Rent
Adjustment for the Early Purchase Date is the amount of Basic Rent that, as of
the Early Purchase Date, has been paid for periods after the Early Purchase
Date (based upon the assumption that all prior amounts of Basic Rent due have
been paid) or the amount of Basic Rent that, as of the Early Purchase Date, is
the amount of Basic Rent that has accrued but has not been paid for periods
prior to the Early Purchase Date. If Lessee exercises its Early Purchase
Option and the Basic Rent Adjustment is negative and Lessee pays all other
amounts due in relation to such exercise, then Lessee shall pay an amount
equal to the Early Purchase Price less the absolute value of the amount of
such Basic Rent Adjustment listed on Schedule 6 to the Participation Agreement
(as a rebate of such Basic Rent and not as a reduction in Early Purchase
Price). If Lessee exercises the Early Purchase Option and the Basic Rent
Adjustment is positive, Lessee shall pay an amount equal to the Early Purchase
Price plus the Basic Rent Adjustment (as a payment of accrued, but unpaid
Basic Rent and not an increase in the Early Purchase Price). If Lessee





                                      53
<PAGE>

                                                Lease Agreement (TRLI 2001-1C)


elects to pay the Early Purchase Price in installments, then the amount of
Basic Rent Adjustment listed on Schedule 6 to the Participation Agreement
shall increase or decrease, as the case may be, the amount of Early Purchase
Price payable by Lessee on the Early Purchase Date.

       Notwithstanding the foregoing provisions of this Section 22.1 to the
contrary, Lessee may purchase or cause an Affiliate of Lessee to purchase the
Beneficial Interest in lieu of Lessee purchasing the Units pursuant to this
Section 22.1 for a purchase price equal to the Beneficial Interest Purchase
Price and may keep this Lease (and the Equipment Notes) in place; provided,
that Lessee shall remain liable under this Lease to pay Basic Rent and all
other payments hereunder in full, provided, further, that such purchase shall
be made in all respects in accordance with Section 6.9 of the Participation
Agreement.


       Section 22.2    Election to Retain or Return Equipment at End of Basic
or Renewal Term. Not less than 180 days and not more than 360 days prior to
the end of the Basic Term or any Renewal Term, Lessee shall give Lessor a
preliminary notice of its decision to return or retain the Units and the Other
Units subject to the Other Leases (it being understood that at the end of the
Basic Term or any Renewal Term Lessee must return all (and not less than all)
such Units and Other Units if it returns any, or retain all (and not less than
all) such Units and Other Units if it retains any) at the end of the Basic
Term or such Renewal Term and not less than 120 days prior to the end of the
Basic Term or the end of any Renewal Term, Lessee shall give Lessor
irrevocable written notice of its decision to return or retain the Units at
the end of the Basic Term or such Renewal Term and such corresponding notices
pursuant to the Other Leases. If Lessee elects to retain Units, Lessee shall
comply with Section 22.3 and/or 22.4 hereof, as it may elect in accordance
with the provisions thereof including the notice requirements stated therein.
If Lessee fails to give the 120 days' notice required by this Section 22.2 and
such corresponding notices pursuant to the Other Leases, or a subsequent
notice required by Section 22.3 or 22.4 and such corresponding notices
pursuant to the Other Leases, Lessee shall be deemed to have irrevocably
elected to return all of the Units at the end of the Basic Term or the
applicable Renewal Term, as the case may be, in accordance with Section 6.


       Section 22.3    Purchase Option. Provided that Lessee shall have duly
given the notice required by Section 22.2 and by the next succeeding sentence
of this Section 22.3 and, in the case of a purchase, Lessee shall have given
the






                                      54
<PAGE>


                                                Lease Agreement (TRLI 2001-1C)

corresponding notices under the Other Leases and shall upon the purchase of
the Units hereunder concurrently purchase the Other Units under the Other
Leases, Lessee shall have the right and, upon the giving of such notice under
this Section 22.3, the obligation to purchase all of the Units at a price
equal to the Fair Market Sales Value of such Units, at the expiration of the
Basic Term, or, if a Renewal Term is then in effect, at the end of such
Renewal Term, plus all other amounts due and owing by Lessee under the
Operative Agreements, including, without limitation, Late Payment Interest and
any unpaid Rent (so that, after receipt and application of all such payments,
but without withdrawal from any Reserve Account, Owner Participant shall be
entitled under the terms of the Collateral Agency Agreement to receive, and
does receive, taking into account all Basic Rent payments in respect of the
Units, the sum of the Accumulated Equity Deficiency Amount and Late Payment
Interest related thereto and any other amounts then due to Owner Participant).
Lessee shall give Lessor written notice not less than 90 days and not more
than 360 days prior to the end of the Basic Term or any Renewal Term, as the
case may be, of its election to exercise the purchase option provided for in
this Section 22.3, which notice shall be irrevocable. Payment of the purchase
price, together with all other amounts due and owing by Lessee under the
Operative Agreements shall be made at the place of payment specified in
Section 3.5 hereof in immediately available funds against delivery of a bill
of sale transferring and assigning to Lessee all right, title and interest of
Lessor in and to such Units on an "as-is" "where-is" basis and containing a
warranty as to the absence of Lessor's Liens. Lessor shall not be required to
make any other representation or warranty as to the condition of such Units or
any other matters, and may specifically disclaim any such representations or
warranties.


       Section 22.4   Renewal Option. Provided no Event of Default shall have
occurred and be continuing and Lessee shall have duly given the notice
required by Section 22.2, and the corresponding notices under the Other Leases
and shall upon the renewal of the Units hereunder concurrently renew the Other
Units under the Other Leases and Lessee has not exercised its option to
purchase the Units pursuant to Section 22.3, Lessee shall have the right and,
upon the giving of a notice under this Section 22.4 as below provided, the
obligation to lease pursuant to this Lease all (but not less than all) of the
Units at the expiration of the Basic Term or any applicable Renewal Term.
Lessee may exercise this renewal option by giving Lessor written notice not
less than 90 days and not more than 360 days prior to the end of the Basic
Term (or, in the circumstances described below the then Renewal Term) that
Lessee elects to renew this Lease with respect to all, but not less than all,
of the





                                      55
<PAGE>

                                                Lease Agreement (TRLI 2001-1C)


Units then leased hereunder at a rental payment calculated by reference to the
then fair market rental value (a "Fair Market Renewal") or a fixed rental (a
"Fixed Rate Renewal"). At Lessee's option, such renewal may, in the case of a
Fair Market Renewal, be for a renewal term of one or more years or, in the
case of a Fixed Rate Renewal, be for an initial renewal term of three years
(but not to extend beyond the Outside Renewal Date) and in connection with any
renewal term following the initial renewal term, a term of one year or more
expiring not later than the Outside Renewal Date, in each case as Lessee shall
specify in such notice, which notice shall be irrevocable. The Basic Rent for
each Unit during any Renewal Term (the "Renewal Rent") shall (a) in the case
of any Fixed Rate Renewal, be 1/12th of 100% of the average annual Basic Rent
allocated over the period from the end of the Basic Rent Holiday through the
Basic Term Expiration Date, payable monthly in arrears and (b) in the case of
any Fair Market Renewal, be 100% of the Fair Market Rental Value determined as
of the commencement of the applicable Renewal Term; provided, however, that in
the case of the first two years of the Fair Market Renewal period(s) that
immediately follow the Basic Term Expiration Date (whether under Section 22.4
or Section 6.1), be 105% of the Fair Market Rental Value determined as of the
commencement of the applicable Renewal Term; provided further, however, that
the preceding proviso shall not apply in the event that the Lessee provides
the Lessor, at the Lessee's sole cost and expense, with an opinion of
independent tax counsel selected by Lessor (which counsel shall be selected by
Lessor from among four nationally recognized law firms proposed by Lessee,
each of which must be experienced in leveraged leasing transactions similar to
the transactions contemplated herein) to the effect that applicable Treasury
Regulations (or other administrative pronouncements upon which taxpayers may
rely for Federal income tax purposes) will permit rent for such Renewal Term
at a rate equal to 100% of the fair market rent determined as of the time of
such Renewal Term without resulting in any adverse Federal income tax
consequences to the Owner Participant Parent (within the meaning of the Tax
Indemnity Agreement) under Code Section 467 or any successor provision
thereto. Each Renewal Term shall commence immediately upon the expiration of
the Basic Term or the preceding Renewal Term, as the case may be. Lessee shall
not be entitled to enter any Fixed Rate Renewal following the expiry of any
Fair Market Renewal.


       Section 22.5    Rent Appraisal; Outside Renewal Date. Promptly
following Lessee's irrevocable written notice pursuant to Section 22.2 of its
election to retain the Units at the end of the Basic Term or any Renewal Term
(and, in any event, if it is anticipated that there will be any Extended Units
at the end of the Basic





                                      56
<PAGE>
                                                Lease Agreement (TRLI 2001-1C)



Term or such Renewal Term), Lessor and Lessee shall determine (a) if Lessee
shall have exercised a Fixed Rate Renewal, (i) the remaining useful life and
Fair Market Sales Value (based on the actual condition of a reasonable
sampling of such Units and determined pursuant to the appraisal procedure set
forth in the definition of Fair Market Sales Value) of the Units, and (ii) the
latest date such that (1) the period from the Closing Date to such date would
not exceed 80% of the useful life of any Unit (as determined in subclause (i)
above) from and after the Closing Date, and (2) the Fair Market Sales Value of
each Unit (determined without regard to inflation or deflation from the
Closing Date) on such date would not be less than 20% of the Equipment Cost of
such Unit (such date determined under this subclause (ii) shall thereafter be
the latest date to which this Lease may be renewed pursuant to a Fixed Rate
Renewal under Section 22.4 (the "Outside Renewal Date")), (b) if Lessee shall
have exercised the purchase option under Section 22.3(i) or any renewal option
under Section 22.4, the Fair Market Sales Value of the applicable Units as of
the end of the then existing Basic Term or Renewal Term, as applicable, in
each case assuming such Units are at least in the condition required by this
Lease, and (c) if Lessee shall have exercised a Fair Market Renewal (or if it
is anticipated that there will be any Extended Units at the end the Basic Term
or such Renewal Term), the Fair Market Rental Value of the applicable Units as
of the end of the then existing Basic Term or Renewal Term, as applicable, in
each case assuming such Units are at least in the condition required by this
Lease.


       Section 22.6    Stipulated Loss Amount and Termination Amount During
Renewal Term. All of the provisions of this Lease, other than Section 10,
shall be applicable during any Renewal Term for such Units, except as
specified in the next sentence. During any Renewal Term, the Stipulated Loss
Amount and Termination Amount of any Unit shall be determined on the basis of
the Fair Market Sales Value of such Unit as of the first day of such Renewal
Term, reduced in equal monthly increments to the Fair Market Sales Value of
such Unit as of the last day of such Renewal Term; provided that in no event
during any Fixed Rate Renewal shall the Stipulated Loss Amount and Termination
Amount of any Unit be less than 20% of the Equipment Cost of such Unit.


       Section 22.7    Deemed Renewals. If Lessee does not exercise its
purchase option under Section 22.3 or its renewal option under Section 22.4 at
the end of the Basic Term or any Renewal Term, then the Lease for any Unit
subject to a Sublease at the end of the Basic Term or such Renewal Term shall
be deemed automatically renewed for a Renewal Term expiring at the expiration
of such





                                      57
<PAGE>


                                                Lease Agreement (TRLI 2001-1C)


Sublease's term (but in no event later than three years following the expiry
of the Basic Term or such Renewal Term, as applicable) (such Unit, an
"Extended Unit"). The terms and conditions of any such deemed renewal of a
Unit under this Section 22.7 including rent shall otherwise be those generally
provided in Section 22.4 in respect of a Fair Market Renewal for the period
thereof (which shall be considered a Renewal Term).


       Section 22.8    Funding of Accounts on Purchase. Lessee will not
exercise the purchase option under this Section 22 unless either (a) the full
amount required to fund the Post Lease Term Reserve Account is (upon
consummation of such purchase and distribution of all amounts required to be
distributed by the Collateral Agent under the Collateral Agency Agreement) and
will be then available to the Collateral Agent to fund such account or (b) an
indemnity pursuant to Section 3.13 of the Collateral Agency Agreement has been
provided.


SECTION 23.  Limitation of Lessor's Liability.

       It is expressly agreed and understood that all representations,
warranties and undertakings of Lessor hereunder (except as expressly provided
herein) shall be binding upon Lessor only in its capacity as Owner Trustee
under the Trust Agreement and in no case shall the Trust Company be personally
liable for or on account of any statements, representations, warranties,
covenants or obligations stated to be those of Lessor hereunder, except that
the Trust Company shall be personally liable for its gross negligence or
wilful misconduct and for its breach of its covenants, representations and
warranties contained herein to the extent covenanted or made in its individual
capacity.


SECTION 24.  Investment of Security Funds.

       Any moneys received by Lessor or the Indenture Trustee pursuant to
Section 12.2 which are required to be paid to Lessee after completion of
repairs to be made pursuant to Section 12.2 or pursuant to Section 11.4(a) or
11.5, as the case may be, shall be paid directly to the appropriate Non-Shared
Payments Account established under the Collateral Agency Agreement.




                                      58
<PAGE>


                                                Lease Agreement (TRLI 2001-1C)


SECTION 25.  Miscellaneous.


       Section 25.1    Governing Law; Severability. THIS LEASE SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES (OTHER THAN
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW). Whenever possible,
each provision of this Lease shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Lease
shall be prohibited by or invalid under the laws of any jurisdiction, such
provision, as to such jurisdiction, shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Lease in any other jurisdiction.


       Section 25.2    Execution in Counterparts. This Lease may be executed
in any number of counterparts, each executed counterpart constituting an
original and in each case such counterparts shall constitute but one and the
same instrument; provided, however, that to the extent that this Lease
constitutes chattel paper (as such term is defined in the Uniform Commercial
Code) no security interest in this Lease may be created through the transfer
or possession of any counterpart hereof other than the counterpart bearing the
receipt therefor executed by the Indenture Trustee on the signature page
hereof, which counterpart shall constitute the only "original" hereof for
purposes of the Uniform Commercial Code.


       Section 25.3    Headings and Table of Contents; Section References. The
headings of the sections of this Lease and the Table of Contents are inserted
for purposes of convenience only and shall not be construed to affect the
meaning or construction of any of the provisions hereof. All references herein
to numbered sections, unless otherwise indicated, are to sections of this
Lease.


       Section 25.4    Successors and Assigns. This Lease shall be binding
upon and shall inure to the benefit of, and shall be enforceable by, the
parties hereto and their respective permitted successors and permitted
assigns.


       Section 25.5    True Lease. It is the intent of the parties to this
Lease that it will be a true lease and not a "conditional sale", that Lessor
shall at all times be considered to be the owner of each Unit which is the
subject of this Lease for the purposes of all federal, state, city and local
income taxes, that this Lease conveys to Lessee no right, title or interest in
any Unit except as lessee and that the Lease will be a finance lease under the
provisions of Article 2A of the New York Uniform




                                      59
<PAGE>
                                                Lease Agreement (TRLI 2001-1C)


Commercial Code. Nothing contained in this Section 25.5 shall be construed to
limit Lessee's use or operation of any Unit or constitute a representation,
warranty or covenant by Lessee as to tax consequences.

       The parties hereto hereby agree that Lessee's obligation to make
payments of the type described in the definition of "Excepted Property" is a
separate and independent obligation from its obligation to make other Rent
payments, and that Lessee's obligation to make payments of the type described
in the definition of "Excepted Property" may be independently enforced and may
be assigned, pledged or otherwise transferred separately from Lessee's
obligations to make other Rent payments. The obligation to make such payments
has been included herein for the convenience of the parties.

       Section 25.6    Amendments and Waivers. No term, covenant, agreement or
condition of this Lease may be terminated, amended or compliance therewith
waived (either generally or in a particular instance, retroactively or
prospectively) except by an instrument or instruments in writing executed by
each party hereto and except as may be permitted by the terms of the
Indenture.


       Section 25.7    Survival. All warranties, representations, indemnities
and covenants made by either party hereto, herein or in any certificate or
other instrument delivered by such party or on the behalf of any such party
under this Lease, shall be considered to have been relied upon by the other
party hereto and shall survive the consummation of the transactions
contemplated hereby on the Closing Date regardless of any investigation made
by either such party or on behalf of either such party, and to the extent
having accrued and not been paid or relating to or otherwise arising in
connection with the transactions contemplated by the Operative Agreements
during the Lease Term, shall survive the expiration or other termination of
this Lease or any other Operative Agreement.


       Section 25.8    Business Days. If any payment is to be made hereunder
or any action is to be taken hereunder on any date that is not a Business Day,
such payment or action otherwise required to be made or taken on such date
shall be made or taken on the immediately succeeding Business Day with the
same force and effect as if made or taken on such scheduled date and as to any
payment (provided any such payment is made on such succeeding Business Day) no
interest shall accrue on the amount of such payment from and after such
scheduled date to the time of such payment on such next succeeding Business
Day.



                                      60
<PAGE>
                                                Lease Agreement (TRLI 2001-1C)


       Section 25.9    Directly or Indirectly; Performance by Managers. Where
any provision in this Lease refers to action to be taken by any Person, or
which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.
In this regard, it is understood and agreed that Lessee has entered into the
Management Agreement with the Manager and the Insurance Agreement with the
Insurance Manager, under which agreements certain rights and obligations of
Lessee hereunder will be exercised and performed by such Persons on behalf of
Lessee. Lessee agrees to instruct the Manager and the Insurance Manager to
take such actions as shall be necessary or appropriate under such agreements
so that Lessee shall be in compliance in all material respects with its
obligations hereunder and under the other Operative Agreements.


       Section 25.10   Incorporation by Reference. The payment obligations set
forth in Sections 7.1 and 7.2 of the Participation Agreement are hereby
incorporated by reference.

                                    * * *

                                      61
<PAGE>
                                                Lease Agreement (TRLI 2001-1C)

             IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease to
be duly executed and delivered on the day and year first above written.

                               Lessor:

                               TRLI 2001-1C RAILCAR STATUTORY TRUST,

                               By: State Street Bank and Trust Company of
                               Connecticut, National Association,  not in its
                               individual capacity except as otherwise
                               expressly provided but solely as Owner Trustee


                               By: _________________________________
                               Name:_______________________________
                               Title:________________________________

                               Lessee:

                               TRINITY RAIL LEASING I L.P.

                               By TILX GP I, LLC,
                                  its General Partner

                                  By:________________________________
                                  Name:  Eric Marchetto
                                  Title: Vice President


<PAGE>

                                                Lease Agreement (TRLI 2001-1C)

       Receipt of this original counterpart of the foregoing Lease is hereby
acknowledged on the ___ day of December, 2001.


                            LASALLE BANK NATIONAL ASSOCIATION,
                            Indenture Trustee



                            By: _________________________________
                            Name:
                            Title:



<PAGE>
                                                Lease Agreement (TRLI 2001-1C)


                                  EXHIBIT A

                          LEASE SUPPLEMENT NO. _____
                                (TRLI 2001-1C)

       This Lease Supplement No. ___, dated as of ____________, between TRLI
2001-1C Railcar Statutory Trust by State Street Bank and Trust Company of
Connecticut, National Association, not in its individual capacity but solely
as Owner Trustee under the Trust Agreement ("Lessor"), and Trinity Rail
Leasing I L.P., a Texas limited partnership ("Lessee");

                                 Witnesseth:

       Lessor and Lessee have heretofore entered into that certain Equipment
Lease Agreement (TRLI 2001-1C) dated as of December 28, 2001 (the "Lease").
The terms used herein are used with the meanings assigned to such terms in the
Lease.

       The Lease provides for the execution and delivery of one or more Lease
Supplements substantially in the form hereof for, among other things, the
purpose of particularly describing all or a portion of the Units to be leased
to Lessee under the Lease.

       Now, therefore, in consideration of the premises and other good and
sufficient consideration, and pursuant to Section 2 of the Lease, Lessor and
Lessee hereby agree as follows:

       1.      Lessor hereby delivers and leases to Lessee, and Lessee hereby
accepts and leases from Lessor, under the Lease as herein supplemented, the
Units described in Schedule 1 hereto.

       2.      All of the terms and provisions of the Lease are hereby
incorporated by reference in this Lease Supplement to the same extent as if
fully set forth herein.

       3.      To the extent that this Lease Supplement constitutes chattel
paper (as such term is defined in the Uniform Commercial Code) no security
interest in this Lease Supplement may be created through the transfer or
possession of any counterpart hereof other than the counterpart bearing the
receipt therefor executed by




<PAGE>

                                                Lease Agreement (TRLI 2001-1C)


the Indenture Trustee on the signature page hereof, which counterpart shall
constitute the only "original" hereof for purposes of the Uniform Commercial
Code.

       4.      THIS LEASE SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAW PRINCIPLES (OTHER THAN SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW).

       5.      This Lease Supplement may be executed in any number of
counterparts, each executed counterpart constituting an original but all
together constituting one and the same instrument.


                                    * * *

                                     A-2
<PAGE>
                                                Lease Agreement (TRLI 2001-1C)


       IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease Supplement
to be duly executed as of the day and year first above written and to be
delivered as of the date first above written.

                               Lessor:

                               TRLI 2001-1C RAILCAR STATUTORY TRUST,
                               By: State Street Bank and Trust Company of
                               Connecticut, National Association, not in its
                               individual capacity but solely as Owner Trustee

                               By:_________________________________
                               Name:_______________________________
                               Lessee:______________________________


                               TRINITY RAIL LEASING I L.P.

                               By    TILX GP I, LLC, its
                                     General Partner
                                     By:______________________________
                                     Name:____________________________
                                     Title:___________________________

       (1) Receipt of this original counterpart of the foregoing Lease
Supplement is hereby acknowledged on this ___ day of ____, 20___.

                               LASALLE BANK NATIONAL ASSOCIATION,
                               as Indenture Trustee

                               By:_________________________________
                               Name:_______________________________
                               Title:______________________________







- --------
(1) This language contained in the original counterpart only.




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.16.5
<SEQUENCE>12
<FILENAME>d94851ex10-16_5.txt
<DESCRIPTION>PARTICIPATION AGREEMENT (TRL 1 2001-1C)
<TEXT>
<PAGE>
                                                                 Exhibit 10.16.5


                     PARTICIPATION AGREEMENT (TRLI 2001-1C)

                          Dated as of December 28, 2001

                                      among

                          TRINITY RAIL LEASING I L.P.,
                                   as Lessee,

                         TRINITY RAIL MANAGEMENT, INC.,

                       TRINITY INDUSTRIES LEASING COMPANY,
                                   as Manager,

                      TRLI 2001-1C RAILCAR STATUTORY TRUST,
             BY STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
                              NATIONAL ASSOCIATION,
                                as Owner Trustee,

                             TRIMARAN LEASING, L.P.,
                              as Owner Participant

                                       and

                       LASALLE BANK NATIONAL ASSOCIATION,
                  as Indenture Trustee and Pass Through Trustee




                        Tank Cars and Covered Hopper Cars





                                          Participation Agreement (TRLI 2001-1C)


<PAGE>
                                      TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                            Page
                                                                                            ----
<S>         <C>                                                                             <C>
SECTION 1.  DEFINITIONS; INTERPRETATION OF THIS
            AGREEMENT.........................................................................4

SECTION 2.  SALE AND PURCHASE; PARTICIPATION IN EQUIPMENT COST; CLOSING;
            TRANSACTION COSTS.................................................................4
            Section 2.1   Sale and Purchase of Equipment......................................4
            Section 2.2   Participation in Equipment Cost.....................................5
            Section 2.3   Closing Date; Procedure for Participation...........................5
            Section 2.4   Owner Participant's Instructions to the Owner Trustee;
                          Satisfaction of Conditions..........................................7
            Section 2.5   Expenses............................................................7
            Section 2.6   Calculation of Adjustments to Basic Rent,
                          Stipulated Loss Value and Termination Value;
                          Confirmation and Verification......................................11
            Section 2.7   Postponement of Closing Date.......................................14

SECTION 3.  REPRESENTATIONS AND WARRANTIES...................................................16
            Section 3.1   Representations and Warranties of the Trust
                          Company............................................................16
            Section 3.2   Representations and Warranties of the Lessee.......................19
            Section 3.3   Representations and Warranties of the Indenture Trustee............26
            Section 3.4   Representations, Warranties and Covenants
                          Regarding Beneficial Interest, Equipment Note
                          and Pass Through Certificates......................................27
            Section 3.5   Representations and Warranties of the Owner Participant............29
            Section 3.6   Representations and Warranties of TILC.............................31
            Section 3.7   Representations and Warranties of TRMI.............................36
            Section 3.8   Representations and Warranties of the Pass Through Trustee.........38
            Section 3.9   Opinion Acknowledgment.............................................39

SECTION 4.  CLOSING CONDITIONS...............................................................40
            Section 4.1   Conditions Precedent to Investment by Each Participant.............40
</TABLE>



                                          Participation Agreement (TRLI 2001-1C)



                                        i
<PAGE>
<TABLE>
<CAPTION>
                                                                                            Page
                                                                                            ----
<S>         <C>                                                                             <C>
            Section 4.2   Additional Conditions Precedent to Investment
                          by the Loan Participant............................................48
            Section 4.3   Additional Conditions Precedent to Investment
                          by the Owner Participant...........................................48
            Section 4.4   Conditions Precedent to the Obligation of
                          TILC and the Lessee................................................50

SECTION 5.  FINANCIAL AND OTHER REPORTS OF THE LESSEE........................................51

SECTION 6.  CERTAIN COVENANTS OF THE PARTICIPANTS, THE TRUSTEES  AND THE LESSEE..............53
            Section 6.1   Restrictions on Transfer of Beneficial Interest....................53
            Section 6.2   Lessor's Liens Attributable to the Owner Participant...............56
            Section 6.3   Lessor's Liens Attributable to Trust Company.......................57
            Section 6.4   Liens Created by the Indenture Trustee and
                          the Loan Participant...............................................57
            Section 6.5   Covenants of Owner Trustee, Owner
                          Participant and Indenture Trustee..................................58
            Section 6.6   Amendments to Operative Agreements
                          That Are Not Lessee Agreements.....................................59
            Section 6.7   Certain Representations, Warranties and Covenants..................59
            Section 6.8   Covenants of the Manager...........................................59
            Section 6.9   Lessee's Purchase in Certain Circumstances.........................59
            Section 6.10  Owner Participant as Affiliate of Lessee...........................61
            Section 6.11  Records; U.S. Income Tax Information...............................62
            Section 6.12  Replacement of Manager.............................................62
            Section 6.13  Acknowledgment of Equity Collateral Security Documents.............65

SECTION 7.  LESSEE'S INDEMNITIES.............................................................65
            Section 7.1   General Tax Indemnity..............................................65
            Section 7.2   General Indemnification............................................75
            Section 7.3   Indemnification by TILC............................................81
            Section 7.4   Indemnification by TRMI............................................86

SECTION 8.  LESSEE'S RIGHT OF QUIET ENJOYMENT................................................91

SECTION 9.  SUCCESSOR INDENTURE TRUSTEE......................................................91

SECTION 10. MISCELLANEOUS....................................................................91
</TABLE>




                                          Participation Agreement (TRLI 2001-1C)



                                       ii

<PAGE>
<TABLE>
<CAPTION>
                                                                                            Page
                                                                                            ----
<S>         <C>                                                                             <C>
            Section 10.1  Consents...........................................................91
            Section 10.2  Refinancing........................................................92
            Section 10.3  Amendments and Waivers.............................................94
            Section 10.4  Notices............................................................94
            Section 10.5  Survival...........................................................97
            Section 10.6  No Guarantee of Residual Value or Debt.............................97
            Section 10.7  Successors and Assigns.............................................97
            Section 10.8  Business Day.......................................................97
            Section 10.9  GOVERNING LAW......................................................98
            Section 10.10 Severability.......................................................98
            Section 10.11 Counterparts.......................................................98
            Section 10.12 Headings and Table of Contents.....................................98
            Section 10.13 Limitations of Liability...........................................98
            Section 10.14 Maintenance of Non-Recourse Debt...................................99
            Section 10.15 Ownership of and Rights in Units..................................100
            Section 10.16 No Petition.......................................................100
            Section 10.17 Consent To Jurisdiction...........................................101
            Section 10.18 WAIVER OF JURY TRIAL..............................................102
</TABLE>

EXHIBITS AND SCHEDULES

<TABLE>
<S>                  <C>
Exhibit A-1     -    Form of Certificate of Insurance Broker Confirming Insurance Coverage (Primary Liability)

Exhibit A-2     -    Form of Certificate of Insurance Broker Confirming Insurance Coverage (Excess Liability)

Exhibit B-1     -    Insurance Requirements as to Public Liability Insurance

Exhibit B-2     -    Insurance Requirements as to Physical Damage Insurance

Exhibit C       -    Form of Transfer Agreement

Exhibit D       -    Form of Notice of Assignment of Sublease

Exhibit E-1     -    Form of Skadden, Arps, Slate, Meagher & Flom (Illinois) Opinion

Exhibit E-2     -    Form of Trinity Rail Leasing I L.P., Trinity Industries Leasing Company and
                     Trinity Rail Management, Inc. Opinion

Exhibit E-3     -    Form of Bingham Dana LLP Opinion

Exhibit E-4     -    Form of Winston & Strawn Opinion
</TABLE>




                                          Participation Agreement (TRLI 2001-1C)


                                       iii

<PAGE>

EXHIBITS AND SCHEDULES

<TABLE>
<S>                  <C>
Exhibit E-5     -    Form of Philip Morris Capital Corporation Legal Department Opinion

Exhibit E-6     -    Form of Opinion of in-house counsel for the Indenture Trustee

Exhibit E-7     -    Form of Alvord & Alvord Opinion

Exhibit E-8     -    Form of McCarthy Tetrault Opinion

Exhibit E-9     -    Form of Andrews & Kurth L.L.P. Opinion

Exhibit E-10    -    Form of Opinion of in-house counsel for the Pass Through Trustee

Exhibit E-11    -    Form of Morris, James, Hitchens & Williams Opinion

Exhibit F       -    Form of Officer's Solvency Certificate

Exhibit G       -    Form of Officer's Accounts Balance Certificate

Schedule 1      -    Description of Equipment, Designation of Basic Groups, Designation of Functional Groups
                     and Equipment Cost

Schedule 1-B    -    List of Existing Subleases

Schedule 2      -    Commitment Percentage and Payment Information for Participants

Schedule 3-A    -    Schedule of Basic Rent Payments

Schedule 3-B    -    Basic Rent Allocation Schedule

Schedule 4-A    -    Schedule of Stipulated Loss Value and Termination Value

Schedule 4-B    -    Termination Amount Schedule

Schedule 5      -    Terms of Equipment Note

Schedule 6      -    Purchase Information

Schedule 3.2(m) -    Written Information Provided by Trinity Rail Leasing I L.P., Trinity Industries Leasing Company
                     and Trinity Rail Management, Inc.
</TABLE>



                                          Participation Agreement (TRLI 2001-1C)


                                       iv

<PAGE>

                     PARTICIPATION AGREEMENT (TRLI 2001-1C)


     This PARTICIPATION AGREEMENT (TRLI 2001-1C), dated as of December 28, 2001
(this "Agreement"), is by and among (i) Trinity Rail Leasing I L.P., a Texas
limited partnership (together with its permitted successors and assigns, the
"Lessee"), (ii) Trinity Rail Management, Inc., a Delaware corporation ("TRMI"),
(iii) Trinity Industries Leasing Company, a Delaware corporation ("TILC"), (iv)
TRLI 2001-1C Railcar Statutory Trust, a Connecticut statutory trust, by State
Street Bank and Trust Company of Connecticut, National Association, a national
banking association, ("Trust Company"), not in its individual capacity except as
expressly provided herein but solely as trustee (together with its permitted
successors and assigns, the "Owner Trustee") under the Trust Agreement (such
term and other defined terms used herein shall have the meanings assigned
thereto in Section 1 below), (v) Trimaran Leasing, L.P., a Delaware limited
partnership (together with its permitted successors and assigns, the "Owner
Participant") and (vi) LaSalle Bank National Association, a national banking
association, not in its individual capacity except as expressly provided herein
but solely as pass through trustee under the Pass Through Trust Agreement (in
such capacity, together with its permitted successors and assigns, the "Pass
Through Trustee" or the "Loan Participant"), and as trustee under the Indenture
(in such capacity, together with its permitted successors and assigns, the
"Indenture Trustee"). The Owner Participant and the Loan Participant are
sometimes hereinafter referred to collectively as the "Participants."


                                   WITNESSETH:

     WHEREAS, on or prior to the date hereof, the Owner Participant and the
Trust Company have entered into the Trust Agreement pursuant to which the Owner
Trustee has agreed, among other things, to hold the Trust Estate for the benefit
of the Owner Participant thereunder on the terms specified in the Trust
Agreement, subject, however, to the Lien created under the Indenture and,
subject to the terms and conditions hereof, to purchase on the Closing Date the
Equipment described in Schedule 1 hereto from the Lessee and concurrently
therewith to lease such Equipment to the Lessee;

     WHEREAS, on or prior to the date hereof and pursuant to the Pass Through
Trust Agreement a grantor trust was created to facilitate the financing
contemplated hereby;

     WHEREAS, on the Closing Date, the Owner Trustee and the Indenture Trustee
will enter into the Indenture, pursuant to which the Owner Trustee will agree,
among other things, to borrow from the Loan Participant the loan in connection
with
                                          Participation Agreement (TRLI 2001-1C)



<PAGE>
the financing of the Total Equipment Cost and to issue to the Loan Participant
the Equipment Note as evidence of such loan;

     WHEREAS, TILC will, on the Closing Date, pursuant to the Transfer and
Assignment Agreement (i) sell to the Partnership all of TILC's right, title and
interest in and to the Equipment described on Schedule 1 hereto and (ii) assign
and transfer to the Partnership all of TILC's right, title and interest in and
to any Existing Equipment Subleases;

     WHEREAS, pursuant to the Pledged Equipment Transfer and Assignment
Agreements, TILC (i) sold to the Partnership all of TILC's right, title and
interest in and to the Pledged Equipment and (ii) assigned and transferred to
the Partnership all of TILC's right, title and interest in and to any Existing
Pledged Equipment Leases,;

     WHEREAS, pursuant to the terms of the Trust Agreement, the Owner
Participant has authorized and directed the Owner Trustee to, and the Owner
Trustee will, among other things and subject to the terms and conditions of the
Operative Agreements, (i) purchase the Equipment described in Schedule 1 hereto
from the Lessee and accept delivery from the Lessee of the Bill of Sale
evidencing the purchase and transfer of title of each Unit to the Owner Trustee,
(ii) own the Equipment described in Schedule 1 hereto as provided in the
Operative Agreements, (iii) accept pursuant to the Assignment the assignment and
transfer from the Lessee of all Lessee's right, title and interest in and to the
Existing Equipment Subleases and (iv) execute and deliver the Lease, pursuant to
which, subject to the terms and conditions set forth therein, the Owner Trustee
agrees to lease to the Lessee, and the Lessee agrees to lease from the Owner
Trustee, each Unit to be delivered on the Closing Date, such lease to be
evidenced by the execution and delivery of the Lease Supplement covering such
Units, and to assign the Existing Equipment Subleases to the Lessee, such
assignment to be evidenced by the execution and delivery of the Assignment
covering such Existing Equipment Subleases;

     WHEREAS, concurrently with the execution and delivery of this Agreement,
the Lessee, TILC, TRMI, the Owner Trustee, the Other Owner Trustees, the
Indenture Trustee, the Other Indenture Trustees and the Collateral Agent have
entered into the Second Amended and Restated Collateral Agency Agreement to
amend and restate the Original Collateral Agency Agreement, pursuant to which
the Lessee will agree, among other things, (i) to grant to the Collateral Agent
for the security and the benefit of the parties specified therein a security
interest in the Collateral to secure the performance by the Lessee of its
obligations under the Lease and the Other Leases, and (ii) to exclude certain
Pledged Equipment previously designated as Special Collateral from the
definition of Special Collateral under the Original Collateral Agency Agreement
so that such Pledged Equipment will not be subject to release provisions of
Section 2.8 of the Collateral Agency Agreement;



                                          Participation Agreement (TRLI 2001-1C)


                                        2
<PAGE>
     WHEREAS, pursuant to the terms of the Trust Agreement, the Owner
Participant has authorized and directed the Owner Trustee to, and the Owner
Trustee will, among other things and subject to the terms and conditions of the
Operative Agreements, grant to the Indenture Trustee for the security and the
benefit of the holder of the Equipment Note a security interest in the Indenture
Estate;

     WHEREAS, concurrently with the execution and delivery of this Agreement,
Lessee, Trinity and the Owner Participant (or an Affiliate of the Owner
Participant) will enter into the Tax Indemnity Agreement;

     WHEREAS, the proceeds from the sale of the Equipment Note to the Loan
Participant will be applied, together with the equity contribution made by the
Owner Participant pursuant to this Agreement, to effect the purchase of the
Equipment described on Schedule 1 hereto by the Owner Trustee from the Lessee as
contemplated hereby;

     WHEREAS, concurrently with the execution and delivery of this Agreement,
the Lessee, the Owner Trustee, the Other Owner Trustees and the Equity
Collateral Agent have entered into the Equity Collateral Security Agreement,
pursuant to which the Lessee will agree, among other things, to grant to the
Equity Collateral Agent for the security and the benefit of the parties
specified therein a security interest in the Equity Collateral to secure the
performance by the Lessee of its obligations under the Lease and the Other
Leases;

     WHEREAS, prior to the Closing Date, the Partners made capital contributions
to the Lessee in accordance with the Partnership Agreement (as amended prior to
the Closing Date) and on the Closing Date the proceeds of such capital
contributions will be applied to fund certain reserve accounts of the Lessee as
contemplated hereby and by the Collateral Agency Agreement, and to fund the
Equity Collateral Account as contemplated hereby and by the Equity Collateral
Security Documents;

     WHEREAS, concurrently with the execution and delivery of this Agreement,
the Lessee and TILC have entered into an amendment to the Management Agreement,
pursuant to which TILC will provide management services with respect to the
Equipment and the Pledged Equipment;

     WHEREAS, concurrently with the execution and delivery of this Agreement,
the Lessee and TILC have entered into an amendment to the Insurance Agreement,
pursuant to which TILC will provide services to the Lessee in connection with
obtaining, managing and maintaining insurance with respect to the Equipment and
the Pledged Equipment required under the Operative Agreements;




                                          Participation Agreement (TRLI 2001-1C)


                                        3
<PAGE>

     WHEREAS, on or prior to the date hereof, the General Partner and the
Limited Partner have entered into the First Amendment to Limited Partnership
Agreement of the Lessee in connection with the transactions contemplated hereby,
and each of the General Partner and the Limited Partner has similarly amended
its respective limited liability company agreement;

     WHEREAS, concurrently with the execution and delivery of this Agreement,
the Lessee, the General Partner, the Limited Partner and TRMI have entered into
an amendment to the Administrative Services Agreement, pursuant to which TRMI
agrees to provide certain administrative services with respect to the
Partnership, the General Partner and the Limited Partner;

     WHEREAS, concurrently with the execution and delivery of this Agreement,
Trinity Industries, Inc. has issued the Trinity Guaranty in favor of the
beneficiaries named therein, pursuant to which Trinity Industries, Inc. will
guarantee performance of the obligations of TILC and TRMI under the Operative
Agreements to which TILC or TRMI is a party, respectively; and

     WHEREAS, concurrently with the execution and delivery of this Agreement,
TILC and the Marks Company have entered into the Second Supplement to the Marks
Company Trust Supplement to allocate all Marks relating to the Units to the
2001-1A SUBI Portfolio, and the relevant parties thereto have entered into the
Amended Marks Trust Documents in relation to such allocation.

     NOW, THEREFORE, in consideration of the mutual agreements herein contained
and other good and valuable consideration, receipt of which is acknowledged,
the parties hereto agree as follows:

SECTION 1. DEFINITIONS; INTERPRETATION OF THIS AGREEMENT.

     Unless otherwise defined herein or unless the context shall otherwise
require, capitalized terms used in this Agreement shall have the meanings
assigned to such terms in Appendix A to the Equipment Lease Agreement (TRLI
2001-1C), dated as of December 28, 2001, between the Owner Trustee and the
Lessee. Unless other wise indicated, all references herein to Sections,
Schedules and Exhibits refer to Sections, Schedules and Exhibits of this
Agreement.

SECTION 2. SALE AND PURCHASE; PARTICIPATION IN EQUIPMENT COST; CLOSING;
           TRANSACTION COSTS.

     Section 2.1 Sale and Purchase of Equipment. Subject to the terms and
conditions hereof and on the basis of the representations and warranties set
forth



                                          Participation Agreement (TRLI 2001-1C)


                                       4
<PAGE>
herein, the Lessee agrees to sell to the Owner Trustee, and the Owner Trustee
agrees to purchase from the Lessee, on the Closing Date and immediately
following consummation of the transactions described in the third and fourth
recital clauses above, the Equipment described in Schedule 1, and, in connection
therewith, the Owner Trustee agrees to pay to the Lessee the cost for each Unit
as specified in Schedule 1. On the Closing Date, the Lessee shall deliver each
Unit described on Schedule 1 to the Owner Trustee, and the Owner Trustee shall
accept such delivery.

     Section 2.2   Participation in Equipment Cost.

         (a) Equity Participation. On the Closing Date, subject to the terms and
conditions hereof and on the basis of the representations and warranties set
forth herein, the Owner Participant agrees to participate in the payment of the
Total Equipment Cost for the Units delivered on the Closing Date by making an
equity investment in the beneficial ownership of such Units in the amount equal
to the product of the Total Equipment Cost for such Units delivered on the
Closing Date and the percentage set forth opposite the Owner Participant's name
in Schedule 2 (the "Owner Participant's Commitment"). The aggregate amount of
the Owner Participant's Commitment plus the aggregate amount of Transaction
Costs payable by the Owner Participant shall not exceed the sum of (x) the Owner
Participant's Commitment and (y) 1.94% of the Total Equipment Cost. The Owner
Participant's Commitment shall be paid to the Indenture Trustee to be held (but
not as part of the Indenture Estate) and applied on behalf of the Owner Trustee
toward payment of the Total Equipment Cost as provided in Section 2.3.

         (b) Debt Participation. On the Closing Date, subject to the terms and
conditions hereof and on the basis of the representations and warranties set
forth herein, the Loan Participant agrees to participate in the payment of the
Total Equipment Cost for the Units delivered on the Closing Date by making a
secured loan, not from its own funds but solely from funds available to it for
such purposes under the Pass Through Trust Agreement, to be evidenced by the
Equipment Note, to the Owner Trustee in the amount equal to the product of the
Total Equipment Cost for the Units delivered on the Closing Date and the
percentage set forth opposite the Loan Participant's name in Schedule 2 (the
"Loan Participant's Commitment"). The Equipment Note shall bear interest at the
Debt Rate.

     Section 2.3   Closing Date; Procedure for Participation.

         (a) Notice of Closing Date. Not later than three Business Days' prior
to the Closing Date (or such lesser notice as may be agreed upon by the Lessee,
the Owner Participant and the Loan Participant), the Lessee shall give the Owner
Participant, the Indenture Trustee, the Owner Trustee and the Loan Participant a
notice (a "Notice of Delivery") by facsimile or other form of telecommunication
or



                                          Participation Agreement (TRLI 2001-1C)


                                       5
<PAGE>
telephone (to be promptly confirmed in writing) of the Closing Date, which
Notice of Delivery shall specify in reasonable detail the number and type of
Units to be delivered on such date, the Total Equipment Cost of such Units, and
the respective amounts of the Owner Participant's Commitment and the Loan
Participant's Commitment required to be paid with respect to the Units. Prior
to 11:00 a.m., Chicago time, on the Closing Date, subject to the satisfaction
(or waiver) of the respective conditions specified in Section 4, the Owner
Participant shall make the amount of the Owner Participant's Commitment required
to be paid on the Closing Date available to the Indenture Trustee, and
immediately prior to the delivery and acceptance of the Units as specified in
Section 2.3(b), the Loan Participant shall make the amount of the Loan
Participant's Commitment for the Total Equipment Cost required to be paid on the
Closing Date available to the Indenture Trustee, in either case, by transferring
or delivering such amounts, in funds immediately available on the Closing Date,
to the Indenture Trustee, either directly to, or for deposit in, the Indenture
Trustee's account at LaSalle Bank National Association, ABA No. 071000505, Att.:
Kristine Schossow, Corporate Trust Services Division, Trust TRLI 2001-1C,
Account No. 2090067, Ref: 608775318 TRLI. The making available by the Owner
Participant of the amount of the Owner Participant's Commitment for the Total
Equipment Cost shall be deemed a waiver of the Notice of Delivery by the Owner
Participant and the Owner Trustee. The making available by the Loan Participant
of the amount of the Loan Participant's Commitment for the Total Equipment Cost
shall be deemed a waiver of the Notice of Delivery by the Loan Participant and
the Indenture Trustee.

         (b) Closing. The closing of the transactions contemplated hereby (the
"Closing") shall take place on or before 2:00 p.m., Chicago time, on the Closing
Date at the offices of Skadden, Arps, Slate, Meagher & Flom (Illinois), or at
such other place or time as the parties hereto shall agree. Upon receipt by the
Indenture Trustee on the Closing Date of the full amount of the Owner
Participant's Commitment and the Loan Participant's Commitment in respect of
the Units delivered on the Closing Date, TILC shall pursuant to the Transfer and
Assignment Agreement deliver the Units described on Schedule 1 hereto to the
Lessee by delivery of the TILC Bill of Sale and shall make an assignment of the
Existing Equipment Sub leases to the Lessee by delivery of the TILC Assignment,
and immediately thereafter, (i) the Indenture Trustee, on behalf of the Owner
Trustee, shall, subject to the conditions set forth in Sections 4.1, 4.2 and 4.3
having been fulfilled to the satisfaction of the Participants or waived by the
Participants, pay to the Lessee from the funds then held by it, in immediately
available funds, an amount equal to the Total Equipment Cost for the Units
delivered on the Closing Date, (ii) the Lessee shall pay to TILC pursuant to the
Transfer and Assignment Agreement an amount equal to the Total Equipment Cost
for the Units delivered on the Closing Date, (iii) the Lessee shall deliver the
Units described on Schedule 1 hereto by delivery of the Bill of Sale, (iv) the
Owner Trustee shall, pursuant to the Lease, lease and deliver the




                                          Participation Agreement (TRLI 2001-1C)

                                       6

<PAGE>
Units listed on Schedule 1 hereto to the Lessee, and the Lessee, pursuant to the
Lease, shall accept delivery of the Units described on Schedule 1 hereto under
the Lease, such lease, delivery and acceptance of such Units under the Lease
shall be conclusively evidenced by the execution and delivery by the Lessee and
the Owner Trustee of the Lease Supplement covering the Equipment so delivered as
described in Schedule 1 and (v) the Owner Trustee shall execute and deliver the
Equipment Note relating to such Lease Supplement to the Loan Participant. Each
of the Lessee, the Owner Participant, the Owner Trustee, TILC, the Loan
Participant and the Indenture Trustee hereby agrees to take all actions required
to be taken by it in connection with the Closing as contemplated by this Section
2.3(b).

     Section 2.4  Owner Participant's Instructions to the Owner Trustee;
Satisfaction of Conditions.

         (a) The Owner Participant agrees that the making available to the
Indenture Trustee of the amount of the Owner Participant's Commitment for the
Units delivered on the Closing Date in accordance with the terms of this Section
2 shall constitute, without further act, authorization and direction by the
Owner Participant to the Owner Trustee, subject, on the Closing Date, to the
conditions set forth in Sections 4.1 and 4.3 having been fulfilled to the
satisfaction of the Owner Participant or waived by the Owner Participant, to
take the actions specified in Section 2.04 of the Trust Agreement with respect
to the Units on the Closing Date.

         (b) The Owner Participant agrees that the authorization by the Owner
Participant or its counsel to the Indenture Trustee to release to the Lessee the
Owner Participant's Commitment with respect to the Units delivered on the
Closing Date shall constitute, without further act, notice and confirmation that
all conditions to closing set forth in Sections 4.1 and 4.3 were either met to
the satisfaction of the Owner Participant or, if not so met, were waived by the
Owner Participant.

         (c) The Loan Participant agrees that the authorization by the Loan
Participant or its counsel to the Indenture Trustee to release to the Lessee the
Loan Participant's Commitment with respect to the Units delivered on the Closing
Date shall constitute, without further act, notice and confirmation that all
conditions to closing set forth in Sections 4.1 and 4.2 were either met to the
satisfaction of the Loan Participant or, if not so met, were waived by the Loan
Participant.

     Section 2.5  Expenses.

         (a) If the Owner Participant shall have made its investment provided
for in Section 2.2 and the transactions contemplated by this Agreement are
consummated, either the Owner Participant will promptly pay, or the Owner
Trustee will promptly pay, with funds the Owner Participant hereby agrees to pay
(which,


                                          Participation Agreement (TRLI 2001-1C)


                                       7
<PAGE>

together with the Owner Participant's Commitment, shall not exceed the amount
set forth in the second sentence of Section 2.2(a)) to the Owner Trustee, the
following (collectively referred to as the "Transaction Costs") if evidenced by
an invoice delivered to the Owner Participant within four (4) months after the
Closing Date and approved by the Lessee and the Owner Participant (such approval
not to be unreasonably withheld or delayed):


            (i) the cost of reproducing, printing and filing the Operative
Agreements, the Equipment Note, the Pass Through Documents and all amendments
and supplements to the foregoing, including all costs and fees in connection
with the initial filing and recording of the Lease, the Indenture and any other
document required to be filed or recorded pursuant to the provisions hereof or
of any other Operative Agreement and the fees and expenses of the Rating Agency
in connection with the rating of the Pass Through Certificates;

            (ii) the reasonable out-of-pocket expenses of the Owner Participant
and the reasonable fees of Winston & Strawn, special counsel for the Owner
Participant, plus disbursements, for their services rendered in connection with
the negotiation, execution and delivery of this Agreement and the other
Operative Agreements;

            (iii) the reasonable out-of-pocket expenses of the Collateral Agent
and the Equity Collateral Agent and the reasonable fees and expenses of Andrews
& Kurth L.L.P., special counsel for the Collateral Agent and Equity Collateral
Agent, for their services rendered in connection with the negotiation,
execution and delivery of the Operative Agreements;

            (iv) the reasonable fees and expenses of Skadden, Arps, Slate,
Meagher & Flom (Illinois), special counsel for TILC, the Lessee and TRMI, for
their services rendered in connection with the preparation of documentation,
negotiation, execution and delivery of this Agreement and the other Operative
Agreements;

            (v) the reasonable fees and expenses of Vinson & Elkins L.L.P.,
special counsel for the Initial Purchasers, for their services rendered in
connection with the preparation of documentation, negotiation, execution and
delivery of the Pass Through Documents, this Agreement and the other Operative
Agreements;

            (vi) the reasonable fees and expenses of (x) Alvord & Alvord,
special STB counsel and (y) McCarthy Tetrault, special Canadian rail counsel;



                                          Participation Agreement (TRLI 2001-1C)


                                       8
<PAGE>
            (vii) the reasonable fees and expenses of Bingham Dana LLP, special
counsel for the Owner Trustee, for their services rendered in connection with
the negotiation, execution and delivery of this Agreement and the other
Operative Agreements;

            (viii) the reasonable fees and expenses of Schwartz, Cooper,
Greenberger & Krauss, special counsel for the Indenture Trustee and the Pass
Through Trustee, for their services rendered in connection with the negotiation,
execution and delivery of the Pass Through Documents, this Agreement and the
other Operative Agreements;

            (ix) the reasonable fees and expenses payable to the Arranger for
its services rendered as advisor to the Lessee;

            (x) the initial fees and reasonable out-of-pocket expenses of the
Owner Trustee;

            (xi) the initial fees and reasonable out-of-pocket expenses of the
Indenture Trustee;

            (xii) the initial fees and reasonable out-of-pocket expenses of the
Pass Through Trustee;

            (xiii) the reasonable fees of Rail Solutions, Inc. (which fees shall
in no event exceed $10,000.00 in the aggregate in respect of the amounts payable
hereunder), plus disbursements, for their services rendered in connection with
delivering the Appraisal required by Section 4.3(a) and for other consulting
services;

            (xiv) [intentionally omitted];

            (xv) the costs incurred in connection with any adjustment pursuant
to Section 2.6(a); and

            (xvi) all costs and fees in connection with the qualification of
the Pass Through Certificates under federal or state securities laws or Blue Sky
laws in accordance with the provisions of the Certificate Purchase Agreement.

         Except as expressly provided above, Transaction Costs shall not include
internal costs and expenses such as salaries and overhead of whatsoever kind or
nature of, or costs incurred by, parties to this Agreement pursuant to
arrangements with third parties for services (other than those expressly
referred to above).



                                          Participation Agreement (TRLI 2001-1C)


                                        9


<PAGE>
         (b) Upon the consummation of the transactions contemplated by this
Agreement, the Lessee agrees to be responsible for, and will pay when due as
Supplemental Rent: (i) the reasonable expenses (including reasonable legal fees
and expenses) of the Owner Trustee, the Indenture Trustee, the Participants and
the Certificateholders (but only to the extent their consent or approval is
required under the Operative Agreements in connection with such supplements,
amendments, modifications, alterations, waivers or consents described below)
incurred subsequent to the delivery of the Equipment on the Closing Date, in
connection with any supplements, amendments, modifications, alterations, waivers
or consents (whether or not consummated) of any of the Operative Agreements
which are either (1) requested by the Lessee or (2) required by any applicable
law or regulation (other than laws or regulations solely relating to the
business of the Lessor, the Indenture Trustee, the Trust Company, the Pass
Through Trustee, the Initial Purchasers, the Collateral Agent, the Equity
Collateral Agent, any Participant or any Certificateholder) or (3) entered into
in connection with, or as a result of, a Lease Default or (4) required pursuant
to the terms of the Operative Agreements (including such reasonable expenses
incurred in connection with any adjustment pursuant to Section 2.6), (ii) the
ongoing fees of the Owner Trustee under the Trust Agreement; (iii) the ongoing
fees of the Indenture Trustee under the Operative Agreements, (iv) the ongoing
fees of the Collateral Agent under the Collateral Agency Agreement and the
ongoing fees of the Equity Collateral Agent under the Equity Collateral Security
Agreement, (v) the ongoing fees of the Pass Through Trustee under the Pass
Through Trust Agreement and (vi) the ongoing fees of the Deposit Account Bank
under the Blocked Account Agreement; provided that, the fees referred to in
clauses (iv) and (vi) immediately above shall be allocated between the
transactions contemplated hereby and the transactions contemplated by the Other
Participation Agreements on a pro rata basis based on the aggregate commitments
of the Participants hereunder as compared with the aggregate commitments of the
participants under the Other Participation Agreements.

         (c) If the transactions contemplated hereby are not consummated as a
result of a default by the Owner Participant in its obligations to consummate
the transactions contemplated hereby, the Owner Participant shall pay those
Transaction Costs referred to in Sections 2.5(a)(ii) and (xiii) above and the
Lessee shall pay the remainder. If the transactions contemplated hereby are not
consummated due to any other reason, the Lessee shall pay all Transaction Costs.

         (d) Notwithstanding the foregoing provisions of this Section 2.5, the
Lessee shall have no liability for (i) any costs or expenses relating to any
voluntary transfer of the Owner Participant's interest in the Equipment pursuant
to Section 6.1 other than during the continuance of a Lease Event of Default and
no such costs or expenses shall constitute Transaction Costs, (ii) any costs or
expenses



                                          Participation Agreement (TRLI 2001-1C)



                                       10
<PAGE>

relating to any voluntary transfer of any Loan Participant's interest in the
Equipment Note and (iii) any costs or expenses relating to any voluntary
transfer of any Certificateholder's interest in the Pass Through Certificates,
and in each case no such costs or expenses shall constitute Transaction Costs.

         (e) To the extent Transaction Costs exceed 1.94% of the Total Equipment
Cost, Lessee shall pay the Transaction Costs specified in Sections 2.5(a) (iv)
and (ix) above up to an amount equal to the amount of such excess.

    Section 2.6  Calculation of Adjustments to Basic Rent, Stipulated Loss Value
and Termination Value; Confirmation and Verification.


         (a) Calculation of Adjustments. In the event that (A) the Closing Date
is other than December 28, 2001, (B) the actual interest rate on the Equipment
Note is different from the Debt Rate or the amortization of the Equipment Note
is different from that set forth on Schedule 5, (C) a refinancing contemplated
by Section 10.2 occurs, (D) the actual aggregate Equipment Cost or composition
of the Units is different from that set forth on Schedule 1, (E) the actual
aggregate amount of Transaction Costs paid pursuant to Section 2.5(a) is other
than an amount equal to 1.94% of the Total Equipment Cost, (F) there is any
change in, or cost relating to a revision in, the structure of the transaction
contemplated hereby as required by the Rating Agency, (G) there is any change in
the Code or in the regulations promulgated thereunder or other official
administrative pronouncement, which change is enacted or effective after the
execution of this Agreement and prior to the Closing Date (provided that the
Owner Participant or the Lessee, as the case may be, shall have provided notice
to the other prior to the Closing Date), and which change alters or eliminates
any tax assumption used in calculating Basic Rent, Stipulated Loss Values,
Stipulated Loss Amounts, Termination Values, Termination Amounts, Early Purchase
Price, or (H) there is any change in, or cost relating to revision in, the
structure of the transaction contemplated hereby as a result of any change in
generally accepted accounting principles affecting the accounting treatment of
the transaction by the Owner Participant then, in each such case, the Owner
Participant shall recalculate the payments or amounts, as the case may be, of
Basic Rent, the allocation of Basic Rent, Stipulated Loss Values, Stipulated
Loss Amounts, Termination Values, Termination Amounts, Early Purchase Price,
Scheduled Amortization and Scheduled Amortization Amount (and the corresponding
Rated Amortization and Rated Amortization Amount), (i) to preserve the Net
Economic Return that the Owner Participant would have realized had such event
not occurred, and (ii) to minimize to the greatest extent possible, consistent
with the foregoing clause (i), the present value (discounted monthly at an
interest rate per annum equal to the Debt Rate) of the sum of the payments of
Basic Rent to the Early Purchase Date and the Early Purchase Price; provided,
however, that in no event shall the Early Purchase Price be less than the
expected fair market value of the Equipment on


                                          Participation Agreement (TRLI 2001-1C)



                                       11
<PAGE>

the Early Purchase Date and the Basic Term Expiration Date, respectively, as
determined by the Appraisal. Any such recalculation performed due to the
occurrence of any one or more of the events described in clause (A), (B), (D),
(E), (F), (G) or (H) above shall be made prior to the Closing Date. In
performing any such recalculation and in determining the Owner Participant's Net
Economic Return, the Owner Participant shall utilize the same methods and
assumptions originally used in making the computations of Basic Rent, Stipulated
Loss Values, Stipulated Loss Amounts, Termination Values, Termination Amounts
and Early Purchase Price initially set forth in Schedules 3-A, 3-B, 4-A, 4-B and
6 (other than those assumptions changed as a result of any of the events
described in clauses (A) through (H) of the preceding sentence necessitating
such recalculation; it being agreed that such recalculation shall reflect solely
any changes of assumptions or facts resulting directly from the event or events
necessitating such recalculation). Such adjustments shall comply (to the extent
the original structure complied) with Section 467 of the Code and the
requirements of Sections 4.02(5), 4.07(1) and (2) of Revenue Procedure 2001-28
calculated, except in the case of a refinancing pursuant to Section 10.2,
without taking into account any change after the Closing Date in or to Section
467 of the Code (and any regulations thereunder).

         (b) Confirmation and Verification. Upon completion of any recalculation
described in Section 2.6(a), a duly authorized officer of the Owner Participant
shall provide a certificate to the Lessee either (x) stating that the amounts of
Basic Rent, Stipulated Loss Values, Stipulated Loss Amounts, Termination Values,
Termination Amounts and Early Purchase Price as are then set forth in Schedules
3-A, 3-B, 4-A, 4-B and 6 do not require change, or (y) setting forth such
adjustments to the amounts of Basic Rent, Stipulated Loss Values, Stipulated
Loss Amounts, Termination Values, Termination Amounts or Early Purchase Price as
have been calculated by the Owner Participant in accordance with Section 2.6(a).
Such certificate shall describe in reasonable detail the basis for any such
adjustments, and any such adjustment and corresponding adjustments to the
Stipulated Loss Values, Termination Values and Early Purchase Price will be
computed on a basis consistent with that used by the Owner Participant in the
original calculation of Basic Rent. Any such adjustment shall be deemed approved
upon notice of such approval by the Lessee to the Owner Participant or on the
thirty-first (31st) day following delivery of such certificate by the Owner
Participant to the Lessee unless the Lessee, prior to such day, requests
verification pursuant to the following sentence, and shall become effective, in
the case of adjustments made pursuant to clause (A), (B), (D), (E), (F), (G) or
(H) of the first sentence of Section 2.6(a), as of the earlier of (i) the first
Rent Payment Date and (ii) the date the Lessee approves or has been deemed to
have approved such adjustment, and, in the case of an adjustment made pursuant
to clause (C) of the first sentence of Section 2.6(a), as of the date of the
refinancing. If the Lessee shall so request, the recalculation of any such
adjustments described in this Section 2.6 shall be verified by a nationally
recognized firm of independent



                                          Participation Agreement (TRLI 2001-1C)



                                       12
<PAGE>
accountants selected by the Owner Participant and reasonably acceptable to the
Lessee, and any such recalculation of such adjustment as so verified shall be
binding on the Lessee and the Owner Participant. Such accounting firm shall be
requested to make its determination within 30 days. The Owner Participant shall
provide to a representative of such accounting firm, on a confidential basis,
such information as it may reasonably require, including the original
assumptions used by the Owner Participant and the methods used by the Owner
Participant in the original calculation of, and any recalculation of, Basic
Rent, Stipulated Loss Values, Stipulated Loss Amounts, Termination Values,
Termination Amounts, Early Purchase Price, Scheduled Amortization and Scheduled
Amortization Amount (and the corresponding Rated Amortization and Rated
Amortization Amount) and such other information as is necessary to determine
whether the computation is accurate and in conformity with the provisions of
this Agreement, provided that in no event shall the Owner Participant have any
obligation to provide the Lessee with any such information; and provided,
further, that the Owner Participant shall have no obligation to disclose to the
Lessee, such accounting firm or any other Person, or to permit the Lessee, such
accounting firm or any other Person, to examine any federal, state or local
income tax returns of the Owner Participant, or books or accounting records
related thereto, for any taxable year. Subject to the immediately following
sentence, the costs of such verification shall be borne by the Lessee. If such
accounting firm's verification shall result in a decrease in the net present
value (expressed as a percentage of Total Equipment Cost, discounted monthly at
a rate per annum equal to the Debt Rate) of the sum of the Basic Rent to the
Early Purchase Date and the Early Purchase Price, calculated as of the Closing
Date, as compared to the net present value of the sum of the Basic Rent to the
Early Purchase Date and the Early Purchase Price, proposed by the Owner
Participant, by more than the greater of (i) ten basis points or (ii) 5% of the
proposed adjustment, then the Owner Participant agrees to reimburse the Lessee
for any amounts paid for such verification. Any revised adjustment resulting
from such verification shall become effective on the next Rent Payment Date
after such verification has been concluded (except that, in the case of an
adjustment pursuant to clause (C) of the first sentence of Section 2.6(a), such
adjustment shall be effective as of the date of the refinancing), and shall take
into account any underpayment or overpayment, together with interest thereon at
the Debt Rate, resulting from an earlier effective ness of the original
calculation.

         (c) Compliance. Notwithstanding the foregoing, any adjustment made to
the payments of Basic Rent, Stipulated Loss Amounts, Termination Amounts or
Early Purchase Price, pursuant to the foregoing, shall comply with the following
requirements: (i) each installment of Basic Rent, as so adjusted, under any
circumstances and in any event, will be in an amount at least sufficient for the
Owner Trustee to pay in full as of the due date of such installment any payment
of principal of and interest on the Equipment Note required to be paid on the
due date of such installment of Basic Rent in accordance with the Scheduled
Amortization, and (ii)



                                          Participation Agreement (TRLI 2001-1C)


                                       13

<PAGE>
Stipulated Loss Amount, Termination Amount and Early Purchase Price, as so
adjusted, under any circumstances and in any event, will be an amount which,
together with any other amounts required to be paid by the Lessee under the
Lease in connection with an Event of Loss or a termination of the Lease, as the
case may be, will be at least sufficient to pay in full, as of the date of
payment thereof, the aggregate unpaid principal of and all unpaid interest on
the Equipment Note in accordance with the Scheduled Amortization accrued to the
date on which Stipulated Loss Amount, Termination Amount or Early Purchase
Price, as the case may be, is paid in accordance with the terms of the Lease.

         (d) Invoices. All invoices in respect of Transaction Costs to the
extent not delivered on the Closing Date shall be directed to the Owner
Participant at the address set forth in Section 10.4, with a copy to the Lessee.


     Section 2.7  Postponement of Closing Date.

         (a) If for any reason whatsoever the Closing is not consummated on the
Closing Date provided for pursuant to Section 2.3 (the "Scheduled Closing
Date"), the Closing shall be deemed postponed to the next Business Day or to
such other Business Day on or prior to December 31, 2001 as the Lessee shall
specify by facsimile or telephonic (confirmed in writing) notice to the Owner
Participant, the Indenture Trustee, the Owner Trustee, the Pass Through Trustee
and the Initial Purchasers, in which case the Participants will keep their funds
available, provided that the notice of postponement shall be received by each
party no later than 4:30 p.m.,Chicago time, on the originally scheduled Closing
Date, and the term "Closing Date" as used in this Agreement shall mean the
postponed "Closing Date."

         (b) If the closing fails to occur on the Scheduled Closing Date, the
Indenture Trustee shall promptly return to each Participant that makes funds
avail able to it in accordance with this Section 2 such funds, together with
interest or income earned thereon.

         (c) If the Closing fails to occur on the Scheduled Closing Date and
funds are not returned to each Participant that made funds available by the
Indenture Trustee as provided by Section 2.7(b) above, the Indenture Trustee
shall, if so instructed by the Lessee in the facsimile or telephonic (confirmed
in writing) notice from the Lessee (which notice shall specify the Specified
Investments to be purchased), use reasonable best efforts to invest, at the risk
of the Lessee (except as provided below with respect to the Indenture Trustee's
gross negligence or willful misconduct), the funds received by the Indenture
Trustee from the Participants in Specified Investments in accordance with the
Lessee's instructions. Any such Specified Investments purchased by the Indenture
Trustee upon instructions from the Lessee shall be held in trust by the
Indenture Trustee (but not as part of the Indenture



                                          Participation Agreement (TRLI 2001-1C)


                                       14
<PAGE>

Estate under the Indenture) for the benefit of the Participants that provided
such funds. In order to obtain funds for the payment of the Equipment Cost for
the Units on the Closing Date or to return funds to the Participants pursuant to
Section 2.7(b), the Indenture Trustee is authorized to sell any Specified
Investments purchased as aforesaid. The Indenture Trustee shall not be liable
for failure to invest such funds or for any losses incurred on such investments
except for losses resulting from its own willful misconduct or gross negligence.

         (d) If the Closing fails to occur on the Scheduled Closing Date, unless
the Indenture Trustee returns all funds to the Participants by 2:00 p.m.,
Chicago time, on the Scheduled Closing Date, the Lessee shall reimburse each
Participant that has made funds available pursuant to this Section 2 for the
loss of the use of its funds an amount equal to the excess, if any, of (x)
interest on such funds at the Debt Rate for the period from and including the
Scheduled Closing Date to but excluding the actual Closing Date or, if earlier,
the day on which such Participant's funds are returned if such return is made by
2:00 p.m., Chicago time (or to but excluding the next following Business Day if
such return is not made by such time); provided that with respect to the Owner
Participant such period shall in any case be at least one day, unless the Owner
Participant shall have received, prior to 12:00 noon (Chicago time) on the
Business Day preceding the Scheduled Closing Date, a notice of postponement of
the Scheduled Closing Date pursuant to Section 2.7(a), over (y) any amount paid
to such Participant in respect of interest or income earned by the Indenture
Trustee on such funds pursuant to Section 2.7(c) above.

         (e) If the Closing fails to occur on the Scheduled Closing Date, the
Lessee shall, on the Closing Date or on the date funds are required to be
returned to the Participants pursuant to Section 2.7(b) above, reimburse the
Indenture Trustee, for the benefit of the Participants that provided funds which
are invested by the Indenture Trustee pursuant to this Section 2.7 for any
losses incurred on such investments (except with respect to any Participant, if
the Closing failed to occur as a result of default by such Participant, or with
respect to the Owner Participant, as result of default of the Owner Trustee
(acting pursuant to instructions from the Owner Participant)). All income and
profits on the investment of such funds shall be for the respective accounts of
such Participants, and the Indenture Trustee shall not be liable for failure to
invest such funds or for any losses incurred on such investments, except for its
willful misconduct or gross negligence.

         (f) Notwithstanding the provisions of Section 2.7(a), the Participants
shall not be under any obligation to make their respective commitments available
beyond 2:00 p.m. (Chicago time) on December 31, 2001.


                                          Participation Agreement (TRLI 2001-1C)


                                       15

<PAGE>
SECTION 3.  REPRESENTATIONS AND WARRANTIES.

     Section 3.1 Representations and Warranties of the Trust Company. Trust
Company, in its individual capacity (except with respect to clauses (c), (k) and
(m) (to the extent applicable to Trust Company in its capacity as Owner Trustee)
below) and as Owner Trustee with respect to clauses (c), (f) and (k) (to the
extent applicable to Trust Company in its capacity as Owner Trustee) below,
represents and warrants to each of the Owner Participant, the Indenture Trustee,
the Pass Through Trustee, TILC, TRMI and the Lessee, notwithstanding the
provisions of Section 10.13 or any similar provision in any other Operative
Agreement, that, as of the date hereof:

         (a) Trust Company (i) is a national banking association duly
incorporated, validly existing and in good standing under the laws of the United
States of America, (ii) has the full corporate power, authority and legal right
under the laws of the State of Connecticut and the United States pertaining to
its banking, trust and fiduciary powers to carry on its business as now
conducted and execute, deliver and perform its obligations hereunder and under
the Trust Agreement and (iii) assuming due authorization, execution and delivery
of the Trust Agreement by the Owner Participant, has full power and authority,
as Owner Trustee and/or, to the extent expressly provided herein or therein, in
its individual capacity, to execute, deliver and perform its obligations under
each of the Owner Trustee Agreements;

         (b) (i) Trust Company has duly authorized, executed and delivered the
Trust Agreement, (ii) assuming the due authorization, execution and delivery of
the Trust Agreement by the Owner Participant, Trust Company in its trustee
capacity and, to the extent expressly provided therein, in its individual
capacity, has, or on or prior to the Closing Date will have, duly authorized,
executed and delivered each of the other Owner Trustee Agreements and, as of the
Closing Date, the Equipment Note, the Lease Supplement and the Indenture
Supplement to be delivered on the Closing Date, (iii) assuming the due
authorization, execution and delivery of the Trust Agreement by the Owner
Participant, the Trust is a Connecticut statutory trust duly organized and
validly existing in good standing under the laws of the State of Connecticut and
(iv) the Trust Agreement constitutes a legal, valid and binding obligation of
Trust Company enforceable against it in accordance with the terms thereof except
as enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally and by
general principles of equity;

         (c) assuming the due authorization, execution and delivery of the Trust
Agreement by the Owner Participant, each of the Owner Trustee Agreements (other
than the Trust Agreement) to which it is a party constitutes, or when entered
into will constitute, a legal, valid and binding obligation of the Owner
Trustee, enforceable against it in accordance with the terms thereof, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other


                                          Participation Agreement (TRLI 2001-1C)



                                       16
<PAGE>

similar laws affecting the rights of creditors generally and by general
principles of equity;

         (d) neither the execution and delivery by Trust Company or Owner
Trustee, as the case may be, of the Owner Trustee Agreements or the Equipment
Note to be delivered on the Closing Date, nor the consummation by Trust Company
or Owner Trustee, as the case may be, of any of the transactions contemplated
hereby or thereby, nor the compliance by Trust Company or Owner Trustee, as the
case may be, with any of the terms and provisions hereof and thereof, (i)
requires or will require any approval of its stockholders, or approval or
consent of any trustees or holders of any indebtedness or obligations of it in
its individual capacity, or (ii) violates or will violate its articles of
association or bylaws, or contravenes or will contravene any provision of, or
constitutes or will constitute a default under, or results or will result in any
breach of, any indenture, mortgage, chattel mortgage, deed of trust, conditional
sale contract, bank loan or credit agreement, license or other agreement or
instrument to which Trust Company is a party or by which it or any of its
properties may be bound or affected, or contravenes or will contravene any law,
governmental rule or regulation of the United States of America or the State of
Connecticut governing the banking, trust or fiduciary powers of Trust Company,
or any judgment or order applicable to or binding on it;

         (e) there are no Taxes payable by Trust Company or the Owner Trustee,
imposed by the State of Connecticut or any political subdivision thereof in
connection with the execution and delivery by Trust Company of the Trust
Agreement, and, as Trust Company or Owner Trustee, as the case may be, of this
Agreement, the other Owner Trustee Agreements (other than the Trust Agreement)
or the Equipment Note to be delivered on the Closing Date solely because Trust
Company is a national banking association with its principal place of business
in Connecticut and performs certain of its duties as Owner Trustee in the State
of Connecticut; and there are no Taxes payable by Trust Company or the Owner
Trustee, as the case may be, imposed by the State of Connecticut or any
political subdivision thereof in connection with the acquisition of its interest
in the Equipment (other than franchise or other taxes based on or measured by
any fees or compensation received by Trust Company or the Owner Trustee for
services rendered in connection with the transactions contemplated hereby)
solely because Trust Company is a national banking association with its
principal place of business in Connecticut and performs certain of its duties as
Owner Trustee in the State of Connecticut;

         (f) there are no pending or, to its knowledge, threatened actions or
proceedings against Trust Company or the Owner Trustee, before any court or
administrative agency which individually or in the aggregate, if determined
adversely to it, would materially adversely affect the ability of Trust Company
or the Owner



                                          Participation Agreement (TRLI 2001-1C)


                                       17
<PAGE>


Trustee, as the case may be, to perform its obligations under the Trust
Agreement, the other Owner Trustee Agreements or the Equipment Note to be
delivered on the Closing Date;

         (g) both its chief executive office, and the place where its records
concerning the Equipment and all its interest in, to and under all documents
relating to the Trust Estate, are located in Hartford, Connecticut, and Trust
Company agrees to give the Owner Participant, the Indenture Trustee and the
Lessee written notice within 30 days following any relocation of said chief
executive office or said place from its present location;

         (h) no consent, approval, order or authorization of, giving of notice
to, or registration with, or taking of any other action in respect of, any
Connecticut state or local governmental authority or agency or any United States
federal governmental authority or agency regulating the banking or trust powers
of Trust Company is required for the execution and delivery of, or the carrying
out by, Trust Company or the Owner Trustee, as the case may be, of any of the
transactions contemplated hereby or by the Trust Agreement or of any of the
transactions contemplated by any of the other Owner Trustee Agreements, other
than any such consent, approval, order, authorization, registration, notice or
action as has been duly obtained, given or taken;

         (i) on the Closing Date, the Owner Trustee's right, title and interest
in and to the Equipment delivered on the Closing Date shall be free and clear of
any Lessor's Lien attributable to Trust Company;

         (j) proceeds received by the Owner Trustee from the Owner Participant
pursuant to the Trust Agreement will be administered by it in accordance with
Article III of the Trust Agreement;

         (k) the Owner Trustee shall receive from the Lessee such title as was
conveyed to it by the Lessee, subject to the rights of the Owner Trustee and the
Lessee under the Lease and the Lien created pursuant to the Indenture and the
Indenture Supplement in respect of the Equipment delivered on the Closing Date,
and there will be no Lessor's Liens attributable to the Owner Trustee on the
Equipment or any interest therein or on the Trust Estate;

         (l) to its knowledge, no Indenture Default has occurred and is
continuing; and

         (m) the Owner Trustee is not engaged in the business of extending
credit for the purposes of purchasing or carrying margin stock, and no proceeds
of the Equipment Note or the Owner Participant's Commitment as contemplated by



                                          Participation Agreement (TRLI 2001-1C)


                                       18
<PAGE>

this Agreement and the other Operative Agreements will be used by the Owner
Trustee for a purpose which violates, or would be inconsistent with, Section 7
of the Securities Exchange Act of 1934, as amended, or Regulations T, U and X of
the Federal Reserve System. Terms for which meanings are provided in Regulations
T, U and X of the Federal Reserve System or any regulations substituted
therefor, as from time to time in effect, are used in this Section 3.1(m) with
such meanings.

     Section 3.2 Representations and Warranties of the Lessee. The Lessee
represents and warrants to the Owner Trustee, the Indenture Trustee and the
Participants, as of the date hereof:

         (a) as to organization, powers and partnership organizational
documents:

            (i) the Lessee is a limited partnership duly organized, validly
existing, and in good standing under the laws of the State of Texas, is duly
licensed or qualified and in good standing in each jurisdiction in which the
failure to so qualify would have a material adverse effect on its ability to
carry on its business as now conducted or to enter into and perform its
obligations under the Lessee Agreements, is a special purpose limited
partnership organized to enter into the transactions contemplated by this
Agreement, the Lessee Agreements, the Lessee Agreements (as defined in each
Other Participation Agreement), the Pass Through Documents to which it is a
party and the Other Pass Through Documents to which it is a party, has the
limited partnership power and authority to sell the Equipment described on
Schedule 1 hereto to the Owner Trustee and to assign the Existing Equipment
Subleases, as contemplated by this Agreement, to pledge the Equity Collateral to
the Equity Collateral Agent as contemplated hereunder and under the Equity
Collateral Security Documents, and had the limited partnership power and
authority to pledge the Pledged Equipment to the Collateral Agent and to assign
the Existing Pledged Equipment Leases, as contemplated by the Participation
Agreement TRLI 2001-1A, and to carry on its business as now conducted, has the
requisite limited partnership power and authority to execute, deliver and
perform its obligations under the Lessee Agreements and has conducted no
business or operations prior to the date hereof (other than those associated
with its organization and capitalization or as contemplated by the Operative
Agreements or the Other Operative Agreements);

            (ii) the General Partner is a limited liability company duly formed,
validly existing and in good standing under the laws of the State of Delaware
and has the power and authority to execute, deliver and perform its obligations
under the Partnership Agreement and each other organizational document of the
Partnership to which the General Partner is a party;



                                          Participation Agreement (TRLI 2001-1C)


                                       19
<PAGE>
            (iii) the Limited Partner is a limited liability company duly
formed, validly existing and in good standing under the laws of the State of
Delaware and has the power and authority to execute, deliver and perform its
obligations under the Partnership Agreement and each other organizational
document of the Partnership to which the Limited Partner is a party;

            (iv) the General Partner and the Limited Partner are the only
partners of the Partnership;

            (v) the execution, delivery and performance by each Partner of the
Partnership Agreement and each other organizational document of the Partner ship
to which such Partner is a party (A) have been duly authorized by all requisite
limited liability company or member action of such Partner and (B) did not and
do not (x) violate (i) any provision of law, statute, rule or regulation, or of
the certificate of formation or limited liability company agreement or other
constitutive documents of such Partner, (ii) any order of any governmental
authority or (iii) any provision of any indenture, agreement or other instrument
to which such Partner is a party or by which it or any of its property is or may
be bound, (y) conflict with, result in a breach of or constitute (alone or with
notice, or lapse of time or both) a default under any such indenture, agreement
or other instrument or (z) result in the creation or imposition of any Lien upon
any property or assets of such Partner;

            (vi) each of the Partnership Agreement and each other organizational
document of the Partnership has been duly executed and delivered by each party
thereto and constitutes a legal, valid and binding obligation of each such party
enforceable against such party in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally and by
general principles of equity;

         (b) each of the Lessee Agreements and the Pass Through Documents to
which the Lessee is a party has been duly authorized by all necessary limited
partnership action of the Lessee and, if required, limited liability company
action of each Partner, this Agreement has been duly executed and delivered (and
in the case of the other Lessee Agreements, such other Lessee Agreements will on
the Closing Date have been duly executed and delivered) by the General Partner
in its capacity as the general partner of the Lessee, and constitutes (and in
the case of the other Lessee Agreements, such other Lessee Agreements will on
the Closing Date constitute) the legal, valid and binding obligations of the
Lessee (assuming the due authorization, execution and delivery by each other
party thereto), enforceable against the Lessee in accordance with their
respective terms except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general principles of equity;



                                          Participation Agreement (TRLI 2001-1C)


                                       20

<PAGE>

         (c) the execution, delivery and performance by the Lessee of each
Lessee Agreement and each Pass Through Document to which Lessee is a party and
compliance by the Lessee with all of the provisions thereof do not and will not
contravene any law or regulation, or any order of any court or governmental
authority or agency applicable to or binding on the Lessee or any of its
properties, or contravene the provisions of, or constitute a default by the
Lessee under, or result in the creation of any Lien (except for Permitted Liens)
upon the property of the Lessee under its organizational documents or any
indenture, mortgage, contract or other agreement or instrument to which the
Lessee is a party or by which the Lessee or any of its properties may be bound
or affected;

         (d) there are no proceedings pending or, to the knowledge of the
Lessee, threatened against the Lessee or any Partner in any court or before any
governmental authority or arbitration board or tribunal. The Lessee and each
Partner are not subject to any order of any court or governmental authority or
arbitration board or tribunal;

         (e) the unaudited balance sheet of the Lessee as of the Closing Date
fairly presents, in conformity with generally accepted accounting principles
applied on a pro forma basis, the pro forma financial position of the Lessee as
of such date;

         (f) no consent, approval or authorization of, or filing, registration
or qualification with, or the giving of notice to, any trustee or any holder of
indebted ness of the Lessee or any governmental authority on the part of the
Lessee is required in the United States or Canada in connection with the
execution and delivery by the Lessee of the Lessee Agreements or in order for
the Lessee to perform its obligations thereunder in accordance with the terms
thereof, other than (i) notices required to be filed with the STB and the
Registrar General of Canada as described in Section 3.2(g), which notices shall
have been filed on the Closing Date, (ii) as may be required under existing
laws, ordinances, governmental rules and regulations to be obtained, given,
accomplished or renewed at any time after the Closing Date in connection with
the operation and maintenance of the Equipment, the Pledged Equipment and the
Subleases and the Pledged Equipment Leases in accordance with the Operative
Agreements which are routine in nature and are not normally applied for prior to
the time they are required, and which the Lessee has no reason to believe will
not be timely obtained, (iii) as may be required under the Operative Agreements
in connection with any refinancing of the Equipment Notes, (iv) as may be
required under the Operative Agreements in consequence of any transfer of the
Beneficial Interest or any transfer of ownership of the Equipment or the Pledged
Equipment and (v) filing and recording to perfect the Liens under the Indenture,
the Collateral



                                          Participation Agreement (TRLI 2001-1C)


                                       21
<PAGE>

Agency Agreement and the Equity Collateral Security Agreement as required
thereunder;

         (g) the Lease, the Lease Supplement, the Indenture and the Indenture
Supplement (each in respect of the Units delivered on the Closing Date), the
Collateral Agency Agreement (or a memorandum with respect to any or all of such
documents), the TILC Bill of Sale, the Bill of Sale, the TILC Assignment and the
Assignment will on or before the Closing Date be duly filed with the STB
pursuant to 49 U.S.C. Section 11301 and deposited with the Registrar General of
Canada pursuant to Section 105 of the Canada Transportation Act, and such filing
with the STB pursuant to 49 U.S.C. Section 11301 and such deposit with the
Registrar General of Canada will under the laws of the United States and Canada
perfect the Owner Trustee's, the Indenture Trustee's and the Collateral Agent's
rights in such Operative Agreements and in the Units described on Schedule 1
hereto and the Pledged Units and no other filing, recording or deposit with, or
giving of notice to any other U.S. federal, state or local government or
Canadian national or provincial government or agency thereof, or any other
action, is necessary in order to protect the rights of the Owner Trustee, the
Indenture Trustee and the Collateral Agent in such Operative Agreements or in
such Units in the United States, any state thereof or the District of Columbia
or Canada or any province thereof;

         (h) the Equipment described on Schedule 1 hereto is covered by the
insurance required by Section 12 of the Lease and the Pledged Equipment is
covered by the insurance required by Section 6.4 of the Collateral Agency
Agreement, and all premiums due prior to the Closing Date in respect of such
insurance shall have been paid in full and such insurance is in full force and
effect;

         (i) (x) no Lease Default has occurred and is continuing and, to the
knowledge of the Lessee, no Event of Loss, Pledged Unit Event of Loss or event
which, with the giving of notice, the passage of time or both, would constitute
an Event of Loss or a Pledged Unit Event of Loss, has occurred; (y) no Lease
Default (as defined in the Lease Agreement TRLI 2001-1A) has occurred and is
continuing and (z) no Lease Default (as defined in the Lease Agreement TRLI
2001-1B) has occurred and is continuing;

         (j) neither the Lessee nor any Partner is an "investment company" or an
"affiliated person" of an "investment company" within the meaning of the
Investment Company Act of 1940, as amended;

         (k) the acquisition by the Owner Participant of the Beneficial Interest
for its own account will not constitute a prohibited transaction within the
meaning of Section 4975(c)(1)(A) through (D) of the Code or Section 406(a)(1)(A)
through (D) of ERISA. The representation made by the Lessee in the preceding



                                          Participation Agreement (TRLI 2001-1C)


                                       22
<PAGE>

clause is made in reliance upon and subject to the accuracy of the
representation of the Owner Participant in Section 3.5(h) and the accuracy of
the representation of the Initial Purchasers set forth in Section 4(e) of the
Certificate Purchase Agreement;

         (l) on the Closing Date, (i) the Lessee shall have and shall pursuant
to the Bill of Sale relating to the Equipment described on Schedule 1 hereto
convey to the Owner Trustee, all legal and beneficial title to such Equipment
free and clear of all Liens (other than Permitted Liens of the type described in
clause (ii) below with respect to the Existing Equipment Subleases and in
clauses (iii), (iv) and (v) of the definition thereof), and such conveyance will
not be void or voidable under any applicable law; (ii) the Lessee shall have,
and the Assignment to be delivered on the Closing Date shall assign to the Owner
Trustee, all legal and beneficial title to the Existing Equipment Subleases,
free and clear of all Liens (other than in each case Permitted Liens of the type
described in clauses (iii), (iv) and (v) of the definition thereof), and such
assignment will not be void or voidable under any applicable law; (iii) all of
the Units delivered on the Closing Date are subject to sublease by Sublessees
under the Existing Equipment Subleases on rental and other terms which are no
different, taken as a whole, from those for similar railcars in the rest of the
TILC Fleet; and (iv) the Lessee has all legal and beneficial title to the
Pledged Equipment and the Pledged Equipment Leases free and clear of all Liens
(other than Permitted Liens of the type described in clauses (ii), (iii), (iv)
and (v) of the definition thereof). In addition, all of the Pledged Units under
the Existing Pledged Equipment Leases delivered pursuant to the Pledged
Equipment Transfer and Assignment Agreements (x) were, as of the date of the
respective Pledged Equipment Transfer and Assignment Agreement, subject to
lease by Pledged Equipment Lessees on rental and other terms which were no
different, taken as a whole, from those for similar railcars in the rest of the
TILC Fleet, as of such date, and (y) as of the Closing Date, are subject to the
Existing Pledged Equipment Leases as assigned pursuant to the Pledged Equipment
Transfer and Assignment Agreements. As of the Closing Date, the Lessee is not in
default under any Existing Pledged Equipment Leases, and, to the best of the
Lessee's knowledge, there are no defaults by any Pledged Equipment Lessee
thereunder existing as of the Closing Date under the Existing Pledged Equipment
Leases, except such defaults as are not material;

         (m) the written information provided by the Lessee or on behalf of the
Lessee to the Owner Participant and/or the Loan Participant in each document set
forth on Schedule 3.2(m) hereto (with respect to each document set forth in Part
I of Schedule 3.2(m), as of the date such information was provided to the Owner
Participant and/or the Loan Participant, and with respect to each document set
forth in Part II of Schedule 3.2(m), as of the Closing Date) does not contain
any untrue statement of a material fact and does not omit a material fact
necessary to make the statements contained therein, in light of the
circumstances under which they were




                                          Participation Agreement (TRLI 2001-1C)


                                       23

<PAGE>
made, not misleading. The assumptions and related financial information relating
to the proposed business and operations of the Lessee and the Partnership Fleet
which are contained in the information on Schedule 3.2(m) have been prepared in
good faith based upon information that the Lessee deems fair and reasonable, and
there are no statements or conclusions therein which are based on or include
information known to the Lessee to be misleading in any material respect or
which fail to take into account material information known to the Lessee
regarding the matters stated therein (with respect to the information set forth
in Part I of Schedule 3.2(m), as of the date such statements or conclusions were
made to the Owner Participant and/or the Loan Participant, and with respect to
the information set forth in Part II of Schedule 3.2(m), as of the Closing
Date). Certain information contained in the information on Schedule 3.2(m) (e.g.
statistical information relating to renewal and remarketing of railcars,
potential increases in absolute or nominal railcar lease rates, anticipated
utilization, and maintenance costs) is based on the historical experience of
TILC. Subject to the foregoing, there can be no assurance that past experience
will be indicative of future performance with respect to these or other
operating and marketing factors set forth in the information on Schedule 3.2(m);

         (n) the Lessee and the Partners are not engaged in the business of
extending credit for the purposes of purchasing or carrying margin stock, and no
proceeds of the Equipment Note or the Owner Participant's Commitment as
contemplated by this Agreement and the other Operative Agreements will be used
by the Lessee or any Partner for a purpose which violates, or would be
inconsistent with, Section 7 of the Securities Exchange Act of 1934, as amended,
or Regulations T, U and X of the Federal Reserve System. Terms for which
meanings are provided in Regulations T, U and X of the Federal Reserve System or
any regulations substituted therefor, as from time to time in effect, are used
in this Section 3.2(n) with such meanings;

         (o) the Lessee is not in violation of any term of any of its
organizational documents or any other agreement or instrument to which it is a
party or by which it may be bound. The Lessee is in compliance with all laws,
ordinances, governmental rules and regulations to which it is subject and the
Lessee has obtained all required licenses, permits, franchises and other
governmental authorizations material to the conduct of its business;

         (p) on the Closing Date, all sales, use or transfer taxes, if any, due
and payable upon the purchase of the Equipment described on Schedule 1 hereto by
the Lessee from TILC and by the Owner Trustee from the Lessee and upon the lease
thereof by the Owner Trustee to the Lessee and, if applicable, upon the
assignment of the Existing Equipment Subleases from TILC to the Lessee and by
the Lessee to the Owner Trustee and upon the purchase of the Pledged Equipment
by the Lessee from TILC and, if applicable, upon the assignment of the Existing
Pledged Equipment



                                          Participation Agreement (TRLI 2001-1C)


                                       24

<PAGE>

Leases from TILC to the Lessee, have been paid or will have been paid or such
transactions will then be exempt from any such taxes, and the Lessee will cause
any required forms or reports in connection with such taxes to be filed in
accordance with applicable laws and regulations. No taxes, fees or other charges
in connection with the execution and delivery of the Operative Agreements or the
issuance and sale of the Equipment Note to be delivered on the Closing Date are
payable;

         (q) no broker's or finder's or placement fee or commission will be
payable with respect to the transactions contemplated by the Operative
Agreements as a result of any action by the Lessee, except for the fees of the
Arranger, which shall be included in Transaction Costs as provided in this
Agreement, and the Lessee agrees that it will hold the Participants, the
Indenture Trustee, the Pass Through Trustee and the Owner Trustee harmless from
any claim, demand or liability for broker's or finder's or placement fees or
commission alleged to have been incurred as a result of any action by the Lessee
in connection with this transaction;

         (r) (i) each Unit delivered on the Closing Date, taken as a whole, and
each major component thereof, complies in all material respects with all
applicable laws and regulations, conforms with the specifications for such Unit
contained in the Appraisal referred to in Section 4.3(a) hereof (to the extent a
copy of such Appraisal or a relevant excerpt therefrom has been delivered to the
Lessee) and is substantially complete such that it is ready and available to
operate in commercial service and otherwise perform the function for which it
was designed; and the railcar identification marks shown on Schedule 1 are the
marks presently used on the Units of Equipment set forth on Schedule 1, (ii) on
the Closing Date (as defined in the Participation Agreement TRLI 2001-1A), each
Pledged Unit, taken as a whole, and each major component thereof, conformed with
the specifications for such Pledged Unit contained in the Appraisal referred to
in Section 4.3(a) of the Participation Agreement TRLI 2001-1A (to the extent a
copy of such Appraisal or a relevant excerpt therefrom had been delivered to the
Lessee) and (iii) on the Closing Date, each Pledged Unit, taken as a whole, and
each major component thereof, complies in all material respects with all
applicable laws and regulations and is substantially complete such that it is
ready and available to operate in commercial service and otherwise perform the
function for which it had been designed; and the railcar identification marks
shown on Schedule 1-A to each Pledged Equipment Transfer and Assignment
Agreement are the marks presently used on the Pledged Units except that CFMX
2115 has been remarked to TILX 5660, and CFMX 2118 has been remarked to TILX
5663; and

         (s) neither the Lessee nor any Partner is subject to regulation as a
"holding company," an "affiliate" of a "holding company," or a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended.



                                          Participation Agreement (TRLI 2001-1C)



                                       25

<PAGE>

     Section 3.3 Representations and Warranties of the Indenture Trustee. The
Indenture Trustee represents and warrants to the Owner Participant, the Owner
Trustee, the Pass Through Trustee, TILC, TRMI and the Lessee that, as of the
date hereof:

         (a) the Indenture Trustee is a national banking association duly
incorporated, validly existing and in good standing under the laws of the United
States and has the full corporate power, authority and legal right under the
laws of the State of Illinois and the United States pertaining to its banking,
trust and fiduciary powers to execute, deliver and perform its obligations
under each of the Indenture Trustee Agreements;

         (b) the execution, delivery and performance by the Indenture Trustee of
each of the Indenture Trustee Agreements have been duly authorized by the
Indenture Trustee and will not violate any applicable federal or Illinois law
governing its banking or trust powers or its charter documents or bylaws or the
provisions of any indenture, mortgage, contract or other agreement to which it
is a party or by which it or any of its properties may be bound or affected;

         (c) this Agreement has been duly executed and delivered and
constitutes, and each of the other Indenture Trustee Agreements, when executed
and delivered, will constitute (assuming the due authorization, execution and
delivery by each other party thereto) the legal, valid and binding obligation of
the Indenture Trustee, enforceable against the Indenture Trustee in accordance
with its terms except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general principles of equity;

         (d) there are no proceedings pending or, to the knowledge of the
Indenture Trustee, threatened, and to the knowledge of the Indenture Trustee
there is no existing basis for any such proceedings, against or affecting the
Indenture Trustee in or before any court or before any governmental authority or
arbitration board or tribunal which, individually or in the aggregate, if
adversely determined, might impair the ability of the Indenture Trustee to
perform its obligations under the Indenture Trustee Agreements;

         (e) no authorization or approval or other action by, and no notice to
or filing with, any stockholder, trustee or holder of indebtedness or any
federal or Illinois state governmental authority or regulatory body governing
the Indenture Trustee in its trust capacity, is required for the due execution,
delivery and performance by the Indenture Trustee of the Indenture Trustee
Agreements, except as have been previously obtained, given or taken;



                                          Participation Agreement (TRLI 2001-1C)



                                       26
<PAGE>

         (f) the Indenture Trustee is not in default under any of the Indenture
Trustee Agreements; and

         (g) neither the Indenture Trustee, nor any Person authorized to act on
behalf of the Indenture Trustee, has directly or indirectly offered any interest
in the Trust Estate or the Equipment Note or any security similar to either
thereof related to this transaction for sale to, or solicited offers to buy any
of the same from, or otherwise approached or negotiated with respect to any of
the same with, any Person other than the Pass Through Trustee and the Initial
Purchasers.

     Section 3.4 Representations, Warranties and Covenants Regarding Beneficial
Interest, Equipment Note and Pass Through Certificates.

         (a) Owner Trustee and Trust Company. Each of the Owner Trustee and the
Trust Company represents and warrants to the Lessee, the Indenture Trustee, the
Pass Through Trustee, TILC, TRMI and the Owner Participant that, as of the date
hereof and as of the Closing Date, except as expressly provided in the Operative
Agreements, neither the Owner Trustee, nor the Trust Company nor any Person
authorized or employed by the Owner Trustee or the Trust Company as agent or
otherwise has directly or indirectly offered or sold any interest in the
Beneficial Interest, the Equipment Note, the Pass Through Certificates or any
part thereof, or in any similar security or lease, the offering of which for the
purposes of the Securities Act would be deemed to be part of the same offering
as the offering of the Beneficial Interest, the Equipment Note, the Pass Through
Certificates or any part thereof or solicited any offer to acquire any of the
same in violation of the registration requirements of Section 5 of the
Securities Act.

         (b) Lessee. The Lessee represents and warrants to the Owner Trustee,
the Indenture Trustee, the Owner Participant and the Pass Through Trustee that,
as of the date hereof and as of the Closing Date, neither the Lessee nor any
Person authorized or employed by the Lessee as agent or otherwise has directly
or indirectly offered or sold any interest in the Beneficial Interest, the
Equipment Note, the Pass Through Certificates or any part thereof, the offering
of which for the purposes of the Securities Act would be deemed to be part of
the same offering as the offering of the Beneficial Interest, the Equipment
Note, the Pass Through Certificates or any part thereof or solicited any offer
to acquire any of the same in violation of the registration requirements of
Section 5 of the Securities Act.

         (c) TRMI. TRMI represents and warrants to the Owner Trustee, the
Indenture Trustee, the Owner Participant and the Pass Through Trustee that, as
of the date hereof and as of the Closing Date, neither TRMI nor any Person
authorized or employed by TRMI as agent or otherwise has directly or indirectly
offered or sold

                                          Participation Agreement (TRLI 2001-1C)

                                       27

<PAGE>

any interest in the Beneficial Interest, the Equipment Note, the Pass Through
Certificates or any part thereof, the offering of which for the purposes of the
Securities Act would be deemed to be part of the same offering as the offering
of the Beneficial Interest, the Equipment Note, the Pass Through Certificates or
any part thereof or solicited any offer to acquire any of the same in violation
of the registration requirements of Section 5 of the Securities Act.

         (d) TILC. TILC represents and warrants to the Owner Trustee, the
Indenture Trustee, the Owner Participant and the Pass Through Trustee that, as
of the date hereof and as of the Closing Date, neither TILC nor any Person
authorized or employed by TILC as agent or otherwise has directly or indirectly
offered or sold any interest in the Beneficial Interest, the Equipment Note, the
Pass Through Certificates or any part thereof, the offering of which for the
purposes of the Securities Act would be deemed to be part of the same offering
as the offering of the Beneficial Interest, the Equipment Note, the Pass Through
Certificates or any part thereof or solicited any offer to acquire any of the
same in violation of the registration requirements of Section 5 of the
Securities Act.

         (e) Owner Participant. The Owner Participant represents and warrants to
the Owner Trustee, the Indenture Trustee, TILC, TRMI, the Lessee and the Pass
Through Trustee that, as of the date hereof and as of the Closing Date, neither
the Owner Participant nor any Person authorized or employed by the Owner
Participant as agent or otherwise has directly or indirectly offered or sold any
interest in the Beneficial Interest, the Equipment Note, the Pass Through
Certificates or any part thereof, or in any similar security or lease, the
offering of which for the purposes of the Securities Act would be deemed to be
part of the same offering as the offering of the Beneficial Interest, the
Equipment Note, the Pass Through Certificates or any part thereof or solicited
any offer to acquire any of the same in violation of the registration
requirements of Section 5 of the Securities Act.

         (f) Pass Through Trustee. The Pass Through Trustee represents and
warrants to the Owner Trustee, the Indenture Trustee, TILC, TRMI, the Lessee and
the Owner Participant that, as of the date hereof and as of the Closing Date,
neither the Pass Through Trustee nor any Person authorized or employed by the
Pass Through Trustee as agent or otherwise has directly or indirectly offered or
sold any interest in the Beneficial Interest, the Equipment Note, the Pass
Through Certificates or any part thereof, the offering of which for the purposes
of the Securities Act would be deemed to be part of the same offering as the
offering of the Beneficial Interest, the Equipment Note, the Pass Through
Certificates or any part thereof or solicited any offer to acquire any of the
same in violation of the registration requirements of Section 5 of the
Securities Act.

                                          Participation Agreement (TRLI 2001-1C)

                                       28

<PAGE>

         (g) Future Actions. Each of the Owner Trustee, the Trust Company, the
Owner Participant, the Lessee, TILC, TRMI, the Indenture Trustee and the Pass
Through Trustee agrees, as to its own actions only, severally but not jointly,
that neither the Owner Trustee, the Trust Company, the Owner Participant, the
Lessee, TILC, TRMI, the Indenture Trustee nor the Pass Through Trustee nor
anyone acting on behalf of the Owner Trustee, the Trust Company, the Owner
Participant, the Lessee, TILC, TRMI, the Indenture Trustee or the Pass Through
Trustee will offer the Beneficial Interest, the Equipment Note, the Pass Through
Certificates or any part thereof or any similar interest for issue or sale to
any prospective purchaser, or solicit any offer to acquire any of the Beneficial
Interest, the Equipment Note, the Pass Through Certificates or any part thereof
so as to cause Section 5 of the Securities Act to apply to the issuance and sale
of the Beneficial Interest, the Equipment Note, the Pass Through Certificates or
any part thereof.

         Section 3.5 Representations and Warranties of the Owner Participant.
The Owner Participant represents and warrants to the Owner Trustee, the
Indenture Trustee, the Pass Through Trustee, TILC, TRMI and the Lessee that, as
of the date hereof:

         (a) the Owner Participant is a limited partnership duly formed, validly
existing and in good standing under the laws of the State of Delaware and has
full limited partnership power and authority to carry on its business as now
conducted;

         (b) the Owner Participant has the requisite limited partnership power
and authority to execute, deliver and perform its obligations under the Owner
Participant Agreements, and the execution, delivery and performance by it
thereof do not and will not contravene any law or regulation, or any order of
any court or governmental authority or agency applicable to or binding on the
Owner Participant or any of its properties, or contravene the provisions of, or
constitute a default under, or result in the creation of any Lien (other than
such as are created by the Operative Agreements) upon the Equipment under, its
Certificate of Limited Partnership, limited partnership agreement or any
indenture, mortgage, contract or other agreement or instrument to which the
Owner Participant is a party or by which it or any of its properties may be
bound or affected;

         (c) the Owner Participant Agreements have been duly authorized by all
necessary actions on the part of the Owner Participant and its general partner,
do not require any approval not already obtained of the partners of the Owner
Participant or any approval or consent not already obtained of any trustee or
holders of indebtedness or obligations of the Owner Participant, have been, or
on or before the Closing Date will be, duly executed and delivered by the
general partner of the Owner Participant in its capacity as general partner of
the Owner Participant and

                                          Participation Agreement (TRLI 2001-1C)


                                       29
<PAGE>

(assuming the due authorization, execution and delivery by each other party
thereto) constitute, or will constitute, the legal, valid and binding
obligations of the Owner Participant, enforceable against the Owner Participant
in accordance with their respective terms, except as enforceability may be
limited by bankruptcy, insolvency, moratorium or other similar laws affecting
the rights of creditors generally and by general principles of equity;

         (d) no authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required for
the due execution, delivery or performance by the Owner Participant of the Trust
Agreement, the Tax Indemnity Agreement or this Agreement;

         (e) the Trust Estate is free and clear of any Lessor's Lien
attributable to the Owner Participant;

         (f) there are no pending or, to the Owner Participant's knowledge,
threatened actions or proceedings against the Owner Participant before any court
or administrative agency which would materially adversely affect the Owner
Participant's ability to perform its obligations under the Trust Agreement, the
Tax Indemnity Agreement or this Agreement;

         (g) as of the Closing Date, the Owner Participant is purchasing the
Beneficial Interest to be acquired by it for its own account with no present
intention of distributing such Beneficial Interest or any part thereof in any
manner which would violate the Securities Act, but without prejudice, however,
to the right of the Owner Participant at all times to sell or otherwise dispose
of all or any part of such Beneficial Interest in compliance with the Securities
Act and any state securities or "blue sky" laws; provided, however, that
subject to the provisions of Section 6.1, the disposition of the Beneficial
Interest shall at all times be within the Owner Participant's control. The Owner
Participant acknowledges that its Beneficial Interest has not been registered
under the Securities Act, and that neither the Owner Participant, the Owner
Trustee, Trust Company, the Lessee, TRMI nor TILC contemplates filing, or is
legally required to file, any such registration statement. Notwithstanding the
foregoing, the Owner Participant makes no representation that the Beneficial
Interest is a "security" within the meaning of such term under the Securities
Act;

         (h) with respect to the source of the amount to be invested by the
Owner Participant pursuant to Section 2.2, no part of such amount constitutes
assets of any employee benefit plan subject to Title I of ERISA or Section 4975
of the Code; and

                                          Participation Agreement (TRLI 2001-1C)


                                       30
<PAGE>

         (i) no broker's or finder's or placement fee or commission will be
payable with respect to the transactions contemplated by the Operative
Agreements as a result of any action by the Owner Participant, and the Owner
Participant agrees that it will hold TILC, TRMI, the Lessee, the Indenture
Trustee, the Loan Participant and the Owner Trustee harmless from any claim,
demand or liability for broker's or finder's or placement fees or commission
alleged to have been incurred as a result of any action by the Owner Participant
in connection with this transaction.

     Section 3.6 Representations and Warranties of TILC. TILC represents and
warrants to each of the Owner Trustee, the Indenture Trustee and the
Participants, as of the date hereof:

         (a) TILC is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware, is duly licensed or qualified
and in good standing in each jurisdiction in which the failure to so qualify
would have a material adverse effect on its ability to carry on its business as
now conducted or to execute, deliver and perform its obligations under the TILC
Agreements, the Pledged Equipment Transfer and Assignment Agreements, the TILC
Pledged Equipment Assignments and the TILC Pledged Equipment Bills of Sale, has
the power and authority to carry on its business as now conducted, and has the
requisite power and authority to execute, deliver and perform its obligations
under the TILC Agreements;

         (b) the TILC Agreements have been duly authorized by all necessary
corporate action, executed and delivered by TILC, and (assuming the due
authorization, execution and delivery by each other party thereto) constitute
the legal, valid and binding obligations of TILC, enforceable against TILC in
accordance with their respective terms except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the rights of creditors generally and by general principles of equity;

         (c) the execution, delivery and performance by TILC of each TILC
Agreement and compliance by TILC with all of the provisions thereof do not and
will not contravene (i) any law or regulation, or any order of any court or
governmental authority or agency applicable to or binding on TILC or any of its
properties, or (ii) the provisions of, or constitute a default by TILC under,
its certificate of incorporation or bylaws or (iii) any indenture, mortgage,
contract or other agreement or instrument to which TILC is a party or by which
TILC or any of its properties may be bound or affected except, with respect to
clause (iii), where such contravention would not materially adversely affect
TILC's ability to perform its obligations under the TILC Agreements or
materially adversely affect its financial condition or business;

                                          Participation Agreement (TRLI 2001-1C)

                                       31
<PAGE>

         (d) there are no proceedings pending or, to the knowledge of TILC,
threatened against TILC in any court or before any governmental authority or
arbitration board or tribunal which, if adversely determined, would materially
adversely affect TILC's ability to perform its obligations under the TILC
Agreements or materially adversely affect its financial condition or business;

         (e) TILC is not in violation of any term of any charter instrument or
bylaw or any other material agreement or instrument to which it is a party or by
which it may be bound except where such violation would not materially adversely
affect TILC's ability to perform its obligations under the TILC Agreements or
materially adversely affect its financial condition or business. TILC is in
compliance with all laws, ordinances, governmental rules and regulations to
which it is subject, the failure to comply with which would have a material and
adverse effect on its operations or condition, financial or otherwise, or would
impair the ability of TILC to perform its obligations under the TILC Agreements,
and has obtained all required licenses, permits, franchises and other
governmental authorizations material to the conduct of its business;

         (f) no consent, approval or authorization of, or filing, registration
or qualification with, or the giving of notice to, any trustee or any holder of
indebtedness of TILC or any governmental authority on the part of TILC is
required in the United States in connection with the execution and delivery by
TILC of the TILC Agreements, or is required to be obtained in order for TILC to
perform its obligations thereunder in accordance with the terms thereof, other
than (i) as may be required under existing laws, ordinances, governmental rules
and regulations to be obtained, given, accomplished or renewed at any time after
the Closing Date in connection with the performance of its obligations under the
TILC Agreements and which are routine in nature and are not normally applied for
prior to the time they are required, and which TILC has no reason to believe
will not be timely obtained or (ii) as may be required under the Operative
Agreements in consequence of any transfer of ownership of the Equipment
occurring after the Closing Date;

         (g) to the best knowledge of TILC, no casualty event or other event
that may constitute an Event of Loss under the Lease or a Pledged Unit Event of
Loss under the Collateral Agency Agreement has occurred as of the date of this
Agreement with respect to any Unit delivered on the Closing Date or any Pledged
Unit;

         (h) (i) TILC shall have, and the TILC Bill of Sale to be delivered on
the Closing Date shall convey to the Lessee, all legal and beneficial title to
the Units which are being delivered on the Closing Date, free and clear of all
Liens (other than Permitted Liens of the type described in clause (ii) below
with respect to the Existing Equipment Subleases, and in clauses (iii), (iv) and
(v) of the definition

                                          Participation Agreement (TRLI 2001-1C)


                                       32
<PAGE>

thereof), and such conveyance will not be void or voidable under any applicable
law; (ii) TILC shall have, and the TILC Assignment to be delivered on the
Closing Date shall assign to the Lessee, all legal and beneficial title to the
Existing Equipment Subleases, free and clear of all Liens (other than subleases
of the Existing Equipment Subleases by the Sublessees as expressly permitted by
the Existing Equipment Subleases and other than Permitted Liens of the type
described in clauses (iii), (iv) and (v) of the definition thereof), and such
assignment will not be void or voidable under any applicable law; (iii) all of
the Units being delivered on the Closing Date other than an immaterial amount
shall be subject to sublease by the Sublessees under the Existing Equipment
Subleases on rental and other terms which are no different, taken as a whole,
from those for similar railcars in the rest of the TILC Fleet; (iv) the TILC
Pledged Equipment Bills of Sale have conveyed to the Lessee, all legal and
beneficial title to the Pledged Units, free and clear of all Liens (other than
Permitted Liens of the type described in clause (v) below with respect to the
Existing Pledged Equipment Leases, and in clauses (iii), (iv) and (v) of the
definition thereof), and such conveyances are not void or voidable under any
applicable law; (v) the TILC Pledged Equipment Assignments have assigned to the
Lessee all legal and beneficial title to the Existing Pledged Equipment Leases,
free and clear of all Liens (other than leases of the Existing Pledged Equipment
Leases by the Pledged Equipment Lessees as expressly permitted by the Existing
Pledged Equipment Leases and other than Permitted Liens of the type described in
clauses (iii), (iv) and (v) of the definition thereof), and such assignments are
not void or voidable under any applicable law; and (vi) all of the Pledged Units
delivered pursuant to the Pledged Equipment Transfer and Assignment Agreements
other than an immaterial amount were subject to lease by the Pledged Equipment
Lessees under the Existing Pledged Equipment Leases on rental and other terms
which were, as of the respective date of the Pledged Equipment Transfer and
Assignment Agreements, no different, taken as a whole, from those for similar
railcars in the rest of the TILC Fleet, as of such date;

         (i) (a) all sales, use or transfer taxes, if any, due and payable upon
the sale of the Equipment and assignment of Existing Equipment Subleases by TILC
to the Lessee will have been paid or such transactions will then be exempt from
any such taxes and TILC will cause any required forms or reports in connection
with such taxes to be filed in accordance with applicable laws and regulations;
and (b) all sales, use or transfer taxes, if any, due and payable upon the sale
of the Pledged Equipment and assignment of Existing Pledged Equipment Leases by
TILC to the Lessee have been paid or such transactions have then been exempt
from any such taxes and TILC has caused or will cause any required forms or
reports in connection with such taxes to be filed in accordance with applicable
laws and regulations;

         (j) all Units delivered on the Closing Date are, and all Pledged Units
delivered to the Lessee were when delivered, substantially similar in terms of
objectively identifiable characteristics that are relevant for purposes of the
services to

                                          Participation Agreement (TRLI 2001-1C)


                                       33
<PAGE>

be performed by TILC under the Management Agreement to the equipment in the TILC
Fleet;

         (k) (i) in selecting the Units to be sold on the Closing Date to the
Lessee pursuant to the TILC Bill of Sale, TILC has not discriminated against the
Lessee in a negative fashion when such Units are compared with the other
equipment in the TILC Fleet, and (ii) in selecting the Pledged Units sold to the
Lessee pursuant to the TILC Pledged Equipment Bills of Sale, TILC did not
discriminate against the Lessee in a negative fashion when Pledged Units were
then compared with the other equipment in the TILC Fleet, as of such respective
date;

         (l) the written information provided by TILC or on behalf of TILC to
the Owner Participant and/or the Loan Participant in each document set forth on
Schedule 3.2(m) hereto (with respect to each document set forth in Part I of
Schedule 3.2(m), as of the date such information was provided to the Owner
Participant and/or the Loan Participant, and with respect to each document set
forth in Part II of Schedule 3.2(m), as of the Closing Date) does not contain
any untrue statement of a material fact and does not omit a material fact
necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading. The assumptions and
related financial information relating to the proposed business and operations
of TILC and the Partnership Fleet which are contained in the information on
Schedule 3.2(m) have been prepared in good faith based upon information that
TILC deems fair and reasonable, and there are no statements or conclusions
therein which are based on or include information known to TILC to be misleading
in any material respect or which fail to take into account material information
known to TILC regarding the matters stated therein (with respect to the
information set forth in Part I of Schedule 3.2(m), as of the date such
statements or conclusions were made to the Owner Participant and/or the Loan
Participant, and with respect to the information set forth in Part II of
Schedule 3.2(m), as of the Closing Date). Certain information contained in the
information on Schedule 3.2(m) (e.g. statistical information relating to renewal
and remarketing of railcars, potential increases in absolute or nominal railcar
lease rates, anticipated utilization, and maintenance costs) is based on the
historical experience of TILC. Subject to the foregoing, there can be no
assurance that past experience will be indicative of future performance with
respect to these or other operating and marketing factors set forth in the
information on Schedule 3.2(m);

         (m) the representations and warranties of the Lessee contained in
Section 3.2(h), clause (iii) of Section 3.2(l), the first sentence of Section
3.2(p) and in Section 3.2(r) (to the extent a copy of any such Appraisal or a
relevant excerpt therefrom has been delivered to TILC) are true and correct as
of the date hereof (except with respect to representations and warranties made
as of an earlier date, in which case such representations and warranties shall
be true as of such earlier date);

                                          Participation Agreement (TRLI 2001-1C)

                                       34
<PAGE>

         (n) TILC is not in default under any Existing Equipment Subleases,
and, to the best of the TILC's knowledge, there are (i) no defaults by any
Sublessee thereunder existing as of the date hereof under the Existing Equipment
Subleases, except such defaults as are not material, (ii) no claims or
liabilities arising as a result of the operation or use of any Unit described on
Schedule 1 hereto prior to the date hereof as to which the Lessor, as owner of
the Units delivered on the Closing Date, would be liable. TILC was not in
default under any Existing Pledged Equipment Leases on the respective date of
the applicable Pledged Equipment Transfer and Assignment Agreement, and, to the
best of the TILC's knowledge, there were (i) no defaults by any Pledged
Equipment Lessee thereunder existing as of each such relevant date under the
Existing Pledged Equipment Leases, except such defaults as were not material and
(ii) no claims or liabilities arising as a result of the operation or use of any
Pledged Unit prior to each such relevant date, as to which the Lessee, as owner
of the Pledged Units, would be liable;

         (o) (i) as of the Closing Date, TILC shall have provided, or caused to
be provided, in either case in accordance with the terms of the relevant
Existing Equipment Sublease, a notice relating to each Existing Equipment
Sublease (which notice shall be substantially in the form attached hereto as
Exhibit D) to the related Sublessee under such Existing Equipment Sublease, and
(ii) on or prior to the Closing Date, TILC shall have provided, or caused to be
provided, in either case in accordance with the terms of the relevant Existing
Pledged Equipment Lease, a notice relating to each Existing Pledged Equipment
Lease (other than those with respect to Pledged Units that constitute Special
Collateral after the Closing Date) (which notice shall be substantially in the
form attached hereto as Exhibit D) to the related Pledged Equipment Lessee under
such Existing Pledged Equipment Lease;

         (p) (i) the balance sheet of TILC as of March 31, 2001, and the related
statements of operations, stockholders' equity and cash flows for the period
then ended, and (ii) the balance sheet of TILC as of September 30, 2001 and the
related statements of income and cash flows of TILC for the six month period
beginning on April 1, 2001 and ending on September 30, 2001, have been prepared
in accordance with generally accepted accounting principles (except as may be
stated in the notes thereto and except, with respect to interim financial
statements, for year-end audit adjustments), consistently applied, and fairly
set forth, in all material respects, the financial condition of TILC as of such
dates and the results of their operations and cash flows for such periods; and

         (q) TILC is not engaged in the business of extending credit for the
purposes of purchasing or carrying margin stock, and no proceeds of the
Equipment Note or the Owner Participant's Commitment as contemplated by this
Agreement and the other Operative Agreements will be used by TILC for a purpose
which violates,

                                          Participation Agreement (TRLI 2001-1C)


                                       35
<PAGE>

or would be inconsistent with, Section 7 of the Securities Exchange Act of 1934,
as amended, or Regulations T, U and X of the Federal Reserve System. Terms for
which meanings are provided in Regulations T, U and X of the Federal Reserve
System or any regulations substituted therefor, as from time to time in effect,
are used in this Section 3.6(q) with such meanings.

     Section 3.7 Representations and Warranties of TRMI. TRMI represents and
warrants to the Indenture Trustee, the Owner Trustee and the Participants, as of
the date hereof:

         (a) TRMI is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware, is duly licensed or qualified
and in good standing in each jurisdiction in which the failure to so qualify
would have a material adverse effect on its ability to carry on its business as
now conducted or to execute, deliver and perform its obligations under the TRMI
Agreements, has the power and authority to carry on its business as now
conducted, and has the requisite power and authority to execute, deliver and
perform its obligations under the TRMI Agreements;

         (b) the TRMI Agreements have been duly authorized by all necessary
corporate action, executed and delivered by TRMI, and (assuming the due
authorization, execution and delivery by each other party thereto) constitute
the legal, valid and binding obligations of TRMI, enforceable against TRMI in
accordance with their respective terms except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the rights of creditors generally and by general principles of equity;

         (c) the execution, delivery and performance by TRMI of each TRMI
Agreement and compliance by TRMI with all of the provisions thereof do not and
will not contravene (i) any law or regulation, or any order of any court or
governmental authority or agency applicable to or binding on TRMI or any of its
properties, or (ii) the provisions of, or constitute a default by TRMI under,
its certificate of incorporation or bylaws or (iii) any indenture, mortgage,
contract or other agreement or instrument to which TRMI is a party or by which
TRMI or any of its properties may be bound or affected except, with respect to
clause (iii) above, where such contravention would not materially adversely
affect TRMI's ability to perform its obligations under the TRMI Agreements or
materially adversely affect its financial condition or business;

         (d) there are no proceedings pending or, to the knowledge of TRMI,
threatened against TRMI in any court or before any governmental authority or
arbitration board or tribunal which, if adversely determined, would materially

                                          Participation Agreement (TRLI 2001-1C)


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<PAGE>

adversely affect TRMI's ability to perform its obligations under the TRMI
Agreements or materially adversely affect its financial condition or business;

         (e) TRMI is not in violation of any term of any charter instrument or
bylaw or any other material agreement or instrument to which it is a party or by
which it may be bound except where such violation would not materially adversely
affect TRMI's ability to perform its obligations under the TRMI Agreements or
materially adversely affect its financial condition or business. TRMI is in
compliance with all laws, ordinances, governmental rules and regulations to
which it is subject, the failure to comply with which would have a material and
adverse effect on its operations or condition, financial or otherwise, or would
impair the ability of TRMI to perform its obligations under the TRMI Agreements,
and has obtained all licenses, permits, franchises and other governmental
authorizations material to the conduct of its business;

         (f) no consent, approval or authorization of, or filing, registration
or qualification with, or the giving of notice to, any trustee or any holder of
indebted ness of TRMI or any governmental authority on the part of TRMI is
required in the United States in connection with the execution and delivery by
TRMI of the TRMI Agreements, or is required to be obtained in order for TRMI to
perform its obligations thereunder in accordance with the terms thereof, other
than those which (i) are routine in nature and are not normally applied for
prior to the time they are required, and which TRMI has no reason to believe
will not be timely obtained or (ii) the failure to obtain would not have a
material and adverse effect on its operations or condition, financial or
otherwise, or would impair the ability of TRMI to perform its obligations under
the TRMI Agreements;

         (g) the written information provided by TRMI or on behalf of TRMI to
the Owner Participant and/or the Loan Participant as of the date such
information was provided to the Owner Participant and/or the Loan Participant,
as the case may be, did not contain any untrue statement of a material fact and
did not omit a material fact necessary to make the statements contained therein,
in light of the circumstances under which they were made, not misleading. No
representation or warranty is given with respect to any forecasts or projections
included therein or omitted therefrom;

         (h) the representations and warranties of the Lessee contained in
Sections 3.2(a), (b), (c), (d), (e), (f), (g), (i), (j), (k), clauses (i), (ii)
and (iv) of (l), (m), (n), (o), (p) other than the first sentence thereof, (q)
and (s) are true and correct as of the date hereof (except with respect to
representations and warranties made as of an earlier date, in which case such
representations and warranties shall be true as of such earlier date); and

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         (i) (x) the balance sheet of TRMI as of March 31, 2001, and the related
statements of operations, stockholders' equity and cash flows for the period
then ended, and (y) the balance sheet of TRMI as of September 30, 2001 and the
related statements of income and cash flows of TRMI for the six month period
beginning on April 1, 2001 and ending on September 30, 2001, have been prepared
in accordance with generally accepted accounting principles (except as may be
stated in the notes thereto and except, with respect to interim financial
statements, for year-end audit adjustments), consistently applied, and fairly
set forth, in all material respects, the financial condition of TRMI as of such
dates and the results of their operations and cash flows for the periods then
ended.

     Section 3.8 Representations and Warranties of the Pass Through Trustee. The
Pass Through Trustee represents and warrants to the Owner Trustee, the Indenture
Trustee, the Owner Participant, TILC, TRMI and the Lessee that, as of the date
hereof:

         (a) the Pass Through Trustee is a national banking association duly
organized and validly existing in good standing under the laws of the United
States of America and has the full corporate power, authority and legal right
under the laws of the United States of America and the State of Illinois
pertaining to its banking, trust and fiduciary powers to execute, deliver and
perform its obligations under the Pass Through Trustee Agreements and the Pass
Through Documents to which it is a party;

         (b) this Agreement has been, and on the Closing Date, each of the other
Pass Through Trustee Agreements will have been, duly authorized, executed and
delivered by the Pass Through Trustee; this Agreement constitutes, and on the
Closing Date, each of the other Pass Through Trustee Agreements will constitute,
the legal, valid and binding obligations of the Pass Through Trustee,
enforceable against the Pass Through Trustee in accordance with their respective
terms except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of creditors
generally and by general principles of equity;

         (c) the execution, delivery and performance by the Pass Through Trustee
of each of the Pass Through Trustee Agreements, the purchase by the Pass Through
Trustee of the Equipment Note pursuant to this Agreement, and the issuance of
the Pass Through Certificates pursuant to the Pass Through Trust Agreement, do
not contravene any law, rule or regulation of any federal or Illinois
governmental authority or agency regulating the Pass Through Trustee's banking,
trust or fiduciary powers or any judgment or order applicable to or binding on
the Pass Through Trustee and do not contravene or result in any breach of, or
constitute a default under, the Pass Through Trustee's articles of association
or bylaws or any agreement

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<PAGE>

or instrument to which the Pass Through Trustee is a party or by which it or any
of its properties may be bound or affected;

         (d) neither the execution and delivery by the Pass Through Trustee of
each of the Pass Through Trustee Agreements nor the consummation by the Pass
Through Trustee of any of the transactions contemplated thereby, requires the
consent or approval of, the giving of notice to, or the registration with, or
the taking of any other action with respect to, any federal or Illinois
governmental authority or agency regulating the Pass Through Trustee's banking,
trust or fiduciary powers;

         (e) there are no pending or, to its knowledge, threatened actions or
proceedings against the Pass Through Trustee before any court or administrative
agency which individually or in the aggregate, if determined adversely to it,
would materially adversely affect the ability of the Pass Through Trustee to
perform its obligations under any of the Pass Through Trustee Agreements;

         (f) the Pass Through Trustee is not in default under any Pass Through
Trustee Agreement;

         (g) the Pass Through Trustee does not directly or indirectly control,
and is not directly or indirectly controlled by or under common control with,
the Owner Participant, the Owner Trustee, the Initial Purchasers, TILC, TRMI or
the Lessee;

         (h) the Pass Through Trustee is purchasing the Equipment Note for the
purposes contemplated by the Operative Agreements and not with a view to the
transfer or distribution of any Equipment Note to any other Person, except as
contemplated by the Operative Agreements; and

         (i) except for the issue and sale of the Pass Through Certificates
contemplated hereby and by the other Pass Through Trustee Agreements, the Pass
Through Trustee has not directly or indirectly offered any Equipment Note or
Pass Through Certificate or any interest in or to the Trust Estate, the Trust
Agreement or any similar interest for sale to, or solicited any offer to acquire
any of the same from, anyone other than the Owner Trustee and the Owner
Participant, and the Pass Through Trustee has not authorized anyone to act on
its behalf to offer directly or indirectly any Equipment Note, any Pass Through
Certificate or any interest in and to the Trust Estate, the Trust Agreement or
any similar interest related to this transaction for sale to, or to solicit any
offer to acquire any of the same from, any Person other than the Owner Trustee
and the Owner Participant.

         Section 3.9 Opinion Acknowledgment. Each of the parties hereto, with
respect to such party, expressly consents to the rendering by its counsel of the

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<PAGE>

opinion referred to in Section 4.1(e) and acknowledges that such opinion shall
be deemed to be rendered at the request and upon the instructions of such party.

SECTION 4.    CLOSING CONDITIONS.

     Section 4.1 Conditions Precedent to Investment by Each Participant. The
obligation of each Participant to make the investment specified with respect to
such Participant in Section 2 on the Closing Date shall be subject to the
satisfaction or waiver of the following conditions precedent (except that the
obligations of any Person shall not be subject to such Person's own performance
or compliance):

         (a) Execution of Operative Agreements. (i) On or before the Closing
Date, this Agreement, the Trust Agreement, the Lease, the Lease Supplement in
respect of the Units delivered on the Closing Date, the Indenture, the Indenture
Supplement in respect of the Units delivered on the Closing Date, the Equipment
Note, the Pass Through Documents, the Transfer and Assignment Agreement, the
TILC Bill of Sale, the TILC Assignment, the Bill of Sale, the Assignment, the OP
Guaranty, the Trinity Guaranty, the Second Supplement to Marks Company Trust
Supplement, the Second Amended and Restated Collateral Agency Agreement, the
First Amendment to Control Agreement, the Amended and Restated Blocked Account
Agreement, the Equity Collateral Security Agreement, the Equity Collateral
Control Agreement and the Omnibus Amendment Agreement (amending, among other
documents, the Management Agreement, the Insurance Agreement and the
Administrative Services Agreement) shall each be satisfactory in form and
substance to such Participant, shall have been duly executed and delivered by
the parties thereto (except that the execution and delivery of the documents
referred to above (other than this Agreement) by a party hereto or thereto shall
not be a condition precedent to such party's obligations hereunder), shall each
be in full force and effect, and executed counterparts of each shall have been
delivered to such Participant or its counsel on or before the Closing Date; and
no event shall have occurred and be continuing that constitutes a Lease Default
or an Indenture Default.

              (ii) The Operative Agreements (as defined in the Participation
Agreement TRLI 2001-1A) remain in full force and effect, no Lease Default (as
defined in the Lease Agreement TRLI 2001-1A) has occurred and is continuing, and
no Indenture Event of Default (as defined in the Indenture TRLI 2001-1A) has
occurred and is continuing.

              (iii) The Operative Agreements (as defined in the Participation
Agreement TRLI 2001-1B) remain in full force and effect, no Lease Default (as
defined in the Lease Agreement TRLI 2001-1B) has occurred and is continuing, and
no Indenture Event of Default (as defined in the Indenture TRLI 2001-1B) has
occurred and is continuing.

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                                       40
<PAGE>
         (b) Recordation and Filing. On or before the Closing Date (except as
expressly stated below), the Lessee shall have caused the Lease, the Lease
Supplement, the Indenture and the Indenture Supplement (each in respect of Units
delivered on the Closing Date), the Collateral Agency Agreement, the TILC Bill
of Sale, the Bill of Sale, the TILC Assignment and the Assignment to be duly
filed, recorded and deposited in memorandum form with the STB in conformity with
49 U.S.C. Section 11301 and with the Registrar General of Canada pursuant to
Section 105 of the Canada Transportation Act, and all necessary actions shall
have been taken to cause publication of notice of such deposit in The Canada
Gazette in accordance with said Section 105 and all appropriate Uniform
Commercial Code financing statements to be filed where necessary or reasonably
advisable within 10 days after the Closing Date, and the Lessee shall furnish
the Indenture Trustee, the Owner Trustee, the Collateral Agent and each
Participant proof thereof. Without limiting the representations and warranties
set forth in any Operative Agreement, by such recording or filing of the Lease
(or a financing statement or similar notice thereof), the Owner Trustee and the
Lessee are not acknowledging or implying that the Lease constitutes a "security
agreement" or creates a "security interest" within the meaning of the Uniform
Commercial Code in any applicable jurisdiction.

         (c) Representations and Warranties of the Lessee. On the Closing Date,
the representations and warranties of the Lessee contained in Section 3.2 and
Section 3.4(b) hereof shall be true and correct in all material respects as of
the Closing Date as though then made on and as of such date, except to the
extent that such representations and warranties relate solely to an earlier date
(in which case such representations and warranties were true and correct on and
as of such earlier date), and each of the Owner Trustee, the Indenture Trustee
and the Participants shall have received an Officer's Certificate to such effect
dated such date from the General Partner of the Lessee certifying to the
foregoing matters, and the Lessee shall have performed and complied with all
agreements and conditions herein contained which are required to be performed or
complied with by the Lessee on or before said date.

         (d) Representations and Warranties of the Owner Trustee. On the Closing
Date, the representations and warranties of the Trust Company and the Owner
Trustee contained in Section 3.1 and Section 3.4(a) shall be true and correct in
all material respects as of the Closing Date as though then made on and as of
such date except to the extent that such representations and warranties relate
solely to an earlier date (in which case such representations and warranties
were true and correct on and as of such earlier date), and each of the Lessee,
the Indenture Trustee, TILC, TRMI and the Participants shall have received an
Officer's Certificate to such effect dated such date from the Trust Company (in
respect of the Trust Company) and the Owner Trustee (in respect of the Owner
Trustee), and the Trust Company and the Owner Trustee shall have performed and
complied with all agreements and

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                                       41
<PAGE>

conditions herein contained which are required to be performed or complied with
by the Trust Company and the Owner Trustee, respectively, on or before said
date.

         (e) Opinions of Counsel. On the Closing Date, the Owner Trustee, the
Indenture Trustee and each Participant shall have received the favorable written
opinion of each of (i) Skadden, Arps, Slate, Meagher & Flom (Illinois), special
counsel for the Lessee, TILC, Trinity and TRMI, substantially in the form of
Exhibit E-1, (ii) counsel for the Lessee, TILC, Trinity and TRMI (which counsel
shall be the General Counsel of Trinity), substantially in the form of Exhibit
E-2, (iii) Bingham Dana LLP, counsel to the Owner Trustee, substantially in the
form of Exhibit E-3, (iv) Winston & Strawn, special counsel to the Owner
Participant, substantially in the form of Exhibit E-4, (v) Philip Morris Capital
Corporation Legal Department, counsel to the Owner Participant, substantially in
the form of Exhibit E- 5, (vi) Robert A. Wolz, Assistant Counsel to the
Indenture Trustee, substantially in the form of Exhibit E-6, (vii) Alvord &
Alvord, special STB counsel, substantially in the form of Exhibit E-7, (viii)
McCarthy Tetrault, special Canadian counsel, substantially in the form of
Exhibit E-8, (ix) Andrews & Kurth L.L.P., special counsel for the Collateral
Agent and the Equity Collateral Agent, substantially in the form of Exhibit E-9,
(x) Robert A. Wolz, Assistant Counsel to the Pass Through Trustee, substantially
in the form of Exhibit E-10 and (xi) Morris, James, Hitchens & Williams, counsel
for the Marks Company Trust, substantially in the form of Exhibit E-11.

         (f) Title. On the Closing Date, after giving effect to the transactions
contemplated hereby, (i) the Owner Trustee shall have all legal and beneficial
title to each Unit to be delivered on the Closing Date, free and clear of all
Liens (other than Permitted Liens of the type described in clause (ii) below
with respect to the Existing Equipment Subleases, and in clauses (iii), (iv) and
(v) of the definition thereof), (ii) the Owner Trustee shall have received all
right, title and interest of the Lessee in and to the Existing Equipment
Subleases, free and clear of all Liens (other than subleases of the Existing
Equipment Subleases by the Sublessees as expressly permitted by the Existing
Equipment Subleases and other than Permitted Liens of the type described in
clauses (iii), (iv) and (v) of the definition thereof) and (iii) each Sublessee
under an Existing Equipment Sublease shall have been notified of the assignment
thereof to the Owner Trustee. In addition, (i) the Lessee has all legal and
beneficial title to each Pledged Unit, free and clear of all Liens (other than
Permitted Liens of the type described in clause (ii) below with respect to the
Existing Pledged Equipment Leases, and in clauses (iii), (iv) and (v) of the
definition thereof), (ii) the Lessee has received all right, title and interest
of TILC in and to the Existing Pledged Equipment Leases, free and clear of all
Liens (other than subleases of the Existing Pledged Equipment Leases by the
Pledged Equipment Lessees as expressly permitted by the Existing Pledged
Equipment Leases and other than Permitted Liens of the type described in clauses
(iii), (iv) and (v) of the

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                                       42
<PAGE>

definition thereof) and (iii) each Pledged Equipment Lessee under an Existing
Pledged Equipment Lease has been notified of the assignment thereof to the
Lessee.

         (g) Bills of Sale; Assignments. On the Closing Date, each of the
following documents shall each have been duly executed and delivered: (i) the
TILC Bill of Sale and the Bill of Sale, in each case in form and substance
reasonably satisfactory to the Lessee, the Owner Trustee, the Indenture Trustee
and the Pass Through Trustee, dated such date and covering the Units to be
delivered on such date, transferring to the Owner Trustee and the Lessee,
respectively, legal and beneficial title to such Units free and clear of all
Liens (other than Permitted Liens of the type described in clause (ii) below
with respect to the Existing Equipment Subleases, and in clauses (iii), (iv) and
(v) of the definition thereof) and warranting to the Owner Trustee that at the
time of delivery of each such Unit, TILC and the Lessee, as the case may be, had
legal and beneficial title thereto and good and lawful right to sell the same,
and title thereto was free and clear of all Liens (other than Permitted Liens of
the type described in clause (ii) below with respect to the Existing Equipment
Subleases, and in clauses (iii), (iv) and (v) of the definition thereof and,
with respect to the TILC Bill of Sale, warranting that TILC shall be responsible
for discharging any Permitted Lien of the type described in subclause (iii) or
(iv) of the definition thereof which has attached as of the Closing Date) and
(ii) the TILC Assignment and the Assignment, in each case in form and substance
reasonably satisfactory to the Lessee, the Owner Trustee, the Indenture Trustee
and the Pass Through Trustee, dated such date covering the Existing Equipment
Subleases, assigning to the Owner Trustee and Lessee respectively, all right,
title and interest of TILC and the Lessee, respectively, to the Existing
Equipment Subleases, free and clear of all Liens (other than Permitted Liens)
and warranting to the Lessee that, at the time of such assignment, TILC and the
Lessee, respectively, had legal and beneficial title to the Existing Equipment
Subleases and good and lawful right to sell the same, and title thereto was free
and clear of all Liens (other than Permitted Liens);

         (h) Insurance Certificate. On or before the Closing Date, the Indenture
Trustee and each Participant shall have received (x) each certificate relating
to insurance that is required pursuant to Section 12 of the Lease and Section
6.4 of the Collateral Agency Agreement and (y) certificates from a nationally
recognized insurance broker substantially in the forms attached hereto as
Exhibits A- 1 and A-2 with respect to the public liability insurance required by
Section 12.1(b) of the Lease and Section 6.4 of the Collateral Agency Agreement.

         (i) Corporate, Partnership, Limited Liability Company and Other
Organizational Documents. Each of the Participants shall have received such
documents and evidence with respect to Trinity, TILC, TRMI, the Lessee, the
General Partner, the Limited Partner, the Owner Participant, the Pass Through

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<PAGE>

Trustee, the Owner Trustee and the Indenture Trustee as the Participants may
reasonably request in order to establish the consummation of the transactions
contemplated by this Agreement and the taking of all corporate, limited
partnership and other proceedings in connection therewith.

         (j) No Threatened Proceedings. No action or proceeding shall have been
instituted nor shall governmental action be threatened before any court or
governmental agency, nor shall any order, judgment or decree have been issued or
proposed to be issued by any court or governmental agency at the time of the
Closing Date, to set aside, restrain, enjoin or prevent the completion and
consummation of this Agreement or the transactions contemplated hereby.

         (k) Representations and Warranties of the Owner Participant. On the
Closing Date, the representations and warranties of the Owner Participant
contained in Section 3.4(e) and Section 3.5 hereof shall be true and correct in
all material respects as of the Closing Date as though then made on and as of
such date, except to the extent that such representations and warranties relate
solely to an earlier date (in which case such representations and warranties
were true and correct on and as of such earlier date), and each of the Lessee,
TILC, TRMI, the Indenture Trustee and the Pass Through Trustee shall have
received an Officer's Certificate to such effect dated such date from the Owner
Participant, and the Owner Participant shall have performed and complied with
all agreements and conditions herein contained which are required to be
performed or complied with by the Owner Participant on or before said date.

         (l) Notice of Delivery. The Indenture Trustee and the Participants
shall have received the Notice of Delivery described in Section 2.3(a).

         (m) Representations and Warranties of the Indenture Trustee. On the
Closing Date, the representations and warranties of the Indenture Trustee
contained in Section 3.3 hereof shall be true and correct in all material
respects as of the Closing Date as though then made on and as of such date,
except to the extent that such representations and warranties relate solely to
an earlier date (in which case such representations and warranties were true and
correct on and as of such earlier date), and each of the Lessee, TILC, TRMI, the
Owner Trustee and the Participants shall have received an Officer's Certificate
to such effect dated such date from the Indenture Trustee, and the Indenture
Trustee shall have performed and complied with all agreements and conditions
herein contained which are required to be performed or complied with by the
Indenture Trustee on or before said date.

         (n) No Illegality. No change shall have occurred after the execution
and delivery of this Agreement in applicable law or regulations thereunder or
interpretations thereof by regulatory authorities that, in the opinion of such

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<PAGE>

Participant or its counsel, would make it illegal for such Participant to enter
into any transaction contemplated by the Operative Agreements.

         (o) Participants' Investments. (i) The Owner Participant shall have
made available the Owner Participant's Commitment in the amount specified in,
and otherwise in accordance with, Sections 2.2(a) and 2.3 and (ii) the Loan
Participant shall have made available the Loan Participant's Commitment in the
amount specified in, and otherwise in accordance with, Sections 2.2(b) and 2.3.

         (p) Consents. All approvals and consents of any trustees or holders of
any indebtedness or obligations of the Lessee, Trinity, TILC and TRMI, if any,
required to have been obtained in connection with the transactions contemplated
by this Agreement and the other Operative Agreements shall have been duly
obtained and be in full force and effect.

         (q) Governmental Actions. All actions, if any, required to have been
taken on or prior to the Closing Date in connection with the transactions
contemplated by this Agreement and the other Operative Agreements on the Closing
Date shall have been taken by any governmental or political agency, subdivision
or instrumentality of the United States, and all orders, permits, waivers,
exemptions, authorizations and approvals of such entities required to be in
effect on the Closing Date in connection with the transactions contemplated by
this Agreement and the other Operative Agreements on the Closing Date shall have
been issued, and all such orders, permits, waivers, exemptions, authorizations
and approvals shall be in full force and effect, on the Closing Date.

         (r) Tax Indemnity Agreement. On or before the Closing Date, the Tax
Indemnity Agreement shall be satisfactory in form and substance to the Owner
Participant, shall have been duly executed and delivered by the Lessee and the
Guarantor and, assuming due authorization, execution and delivery by the Owner
Participant or one of its Affiliates, shall be in full force and effect.

         (s) Appointment of Representative. The Owner Trustee shall have
authorized its representative, who shall be an individual designated by the
Lessee and acceptable to the Owner Trustee, to accept the Units being delivered
on the Closing Date from the Lessee and to deliver such Units to the Lessee. The
Lessee shall have authorized its representative (who shall be the same
individual designated by the Lessee under this Section 6.1(s)) to accept
delivery of such Units from the Owner Trustee as Lessor pursuant to the Lease.

         (t) Solvency of the Lessee. The Lessee shall have furnished to the
Participants an Officer's Solvency Certificate (substantially in the form
attached hereto as Exhibit F) as to the solvency of the Lessee as of the Closing
Date.

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                                       45
<PAGE>

         (u) Schedule of Subleases and Units; Pledged Equipment Leases and
Pledged Units. The Participants and the Collateral Agent shall have received a
schedule, certified by the Lessee and TILC, listing the Existing Equipment
Subleases under the Lease, the Sublessee under each thereof and the Units
covered thereby.. The Participants and the Collateral Agent shall have received
a schedule, certified by the Lessee and TILC, listing the Existing Equipment
Subleases under the Lease, the Sublessee under each thereof and the Units
covered thereby. The Participants and the Collateral Agent shall have also
received a copy of Schedules 1-A and 1-B to the Participation Agreement TRLI
2001-1A, certified by the Lessee and TILC, listing the Existing Pledged
Equipment Leases, the Pledged Equipment Lessee under each thereof and the
Pledged Units covered thereby.

         (v) Projected Coverage Ratio. The Manager shall have furnished to the
Participants and the Collateral Agent that portion of the report provided for in
Section 7.1 of the Management Agreement setting forth the Projected Coverage
Ratio for the six-month period immediately succeeding the Closing Date.

         (w) Representations and Warranties of TILC. On the Closing Date, the
representations and warranties of TILC contained in Section 3.4(d) and Section
3.6 hereof shall be true and correct in all material respects as of the Closing
Date as though then made on and as of such date, except to the extent that such
representations and warranties relate solely to an earlier date (in which case
such representations and warranties were true and correct on and as of such
earlier date), and each of the Owner Trustee, the Indenture Trustee and the
Participants shall have received an Officer's Certificate to such effect dated
such date from TILC, and TILC shall have performed and complied with all
agreements and conditions herein contained which are required to be performed or
complied with by TILC on or before said date.

         (x) Representations and Warranties of TRMI. On the Closing Date, the
representations and warranties of TRMI contained in Section 3.4(c) and Section
3.7 hereof shall be true and correct in all material respects as of the Closing
Date as though then made on and as of such date, except to the extent that such
representations and warranties relate solely to an earlier date (in which case
such representations and warranties were true and correct on and as of such
earlier date), and each of the Owner Trustee, the Indenture Trustee and the
Participants shall have received an Officer's Certificate to such effect dated
such date from TRMI, and TRMI shall have performed and complied with all
agreements and conditions herein contained which are required to be performed or
complied with by TRMI on or before said date.

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<PAGE>

         (y) Representations and Warranties of the Pass Through Trustee. On the
Closing Date, the representations and warranties of the Pass Through Trustee
contained in Sections 3.4(f) and Section 3.8 hereof shall be true and correct in
all material respects as of the Closing Date as though then made on and as of
such date, except to the extent that such representations and warranties relate
solely to an earlier date (in which case such representations and warranties
were true and correct on and as of such earlier date), and each of the Lessee,
TILC, TRMI, the Indenture Trustee, the Owner Trustee and the Owner Participant
shall have received an Officer's Certificate to such effect dated such date from
the Pass Through Trustee, and the Pass Through Trustee shall have performed and
complied with all agreements and conditions herein contained which are required
to be performed or complied with by the Pass Through Trustee on or before said
date.

         (z) Representations and Warranties of Trinity. On the Closing Date, the
representations and warranties of Trinity contained in the Trinity Guaranty
shall be true and correct in all material respects as of the Closing Date as
though then made on and as of such date, except to the extent that such
representations and warranties relate solely to an earlier date (in which case
such representations and warranties were true and correct on and as of such
earlier date), and each of the Owner Trustee, the Indenture Trustee and the
Participants shall have received an Officer's Certificate to such effect dated
such date from Trinity, and Trinity shall have performed and complied with all
agreements and conditions herein contained which are required to be performed or
complied with by Trinity on or before said date.

         (aa) Accountant's Letter. The Participants shall have received an
accountant's letter from PriceWaterhouseCoopers L.L.P. in form and substance
reasonably satisfactory to each of them.

         (bb) Certificate Rating. On the Closing Date, the Certificates and the
Other Certificates shall be rated "AA-" by Standard & Poor's Ratings Group, a
division of McGraw Hill, Inc.

         (cc) Sublessee Consents. The Lessee shall have obtained the consent to
assignment from Sublessees under Existing Equipment Subleases, such consents to
be substantially in the form of the consents received with respect to the Other
Participation Agreements if not in the form attached hereto as Exhibit D.

         (dd) Second Supplement to Marks Company Trust Supplement. On or before
the Closing Date, the Second Supplement to the Marks Company Trust Supplement
shall have been duly executed and delivered by the parties thereto.

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                                       47
<PAGE>

         (ee) Balances of Accounts. The Lessee shall have furnished to the
Participants an Officer's Accounts Balance Certificate (substantially in the
form attached hereto as Exhibit G) stating that (i) as of the start of business
on December 27, 2001, the Collection Account has a balance of $841,042.60, and
in addition, as of the Closing Date, the Lessee has funded the Collection
Account with the amount of $40,733.30, (ii) the Lessee has funded the Liquidity
Reserve Account so as of the Closing Date the Liquidity Reserve Account shall
have a balance of at least $9,202,959, and (iii) the Lessee has funded the
Equity Collateral Account so as of the Closing Date the Equity Collateral
Account shall have a balance of at least $6,500,000.

     Section 4.2 Additional Conditions Precedent to Investment by the Loan
Participant. The obligation of the Loan Participant to fund the Loan
Participant's Commitment and purchase and pay for the Equipment Note to be
purchased by it pursuant to Sections 2.2(b) and 2.3 on the Closing Date shall be
subject to the satisfaction or waiver of the following additional conditions
precedent:

         (a) Equipment Note. The Equipment Note to be delivered on the Closing
Date shall have been duly authorized, executed and delivered to the Loan
Participant by a duly authorized officer of the Owner Trustee and duly
authenticated by the Indenture Trustee.

         (b) Sale of Pass Through Certificates. The Pass Through Certificates
shall have been sold to the Initial Purchasers pursuant to the Certificate
Purchase Agreement.

         (c) Appraisal. The Pass Through Trustee and each Initial Purchaser
shall have received the verification of value, useful life and estimated
residual value prepared by the Appraiser in connection with the Appraisal.

     Section 4.3 Additional Conditions Precedent to Investment by the Owner
Participant. The obligation of the Owner Participant to provide the funds
specified with respect to it in Sections 2.2(a) and 2.3 on the Closing Date with
respect to any Unit to be delivered on the Closing Date shall be subject to the
satisfaction or waiver of the following additional conditions precedent:

         (a) Appraisal. On or before the Closing Date, the Owner Participant
shall have received an opinion (the "Appraisal") of Rail Solutions, Inc. (the
"Appraiser"), satisfactory in form and substance to the Owner Participant (with
a separate summary or other evidence of such Appraisal as it relates to fair
market value and useful life being provided to the Rating Agency), concluding
that: (i) the fair market value of each Unit being delivered on the Closing Date
is equal to the portion of the Total Equipment Cost with respect to such Unit;
(ii) at the expiration

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of the Basic Term and any Fixed Rate Renewal Term, (A) without taking into
account inflation or deflation from and after the Closing Date or the existence
of any purchase option, it is reasonable to expect that each such Unit will have
a fair market value of at least 20% of the Total Equipment Cost with respect to
such Unit and (B) the remaining economic life of each such Unit will be at least
equal to 20% of the economic life of such Unit as estimated in the Appraisal;
(iii) as of the Early Purchase Date, the estimated fair market value of each
such Unit being delivered on the Closing Date, taking into account inflation or
deflation from and after the Closing Date, will not exceed the portion of the
Early Purchase Price attributable to such Unit; (iv) no Unit being delivered on
the Closing Date is Limited Use Property; (v) the Fixed Rate Renewal is greater
than or equal to the fair market rental value of each such Unit and the Lessee
is not reasonably expected to exercise any Fixed Rate Renewal option; and (vi)
such other matters as the Owner Participant may reason ably request; provided
that the Lessee makes no representation as to the fair market value, useful
life, fair market rental value or estimated residual value of the Equipment,
and the Lessee shall not be responsible for, or incur any liabilities as a
result of, the contents of such Appraisal or report to which it relates or,
except to the extent provided in the Tax Indemnity Agreement.

         (b) Opinion with Respect to Certain Tax Aspects. On the Closing Date,
the Owner Participant shall have received the opinion of Winston & Strawn,
addressed to the Owner Participant, in form and substance satisfactory to the
Owner Participant, containing such counsel's favorable opinion with respect to
such tax matters as the Owner Participant may reasonably request.

         (c) Absence of Change in Tax Laws. No change or proposed change shall
have occurred after the execution and delivery of this Agreement in relevant
United States tax laws, regulations, or administrative or judicial
interpretation thereof which change would cause an adverse change to the tax
assumptions used to calculate Basic Rent, Stipulated Loss Values, Stipulated
Loss Amounts, Termination Values, Termination Amounts and Early Purchase Price,
unless the adjustment referred to in Section 2.6(a) is made to the Owner
Participant's satisfaction.

         (d) Absence of Accounting Changes. No change shall have occurred in
generally accepted accounting principles which shall, in the opinion of the
Owner Participant, adversely affect its Net Economic Return.

         (e) No Material Adverse Change. No material adverse change shall have
occurred in the business, operations or the financial condition of any of
Lessee, Manager, the Administrator, the Insurance Manager or Trinity.

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<PAGE>

         (f) Absence of Certain Changes. The Owner Participant shall be
satisfied that the transaction is consistent in all respects with the Owner
Participant's internal approvals, including but not limited to its Investment
Committee approval relating to the transaction.

     Section 4.4 Conditions Precedent to the Obligation of TILC and the Lessee.
The obligation of TILC with respect to the sale of the Units to the Lessee on
the Closing Date, the obligation of the Lessee with respect to the sale of such
Units to the Owner Trustee and the obligation of the Lessee to accept such Units
under the Lease as of the Closing Date is subject to the satisfaction or waiver
of the following conditions precedent:

         (a) Corporate Documents. On or before the Closing Date, the Lessee
shall have received such documents and evidence with respect to the
Participants, the Owner Trustee, the Pass Through Trustee and the Indenture
Trustee as the Lessee may reasonably request in order to establish the
authorization of the consummation of, or otherwise relating to the ability to
consummate, the transactions contemplated by this Agreement and the other
Operative Agreements, the taking of all corporate and other proceedings in
connection therewith and compliance with the conditions herein or therein set
forth.

         (b) Operative Agreements. On or before the Closing Date, the Operative
Agreements shall have been duly authorized, executed and delivered by the
respective party or parties thereto (other than the Lessee, Trinity, TILC and
TRMI), and an executed counterpart of each thereof shall have been delivered to
the Lessee or its special counsel.

         (c) Representations and Warranties. On the Closing Date, the
representations and warranties of each of the Owner Trustee, the Indenture
Trustee and the Participants contained in Section 3 hereof shall be true and
correct in all material respects as of the Closing Date as though made on and as
of such date, and the Lessee shall have received an Officer's Certificate to
such effect dated such date from each of the Owner Trustee as described in
Section 4.1(d), the Owner Participant as described in Section 4.1(k), the
Indenture Trustee as described in Section 4.1(m) and the Pass Through Trustee as
described in Section 4.1(y).

         (d) Opinions of Counsel. On the Closing Date, the Lessee shall have
received the opinions of counsel referred to in Section 4.1(e) (other than that
set forth in clauses (i) and (ii) therein), addressed to the Lessee.

         (e) No Threatened Proceedings. No action or proceeding shall have been
instituted nor shall governmental action be threatened before any court or
governmental agency, nor shall any order, judgment or decree have been issued or

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<PAGE>

proposed to be issued by any court or governmental agency at the time of the
Closing Date, to set aside, restrain, enjoin or prevent the completion and
consummation of this Agreement or the transactions contemplated hereby.

         (f) No Illegality. No change shall have occurred after the execution
and delivery of this Agreement in applicable law or regulations thereunder or
interpretations thereof by regulatory authorities that, in the opinion of the
Lessee or its counsel, would make it illegal for the Lessee to enter into any
transaction contemplated by the Operative Agreements.

         (g) Participants' Investments. (i) The Owner Participant shall have
made available the Owner Participant's Commitment in the amount specified in,
and otherwise in accordance with, Sections 2.2(a) and 2.3 and (ii) the Loan
Participant shall have made available the Loan Participant's Commitment in the
amount specified in, and otherwise in accordance with, Sections 2.2(b) and 2.3.

         (h) Absence of Change in Tax Laws; Absence of Change in Rent. No change
shall have occurred after the execution and delivery of this Agreement in
relevant United States tax laws or regulations, which change would cause an
increase in the net present value (expressed as a percentage of Total Equipment
Cost) of the Basic Rent (discounted monthly at a rate per annum equal to the
Debt Rate) to exceed 100 basis points. No other adjustment under Section 2.6(a)
would cause an increase in the net present value (expressed as a percentage of
Total Equipment Cost) of the Basic Rent (discounted monthly at a rate per annum
equal to the Debt Rate) to exceed 100 basis points.

         (i) No Adverse Accounting Treatment. The Lessee shall not have been
advised by its independent accountants that the Lessee or its affiliates will
not be afforded "off-balance sheet" accounting treatment with respect to the
Lease and the transactions contemplated by the Operative Agreements; provided,
that the Lessee shall not have deliberately caused the loss of "off-balance
sheet" accounting treatment to provoke non-satisfaction of such condition
precedent pursuant to this Section 4.4(i).

SECTION 5.   FINANCIAL AND OTHER REPORTS OF THE LESSEE.

     The Lessee agrees during the Lease Term and (if longer, in the event that
the Lessee has assumed all of the rights and obligations of the Lessor under the
Indenture in respect of the Equipment Notes) so long as any Equipment Note
remains outstanding, that it will furnish directly to each Participant the
following:

         (a) as soon as available and in any event within 60 days after the end
of each of the first three quarters of each fiscal year, a balance sheet of the

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Lessee as at the end of such quarter, together with the related consolidated
statements of income and cash flows of the Lessee for the period beginning on
the first day of such fiscal year and ending on the last day of such quarter,
setting forth in each case (except for the balance sheet) in comparative form
the figures for the corresponding periods of the previous fiscal year, all in
reasonable detail and prepared in accordance with generally accepted accounting
principles;

         (b) as soon as available and in any event within 120 days after the
last day of each fiscal year, a copy of the Lessee's audited annual report
covering the operations of the Lessee including a balance sheet, and related
statements of income and retained earnings and statement of cash flows of the
Lessee for such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable detail and prepared in
accordance with generally accepted accounting principles applied on a
consistent basis, which statements will have been certified by a firm of
independent public accountants of recognized national standing selected by the
Lessee;

         (c) within the time period prescribed in paragraph (a) above, a
certificate, signed by the Treasurer or principal financial officer of the
General Partner, (i) to the effect that such officer is not aware (without any
obligation of due inquiry), as of the date of such certificate, of any Lease
Default, and if a Lease Default shall exist, specifying such Lease Default, the
nature and status thereof and what action Lessee is taking or plans to take with
respect thereto and (ii) setting forth the Historical Coverage Ratio and the
Projected Coverage Ratio as of the last Business Day of the immediately
preceding calendar quarter;

         (d) within the time period prescribed in paragraph (b) above, a
certificate, signed by the Treasurer or principal financial officer of the
General Partner, (i) to the effect that the signer has reviewed the Operative
Agreements and activities and records of the Lessee during the immediately
preceding fiscal year and that, after due inquiry, such officer is not aware, as
of the date of such certificate, of any Lease Default, and if a Lease Default
shall exist, specifying such Lease Default, the nature and status thereof and
what action Lessee is taking or plans to take with respect thereto, (ii) setting
forth the Historical Coverage Ratio and the Projected Coverage Ratio as of the
last Business Day of the preceding fiscal year and (iii) setting forth in
summary terms the Lessee's compliance with Section 8.3 of the Lease as to new
Subleases entered into by the Lessee, and sub-subleases entered into by any
Sublessee, during such fiscal year, including without limitation as to whether
such new Subleases are subject and subordinate to the terms of the Lease;

         (e) within the time periods presented in Section 7 of the Management
Agreement, each of the reports referred to therein delivered by the Manager to
the Lessee; and

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         (f) promptly after request therefor, such additional information with
respect to the financial condition or business of the Lessee as the Owner
Participant or the Indenture Trustee may from time to time reasonably request.

SECTION 6.   CERTAIN COVENANTS OF THE PARTICIPANTS, THE TRUSTEES AND THE LESSEE.

     Section 6.1 Restrictions on Transfer of Beneficial Interest. The Owner
Participant agrees that it shall not, directly or indirectly, sell, convey,
assign, pledge, mortgage or otherwise transfer all or any part of the Beneficial
Interest (collectively, for purposes of this Section 6.1, a "transfer") prior to
the expiration or earlier termination of the Lease Term without the Lessee's
prior written consent (which consent shall not be unreasonably withheld);
provided, however, no such consent shall be required in connection with any
indirect transfer of the Beneficial Interest resulting from (i) any direct or
indirect change of control of Philip Morris Capital Corporation or change of
control of any direct or indirect parent of Philip Morris Capital Corporation or
(ii) any transfer of substantially all of the assets of Philip Morris Capital
Corporation as an entirety; provided, further, that no such consent shall be
required if the following conditions are satisfied:

         (a) the Person to whom such transfer is to be made (a "Transferee") is
(i) an institutional or corporate investor with tangible net worth or, in the
case of a bank or lending institution, combined capital and surplus at the time
of such transfer, of at least $75,000,000, determined in accordance with
generally accepted accounting principles, as of the date of such transfer, or
(ii) an Affiliate of an institutional or corporate investor that satisfies the
requirements set forth in clause (i) above if such investor guarantees pursuant
to a guaranty in form and substance satisfactory to the Lessee the obligations
of the Owner Participant under the Operative Agreements assumed by such
Affiliate as required herein or (iii) an Affiliate of the Owner Participant;
provided that in the event of a transfer pursuant to clause (iii) which does not
qualify under clauses (i) or (ii), the Owner Participant shall remain liable for
all of its obligations under this Agreement and the other Operative Agreements;

         (b) so long as no Lease Event of Default has occurred and is
continuing, neither the Transferee nor any of its Affiliates shall compete
(directly or indirectly) (other than as a passive investor or loan participant
in the financing of equipment or facilities used in railcar leasing) with the
Lessee or TILC (unless such non-competition requirement has been waived in
writing by the Lessee and TILC) in any respect material to the full service
railcar leasing business of the Lessee or TILC; provided, that no Transferee or
Affiliate thereof shall be deemed to (i) be engaged in railcar leasing or (ii)
hold (directly or indirectly) any material interest in any business

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<PAGE>

that is competitive with Lessee's or TILC's railcar leasing business, solely by
reason of any sale, lease or other disposition (or any actions in furtherance of
any of the foregoing) of any of such Person's interest in any equipment or
facilities directly or indirectly owned, leased or otherwise controlled
pursuant to any such Person's passive investment or loan participation in the
financing of any such equipment or facilities used in railcar leasing or any
re-leasing or sale of any rail equipment which is returned to or repossessed by
or on behalf of such Person from a lessee or borrower in connection with a lease
financing or lender transaction entered into by such Person as a passive lessor,
investor or lender;

         (c) each of the Indenture Trustee, the Owner Trustee and the Lessee
shall have received 10 days (or, if a Lease Event of Default shall have occurred
and is continuing and the proposed Transferee or any of its Affiliates would
not, but for the occurrence of such Lease Event of Default, have satisfied the
requirements set forth in Section 6.1(b) above or Section 6.1(l) below, fifteen
(15) Business Days) prior written notice of such transfer specifying the name
and address of any proposed Transferee and such additional information as shall
be necessary to determine whether the proposed transfer satisfies the
requirements of this Section 6.1;

         (d) such Transferee enters into an agreement (i) in the form attached
hereto as Exhibit C or (ii) otherwise in form and substance satisfactory to each
of the Lessee and the Owner Trustee and not reasonably objected to by the
Indenture Trustee whereby such Transferee confirms that it shall be deemed a
party to this Agreement and each other Operative Agreement to which the
transferring Owner Participant is a party, and agrees to be bound by all the
terms of, and to undertake all of the obligations and liabilities of the
transferring Owner Participant contained in, this Agreement and such other
Operative Agreements and in which the Transferee shall make representations and
warranties comparable to those of the Owner Participant contained herein and
therein;

         (e) an opinion of counsel of the Transferee (which counsel shall be
reasonably acceptable to the Lessee, the Owner Trustee and the Indenture Trustee
and which may be internal counsel of the Transferee), confirming (i) the
existence, corporate power and authority of, and due authorization, execution
and delivery of all relevant documentation by, the Transferee (with appropriate
reliance on certificates of corporate officers or public officials as to
matters of fact), (ii) that each agreement referred to in Section 6.1(d) above
is the legal, valid, and binding obligation of the Transferee, enforceable
against the Transferee in accordance with its terms (subject to customary
qualifications as to bankruptcy and equitable principles) and (iii) compliance
of the transfer with applicable requirements of federal securities laws and
securities laws of the Transferee's domicile, shall be provided, prior to such
transfer, to each of the Lessee, the Owner Trustee and the Indenture Trustee,
which opinion

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<PAGE>

shall be in form and substance reasonably satisfactory to the Lessee, the Owner
Trustee and the Indenture Trustee;

         (f) such transfer complies in all respects with and does not violate
any applicable provisions of the federal securities laws and the securities law
of any applicable state or any other applicable law;

         (g) except as specifically consented to in writing by each of the
Lessee, the Owner Trustee, the Pass Through Trustee and the Indenture Trustee,
the terms of the Operative Agreements shall not be altered;

         (h) after giving effect to such transfer, the Beneficial Interest and
the beneficial interests with respect to the Other Trusts shall be held by not
more than three Persons in the aggregate; provided that for the purpose of
calculating the number of Persons under this Section 6.1(h), Persons that are
Affiliates of each other shall be considered to be one Person;

         (i) all reasonable expenses of the parties hereto (including, without
limitation, reasonable legal fees and expenses of special counsel) incurred in
connection with each transfer of such Beneficial Interest shall be paid by the
transferring Owner Participant;

         (j) such transfer either (i) does not involve the use of any funds
which constitute assets of an employee benefit plan subject to Title I of ERISA
or Section 4975 of the Code or (ii) if clause (i) is not applicable, will not
constitute a prohibited transaction under ERISA or the Code;

         (k) as a result of and following such transfer, no Indenture Default
attributable to the Owner Participant or the Owner Trustee shall have occurred
and be continuing;

         (l) unless a Lease Event of Default shall have occurred and is
continuing, the transfer does not involve the sale of the stock of any Owner
Participant, the sole asset of which is all or a portion of the Beneficial
Interest, to, or the merger of any such Owner Participant with or into, any
Person who is a competitor of the Lessee or TILC as described in Section 6.1(b),
provided that the Lessee may waive this requirement in writing;

         (m) the Transferee (i) is a "United States Person" within the meaning
of Section 7701(a)(30) of the Code or (ii) is engaged in a United States trade
or business for purposes of Subtitle A, Chapter 1, Subchapter N of the Code and
is acquiring such Beneficial Interest in connection with such trade or business;
and

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<PAGE>


          (n)  the Owner Participant shall deliver to the Lessee an Officer's
Certificate certifying as to compliance with the transfer requirements contained
herein; provided that no such Officer's Certificate is required in case of a
transfer of the Beneficial Interest to the Lessee (or Lessee's designee)
pursuant to Section 6.9.

     Upon any such transfer (i) except as the context otherwise requires, such
Transferee shall be deemed the "Owner Participant" for all purposes, and shall
enjoy the rights and privileges and perform the obligations of the Owner
Participant to the extent of the interest transferred hereunder and under each
other Operative Agreement to which the Owner Participant is a party, and,
except as the context otherwise requires, each reference in this Agreement and
each other Operative Agreement to the "Owner Participant" shall thereafter be
deemed to include such Transferee for all purposes to the extent of the interest
transferred, and (ii) the transferor, except to the extent provided in Section
6.1(i) hereof and except in the case of a transfer to a Transferee described in
the proviso to Section 6.1(a)(iii) hereof, shall be released from all
obligations hereunder and under each other Operative Agreement to which such
transferor is a party or by which such transferor is bound solely to the extent
such obligations are expressly assumed by a Transferee; and provided, further,
that in no event shall any such transfer or assignment waive or release the
transferor from any liability on account of any breach existing prior to such
transfer of any of its representations, warranties, covenants or obligations set
forth herein or in any of the other Operative Agreements or for any fraudulent
or willful misconduct. Subject to Section 6.1(l), the provisions of this Section
6.1 shall not be construed to restrict the Owner Participant from consolidating
with or merging into any other corporation or restricting another corporation
from merging into or consolidating with the Owner Participant. Notwithstanding
any transfer, the transferor Owner Participant shall be entitled to all benefits
accrued and all rights vested prior to such transfer, including, without
limitation, rights to indemnification under any of the Operative Agreements. No
transfer hereunder shall, by virtue of the Transferee engaging in a business or
activity not generally conducted by other institutional or corporate investors
in lease transactions, increase the Lessee's indemnification obligations under
Section 7.1 or 7.2. The Owner Participant hereby acknowledges and agrees (and
each Transferee by virtue of any transfer shall be deemed to have acknowledged
and agreed) to the terms of the Collateral Agency Agreement.

     The Lessee agrees to provide notice to the Rating Agency of any proposed
transfer by an Owner Participant no later than 5 days after Lessee's receipt of
notice of such proposed transfer from an Owner Participant.

     Section 6.2 Lessor's Liens Attributable to the Owner Participant. The Owner
Participant hereby unconditionally agrees with and for the benefit of each of


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<PAGE>


the other parties to this Agreement that the Owner Participant shall not
directly or indirectly create, incur, assume or suffer to exist any Lessor's
Lien attributable to the Owner Participant on or against all or any portion of
the Indenture Estate or the Equipment, and the Owner Participant agrees that it
shall, at its own cost and expense, take such action as may be necessary to duly
discharge and satisfy in full any such Lessor's Lien; provided that the Owner
Participant may contest any such Lessor's Lien in good faith by appropriate
proceedings so long as such proceedings do not involve any material danger of
the sale, forfeiture or loss of the Equipment or any interest therein or
interference with the use, operation, or possession of the Equipment or any
portion thereof by the Lessee under the Lease or the rights of the Indenture
Trustee under the Indenture.

     Section 6.3 Lessor's Liens Attributable to Trust Company. Trust Company
hereby unconditionally agrees with and for the benefit of each of the other
parties to this Agreement that it shall not directly or indirectly create,
incur, assume or suffer to exist any Lessor's Lien attributable to it on or
against all or any portion of the Trust Estate or the Equipment, the Trust
Company agrees that it shall, at its own cost and expense, take such action as
may be necessary to duly discharge and satisfy in full any such Lessor's Lien;
provided that the Trust Company may contest any such Lessor's Lien in good faith
by appropriate proceedings so long as such proceedings do not involve any
material danger of the sale, forfeiture or loss of the Equipment or any interest
therein or interference with the use, operation, or possession of the Equipment
or any portion thereof by the Lessee under the Lease or the right of the
Indenture Trustee under the Indenture.

     Section 6.4 Liens Created by the Indenture Trustee and the Loan
Participant.

          (a)  The Indenture Trustee, in its individual capacity, covenants and
agrees with each of the Lessee, the Owner Trustee, the Owner Participant and the
Loan Participant that it shall not cause or permit to exist any Lien on or
against all or any portion of the Equipment, the Pledged Equipment, the Trust
Estate or the Indenture Estate arising as a result of (i) claims against the
Indenture Trustee in its individual capacity not related to its interest in the
Equipment, the Pledged Equipment and the Trust Estate, or to the administration
of the Indenture Estate pursuant to the Indenture, (ii) acts of the Indenture
Trustee in its individual capacity not contemplated by, or failure of the
Indenture Trustee to take any action it is expressly required to perform by, any
of the Operative Agreements, (iii) claims against the Indenture Trustee
attributable to the actions of the Indenture Trustee in its individual capacity
relating to Taxes or expenses that are not indemnified against by the Lessee
pursuant to Section 7 or (iv) claims against the Indenture Trustee arising out
of the transfer by the Indenture Trustee of all or any portion of its interest
in the Equipment, the Pledged Equipment, the Indenture Estate or the Operative


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Agreements, other than a transfer permitted by the Operative Agreements and with
respect to which the Indenture Trustee will, at its own cost and expense (and
without any right of reimbursement from any other party hereto), promptly take
such action as may be necessary duly to discharge any such Lien.

          (b)  The Loan Participant covenants and agrees with each of the
Lessee, the Owner Trustee, the Owner Participant and the Indenture Trustee that
the Loan Participant shall not cause or permit to exist any Lien on or against
all or any portion of the Equipment, the Pledged Equipment, the Trust Estate or
the Indenture Estate arising as a result of (i) claims against the Loan
Participant not related to its interest in the Equipment, the Pledged Equipment
and the Trust Estate, (ii) acts of the Loan Participant not contemplated by, or
failure of the Loan Participant to take any action it is expressly required to
perform by, any of the Operative Agreements, (iii) claims against the Loan
Participant relating to Taxes or expenses that are not indemnified against by
the Lessee pursuant to Section 7, or (iv) claims against the Loan Participant
arising out of the transfer by the Loan Participant of all or any portion of its
interest in the Equipment, the Pledged Equipment, the Indenture Estate or the
Operative Agreements, other than a transfer permitted by the Operative
Agreements and with respect to which the Loan Participant will, at its own cost
and expense (and without any right of reimbursement from the Lessee), promptly
take such action as may be necessary duly to discharge any such Lien.

     Section 6.5 Covenants of Owner Trustee, Owner Participant and Indenture
Trustee. Each of the Owner Participant and Trust Company, in its individual and
trust capacities, hereby agrees, as to its own actions only and severally and
not jointly, with (a) the Loan Participant and the Indenture Trustee (so long as
the Equipment Notes remain outstanding), not to amend, supplement, or otherwise
modify any provision of the Trust Agreement in such a manner as to adversely
affect the rights of the Loan Participant or the Indenture Trustee without the
prior written consent of such party and (b) with the Lessee, not to terminate or
revoke the Trust Agreement or the trust created by the Trust Agreement prior to
the payment in full and discharge of the Equipment Notes and all other
indebtedness secured by the Indenture and the final discharge thereof. Each of
the Trust Company and the Indenture Trustee agrees, for the benefit of the
Lessee and the Owner Participant, to comply with the provisions of the Indenture
and not to amend, supplement, or otherwise modify any provision of the Indenture
except in the manner provided in Article IX thereof. Notwithstanding anything to
the contrary contained herein or in any of the other Operative Agreements, the
Indenture Trustee's obligation to take or refrain from taking any actions, or to
use its discretion (including, but not limited to, the giving or withholding of
consent or approval and the exercise of any rights or remedies under such
Operative Agreement), and any liability therefor, shall, in addition to any
other limitations provided herein or in any of the other Operative Agreements,
be limited by the provisions of the Indenture.


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     Section 6.6 Amendments to Operative Agreements That Are Not Lessee
Agreements. Unless a Lease Event of Default shall have occurred and be
continuing, the Owner Trustee, the Indenture Trustee and the Participants shall
not terminate the Operative Agreements to which the Lessee is not or will not be
a party, or amend, supplement, waive or modify in any manner such Operative
Agreements to which the Lessee is not or will not be a party, (i) except in
accordance with such Operative Agreements in effect on the date hereof (as
amended, modified or supplemented from time to time in accordance with the
terms hereof and of such Operative Agreements), or (ii) adverse to the Lessee or
to any of its rights or interests under any of the Operative Agreements, except
with the prior written consent of the Lessee. Without limiting the generality of
the foregoing, each of the Owner Participant and the Owner Trustee, the Pass
Through Trustee and the Indenture Trustee (as applicable) agrees that, in any
event, unless a Lease Event of Default shall have occurred and be continuing, it
will not amend Section 2.10 or Article IX of the Indenture or Article IX of the
Trust Agreement without the prior written consent of the Lessee.

     Section 6.7 Certain Representations, Warranties and Covenants. The Lessee
hereby confirms its representations, warranties and covenants in Article 6 of
the Collateral Agency Agreement, which are hereby incorporated in this Agreement
by this reference as fully as if set forth herein in their entirety.

     Section 6.8 Covenants of the Manager. The Manager hereby confirms the
covenants in Article 7 of the Management Agreement, which are hereby
incorporated in this Agreement by this reference as fully as if set forth
herein in their entirety.

     Section 6.9 Lessee's Purchase in Certain Circumstances.

          (a)  If (A) the Owner Participant or any Affiliate thereof is or
acquires, is acquired by, merges or otherwise consolidates with any company or
Affiliate thereof who would not be an eligible "Transferee" by reason of Section
6.1(b) (and, in the case of an Affiliate, such entity continues to be an
Affiliate of the Owner Participant after such acquisition, merger or
consolidation), or (B) the Lessee shall have requested a waiver pursuant to
Section 12.3(c) of the Lease and the Lessor and the Owner Participant shall have
refused to grant such waiver or shall have granted such waiver but shall have
refused to further waive the requirement that amounts be deposited in the
Special Insurance Reserves Account pursuant to the Collateral Agency Agreement
in connection with the granting of the initial waiver, or (C) the Lessee shall
have elected to purchase, or arrange a purchase of, the Beneficial Interest
pursuant to Section 22.1 of the Lease, the Lessee may elect either to:


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               (i)  keep the Lease and the Equipment Notes in place and require
that the Owner Participant, and the Owner Participant agrees to, transfer its
Beneficial Interest in accordance with the terms of Section 6.1 (other than
provisions of Sections 6.1(a), (b), (i), (l) and (n)) to the Lessee or such
other transferee as the Lessee may designate (such transfer to occur on a
Determination Date which is designated by the Lessee by written notice to the
Owner Participant not less than 60 days prior to such Determination Date) at a
purchase price (the "Beneficial Interest Purchase Price") equal to (1) the
Equity Portion of Termination Amount as of the date of such transfer, plus (2)
in the case of clause (B) above, the excess, if any, of the Fair Market Sales
Value of the Equipment calculated as of such date over the Termination Value as
of such date, plus (3) the Equity Portion of Basic Rent accrued and unpaid
therefor as of the date of such transfer (exclusive of any Basic Rent payable on
such date), plus (4) without duplication or limitation of any amount under
clauses (1) to (3) above, the sum of the Accumulated Equity Deficiency Amount
and Late Payment Interest related thereto, plus (5) without duplication or
limitation of any amount under clauses (1) to (4) above, that portion of
Supplemental Rent due and unpaid on such date that is payable to the Owner
Participant; provided, however, that, without regard to such Owner Participant's
obligations under the Operative Agreements relating to the period prior to such
transfer, any transfer of the Beneficial Interest pursuant to this Section 6.9
shall be without additional representations or warranties of or other
liabilities or obligations on such Owner Participant other than those expressly
set forth in the Owner Participant Agreements; provided, further, that in case
such Owner Participant holds less than 100% of the Beneficial Interest (after
excluding any Beneficial Interests held by the Lessee, TILC or any Affiliate of
either thereof), the purchase price for such Owner Participant's Beneficial
Interest shall be equal to (x) (i) the sum of the amounts calculated under
clauses (1), (2), (3) and (4) above multiplied by (ii) a fraction equal to the
portion such Owner Participant's Beneficial Interest bears to 100% of the
Beneficial Interests, plus (y) without duplication or limitation of any amount
under clause (x) above, that portion of Supplemental Rent due and unpaid on such
date that is payable to such Owner Participant; or

               (ii) on a Determination Date which is designated by the Lessee by
written notice to the Owner Trustee and the Indenture Trustee not less than 60
days prior to such Determination Date, purchase the Equipment for a purchase
price equal to (I) the Termination Amount calculated as of such Determination
Date, plus (II) in the case of clause (B) of the lead paragraph of this Section
6.9(a), the excess, if any, of the Fair Market Sales Value of the Equipment
calculated as of such date over the Termination Value as of such Determination
Date, plus (III) without duplication or limitation, all other amounts due and
owing by the Lessee under the Operative Agreements with respect to the
Equipment, including, without limitation, all accrued and unpaid Basic Rent
therefor as of such Determination Date (exclusive of any Basic Rent payable on
such date), Make-Whole Amount then payable on the


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Equipment Notes pursuant to Section 2.10(c) of the Indenture with respect to the
Equipment and Late Payment Premium, if any, due and owing under the Operative
Agreements with respect to the Equipment so that, after receipt and application
of all such payments the Owner Participant shall be entitled under the terms of
the Collateral Agency Agreement to receive, and does receive, in respect of all
such Units, the sum of the Accumulated Equity Deficiency Amount (without
duplication of any amount provided under clauses (I) - (III) above) and Late
Payment Interest related thereto and any other amounts of Supplemental Rent due
and unpaid on such Determination Date that are payable to the Owner Participant.

          (b)  If the Lessee elects to exercise the option to purchase the
Equipment (as opposed to such Owner Participant's Beneficial Interest) as
provided in Section 6.9(a), the Lessee shall, as the purchase price therefor pay
the purchase price, as specified in Section 6.9(a)(ii), with respect to the
Equipment, together with all other amounts due and owing by the Lessee under the
Operative Agreements.

          (c)  In connection with any purchase of the Equipment under this
Section 6.9, the Lessee will make the payments required by Section 6.9(a)(ii) in
immediately available funds against delivery of a bill of sale transferring and
assigning to the Lessee all right, title and interest of the Lessor in and to
the Equipment on an "as-is" "where-is" basis and containing a warranty with
respect to the absence of any Lessor's Lien. In such event, the costs of
preparing the bill of sale or other transfer documents and all other
documentation relating to such purchase and the costs of any necessary filings
related thereto will be borne by the Lessee.

          If the Lessee shall fail to fulfill its obligations under Sections
6.9(b) and (c), all of the Lessee's obligations under the Lease and the
Operative Agreements, including, without limitation, the Lessee's obligation to
pay installments of Rent, with respect to the Equipment shall continue.

     Section 6.10 Owner Participant as Affiliate of Lessee. So long as there are
any Notes outstanding, if at any time the original or any successor Owner
Participant shall be an Affiliate of the Lessee, the Manager or the
Administrator such Owner Participant and the Lessee agree that, notwithstanding
Section 9.5 of the Indenture, they will not vote its Beneficial Interest in any
respect if there is another Owner Participant not affiliated with the Lessee,
the Manager or the Administrator and, if there is no such Owner Participant,
they will not vote its Beneficial Interest to modify, amend or supplement any
provision of the Lease, this Agreement or any other Operative Agreement or give
or withhold, or permit the Owner Trustee to give or withhold, any consent,
waiver, authorization or approval thereunder unless such action shall have been
consented to by the Pass Through Trustee; provided that the restrictions of this
Section 6.10 shall not apply with respect to any such modification,


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amendment, supplement, consent, waiver, authorization or approval to the extent
pertaining to any Excepted Property.

     Section 6.11 Records; U.S. Income Tax Information. Each of the Lessee, TRMI
and TILC covenants that it will maintain or cause to be maintained and retain
sufficient factual records (to the extent such records are maintained by the
Lessee, TRMI and TILC respectively, any sublessee, or any trustee for or
Affiliate of any thereof, in the ordinary course of their respective businesses)
to enable the Owner Participant to prepare required United States federal, state
and local tax returns. Upon request of the Owner Participant, the Lessee, TRMI
and TILC, respectively, shall deliver such records to the Owner Participant at
the expense of the Owner Participant. In addition, as soon as practicable, the
Lessee, TRMI and TILC, respectively, shall provide or cause to be provided (at
the expense of the Lessee) to the Owner Participant such information (in form
and substance reasonable satisfactory to the Owner Participant) as the Owner
Participant may reasonably request from and as shall be reasonably available to
the Lessee, TRMI and TILC, respectively, to enable the Owner Participant to
fulfill its tax return filing obligations, to respond to requests for
information, to verify information in connection with any income tax audit and
to participate effectively in any tax contest. Such information may include,
without limitation, information as to the location of and use of the Equipment
from time to time (to the extent such information is available on the basis of
the records regularly maintained by the Lessee, TRMI and TILC, respectively, any
sublessee, or any trustee for or Affiliate of any thereof, in the ordinary
course of their respective businesses).

     Section 6.12 Replacement of Manager.

          (a)  Manager Replacement Event. So long as any Equipment Notes remain
outstanding, if a Manager Replacement Event has occurred and is continuing, the
Pass Through Trustee shall have the right, but not the obligation, to require
the Lessee to replace the Manager as provided in this Section 6.12 but only if
the Other Pass Through Trustee, simultaneously therewith exercises its right
under Section 6.12 of the respective Other Participation Agreements.

          (b)  Replacement Manager. The Pass Through Trustee and the Other Pass
Through Trustee shall send a written notice of their decision to replace the
Manager pursuant to this Section 6.12 (a "Manager Replacement Notice") to the
Lessee, the Manager, the Rating Agency, each Owner Participant, each Other Owner
Participant, the Owner Trustee, the Other Owner Trustees, the Indenture Trustee
and the Other Indenture Trustees. If each Owner Participant and each Other Owner
Participant agree with such decision of the Pass Through Trustee and the Other
Pass Through Trustee to replace the Manager, the Lessee shall, within 10
Business Days


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after it received confirmation of such agreement by each Owner Participant and
each Other Owner Participant, provide a written notice (a "Lessee Proposed
Replacement Manager Notice") proposing one or more replacement Managers (each, a
"Replacement Manager") to the Indenture Trustee, the Other Indenture Trustees,
the Rating Agency, each Owner Participant, the Other Owner Participants, the
Owner Trustee, the Other Owner Trustees, the Pass Through Trustee and the Other
Pass Through Trustee; provided, that each proposed Replacement Manager must
satisfy the requirements of Section 8.4(b) of the Management Agreement imposed
on a Successor Manager. A Lessee Proposed Replacement Manager Notice must
contain the names of the proposed Replacement Managers, the information that may
be reason ably required to confirm that the Replacement Managers satisfy the
requirements of Section 8.4(b) of the Management Agreement imposed on a
Successor Manager and other information that the Pass Through Trustee, the Other
Pass Through Trustee, any Owner Participant or any Other Owner Participant may
reasonably request. Within 30 calendar days after the delivery of the Lessee
Proposed Replacement Manager Notice, the Pass Through Trustee and the Other Pass
Through Trustee, acting jointly, and each Owner Participant and each Other Owner
Participant, acting jointly, shall notify the Lessee in writing (a "Response
Notice") whether they accept any of the proposed Replacement Managers with
indication of which Replacement Managers are acceptable or they do not accept
any of the proposed Replacement Managers; provided, however, that the Pass
Through Trustee, the Other Pass Through Trustee, any Owner Participant and any
Other Owner Participant may refuse to accept any proposed Replacement Manager
(i) in their sole discretion, if such proposed Replacement Manager shall have a
rating of long-term Dollar-denominated senior unsecured debt obligations below
BBB- by S&P or Baa3 by Moody's, or (ii) in their reasonable discretion, if the
proposed Replacement Manager shall have a rating of long-term
Dollar-denominated senior unsecured debt obligations equal to or above BBB- by
S&P and Baa3 by Moody's. If the Pass Through Trustee, the Other Pass Through
Trustee, each Owner Participant and each Other Owner Participant (x) accept a
proposed Replacement Manager or (y) any of them fails to deliver a Response
Notice to the Lessee within the required period, the Lessee shall within 60
calendar days (after the delivery of the Response Notice or the expiration of
the required period) replace the Manager with the Replacement Manager; provided,
however, that in the event described under clause (x) immediately above, such
Replacement Manager shall be the Replacement Manager accepted by the Pass
Through Trustee, the Other Pass Through Trustee, each Owner Participant and
each Other Owner Participant in the Response Notice, and in the event described
under clause (y) immediately above, such Replacement Manager may be any of the
Replacement Managers from the Replacement Managers proposed by Lessee in the
Lessee Proposed Replacement Manager Notice. Any Replacement Manager shall
execute and deliver to the Lessee and to the replaced Manager an instrument
accepting such appointment, including customary confidentiality provisions in
favor of the replaced Manager and the Lessee, and


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thereupon such Replacement Manager, without further act, shall become vested
with all the rights, powers, duties and trusts of the replaced Manager under the
Management Agreement on the same terms and conditions as the replaced Manager
(or such other commercially reasonable terms and conditions as the Replacement
Manager may reasonably require and which are reasonably acceptable to the Pass
Through Trustee, the Other Pass Through Trustee, each Owner Participant and each
Other Owner Participant) with like effect as if originally named the Manager
therein except that in any event any Replacement Manager shall not be a
"Guaranteed Party" for purposes of the Trinity Guaranty or the Other Trinity
Guaranty.

          (c)  Alternative Replacement Manager. If the Pass Through Trustee, the
Other Pass Through Trustee, each Owner Participant and each Other Owner
Participant deliver a Response Notice to the Lessee within the period required
in Section 6.12(b) refusing to accept all proposed Replacement Managers in
accordance with Section 6.12(b), the Pass Through Trustee and the Other Pass
Through Trustee, acting jointly, and each Owner Participant and each Other Owner
Participant, acting jointly, shall also propose in such Response Notice an
alternative replacement Manager ("Alternative Replacement Manager"); provided,
that any Alternative Replacement Manager shall satisfy the requirements of
Section 8.4(b) of the Management Agreement imposed on a Successor Manager. Such
Response Notice must contain the name of the proposed Alternative Replacement
Manager, the information that may be reasonably required to confirm that the
Alternative Replacement Manager satisfies the requirements of Section 8.4(b) of
the Management Agreement imposed on a Successor Manager and the other
information that the Lessee may reasonably request. The Lessee shall replace the
Manager with the Alternative Replacement Manager within 60 calendar days after
the delivery of the Response Notice. Any Alternative Replacement Manager
appointed pursuant to this Section 6.12(c) shall execute and deliver to the
Lessee and to the replaced Manager an instrument accepting such appointment,
including customary confidentiality provisions in favor of the replaced Manager
and the Lessee, and thereupon such Alternative Replacement Manager, without
further act, shall become vested with all the rights, powers, duties and trusts
of the replaced Manager under the Management Agreement on the same terms and
conditions as the replaced Manager (or such other commercially reasonable terms
and conditions as the Alternative Replacement Manager may reasonably require and
which are reasonably acceptable to the Pass Through Trustee, the Other Pass
Through Trustee, each Owner Participant and each Other Owner Participant) with
like effect as if originally named the Manager therein except that in any event
any Alternative Replacement Manager shall not be a "Guaranteed Party" for
purposes of the Trinity Guaranty or the Other Trinity Guaranty.

          (d)  Waiver by the Pass Through Trustee and the Other Pass Through
Trustee. Any of the Pass Through


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Trustee or the Other Pass Through Trustee may at any time (i) withdraw any
Manager Replacement Notice without penalty to the Pass Through Trustee and the
Other Pass Through Trustee, and the Lessee shall have no obligation to replace
the Manager under this Section 6.12 or (ii) waive any or all of its rights under
this Section 6.12.

          (e)  No Notes Outstanding. If after the replacement of the Manager
with a Replacement Manager or an Alternative Replacement Manager pursuant to
this Section 6.12, there are no Notes outstanding, the Lessee shall have the
right, but not the obligation, at its sole cost and expense to terminate such
Replacement Manager or Alternative Replacement Manager and return the Manager so
replaced without penalty to the Lessee.

     Section 6.13 Acknowledgment of Equity Collateral Security Documents. Each
of the parties to this Agreement acknowledges and agrees that (a) the Equity
Collateral Security Documents are included in the Operative Agreements and (b)
any rights of the Owner Trustee and/or Owner Participant or any other Equity
Beneficiary (i) to payment or performance under the Equity Collateral Security
Documents or (ii) to amend, waive or otherwise modify any provision of the
Equity Collateral Security Documents are included in Excepted Property. It is
expressly understood that (x) the exercise of any rights and remedies under the
Collateral Agency Agreement and the other Operative Agreements (other than the
Equity Collateral Security Documents) shall not restrict, limit or preclude the
exercise of any rights and remedies under the Equity Collateral Security
Documents and (y) the exercise of any rights and remedies under the Equity
Collateral Security Documents shall not restrict, limit or preclude the exercise
of any rights and remedies under the Collateral Agency Agreement and the other
Operative Agreements (other than the Equity Collateral Security Documents), in
each case without duplication of any amounts otherwise payable under the
Operative Agreements.


SECTION 7. LESSEE'S INDEMNITIES.

     Section 7.1 General Tax Indemnity.

          (a)  Tax Indemnitee Defined. For purposes of this Section 7.1, "Tax
Indemnitee" means the Pass Through Trustee, both in its individual capacity and
as trustee, the Owner Participant, its Affiliates (including, without
limitation, Philip Morris Capital Corporation, Grant Holdings, Inc., Trimaran
Leasing Investors, L.L.C. I, Trimaran Leasing Investors, L.L.C. II and Trimaran
Leasing, L.P.), the Owner Trustee, the Trust Company, the Indenture Trustee,
both in its individual capacity and as trustee, each of their successors or
assigns permitted under the terms of the Operative Agreements, any officer,
director, employee or agent of any of the foregoing, the Trust Estate and the
Indenture Estate; "Equity Tax Indemnitee" means the Owner Participant, its
Affiliates, the Owner Trustee, the Trust Company, and


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each of their respective successors, assigns, officers, directors, employees and
agents and the Trust Estate; "Lender Tax Indemnitee" means each Tax Indemnitee
which is not an Equity Tax Indemnitee.

          (b)  Taxes Indemnified. Except as provided below, all payments by the
Lessee to any Tax Indemnitee in connection with the transactions contemplated
by the Operative Agreements shall be free of withholdings of any nature
whatsoever (and at the time that any payment is made upon which any withholding
is required the Lessee shall pay an additional amount such that the net amount
actually received will, after such withholding and on an After-Tax Basis, equal
the full amount of the payment then due) and shall be free of expense to each
Tax Indemnitee for collection or other charges. The Lessee shall defend,
indemnify and save harmless each Tax Indemnitee from and against, and as between
the Lessee and each Tax Indemnitee the Lessee hereby assumes liability with
respect to, all fees (including, without limitation, license fees and
registration fees), taxes (including, without limitation, income, gross
receipts, franchise, sales, use, value added, property and stamp taxes),
assessments, levies, imposts, duties, charges or withholdings of any nature
whatsoever, together with any and all penalties, additions to tax, fines or
interest thereon ("Taxes") imposed against any of the Tax Indemnitees, any item
of Equipment or Pledged Equipment or the Lessee, upon, arising from or relating
to

               (i)  any item of the Equipment or the Pledged Equipment,

               (ii) the construction, manufacture, financing, purchase,
delivery, ownership, acceptance, rejection, possession, improvement, use,
operation, leasing, subleasing, condition, maintenance, repair, refinancing,
registration, sale, return, replacement, storage, abandonment or other
application or disposition of any item of the Equipment or the Pledged
Equipment,

               (iii) the rental payments, receipts or earnings arising from any
item of the Equipment or the Pledged Equipment or payable pursuant to the
Operative Agreements, or

               (iv) the Operative Agreements, the Equipment Note or any Sublease
or any Pledged Equipment Lease or otherwise with respect to or in connection
with the transactions contemplated thereby.

          (c)  Taxes Excluded. The indemnity provided in Section 7.1(b) shall
not include:


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               (i) as to any Equity Tax Indemnitee, any Income Tax imposed by
the United States federal government (but not excluding any Income Tax required
to make a payment on an After-Tax Basis);

               (ii) as to any Equity Tax Indemnitee, any Income Tax imposed by
any state, local or foreign government or taxing authority or subdivision
thereof; provided, however, that this exclusion shall not apply to the extent
such Taxes (but not including Income Taxes imposed on net income) are
attributable to (I) the use or location of any item of the Equipment or the
activities of the Lessee or its Affiliates or any sublessee in the taxing
jurisdiction, (II) the presence or organization of the Lessee or any sublessee
in the taxing jurisdiction, (III) the status of the Lessee or any sublessee as a
foreign entity or as an entity owned by a foreign person or (IV) Lessee or
sublessee having made (or deemed to have made) payments to the Tax Indemnitee
from the relevant jurisdiction; provided, further, however, that the preceding
proviso shall not apply to any jurisdiction where the Owner Trust, the Owner
Trustee (other than in its individual capacity) or the Owner Participant has its
legal domicile or principal place of business (determined without regard to the
transactions contemplated by the Operative Agreement);

               (iii) as to any Equity Tax Indemnitee, any Tax that is imposed as
a result of the sale, transfer or other disposition, by the Lessor or the Owner
Participant of any of its rights with respect to any item of Equipment, Equity
Collateral or the Owner Participant's interest in the Trust Estate unless such
sale, transfer or other disposition is a result of an Event of Default, results
from any substitution, repair or replacement of any item of Equipment under the
Lease, or results from any sale, transfer or disposition required under the
Lease (including but not limited to Section 10 of the Lease);

               (iv) as to any Equity Tax Indemnitee, any Taxes to the extent
they exceed the Taxes that would have been imposed had an Equity Tax Indemnitee
not transferred, sold or disposed of its interest or rights in any item of the
Equipment to a non-U.S. Person;

               (v)  Taxes imposed on a Lender Tax Indemnitee with respect to any
period after the payment in full of the Equipment Notes; provided that the
exclusion set forth in this clause (v) shall not apply to Taxes to the extent
such Taxes relate to events occurring or matters arising prior to or
simultaneously with the applicable time of payment of the Equipment Notes or
relate to any payment made by the Lessee after such date;

               (vi) as to any Tax Indemnitee, Taxes to the extent caused by any
misrepresentation or breach of warranty or covenant by such Tax


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Indemnitee or a Related Party under any of the Operative Agreements or by the
gross negligence or willful misconduct of such Tax Indemnitee or a Related
Party;

               (vii) as to any Lender Tax Indemnitee, Taxes which become payable
as a result of a sale, assignment, transfer or other disposition (whether
voluntary or involuntary) by such Lender Tax Indemnitee of all or any portion of
its interest in the Equipment or any part thereof, the Pledged Equipment or any
part thereof, the Trust Estate, the Indenture Estate or any of the Operative
Agreements or rights created thereunder, other than as a result of (A) the
substitution, modification or improvement of the Equipment or any part thereof
or the Pledged Equipment or any part thereof, (B) a modification to the
Operative Agreements, or (C) a disposition which occurs as the result of the
exercise of remedies upon a Lease Event of Default; provided, that,
notwithstanding the foregoing, the Lessee shall not be obligated to indemnify
any Lender Tax Indemnitee with respect to net income taxes imposed within the
United States as the result of a sale, assignment, transfer or other
disposition by such Lender Tax Indemnitee or any Taxes imposed as a result of
the status of the Lender Tax Indemnitee as other than a resident of the United
States for tax purposes;

               (viii) as to any Lender Tax Indemnitee, Taxes imposed as the
result of such Lender Tax Indemnitee not being a resident of the United States
for tax purposes;

               (ix) as to any Lender Tax Indemnitee, Income Taxes or transfer
taxes relating to any payments of principal, interest or Make Whole Amount, if
any, on the Equipment Notes or the Pass Through Certificates paid to any such
Tax Indemnitee that are imposed by (A) any other jurisdiction in which such
Indemnitee is subject to such Taxes as a result of it or an Affiliate being
organized in such jurisdiction or conducting activities in that jurisdiction
unrelated to the transactions contemplated by the Operative Agreements, (B) the
United States federal government or (C) any state or local government within the
United States;

               (x)  Taxes to the extent directly resulting from or that would
not have been imposed but for (x) in the case of Taxes imposed on or with
respect to any Equity Tax Indemnitee, the existence of any Lessor Liens with
respect to such Equity Tax Indemnitee, (y) in the case of Taxes imposed on or
with respect to any Lender Tax Indemnitee, the existence of any Liens
attributable to the Indenture Trustee or Liens attributable to the Pass Through
Trustee;

               (xi) Taxes imposed on a Tax Indemnitee to the extent that such
Taxes would not have been imposed upon such Tax Indemnitee but for any failure
of such Tax Indemnitee or a Related Party to comply with (x) any certification,
information, documentation, reporting or other similar requirements


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<PAGE>


concerning the nationality, residence, identity or connection with the
jurisdiction imposing such Taxes, if such compliance is required under the laws
or regulations of such jurisdiction to obtain or establish relief or exemption
from or reduction in such Taxes and the Tax Indemnitee or such Related Party was
eligible to comply with such requirement or (y) any other certification,
information, documentation, reporting or other similar requirements under the
Tax laws or regulations of the jurisdiction imposing such Taxes that would
establish entitlement to otherwise applicable relief or exemption from such
Taxes; provided, however, that the exclusion set forth in this clause (xii)
shall not apply (I) if such failure to comply was due to a failure of the Lessee
to provide reasonable assistance on request in complying with such requirement,
(II) if, in the case of Taxes imposed on the Owner Participant, in the good
faith judgment of the Owner Participant there is a risk of adverse consequence
to the Owner Participant or any Affiliate from such compliance against which
the Owner Participant is not satisfactorily indemnified, (III) in the case of
Taxes imposed on the Owner Participant, if any such failure to comply on the
part of the Owner Trustee was the result of the Owner Trustee's gross negligence
or failure to act in accordance with instructions of the Owner Participant, or
(IV) in the case of any Tax Indemnitee, unless Lessee shall have given such Tax
Indemnitee prior written notice of such requirements;

               (xii) Taxes that are imposed with respect to any period after the
earlier of (x) return of the Equipment to the Lessor in accordance with, and at
a time and place contemplated by the Lease (including the payment of all amounts
due at such time) and (y) the termination of the Term pursuant to Section 6, 10,
11, 15 or 22 of the Lease and the discharge in full of Lessee's payment
obligation's thereunder unless the Equipment is thereafter required to be
returned, in which case, after such return; provided, however, that the
exclusion set forth in this clause (xii) shall not apply to Taxes to the extent
such Taxes relate to events occurring or matters arising prior to or
simultaneously with such return or termination;

               (xiii) as to any Lender Tax Indemnitee, Taxes in the nature of an
intangible or similar tax upon or with respect to the value of the interest of
such Lender Tax Indemnitee in the Indenture Estate, in any Equipment Note or
Pass Through Certificate imposed as a result of such Lender Tax Indemnitee or
any Affiliate of such Lender Tax Indemnitee being organized in, or conducting
activities unrelated to the contemplated transactions in, the jurisdiction
imposing such Taxes;

               (xiv) Taxes imposed on the Owner Trustee or the Indenture Trustee
that are on, based on or measured by any trustee fees for services rendered by
such Tax Indemnitee in its capacity as trustee under the Operative Agreements;


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               (xv) Taxes imposed on any Tax Indemnitee, or any other person
who, together with such Tax Indemnitee, is treated as one employer for employee
benefit plan purposes, as a result of, or in connection with, any "prohibited
transaction," within the meaning of the provisions of the Code or regulations
thereunder or as set forth in Section 406 of ERISA or the regulations
implementing ERISA or Section 4975 of the Code or the regulations thereunder;

               (xvi) Taxes for so long as (x) such Taxes are being contested in
accordance with the provisions of Section 7.1(e) hereof, (y) the Lessee is in
compliance with its obligations under Section 7.1(e), and (z) the payment of
such Taxes is not required pursuant to Section 7.1(e);

               (xvii) Taxes as to which such Tax Indemnitee is indemnified
pursuant to the Tax Indemnity Agreement;

               (xviii) any Taxes imposed on or with respect to any
Certificateholder; and

               (xix) Taxes imposed as a result of the authorization or giving of
any future amendments, supplements, waivers or consents with respect to any
Operative Agreement other than (w) those which are legally required, (x) in
connection with the exercise of remedies pursuant to Section 15 of the Lease,
(y) such as have been proposed by the Lessee or consented to by the Lessee or
(z) those that are required pursuant to the terms of the Operative Agreements.

          (d)  Payments to Tax Indemnitee. The Lessee agrees to pay, on demand,
any and all Taxes indemnified under this Section 7.1 ("Indemnified Taxes"), and
to keep at all times all and every part of each item of the Equipment and
Pledged Equipment free and clear of all Indemnified Taxes which might in any way
affect the interest of any Tax Indemnitee therein or result in a Lien upon any
such item of the Equipment or Pledged Equipment; provided, however, that the
Lessee shall be under no obligation to pay any Tax so long as either the Tax
Indemnitee or the Lessee is contesting in good faith and by appropriate legal
proceedings such tax and the nonpayment thereof does not, in the reasonable
opinion of the Tax Indemnitee, materially adversely affect the interest of any
Tax Indemnitee hereunder or under the Indenture.

          Subject to Section 7.1(e), if any Indemnified Taxes shall have been
charged or levied against any Tax Indemnitee directly and paid by such Tax
Indemnitee after such Tax Indemnitee shall have given written notice thereof to
the Lessee and the same shall have remained unpaid for a period of ten Business
Days thereafter, the Lessee shall reimburse such Tax Indemnitee payment.


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          (e)  Contests. If a written claim is made by any taxing authority
against a Tax Indemnitee for any Taxes with respect to which the Lessee may be
required to indemnify against hereunder (a "Tax Claim"), such Tax Indemnitee
shall give the Lessee written notice of such Tax Claim promptly (but in any
event within twenty (20) days) after its receipt, and shall furnish Lessee with
copies of such Tax Claim and all other writings received from the taxing
authority to the extent relating to such claim (but failure to so notify the
Lessee shall relieve the Lessee of its obligations hereunder only to the extent
it effectively precludes a contest of the claim). The Tax Indemnitee shall not
pay such Tax Claim until at least thirty (30) days after providing the Lessee
with such written notice, unless (a) the Tax Indemnitee is required to do so by
law or regulation and (b) in the written notice described above, the Tax
Indemnitee has notified the Lessee of such requirement. If the Lessee shall so
request within 30 days after receipt of such notice, then such Tax Indemnitee
shall in good faith at Lessee's expense contest such Tax; provided, however,
that to the extent the contest involves only Taxes constituting property taxes,
sales taxes, or use taxes and does not involve any taxes or other issues
relating to a Tax Indemnitee which are unrelated to the transactions
contemplated by the Operative Agreements and if no Equity Insufficiency
Circumstance exists, such contest shall be undertaken by the Lessee at the
Lessee's expense and at no-after-tax cost to the Lessor or the Owner
Participant, but if such contest would involve any other type of Tax or any
taxes or issues relating to a Tax Indemnitee which are unrelated to the
transactions contemplated by Operative Agreements or if an Equity Insufficiency
exists, then such Tax Indemnitee may, in its sole discretion, control such
contest (including selecting the forum for such contest, and determining whether
any such contest shall be conducted by (i) paying such Tax under protest or (ii)
resisting payment of such Tax or (iii) paying such Tax and seeking a refund
thereof; provided, further, however, that at such Tax Indemnitee's option, such
contest shall be conducted by the Lessee in the name of such Tax Indemnitee). In
no event shall such Tax Indemnitee be required or the Lessee be permitted to
contest any Tax for which the Lessee is obligated to indemnify pursuant to this
Section unless: (i) the Lessee shall have acknowledged in writing its liability
to such Tax Indemnitee for an indemnity payment pursuant to this Section as a
result of such claim if and to the extent such Tax Indemnitee or the Lessee, as
the case may be, shall not prevail in the contest of such claim; provided,
however, that the Lessee shall not be required to indemnify for such Taxes to
the extent the results of the contest clearly and unambiguously demonstrate that
the Tax is not an indemnified Tax; (ii) such Tax Indemnitee shall have received
the opinion of independent tax counsel selected by the Tax Indemnitee and
reasonably satisfactory to the Lessee furnished at the Lessee's sole expense, to
the effect that a reasonable basis exists for contesting such claim or, in the
event of an appeal of a court decision, that it is more likely than not that an
appellate court or an administrative agency with appellate jurisdiction, as the
case may be, will reverse or substantially modify the adverse determination;
(iii) the Lessee shall have agreed to pay such Tax Indemnitee on demand (and at
no after-tax


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costs to the Lessor and the Owner Participant) all reasonable costs and expenses
that such Tax Indemnitee may incur in connection with contesting such claim
(including, without limitation, all costs, expenses, reasonable legal and
accounting fees, disbursements, penalties, interest and additions to the Tax);
(iv) no Lease Default described in Section 14(a), 14(b), 14(g) or 14(h) of the
Lease or a Lease Event of Default shall have occurred and shall have been
continuing, unless the Lessee shall have posted a satisfactory bond or other
security with respect to the costs of such contest and the Taxes which may be
required to be indemnified; (v) such Tax Indemnitee shall have determined that
the action to be taken will not result in any substantial danger of sale,
forfeiture or loss of, or the creation of any Lien, or the Lessee shall have or
otherwise made a provision to protect the interest of such Tax Indemnitee (in a
manner satisfactory to such Tax Indemnitee), on the Equipment or any portion
thereof or any interest therein; (vi) the amount of such claims alone, or, if
the subject matter thereof shall be of a continuing or recurring nature, when
aggregated with substantially identical potential claims shall be (A) at least
$5,000 in the event of a Lessee controlled contest, or (B) $25,000 in the event
of a Tax Indemnitee controlled contest; and (vii) if such contest shall be
conducted in a manner requiring the payment of the claim, the Lessee shall have
paid the amount required (and at no after-tax costs to the Lessor and the Owner
Participant). The Lessee shall cooperate with the Tax Indemnitee with respect to
any contest controlled and conducted by the Tax Indemnitee and the Tax
Indemnitee shall consult with the Lessee regarding the conduct of such contest.
The Tax Indemnitee shall cooperate with respect to any contest controlled and
conducted by the Lessee and the Lessee shall consult with the Tax Indemnitee
regarding the conduct of such contest.

          Notwithstanding anything to the contrary contained in this Section
7.1, no Tax Indemnitee shall be required to contest any claim if the subject
matter thereof shall be of a continuing or recurring nature and shall have
previously been adversely decided to the Tax Indemnitee pursuant to the contest
provisions of this Section unless there shall have been a change in the law
(including, without limitation, amendments to statutes or regulations,
administrative rulings or court decisions) enacted, promulgated or effective
after such claim shall have been so previously decided, and such Tax Indemnitee
shall have received an opinion of independent tax counsel selected by the Tax
Indemnitee and reasonably satisfactory to the Lessee, furnished at the Lessee's
sole expense, to the effect that such change is favorable to the position which
such Tax Indemnitee or the Lessee, as the case may be, had asserted in such
previous contest and as a result of such change, there is a reasonable basis to
contest such claim.

          Notwithstanding anything contained in this Section 7.1, a Tax
Indemnitee will not be required to contest the imposition of any Tax and shall
be permitted to settle or compromise any claim without the Lessee's consent if
such Tax Indemnitee (A) shall waive its right to indemnity under this Section
7.1 with respect


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to such Tax (and any directly related claim and any claim the outcome of
which is determined based upon the outcome of such claim) and (B) shall pay to
the Lessee any amount previously paid or advanced by the Lessee pursuant to this
Section 7.1 with respect to such Tax, plus interest at the rate that would have
been payable by the relevant taxing authority with respect to a refund of such
Tax.

          (f)  Payments to Lessee. With respect to any payment or indemnity
hereunder, such payment or indemnity shall have included an amount payable to
the Tax Indemnitee sufficient to hold such Tax Indemnitee harmless on an After-
Tax Basis from all Taxes required to be paid by such Tax Indemnitee with respect
to such payment or indemnity under the laws of any federal, state or local
government or taxing authority in or of the United States, or under the laws of
any taxing authority or governmental subdivision in or of a foreign country;
provided that, if any Tax Indemnitee realizes and recognizes a permanent tax
benefit by reason of such payment or indemnity (whether such tax benefit shall
be by means of a foreign tax credit, investment tax credit, depreciation or
recovery deduction or otherwise), such Tax Indemnitee shall pay to the Lessee an
amount equal to the sum of such tax benefit plus any tax benefit realized as the
result of any payment made pursuant to this proviso, when, as, if and to the
extent realized; provided further that, (i) if at the time such payment shall be
due to the Lessee, a Lease Event of Default shall have occurred and be
continuing, such amount shall not be payable until such Lease Event of Default
shall have been cured, and (ii) the amount which such Tax Indemnitee shall be
required to pay to the Lessee shall not exceed the amounts which the Lessee has
theretofore paid such Tax Indemnitee hereunder with respect to such indemnity or
a substantially identical indemnity.

          For purposes of this Section 7.1, in determining the order in which
the consolidated (for federal income tax purposes) group to which such Tax
Indemnitee belongs utilizes withholding or other foreign taxes as a credit
against such group's United States income taxes, such Tax Indemnitee (and such
group) shall be deemed to utilize (i) first, all foreign taxes other than those
described in clauses (ii) and (iii) below; provided, however, that such other
foreign taxes which are carried back to the taxable year for which a
determination is being made pursuant to such clause (i) shall be deemed utilized
after the foreign taxes described in clause (ii) below, (ii) then, on a pari
passu basis, the foreign taxes indemnified hereunder together with all other
foreign taxes (including fees, taxes and other charges hereunder) with respect
to which such Tax Indemnitee (or any member of such group) is entitled to obtain
indemnification pursuant to an indemnification provision contained in any lease,
loan agreement, financing document or participation agreement (including,
without limitation, this Agreement) pursuant to which there is an agreement that
foreign taxes shall be, or shall be deemed to be, utilized on a basis no less
favorable to the indemnitor than those contemplated in this paragraph, and (iii)
third, foreign taxes attributable to transactions entered into by such Tax


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Indemnitee (or any member of such group) which did not provide for foreign taxes
to be utilized or deemed utilized on at least a pari passu basis.

          (g)  Reports. In the event any reports with respect to Indemnified
Taxes are required to be made, the Lessee will either prepare and file such
reports (and in the case of reports which are required to be filed on the basis
of individual items of Equipment, such reports shall be prepared and filed in
such manner as to show, if required, the interest of each Tax Indemnitee in such
items of Equipment) or, if it shall not be permitted to file the same, it will
notify each Tax Indemnitee of such reporting requirements, prepare such reports
in such manner as shall be satisfactory to each Tax Indemnitee and deliver the
same to each Tax Indemnitee within a reasonable period prior to the date the
same is to be filed. The Lessee shall provide such information as the Owner
Participant or the Lessor may reasonably require from the Lessee to enable the
Owner Participant and the Lessor to fulfill their respective tax filing, tax
audit, and tax litigation obligations.

          (h)  Survival. In the event that, during the continuance of this
Agreement, any Indemnified Tax accrues or becomes payable or is levied or
assessed (or is attributable to the period of time during which the Lease is in
existence or prior to the return of Equipment in accordance with the provisions
of the Lease) which the Lessee is or will be obligated to pay or reimburse,
pursuant to this Section 7.1, such liability shall continue, notwithstanding the
expiration of the Lease, until all such Taxes are paid or reimbursed by the
Lessee.

          (i)  Affiliated Group. For purposes of applying this Section 7.1 with
respect to any Tax, the term "Owner Participant" shall include each member of
the affiliated group of corporations with which Grant Holdings, Inc. (and its
successors and assigns) files consolidated or combined tax returns relating to
such Imposition.

          (j)  Income Tax. For purposes of this Section 7.1, the term "Income
Tax" means any Tax based on or measured by or with respect to gross or net
income (including without limitation, capital gains taxes, personal holding
company taxes, minimum taxes and tax preferences) or gross or net receipts and
Taxes which are capital, net worth, conduct of business, franchise or excess
profits taxes and interest, additions to tax, penalties, or other charges in
respect thereof (provided, however, that Taxes that are, or are in the nature
of, sales, use, rental, value-added, excise, ad valorem, or property (whether
tangible or intangible) taxes shall not constitute an Income Tax).

          (k)  Certain Withholding. If the Indenture Trustee fails to with hold
any Tax required to be withheld with respect to any payment to a Lender Tax
Indemnitee or any claim is otherwise asserted by a taxing authority against any


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Equity Tax Indemnitee for or on account of any amount required to be withheld
from any payment to a Lender Tax Indemnitee or Certificateholder, the Lessee
will indemnify each Equity Tax Indemnitee (without regard to any exclusions in
Section 7.1(c) hereof) on an After-Tax Basis against any Taxes required to be
withheld and any interest, penalties, and additions to tax with respect thereto,
along with other costs (including attorneys' fees) incurred in connection with
such claim.

     Section 7.2 General Indemnification.

          (a)  Claims Defined. For the purposes of Sections 7.2, 7.3 and 7.4,
"Claims" shall mean any and all costs, expenses, liabilities, obligations,
losses, damages, penalties, actions or suits or claims of whatsoever kind or
nature (whether or not on the basis of negligence, strict or absolute liability
or liability in tort) which may be imposed on, incurred by, suffered by, or
asserted against an Indemnified Person, any Unit or any Pledged Unit and, except
as otherwise expressly provided in Section 7.2, 7.3 and 7.4, shall include, but
not be limited to, all reasonable out-of-pocket costs, disbursements and
expenses (including legal fees and expenses) paid or incurred by an Indemnified
Person in connection therewith or related thereto.

          (b)  Indemnified Person Defined. For the purposes of Sections 7.2, 7.3
and 7.4, "Indemnified Person" means the Owner Participant, the Owner Trustee,
Trust Company, the Indenture Trustee, the Pass Through Trustee, each of their
Affiliates and each of their respective directors, officers, employees,
successors and permitted assigns, agents and servants, the Trust Estate and the
Indenture Estate (the respective directors, officers, employees, successors and
permitted assigns, agents and servants of the Owner Participant, the Owner
Trustee, Trust Company, the Indenture Trustee, the Pass Through Trustee and each
of their Affiliates, as applicable, together with the Owner Participant, the
Owner Trustee, Trust Company, the Indenture Trustee, the Pass Through Trustee
and each of their Affiliates, as the case may be, being referred to herein
collectively as the "Related Indemnitee Group" of the Owner Participant, the
Indenture Trustee, the Owner Trustee, the Pass Through Trustee and the Trust
Company, respectively).

          (c)  Claims Indemnified. Whether or not any Unit is accepted under the
Lease, or the Closing occurs, and subject to the exclusions stated in Section
7.2(d) below, Lessee agrees to indemnify, protect, defend and hold harmless each
Indemnified Person on an After-Tax Basis against Claims directly or indirectly
resulting from or arising out of or alleged to result from or arise out of
(whether or not such Indemnified Person shall be indemnified as to such Claim by
any other Person but subject to Section 7.2(g)):

               (i)  this Agreement or any other Operative Agreement or any of
the transactions contemplated hereby and thereby or any Unit or Pledged


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Unit or the ownership, lease, operation, possession, modification, improvement,
abandonment, use, non-use, maintenance, lease, sublease, substitution, control,
repair, storage, alteration, transfer or other application or disposition,
return, overhaul, testing, servicing, replacement or registration of any Unit or
Pledged Unit (including, without limitation, injury, death or property damage of
passengers, shippers or others, and environmental control, noise and pollution
regulations, or the presence, discharge, treatment, storage, handling,
generation, disposal, spillage, release, escape of or exposure of any Person or
thing to (directly or indirectly) Hazardous Sub stances or damage to the
environment (including, without limitation, costs of investigations or
assessments, clean-up costs, response costs, remediation costs, removal costs,
restoration costs, monitoring costs, costs of corrective actions and natural
resource damages)) whether or not in compliance with the terms of the Lease or
the Collateral Agency Agreement, as applicable, or by any of the commodities,
items or materials from time to time contained in any Unit or Pledged Unit,
whether or not in compliance with the terms of the Lease or the Collateral
Agency Agreement, as applicable, or by the inadequacy of any Unit or Pledged
Unit or deficiency or defect in any Unit or Pledged Unit or by any other
circumstances in connection with any Unit or Pledged Unit or by the performance
of any Unit or Pledged Unit or any risks relating thereto;

               (ii) the construction, manufacture, financing, refinancing,
design, purchase, acceptance, rejection, delivery, non-delivery or condition of
any Unit or any Pledged Unit (including, without limitation, latent and other
defects, whether or not discoverable, and any claim for patent, trademark or
copyright infringement);

               (iii) any act or omission (whether negligent or other wise) or
any breach of or failure to perform or observe, or any other non-compliance
with, any covenant, condition or agreement to be performed by, or other
obligation of, the Lessee or any Affiliate of the Lessee under any of the
Operative Agreements, or the falsity of any representation or warranty of the
Lessee or any Affiliate of the Lessee in any of the Operative Agreements to
which it is a party or in any document or certificate delivered by the Lessee or
any Affiliate of the Lessee in connection therewith other than representations
and warranties in the Tax Indemnity Agreement;

               (iv) the offer, sale or delivery of any Equipment Notes or Pass
Through Certificates or any interest in the Trust Estate or in connection with a
refinancing in accordance with the terms hereof; and

               (v)  any violation of law, rule, regulation or order by the
Lessee or any Affiliate of Lessee or any Sublessee or any Pledged Equipment
Lessee or their respective directors, officers, employees, agents or servants.


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          (d)  Claims Excluded. The following are excluded from the Lessee's
agreement to indemnify under this Section 7.2:

               (i)  Claims with respect to any Unit to the extent attributable
to acts or events occurring after (except (A) in any case where remedies are
being exercised under Section 15 of the Lease for so long as the Lessor shall be
entitled to exercise remedies under such Section 15, or (B) the Lessee has
assumed any of the obligations with respect to the Equipment Notes under Section
3.6 of the Indenture and the Equipment Notes remain outstanding under the
Indenture) the later to occur of (x) with respect to such Unit, the earlier to
occur of the termination of the Lease or the expiration of the Lease Term in
accordance with the terms thereof, and (y) with respect to such Unit, the return
of such Unit to the Lessor in accordance with the terms of the Lease (it being
understood that, so long as any such Unit is in storage as provided in Section
6.1(c) of the Lease, the date of return thereof for the purpose of this clause
(i) shall be the last day of the Storage Period);

               (ii) Claims which are Taxes, whether or not the Lessee is
required to indemnify therefor under Section 7.1 hereof or under the Tax
Indemnity Agreement or any loss of tax benefits or increases in tax liability
whether or not the Lessee is required to indemnify a Indemnified Person
elsewhere in the Operative Agreements; provided that this clause (ii) shall not
apply to Taxes necessary to pay Claims on an After-Tax Basis;

               (iii) with respect to any particular Indemnified Person, Claims
to the extent resulting from (x) the gross negligence or willful misconduct of
such Indemnified Person or a Related Party, or (y) any breach of any covenant to
be performed by such Indemnified Person or a Related Party under any of the
Operative Agreements, or the falsity of any representation or warranty of such
Indemnified Person or a Related Party in any of the Operative Agreements or in a
document or certificate delivered in connection therewith;

               (iv) Claims to the extent attributable to any transfer by the
Lessor of the Equipment or any portion thereof or any transfer by the Owner
Participant of all or any portion of its interest in the Trust Estate or the
Equity Collateral other than (A) any transfer after a Lease Event of Default,
(B) the transfer of all or any portion of the Equipment or any Owner
Participant's interest in the Equipment to the Lessee, (C) the transfer of all
or any portion of the Equipment to a third party pursuant to Lessee's election
to terminate the Lease or (D) any transfer of all or any portion of the
Equipment pursuant to Section 6.9;

               (v) with respect to any particular Indemnified Person, unless
such transfer is required by the terms of the Operative Agreements or occurs


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during the continuance of a Lease Event of Default, Claims relating to any
offer, sale, assignment, transfer or other disposition (voluntary or
involuntary) (a) in the case of the Owner Participant, of any of its interest in
the Beneficial Interest (other than pursuant to Section 6.9) or the Equity
Collateral or (b) with respect to the Loan Participant, of all or any portion of
the Loan Participant's interest in the Equipment Notes or the collateral
therefor;

               (vi) with respect to any particular Indemnified Person, Claims
resulting from the imposition of (x) any Lessor's Lien attributable to such
Indemnified Person or a Related Party or (y) any Lien attributable to such
Indemnified Person or a Related Party not expressly permitted under the
Operative Agreements or which such Indemnified Person is required to remove
pursuant to the terms of the Operative Agreements;

               (vii) with respect to any particular Indemnified Person, Claims
to the extent the risk thereof has been expressly assumed by such Indemnified
Person in connection with the exercise by such Indemnified Person of the right
of inspection granted under Section 6.2 of the Lease, inspection or restenciling
under Section 6.1(c) of the Lease or inspection under Section 13.2 of the Lease;

               (viii) Claims relating to any amount that constitutes principal
of, or interest or premium on the Equipment Notes or the Pass Through
Certificates;

               (ix) Claims relating to the payment of any amount which
constitutes Transaction Costs which the Owner Trustee is obligated to pay
pursuant to Section 2.5(a) (other than those that the Lessee may be required to
pay under Section 2.5(c) or Section 2.5(e)) or any other amount to the extent
such Indemnified Person or a Related Party has expressly agreed to pay such
amount without a right of reimbursement, or any Claim payable by any Indemnified
Person pursuant to any provision of any Operative Agreement that expressly
states that such Claim is not subject to indemnification or reimbursement by the
Lessee, or any Claim arising out of obligations expressly assumed by the
Indemnified Person seeking indemnification or a Related Party;

               (x)  Claims relating to any amount that is an ordinary and usual
operating or overhead expense of any Indemnified Person (it being understood
out-of-pocket expenses payable to third parties do not constitute "ordinary and
usual operating or overhead expenses");

               (xi) Claims relating to an Indenture Event of Default that is not
attributable to a Lease Event of Default;


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               (xii) with respect to the Owner Trustee in its individual and
trust capacities, and its Related Indemnitee Group, Claims relating to a failure
on the part of the Owner Trustee to distribute in accordance with the Trust
Agreement any amounts distributable by it thereunder;

               (xiii) with respect to the Indenture Trustee in its individual
and trust capacities, Claims relating to failure on the part of the Indenture
Trustee to distribute in accordance with the Indenture any amounts distributable
by it thereunder;

               (xiv) with respect to the Pass Through Trustee in its individual
and trust capacities, Claims relating to failure on the part of the Pass Through
Trustee to distribute in accordance with the Pass Through Trust Agreement any
amounts distributable by it thereunder;

               (xv) Claims relating to the offer, sale or delivery of any
Equipment Note or any interest in the Trust Estate;

               (xvi) Claims relating to any sale, transfer or holding of the
Equipment Notes or Pass Through Certificates being deemed to result in a
"prohibited transaction" under ERISA; or

               (xvii) without affecting Lessee's obligations under Section
2.5(b), Claims relating to the authorization or giving or withholding of any
future amendments, supplements, waivers or consents with respect to any of the
Operative Agreements which amendments, supplements, waivers or consents are not
requested by Lessee or are not specifically required by the Operative
Agreements.

          (e)  Insured Claims. In the case of any Claim indemnified by the
Lessee hereunder which is covered by a policy of insurance maintained by the
Lessee pursuant to Section 12 of the Lease or otherwise, each Indemnified Person
agrees to provide reasonable cooperation to the insurers in the exercise of
their rights to investigate, defend, settle or compromise such Claim as may be
required to retain the benefits of such insurance with respect to such Claim.

          (f)  Claims Procedure. An Indemnified Person shall, after obtaining
knowledge thereof, promptly notify the Lessee of any Claim as to which
indemnification is sought; provided, however, that the failure to give such
notice shall not release the Lessee from any of its obligations under this
Section 7.2, except (but only if neither the Lessee nor TILC shall have actual
knowledge of such Claim) to the extent that failure to give notice of any
action, suit or proceeding against such Indemnified Person shall have a material
adverse effect on Lessee's ability to defend such Claim or recover proceeds
under any insurance policies maintained by the


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Lessee or to the extent Lessee's indemnification obligations are increased as a
result of such failure. The Lessee shall, after obtaining knowledge thereof,
promptly notify each Indemnified Person of any indemnified Claim affecting such
Indemnified Person. Subject to the provisions of the following paragraph, the
Lessee shall at its sole cost and expense be entitled to control, and shall
assume full responsibility for, the defense of such claim or liability; provided
that the Lessee shall confirm to such Indemnified Person Lessee's obligations to
indemnify hereunder for such Claim, shall keep the Indemnified Person which is
the subject of such proceeding fully apprised of the status of such proceeding
and shall provide such Indemnified Person with all information with respect to
such proceeding as such Indemnified Person shall reasonably request. To the
extent that a Claim is made against Lessee pursuant to this Section 7.2 at a
time when an identical claim for indemnification arising from substantially
similar facts and circumstances is being asserted against TILC, TRMI and/or
Trinity pursuant to this Section 7 or Section 4 of the Trinity Guaranty, if
Lessee is entitled to control the defense of such Claim pursuant to this Section
7.2 and at the same time TILC, TRMI and/or Trinity, as the case may be, is
entitled to control the defense of such claim or liability pursuant to this
Section 7 or Section 4 of the Trinity Guaranty, Lessee's indemnification
obligations under this Section 7.2 shall not be reduced as a result of the
inability of Lessee to control the defense of such Claim where such inability to
control the defense of such Claim is caused by the exercise by TILC, TRMI and/or
Trinity, as applicable, of such Person's right to control the defense of such
indemnified claim as provided by this Section 7 or Section 4 of the Trinity
Guaranty.

          Notwithstanding any of the foregoing to the contrary, the Lessee shall
not be entitled to control and assume responsibility for the defense of any
Claim if (1) a Lease Event of Default shall have occurred and be continuing, (2)
such proceeding will involve any material danger of the sale, forfeiture or loss
of, or the creation of any Lien (other than any Lien permitted under the
Operative Agreements or a Lien which is adequately bonded to the satisfaction of
such Indemnified Person) on, any Unit or Pledged Unit, (3) in the good faith
opinion of such Indemnified Person, there exists an actual or potential conflict
of interest such that it is advisable for such Indemnified Person to retain
control of such proceeding, (4) such Claim involves the possibility of criminal
sanctions or liability to such Indemnified Person or (5) an Equity Insufficiency
Circumstance shall exist. In the circumstances described in clauses (1) - (5),
the Indemnified Person shall be entitled to control and assume responsibility
for the defense of such claim or liability at the expense of the Lessee. In
addition, any Indemnified Person may participate in any proceeding controlled by
the Lessee pursuant to this Section 7.2, but only to the extent that such
Person's participation does not in the reasonable opinion of counsel to the
Lessee materially interfere with such control, at its own expense, in respect of
any such proceeding as to which the Lessee shall have acknowledged in writing
its obligation to indemnify the Indemnified Person pursuant to this Section 7.2,
and at the expense


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of the Lessee in respect of any such proceeding as to which the Lessee shall not
have so acknowledged its obligation to the Indemnified Person pursuant to this
Section 7.2. The Lessee may in any event participate in all such proceedings at
its own cost. Nothing contained in this Section 7.2(f) shall be deemed to
require an Indemnified Person to contest any Claim or to assume responsibility
for or control of any judicial proceeding with respect thereto. No Indemnified
Person shall enter into any settlement or other compromise with respect to any
Claim without the prior written consent of the Lessee unless the Indemnified
Person waives its rights to indemnification hereunder.

          (g)  Subrogation. If a Claim indemnified by the Lessee under this
Section 7.2 is paid in full by the Lessee and/or an insurer under a policy of
insurance maintained by the Lessee, the Lessee and/or such insurer, as the case
may be, shall be subrogated to the extent of such payment to the rights and
remedies of the Indemnified Person (other than under insurance policies
maintained by such Indemnified Person) on whose behalf such Claim was paid with
respect to the transaction or event giving rise to such Claim. Should an
Indemnified Person receive any refund, in whole or in part, with respect to any
Claim paid by the Lessee hereunder, it shall promptly pay over the amount
refunded (but not in excess of the amount the Lessee or any of its insurers has
paid) to the Lessee; provided, however, so long as a Lease Event of Default
shall have occurred and be continuing, such amount may be held by the Collateral
Agent as security for the Lessee's obligations under the Lease and the other
Operative Agreements; provided, further, only with respect to the Owner
Participant and its Related Indemnitee Group, so long as an event referred to in
clause (5) of Section 7.2(f) hereof shall have occurred and be continuing, such
amount may be held by the Owner Trustee as security for the Lessee's obligations
with respect to the Equity Insufficiency Circumstance.

     Section 7.3 Indemnification by TILC.

          (a)  Claims Indemnified. Whether or not any Unit is accepted under the
Lease, or the Closing occurs, and subject to the exclusions stated in Section
7.3(b) below, TILC agrees to indemnify, protect, defend and hold harmless each
Indemnified Person on an After-Tax Basis against Claims directly or indirectly
resulting from or arising out of or alleged to result from or arise out of
(whether or not such Indemnified Person shall be indemnified as to such Claim by
any other Person but subject to Section 7.3(d)):

               (i)  any breach of or any inaccuracy in any representation or
warranty made by TILC in this Agreement or any of the other Operative Agreements
or in any certificate delivered by TILC pursuant hereto or thereto;


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               (ii) any breach of or failure by TILC to perform any covenant or
obligation of TILC set out in or contemplated by this Agreement or any of the
other Operative Agreements; and

               (iii) any violation of law, rule, regulation or order by TILC or
its directors, officers, employees, agents or servants.

          (b)  Claims Excluded. The following are excluded from TILC's agreement
to indemnify under this Section 7.3:

               (i)  Claims with respect to any Unit to the extent attributable
to acts or events occurring after (except (A) in any case where remedies are
being exercised under Section 15 of the Lease for so long as the Lessor shall be
entitled to exercise remedies under such Section 15, or (B) the Lessee has
assumed any of the obligations with respect to the Equipment Notes under Section
3.6 of the Indenture and the Equipment Notes remain outstanding under the
Indenture) the later to occur of (x) with respect to such Unit, the earlier to
occur of the termination of the Lease or the expiration of the Lease Term in
accordance with the terms thereof, and (y) with respect to such Unit, the return
of such Unit to the Lessor in accordance with the terms of the Lease (it being
understood that, so long as any Unit is in storage as provided in Section 6.1(c)
of the Lease, the date of return thereof for the purpose of this clause (i)
shall be the last day of the Storage Period);

               (ii) Claims which are Taxes or any loss of tax benefits or
increases in tax liability; provided that this clause (ii) shall not apply to
Taxes necessary to pay Claims on an After-Tax Basis;

               (iii) with respect to any particular Indemnified Person, Claims
to the extent resulting from (x) the gross negligence or willful misconduct of
such Indemnified Person or a Related Party, or (y) any breach of any covenant to
be performed by such Indemnified Person or a Related Party under any of the
Operative Agreements, or the falsity of any representation or warranty of such
Indemnified Person or a Related Party in any of the Operative Agreements or in a
document or certificate delivered in connection therewith;

               (iv) Claims to the extent attributable to any transfer by the
Lessor of the Equipment or any portion thereof or any transfer by the Owner
Participant of all or any portion of its interest in the Trust Estate or Equity
Collateral other than (A) any transfer after a Lease Event of Default, (B) the
transfer of all or any portion of the Equipment or any Owner Participant's
interest in the Equipment to the Lessee, (C) the transfer of all or any portion
of the Equipment to a third party pursuant to Lessee's election to terminate the
Lease or (D) any transfer of all or any portion of the Equipment pursuant to
Section 6.9;


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               (v)  with respect to any particular Indemnified Person, unless
such transfer is required by the terms of the Operative Agreements or occurs
during the continuance of a Lease Event of Default, Claims relating to any
offer, sale, assignment, transfer or other disposition (voluntary or
involuntary) (a) in the case of the Owner Participant, of any of its interest in
the Beneficial Interest (other than pursuant to Section 6.9) or the Equity
Collateral, or (b) with respect to the Loan Participant, of all or any portion
of its interest in the Equipment Notes or the collateral therefor;

               (vi) with respect to any particular Indemnified Person, Claims
resulting from the imposition of (x) any Lessor's Lien attributable to such
Indemnified Person or a Related Party or (y) any Lien attributable to such
Indemnified Person or a Related Party not expressly permitted under the
Operative Agreements or which such Indemnified Person is required to remove
pursuant to the terms of the Operative Agreements;

               (vii) with respect to any particular Indemnified Person, Claims
to the extent the risk thereof has been expressly assumed by such Indemnified
Person in connection with the exercise by such Indemnified Person of the right
of inspection granted under Section 6.2 of the Lease, inspection or restenciling
under Section 6.1(c) of the Lease or inspection under Section 13.2 of the Lease;

               (viii) Claims relating to any amount that constitutes principal
of, or interest or premium on the Equipment Notes or the Pass Through
Certificates;

               (ix) Claims relating to the payment of any amount which
constitutes Transaction Costs which the Owner Trustee is obligated to pay
pursuant to Section 2.5(a) (other than those that the Lessee may be required to
pay under Section 2.5(c) or Section 2.5(e)) or any other amount to the extent
such Indemnified Person or a Related Party has expressly agreed to pay such
amount without a right of reimbursement, or any Claim payable by any Indemnified
Person pursuant to any provision of any Operative Agreement that expressly
states that such Claim is not subject to indemnification or reimbursement by the
Lessee, or any Claim arising out of obligations expressly assumed by the
Indemnified Person seeking indemnification or a Related Party;

               (x)  Claims relating to any amount that is an ordinary and usual
operating or overhead expense of any Indemnified Person (it being understood
out-of-pocket expenses payable to third parties do not constitute "ordinary and
usual operating or overhead expenses");


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               (xi) Claims relating to an Indenture Event of Default that is not
attributable to a Manager Default;

               (xii) with respect to the Owner Trustee in its individual and
trust capacities, and its Related Indemnitee Group, Claims relating to a failure
on the part of the Owner Trustee to distribute in accordance with the Trust
Agreement any amounts distributable by it thereunder;

               (xiii) with respect to the Indenture Trustee in its individual
and trust capacities, Claims relating to failure on the part of the Indenture
Trustee to distribute in accordance with the Indenture any amounts distributable
by it thereunder;

               (xiv) with respect to the Pass Through Trustee in its individual
and trust capacities, Claims relating to failure on the part of the Pass Through
Trustee to distribute in accordance with the Pass Through Trust Agreement any
amounts distributable by it thereunder;

               (xv) Claims relating to the offer, sale or delivery of any
Equipment Note or any interest in the Trust Estate;

               (xvi) Claims relating to any sale, transfer or holding of the
Equipment Notes or Pass Through Certificates being deemed to result in a
"prohibited transaction" under ERISA; or

               (xvii) Claims relating to the authorization or giving or
withholding of any future amendments, supplements, waivers or consents with
respect to any of the Operative Agreements which amendments, supplements,
waivers or consents are not requested by TILC or are not specifically required
by the Operative Agreements.

          (c)  Claims Procedure. An Indemnified Person shall, after obtaining
knowledge thereof, promptly notify TILC of any Claim as to which indemnification
is sought; provided, however, that the failure to give such notice shall not
release TILC from any of its obligations under this Section 7.3, except (but
only if TILC shall not have actual knowledge of such Claim) to the extent that
failure to give notice of any action, suit or proceeding against such
Indemnified Person shall have a material adverse effect on TILC's ability to
defend such Claim or recover proceeds under any insurance policies maintained by
TILC or to the extent TILC's indemnification obligations are increased as a
result of such failure. TILC shall, after obtaining knowledge thereof, promptly
notify each Indemnified Person of any indemnified Claim affecting such
Indemnified Person. Subject to the provisions of the following paragraph, TILC
shall at its sole cost and expense be entitled to


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<PAGE>


control, and shall assume full responsibility for, the defense of such claim or
liability; provided that TILC shall confirm to such Indemnified Person TILC's
obligations to indemnify hereunder for such Claim, shall keep the Indemnified
Person which is the subject of such proceeding fully apprised of the status of
such proceeding and shall provide such Indemnified Person with all information
with respect to such proceeding as such Indemnified Person shall reasonably
request. To the extent that a Claim is made against TILC pursuant to this
Section 7.3 at a time when an identical claim for indemnification arising from
substantially similar facts and circumstances is being asserted against Lessee,
TRMI and/or Trinity pursuant to this Section 7 or Section 4 of the Trinity
Guaranty, if TILC is entitled to control the defense of such Claim pursuant to
this Section 7.3 and at the same time Lessee, TRMI and/or Trinity, as the case
may be, is entitled to control the defense of such claim or liability pursuant
to this Section 7 or Section 4 of the Trinity Guaranty, TILC's indemnification
obligations under this Section 7.3 shall not be reduced as a result of the
inability of TILC to control the defense of such Claim where such inability to
control the defense of such Claim is caused by the exercise by Lessee, TRMI
and/or Trinity, as applicable, of such Person's right to control the defense of
such indemnified claim as provided by this Section 7 or Section 4 of the Trinity
Guaranty.

          Notwithstanding any of the foregoing to the contrary, TILC shall not
be entitled to control and assume responsibility for the defense of any Claim if
(1) a Lease Event of Default shall have occurred and be continuing, (2) such
proceeding will involve any material danger of the sale, forfeiture or loss of,
or the creation of any Lien (other than any Lien permitted under the Operative
Agreements or a Lien which is adequately bonded to the satisfaction of such
Indemnified Person) on, any Unit or Pledged Unit, (3) in the good faith opinion
of such Indemnified Person, there exists an actual or potential conflict of
interest such that it is advisable for such Indemnified Person to retain control
of such proceeding, (4) such Claim involves the possibility of criminal
sanctions or liability to such Indemnified Person or (5) an Equity Insufficiency
Circumstance shall exist. In the circumstances described in clauses (1) - (5),
the Indemnified Person shall be entitled to control and assume responsibility
for the defense of such claim or liability at the expense of TILC. In addition,
any Indemnified Person may participate in any proceeding controlled by TILC
pursuant to this Section 7.3, but only to the extent that such Person's
participation does not in the reasonable opinion of counsel to TILC materially
interfere with such control, at its own expense, in respect of any such
proceeding as to which TILC shall have acknowledged in writing its obligation to
indemnify the Indemnified Person pursuant to this Section 7.3, and at the
expense of TILC in respect of any such proceeding as to which TILC shall not
have so acknowledged its obligation to the Indemnified Person pursuant to this
Section 7.3. TILC may in any event participate in all such proceedings at its
own cost. Nothing contained in this Section 7.3(c) shall be deemed to require an
Indemnified Person to contest any Claim or to assume responsibility for or
control of any judicial proceeding with respect


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<PAGE>


thereto. No Indemnified Person shall enter into any settlement or other
compromise with respect to any Claim without the prior written consent of TILC
unless the Indemnified Person waives its rights to indemnification hereunder.

          (d)  Subrogation. If a Claim indemnified by TILC under this Section
7.3 is paid in full by TILC and/or an insurer under a policy of insurance
maintained by TILC, TILC and/or such insurer, as the case may be, shall be
subrogated to the extent of such payment to the rights and remedies of the
Indemnified Person (other than under insurance policies maintained by such
Indemnified Person) on whose behalf such Claim was paid with respect to the
transaction or event giving rise to such Claim. Should an Indemnified Person
receive any refund, in whole or in part, with respect to any Claim paid by TILC
hereunder, it shall promptly pay over the amount refunded (but not in excess of
the amount TILC or any of its insurers has paid) to TILC; provided, however, so
long as a Lease Event of Default shall have occurred and be continuing, such
amount may be held by the Collateral Agent as security for TILC's obligations
under the Management Agreement and the other Operative Agreements; provided,
further, only with respect to the Owner Participant and its Related Indemnitee
Group, so long as an event referred to in clause (5) of Section 7.3(c) hereof
shall have occurred and be continuing, such amount may be held by the Owner
Trustee as security for the Lessee's obligations with respect to the Equity
Insufficiency Circumstance.

     Section 7.4 Indemnification by TRMI.

          (a)  Claims Indemnified. Whether or not any Unit is accepted under the
Lease, or the Closing occurs, and subject to the exclusions stated in Section
7.4(b) below, TRMI agrees to indemnify, protect, defend and hold harmless each
Indemnified Person on an After-Tax Basis against Claims directly or indirectly
resulting from or arising out of or alleged to result from or arise out of
(whether or not such Indemnified Person shall be indemnified as to such Claim by
any other Person but subject to Section 7.4(d)):

               (i) any breach of or any inaccuracy in any representation or
warranty made by TRMI in this Agreement or any of the other Operative Agreements
or in any certificate delivered by TRMI pursuant hereto or thereto;

               (ii) any breach of or failure by TRMI to perform any covenant or
obligation of TRMI set out in or contemplated by this Agreement or any of the
other Operative Agreements; and

               (iii) any violation of law, rule, regulation or order by TRMI or
its directors, officers, employees, agents or servants.


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<PAGE>


          (b)  Claims Excluded. The following are excluded from TRMI's agreement
to indemnify under this Section 7.4:

               (i)  Claims with respect to any Unit to the extent attributable
to acts or events occurring after (except (A) in any case where remedies are
being exercised under Section 15 of the Lease for so long as the Lessor shall be
entitled to exercise remedies under such Section 15, or (B) the Lessee has
assumed any of the obligations with respect to the Equipment Notes under Section
3.6 of the Indenture and the Equipment Notes remain outstanding under the
Indenture) the later to occur of (x) with respect to such Unit, the earlier to
occur of the termination of the Lease or the expiration of the Lease Term in
accordance with the terms thereof, and (y) with respect to each Unit, the return
of such Unit to the Lessor in accordance with the terms of the Lease (it being
understood that, so long as any Unit is in storage as provided in Section 6.1(c)
of the Lease, the date of return thereof for the purpose of this clause (i)
shall be the last day of the Storage Period);

               (ii) Claims which are Taxes or any loss of tax benefits or
increases in tax liability; provided that this clause (ii) shall not apply to
Taxes necessary to pay Claims on an After-Tax Basis;

               (iii) with respect to any particular Indemnified Person, Claims
to the extent resulting from (x) the gross negligence or willful misconduct of
such Indemnified Person or a Related Party, or (y) any breach of any covenant to
be performed by such Indemnified Person or a Related Party under any of the
Operative Agreements, or the falsity of any representation or warranty of such
Indemnified Person or a Related Party in any of the Operative Agreements or in a
document or certificate delivered in connection therewith;

               (iv) Claims to the extent attributable to any transfer by the
Lessor of the Equipment or any portion thereof or any transfer by the Owner
Participant of all or any portion of its interest in the Trust Estate or Equity
Collateral other than (A) any transfer after a Lease Event of Default, (B) the
transfer of all or any portion of the Equipment or any Owner Participant's
interest in the Equipment to the Lessee, (C) the transfer of all or any portion
of the Equipment to a third party pursuant to Lessee's election to terminate the
Lease or (D) any transfer of all or any portion of the Equipment pursuant to
Section 6.9;

               (v)  with respect to any particular Indemnified Person, unless
such transfer is required by the terms of the Operative Agreements or occurs
during the continuance of a Lease Event of Default, Claim relating to any offer,
sale, assignment, transfer or other disposition (voluntary or involuntary) (a)
in the case of the Owner Participant, of any of its interest in the Beneficial
Interest (other than


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<PAGE>


pursuant to Section 6.9) or Equity Collateral, or (b) with respect to the Loan
Participant, of all or any portion of its interest in the Equipment Notes or
the collateral therefor;

               (vi) with respect to any particular Indemnified Person, Claims
resulting from the imposition of (x) any Lessor's Lien attributable to such
Indemnified Person or a Related Party or (y) any Lien attributable to such
Indemnified Person or a Related Party not expressly permitted under the
Operative Agreements or which such Indemnified Person is required to remove
pursuant to the terms of the Operative Agreements;

               (vii) with respect to any particular Indemnified Person, Claims
to the extent the risk thereof has been expressly assumed by such Indemnified
Person in connection with the exercise by such Indemnified Person of the right
of inspection granted under Section 6.2 of the Lease, inspection or restenciling
under Section 6.1(c) of the Lease or inspection under Section 13.2 of the Lease;

               (viii) Claims relating to any amount that constitutes principal
of, or interest or premium on the Equipment Notes or the Pass Through
Certificates;

               (ix) Claims relating to the payment of any amount which
constitutes Transaction Costs which the Owner Trustee is obligated to pay
pursuant to Section 2.5(a) (other than those that the Lessee may be required to
pay under Section 2.5(c) or Section 2.5(e)) or any other amount to the extent
such Indemnified Person or a Related Party has expressly agreed to pay such
amount without a right of reimbursement, or any Claim payable by any Indemnified
Person pursuant to any provision of any Operative Agreement that expressly
states that such Claim is not subject to indemnification or reimbursement by the
Lessee, or any Claim arising out of obligations expressly assumed by the
Indemnified Person seeking indemnification or a Related Party;

               (x)  Claims relating to any amount that is an ordinary and usual
operating or overhead expense of any Indemnified Person (it being understood
out-of-pocket expenses payable to third parties do not constitute "ordinary and
usual operating or overhead expenses");

               (xi) Claims relating to an Indenture Event of Default that is not
attributable to a Manager Default;

               (xii) with respect to the Owner Trustee in its individual and
trust capacities, and its Related Indemnitee Group, any Claims relating to a
failure on the part of the Owner Trustee to distribute in accordance with the
Trust


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<PAGE>


Agreement any amounts distributable by it thereunder;

               (xiii) with respect to the Indenture Trustee in its individual
and trust capacities, any Claims relating to failure on the part of the
Indenture Trustee to distribute in accordance with the Indenture any amounts
distributable by it thereunder;

               (xiv) with respect to the Pass Through Trustee in its individual
and trust capacities, any Claims relating to failure on the part of the Pass
Through Trustee to distribute in accordance with the Pass Through Trust
Agreement or Pass Through Trust Supplement any amounts distributable by it
thereunder;

               (xv) Claims relating to the offer, sale or delivery of any
Equipment Note or any interest in the Trust Estate;

               (xvi) Claims relating to any sale, transfer or holding of the
Equipment Notes or Pass Through Certificates being deemed to result in a
"prohibited transaction" under ERISA; or

               (xvii) any Claims relating to the authorization or giving or
withholding of any future amendments, supplements, waivers or consents with
respect to any of the Operative Agreements which amendments, supplements,
waivers or consents are not requested by TRMI or are not specifically required
by the Operative Agreements.

          (c)  Claims Procedure. An Indemnified Person shall, after obtaining
knowledge thereof, promptly notify TRMI of any Claim as to which indemnification
is sought; provided, however, that the failure to give such notice shall not
release TRMI from any of its obligations under this Section 7.4, except (but
only if TRMI shall not have actual knowledge of such Claim) to the extent that
failure to give notice of any action, suit or proceeding against such
Indemnified Person shall have a material adverse effect on TRMI's ability to
defend such Claim or recover proceeds under any insurance policies maintained by
TRMI or to the extent TRMI's indemnification obligations are increased as a
result of such failure. TRMI shall, after obtaining knowledge thereof, promptly
notify each Indemnified Person of any indemnified Claim affecting such
Indemnified Person. Subject to the provisions of the following paragraph, TRMI
shall at its sole cost and expense be entitled to control, and shall assume full
responsibility for, the defense of such claim or liability; provided that TRMI
shall confirm to such Indemnified Person TRMI's obligations to indemnify
hereunder for such Claim, shall keep the Indemnified Person which is the subject
of such proceeding fully apprised of the status of such proceeding and shall
provide such Indemnified Person with all information with respect to such
proceeding as such Indemnified Person shall reasonably request. To the extent
that a


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<PAGE>


Claim is made against TRMI pursuant to this Section 7.4 at a time when an
identical claim for indemnification arising from substantially similar facts and
circumstances is being asserted against Lessee, TILC and/or Trinity pursuant to
this Section 7 or Section 4 of the Trinity Guaranty, if TRMI is entitled to
control the defense of such Claim pursuant to this Section 7.4 and at the same
time Lessee, TILC and/or Trinity, as the case may be, is entitled to control the
defense of such claim or liability pursuant to this Section 7 or Section 4 of
the Trinity Guaranty, TRMI's indemnification obligations under this Section 7.4
shall not be reduced as a result of the inability of TRMI to control the defense
of such Claim where such inability to control the defense of such Claim is
caused by the exercise by Lessee, TILC and/or Trinity, as applicable, of such
Person's right to control the defense of such indemnified claim as provided by
this Section 7 or Section 4 of the Trinity Guaranty.

          Notwithstanding any of the foregoing to the contrary, TRMI shall not
be entitled to control and assume responsibility for the defense of any Claim if
(1) a Lease Event of Default shall have occurred and be continuing, (2) such
proceeding will involve any material danger of the sale, forfeiture or loss of,
or the creation of any Lien (other than any Lien permitted under the Operative
Agreements or a Lien which is adequately bonded to the satisfaction of such
Indemnified Person) on, any Unit or Pledged Unit, (3) in the good faith opinion
of such Indemnified Person, there exists an actual or potential conflict of
interest such that it is advisable for such Indemnified Person to retain control
of such proceeding, (4) such Claim involves the possibility of criminal
sanctions or liability to such Indemnified Person or (5) an Equity Insufficiency
Circumstance shall exist. In the circumstances described in clauses (1) - (5),
the Indemnified Person shall be entitled to control and assume responsibility
for the defense of such claim or liability at the expense of TRMI. In addition,
any Indemnified Person may participate in any proceeding controlled by TRMI
pursuant to this Section 7.4, but only to the extent that such Person's
participation does not in the reasonable opinion of counsel to TRMI materially
interfere with such control, at its own expense, in respect of any such
proceeding as to which TRMI shall have acknowledged in writing its obligation to
indemnify the Indemnified Person pursuant to this Section 7.4, and at the
expense of TRMI in respect of any such proceeding as to which TRMI shall not
have so acknowledged its obligation to the Indemnified Person pursuant to this
Section 7.4. TRMI may in any event participate in all such proceedings at its
own cost. Nothing contained in this Section 7.4(c) shall be deemed to require an
Indemnified Person to contest any Claim or to assume responsibility for or
control of any judicial proceeding with respect thereto. No Indemnified Person
shall enter into any settlement or other compromise with respect to any Claim
without the prior written consent of TRMI unless the Indemnified Person waives
its rights to indemnification hereunder.

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<PAGE>

          (d)  Subrogation. If a Claim indemnified by TRMI under this
Section 7.4 is paid in full by TRMI and/or an insurer under a policy of
insurance maintained by TRMI, TRMI and/or such insurer, as the case may be,
shall be subrogated to the extent of such payment to the rights and remedies of
the Indemnified Person (other than under insurance policies maintained by such
Indemnified Person) on whose behalf such Claim was paid with respect to the
transaction or event giving rise to such Claim. Should an Indemnified Person
receive any refund, in whole or in part, with respect to any Claim paid by TRMI
hereunder, it shall promptly pay over the amount refunded (but not in excess of
the amount TRMI or any of its insurers has paid) to TRMI; provided, however, so
long as a Lease Event of Default shall have occurred and be continuing, such
amount may be held by the Collateral Agent as security for TRMI's obligations
under the Administrative Services Agreement and the other Operative Agreements;
provided, further, only with respect to the Owner Participant and its Related
Indemnitee Group, so long as an event referred to in clause (5) of Section
7.4(c) hereof shall have occurred and be continuing, such amount may be held by
the Owner Trustee as security for the Lessee's obligations with respect to the
Equity Insufficiency Circumstance.


SECTION 8. LESSEE'S RIGHT OF QUIET ENJOYMENT.

     Each party to this Agreement acknowledges notice of, and consents in all
respects to, the terms of the Lease, and expressly, severally and as to its own
actions only, agrees that, so long as no Lease Event of Default has occurred and
is continuing, it shall not take or cause to be taken any action contrary to
the Lessee's rights under the Lease, including, without limitation, the right to
possession, use and quiet enjoyment by the Lessee of the Equipment, or by any
Sublessee of the Equipment or by any Pledged Equipment Lessee of the Pledged
Equipment.


SECTION 9. SUCCESSOR INDENTURE TRUSTEE.

     In the event that the Indenture Trustee gives notice of its resignation
pursuant to Section 8.2 of the Indenture, the Owner Trustee shall promptly
appoint a successor Indenture Trustee reasonably acceptable to the Lessee.


SECTION 10. MISCELLANEOUS.

     Section 10.1 Consents. Each Participant covenants and agrees (subject, in
the case of the Loan Participant, to all of the terms and provisions of the
Indenture) that it shall not unreasonably withhold its consent to any consent
requested by the Lessee, TILC, TRMI, the Owner Trustee, the Pass Through Trustee
or the Indenture Trustee, as the case may be, under the terms of the Operative
Agreements that by its terms is not to be unreasonably withheld by the Owner
Trustee or the Indenture Trustee.


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     Section 10.2 Refinancing. So long as no Lease Event of Default shall have
occurred and be continuing, the Lessee shall have the right, at any time
following the fifth anniversary of the Closing Date (as defined in the
Participation Agreement TRLI 2001-1A), and provided that Lessee is
simultaneously exercising the refinancing option provided by Section 10.2 of
each of the Other Participation Agreements, to request the Owner Participant and
the Owner Trustee to effect an optional prepayment of all, but not less than
all, of the Equipment Notes pursuant to Section 2.10(d) of the Indenture as part
of a refunding or refinancing operation, provided that the Lessee shall obtain
the prior consent of the Owner Participant to be granted in the sole discretion
of the Owner Participant acting in good faith if such refinancing imposes any
increased risk or liability on or otherwise adversely affects, the Owner
Participant; provided further, that the Owner Participant shall not withhold
such consent if in its sole judgment (i) any increased risk, or liability is
both remote and not material, (ii) the Lessee is at the time at least as
creditworthy as on the Closing Date and (iii) Lessee provides an indemnity, in
form and substance satisfactory to the Owner Participant, for such increased
risk or liability. As soon as practicable after receipt of such request and
consent, if required, the Owner Participant and the Lessee will enter into an
agreement, in form and substance satisfactory to the parties thereto, as to the
terms of such refunding or refinancing as follows:

          (a)  the Lessee, the Owner Participant, the Indenture Trustee, the
Owner Trustee, and any other appropriate parties will enter into a financing or
loan agreement (which may involve an underwriting agreement in connection with a
public offering), in form and substance reasonably satisfactory to the parties
thereto, providing for (i) the issuance and sale by the Owner Trustee or such
other party as may be appropriate on the date specified in such agreement (for
the purposes of this Section 10.2, the "Refunding Date") of debt securities in
an aggregate principal amount (in the lawful currency of the United States)
equal to the principal amount of the Equipment Notes outstanding on the
Refunding Date, having the same maturity date as said Equipment Notes and having
a weighted average life which is not less than or greater than (in either case,
by more than three months) the Remaining Weighted Average Life of said Equipment
Notes, (ii) the application of the proceeds of the sale of such debt securities
to the prepayment of all such Equipment Notes on the Refunding Date, and (iii)
payment by Lessee to the Person or Persons entitled thereto of all other
amounts, in respect of accrued interest, any Make Whole Amount or other premium,
if any, payable on such Refunding Date;

          (b)  the Lessee and the Owner Trustee will amend the Lease in a manner
such that (i) if the Refunding Date is not a Rent Payment Date and the accrued
and unpaid interest on the Equipment Notes is not otherwise paid pursuant to
Section 10.2(a), the Lessee shall on the Refunding Date prepay that portion of
the next succeeding installment of Basic Rent as shall equal the aggregate
interest


                                          Participation Agreement (TRLI 2001-1C)


                                       92


<PAGE>


accrued on the Equipment Notes outstanding to the Refunding Date, (ii)
Basic Rent payable in respect of the period from and after the Refunding Date
shall be recalculated to preserve the Net Economic Return which the Owner
Participant would have realized had such refunding not occurred, provided that
the net present value of Basic Rent shall be minimized to the extent consistent
therewith, and (iii) amounts payable in respect of Stipulated Loss Value,
Stipulated Loss Amount, Early Purchase Price, Termination Value and Termination
Amount from and after the Refunding Date shall be appropriately recalculated to
preserve the Net Economic Return which the Owner Participant would have realized
had such refunding not occurred (it being agreed that any recalculations
pursuant to subclauses (ii) and (iii) of this clause (b) shall be performed in
accordance with the requirements of Section 2.6 hereof);

          (c)  the Owner Trustee will enter into an agreement to provide for the
securing thereunder of the debt securities issued by the Owner Trustee pursuant
to clause (a) of this Section 10.2 in like manner as the Equipment Notes and/or
will enter into such amendments and supplements to the Indenture as may be
necessary to effect such refunding or refinancing, which agreements, amendments
and/or supplements shall be reasonably satisfactory in form and substance to
the Owner Participant; provided that, no such agreement or amendment shall
provide for any increase in the security for the new debt securities; and
provided further that, notwithstanding the foregoing (but subject to the
provisions of clauses (a) and (b) and the lead in paragraph of this Section 10.2
above), the Lessee reserves the right to set the economic terms and other terms
not customarily negotiated between an owner participant and a lender of the
refunding or refinancing transaction except to the extent adversely affecting
cash flow, coverage ratios and reserve accounts as to the Owner Participant to
be so offered to the extent that they are passed through to the Lessee in, or
define rights or obligations of the Lessee under, the Operative Agreements;
provided, further, that no such amendment or supplement will in the sole
judgment of the Owner Participant increase its obligations or impair its rights
under the Operative Agreements or otherwise adversely affect it without the
consent of the Owner Participant;

          (d) (i) in the case of a refunding or refinancing involving a public
offering of debt securities, neither the Owner Trustee nor the Owner Participant
shall be an "issuer" for securities law purposes or an "obligor" within the
meaning of the Trust Indenture Act of 1939, as amended, the offering materials
(including any registration statement) for the refunding or refinancing
transaction shall be reason ably satisfactory to the Owner Participant and (ii)
the Lessee shall provide satisfactory indemnity to the Owner Trustee and Owner
Participant with respect to the refunding or refinancing;


                                          Participation Agreement (TRLI 2001-1C)


                                       93
<PAGE>

          (e)  unless otherwise agreed by the Owner Participant, the Lessee
shall pay to the Owner Trustee as Supplemental Rent an amount, on an
After-Tax Basis, equal to any Make-Whole Amount, Late Payment Premium, if any,
payable in respect of Equipment Notes outstanding on the Refunding Date pursuant
to the Indenture, all interest which is accrued and unpaid in respect of late
payments of Basic Rent or any part thereof, all reasonable fees, costs, expenses
of such refunding or refinancing and of the parties hereto incurred in
connection with such refunding or refinancing (including all reasonable
out-of-pocket legal fees and expenses and the reasonable fees of any financial
advisors);

         (f) the Lessee shall give the Indenture Trustee, the Pass Through
Trustee and the Owner Participant not less than 25 days prior written notice of
the Refunding Date;

         (g) the Owner Participant, the Owner Trustee, the Pass Through Trustee
and the Indenture Trustee shall have received (i) such opinions of counsel as
they may reasonably request concerning compliance with the Securities Act of
1933, as amended, and any other applicable law relating to the sale of
securities and (ii) such other opinions of counsel and such certificates and
other documents, each in form and substance reasonably satisfactory to them, as
they may reasonably request in connection with compliance with the terms and
conditions of this Section 10.2; and

         (h) all necessary authorizations, approvals and consents shall have
been obtained and shall be in full force and effect.

         The Lessee shall pay to or reimburse the Participants, the Owner
Trustee and the Indenture Trustee for all costs and expenses (including
reasonable attorneys' and accountants' fees) paid or incurred by them in
connection with such refunding or refinancing.

         Section 10.3 Amendments and Waivers. Except as otherwise provided in
the Indenture, no term, covenant, agreement or condition of this Agreement may
be terminated, amended or compliance therewith waived (either generally or in a
particular instance, retroactively or prospectively) except by an instrument or
instruments in writing executed by each party against which enforcement of the
termination, amendment or waiver is sought.

         Section 10.4 Notices. Unless otherwise expressly specified or permitted
by the terms hereof, all communications and notices provided for herein shall be
in writing or by facsimile, and any such notice shall become effective (i) upon
personal delivery thereof, including, without limitation, by reputable overnight
courier, or (ii) in the case of notice by facsimile, upon confirmation of
receipt thereof, provided such transmission is promptly further confirmed by any
of the methods set forth in


                                       94

                                          Participation Agreement (TRLI 2001-1C)

<PAGE>


clause (i) above, in each case addressed to each party hereto at its address set
forth below or, in the case of any such party hereto, at such other address as
such party may from time to time designate by written notice to the other
parties hereto:

         If to the Lessee:

                  Trinity Rail Leasing I L.P.
                  2525 Stemmons Freeway
                  Dallas, TX 75207
                  Attention: Vice President Leasing Operations
                  Re:  (TRLI 2001-1C)
                  Fax No.:  (214) 589-8271
                  Confirmation No.:  (214) 631-4420

         If to TILC:

                  Trinity Industries Leasing Company
                  2525 Stemmons Freeway
                  Dallas, TX 75207
                  Attention: Vice President Leasing Operations
                  Re:  (TRLI 2001-1C)
                  Fax No.:  (214) 589-8271
                  Confirmation No.:  (214) 631-4420

         If to TRMI:

                  Trinity Rail Management, Inc.
                  2525 Stemmons Freeway
                  Dallas, TX 75207
                  Attention: Vice President Leasing Operations
                  Re:  (TRLI 2001-1C)
                  Fax No.:  (214) 589-8271
                  Confirmation No.:  (214) 631-4420

         If to the Owner Trustee:

                  TRLI 2001-1C Railcar Statutory Trust
                  c/o State Street Bank and Trust Company of Connecticut,
                  National Association
                  225 Asylum Street, Goodwin Square,
                  Hartford, CT 06103
                  Attention:  Corporate Trust Administration
                  Facsimile No.:  (860) 244-1889


                                          Participation Agreement (TRLI 2001-1C)

                                       95


<PAGE>

                  Confirmation No.: (860) 244-1800

         with a copy to:

                  the Owner Participant at the
                  address set forth below

         If to the Owner Participant:

                  Trimaran Leasing, L.P.
                  c/o Philip Morris Capital Corporation
                  225 High Ridge Road, Suite 300
                  Stamford, CT 06905
                  Attention: Vice President, Structured Finance
                  Fax No.: (914) 335-8297
                  Confirmation No.: (914) 335-8204

         If to the Indenture Trustee:

                  LaSalle Bank National Association
                  135 South LaSalle Street
                  Suite 1960
                  Chicago, IL  60603
                  Attention:  Kristine Schossow,
                              Corporate Trust Services Division
                  Facsimile No.:  (312) 904-2236
                  Confirmation No.: (312) 904-2571

                  If to the Pass Through Trustee:

                  LaSalle Bank National Association
                  135 South LaSalle Street
                  Suite 1960
                  Chicago, IL  60603
                  Attention:  Kristine Schossow,
                              Corporate Trust Services Division
                  Facsimile No.:  (312) 904-2236
                  Confirmation No.: (312) 904-2571

         If to the Rating Agency:

                                          Participation Agreement (TRLI 2001-1C)


                                       96

<PAGE>
                Standard & Poor's Corporation
                25 Broadway
                New York, New York 10004
                Attention:  Stephen F. Rooney
                Facsimile No.:  (212) 438-2646
                Confirmation No.:  (212) 438-2591

     Section 10.5 Survival. All warranties, representations, indemnities and
covenants made by any party hereto, herein or in any certificate or other
instrument delivered by any such party or on the behalf of any such party under
this Agreement, shall be considered to have been relied upon by each other party
hereto and shall survive the consummation of the transactions contemplated
hereby on the Closing Date regardless of any investigation made by any such
party or on behalf of any such party.

     Section 10.6 No Guarantee of Residual Value or Debt. Nothing contained
herein or in the Lease, the Indenture, the Trust Agreement or the Tax Indemnity
Agreement or in any certificate or other statement delivered by the Lessee in
connection with the transactions contemplated hereby shall be deemed to be (i) a
guarantee by the Lessee, TILC or TRMI to the Owner Trustee, the Owner
Participant, the Indenture Trustee, the Pass Through Trustee or the Loan
Participant that the Equipment will have any residual value or useful life, or
(ii) a guarantee by the Indenture Trustee, the Owner Trustee, the Owner
Participant, the Lessee, TILC or TRMI of payment of the principal of, premium,
if any, or interest on the Equipment Notes.

     Section 10.7 Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of, and shall be enforceable by, the parties
hereto and their respective successors and assigns as permitted by and in
accordance with the terms hereof, including each successive holder of the
Beneficial Interest permit ted under Section 6.1 hereof and each successive
holder of any Equipment Note permitted under the Indenture issued and delivered
pursuant to this Agreement or the Indenture. The parties hereto agree that each
of the Collateral Agent and Equity Collateral Agent shall be a third party
beneficiary of this Agreement. Except as expressly provided herein or in the
other Operative Agreements, no party hereto may assign their interests herein
without the consent of the parties hereto.

     Section 10.8 Business Day. Notwithstanding anything herein or in any other
Operative Agreement to the contrary, if the date on which any payment is to be
made pursuant to this Agreement or any other Operative Agreement is not a
Business Day, the payment otherwise payable on such date shall be payable on the
next succeeding Business Day with the same force and effect as if made on such
succeeding Business Day and (provided such payment is made on such succeeding
Business Day) no


                                          Participation Agreement (TRLI 2001-1C)


                                       97
<PAGE>
interest shall accrue on the amount of such payment from and after such
scheduled date to the time of such payment on such next succeeding Business Day.

     SECTION 10.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES (OTHER THAN SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW).

     Section 10.10 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

     Section 10.11 Counterparts. This Agreement may be executed in any number of
counterparts, each executed counterpart constituting an original but all
together only one Agreement.

     Section 10.12 Headings and Table of Contents. The headings of the Sections
of this Agreement and the Table of Contents are inserted for purposes of
convenience only and shall not be construed to affect the meaning or
construction of any of the provisions hereof.

     Section 10.13 Limitations of Liability; Extent of Interest.

         (a) Liabilities of Participants. Neither the Indenture Trustee, the
Owner Trustee nor any Participant shall have any obligation or duty to the
Lessee, to TILC, TRMI, to any other Participant or to others with respect to the
transactions contemplated hereby, except those obligations or duties of such
Participant expressly set forth in this Agreement and the other Operative
Agreements, and neither the Indenture Trustee nor any Participant shall be
liable for performance by any other party hereto of such other party's
obligations or duties hereunder. Without limitation of the generality of the
foregoing, under no circumstances whatsoever shall the Indenture Trustee or any
Participant be liable to the Lessee, TILC or TRMI for any action or inaction on
the part of the Owner Trustee in connection with the transactions contemplated
herein, whether or not such action or inaction is caused by willful misconduct
or gross negligence of the Owner Trustee, unless such action or inaction is at
the direction of the Indenture Trustee or any Participant, as the case may be,
and such action or inaction is expressly prohibited hereby.




                                          Participation Agreement (TRLI 2001-1C)


                                       98
<PAGE>
         (b) No Recourse to the Owner Trustee. It is expressly understood and
agreed by and between Trust Company, the Owner Trustee, the Lessee, the Owner
Participant, the Indenture Trustee, and the Loan Participant, and their
respective successors and permitted assigns that, subject to the proviso
contained in this Section 10.13(b), all representations, warranties and
undertakings of the Owner Trustee hereunder shall be binding upon the Owner
Trustee only in its capacity as Owner Trustee under the Trust Agreement, and
(except as expressly provided herein) Trust Company shall not be liable for any
breach thereof, except for its gross negligence or willful misconduct, or for
breach of its covenants, representations and warranties contained herein, except
to the extent covenanted or made in its individual capacity; provided, however,
that nothing in this Section 10.13(b) shall be construed to limit in scope or
substance those representations and warranties of Trust Company made expressly
in its individual capacity set forth herein. The term "Owner Trustee" as used in
this Agreement shall include any successor trustee under the Trust Agreement, or
the Owner Participant if the trust created thereby is revoked.

         (c) Extent of Interest of Holders of Equipment Notes. No holder of an
Equipment Note shall have any further interest in, or other right with respect
to, the mortgage and security interests created by the Indenture when and if the
principal of and interest on all Equipment Notes held by such holder and all
other sums payable to such holder hereunder, under the Indenture and under such
Equipment Notes shall have been paid in full. Each holder of the Equipment
Notes by its acceptance of an Equipment Note, agrees that it will look solely to
the income and proceeds from the Indenture Estate to the extent available for
distribution to such holder as provided in Article III of the Indenture and that
neither TILC, TRMI, the Lessee, the Owner Participant, the Indenture Trustee nor
the Owner Trustee shall be personally liable to any holder of the Equipment
Notes for any amounts payable under the Equipment Notes, the Indenture or
hereunder, except as expressly provided in the Operative Agreements.

         (d) Loan Participant's Source of Funds. It is expressly understood and
agreed by and between the Owner Trustee, the Lessee, the Owner Participant, the
Indenture Trustee and the Loan Participant, and their respective successors and
permitted assigns that, subject to the proviso contained in this Section
10.13(d), the undertakings of the Loan Participant hereunder are limited to the
application of the proceeds of the sale of the Pass Through Certificates to the
purchase by the Pass Through Trustee of the Equipment Notes; provided, however,
that nothing in this Section 10.13(d) shall be construed to limit in scope or
substance those representations and warranties of the Loan Participant made
expressly in its individual capacity set forth herein.

     Section 10.14 Maintenance of Non-Recourse Debt. The parties hereto agree
that if the Owner Trustee becomes a debtor subject to the reorganization
provisions




                                          Participation Agreement (TRLI 2001-1C)


                                       99
<PAGE>
of the Bankruptcy Code, 11 U.S.C. Section 101 et seq. (the "Bankruptcy Code") or
any successor provision, the parties hereto will make an election under
1111(b)(1)(A)(i) of the Bankruptcy Code. If (a) the Owner Trustee becomes a
debtor subject to the reorganization provisions of the Bankruptcy Code or any
successor provision, (b) pursuant to such reorganization provisions the Owner
Trustee is required, by reason of the Owner Trustee being held to have recourse
liability to the Pass Through Trustee or the Indenture Trustee, directly or
indirectly, to make payment on account of any amount payable under the Equipment
Notes or any of the other Operative Agreements and (c) the Indenture Trustee
and/or the Pass Through Trustee actually receives any Excess Amount (as
hereinafter defined) which reflects any payment by the Owner Trustee on account
of (b) above, then the Indenture Trustee and/or the Pass Through Trustee, as the
case may be, shall promptly refund to the Owner Trustee such Excess Amount. For
purposes of this Section 10.14, "Excess Amount" means the amount by which such
payment exceeds the amount which would have been received by the Indenture
Trustee or the Pass Through Trustee if the Owner Trustee had not become subject
to the recourse liability referred to in (b) above.


     Section 10.15 Ownership of and Rights in Units. The sale of the Units
described on Schedule 1 hereto and the Existing Equipment Subleases by TILC
contemplated hereby is intended for all purposes to be a true sale of all of
TILC's right, title and interest in and to such Units and the Existing Equipment
Subleases to the Lessee, which shall be the legal owner thereof upon such sale.
Upon consummation of the sale and leaseback transactions contemplated hereby,
the Lessee's interest in such Units is intended to be that of a lessee only. It
is intended that for federal and state income tax purposes the Owner Participant
will be the owner of such Units. The rights of the Indenture Trustee in and to
such Units pursuant to the Indenture is intended to be that of a secured party
holding a security interest, subject to the Lease and the rights of the Lessee
thereunder. No holder of an Equipment Note is intended to have any right, title
or interest in or to such Units except as a beneficiary of the Lien granted by
the Owner Trustee to the Indenture Trustee pursuant to the Indenture in trust
for the equal and ratable benefit of the holders from time to time of the
Equipment Notes.

     Section 10.16 No Petition. Each party hereto agrees that, prior to the date
which is one year and one day after payment in full of all outstanding Equipment
Notes and all obligations of the Lessee under the Operative Agreements, release
of all Collateral held under the Collateral Agency Agreement and release of all
Equity Collateral held under the Equity Collateral Security Agreement (i) no
party hereto shall authorize the Lessee to commence a voluntary winding-up or
other voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to the Lessee or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect in any jurisdiction
or seeking the appointment of an administrator, a trustee, receiver, liquidator,
custodian or other similar official of the



                                          Participation Agreement (TRLI 2001-1C)


                                      100

<PAGE>
Lessee or any substantial part of its property or to consent to any such relief
or to the appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against the Lessee, or to make a
general assignment for the benefit of any party hereto or any other creditor of
the Lessee, and (ii) none of the parties hereto shall commence or join with any
other Person in commencing any proceeding against the Lessee under any
bankruptcy, reorganization, liquidation or insolvency law or statute now or
hereafter in effect in any jurisdiction. Each of the parties hereto agrees that,
prior to the date which is one year and one day after the payment in full of all
outstanding Equipment Notes and all obligations of the Lessee under the
Operative Agreements, release of all Collateral held under the Collateral Agency
Agreement and release of all Equity Collateral held under the Equity Collateral
Security Agreement, it will not institute against, or join any other Person in
instituting against, Lessee an action in bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or similar proceeding under
the laws of the United States or any state of the United States.

     Section 10.17 Consent To Jurisdiction. Each of the parties hereto hereby
irrevocably and unconditionally:

            (i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any other Operative Agreement or for
recognition and enforcement of any judgment in respect hereof or thereof, to the
nonexclusive general jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and the appellate courts from any thereof;

            (ii) consents that any such action or proceeding may be brought in
such courts, and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;

            (iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form and mail), postage prepaid, to each
party hereto at its address set forth in Section 10.4 hereof, or at such other
address of which the other parties shall have been notified pursuant thereto;
and

            (iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the right
to sue in any other jurisdiction.


                                          Participation Agreement (TRLI 2001-1C)


                                      101

<PAGE>
     SECTION 10.18 WAIVER OF JURY TRIAL. EACH PARTY TO THIS



AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT OR COUNTERCLAIM ARISING IN CONNECTION WITH
THIS AGREEMENT.





                                     *  *  *



                                          Participation Agreement (TRLI 2001-1C)


                                      102
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Participation
Agreement to be executed and delivered, all as of the date first above written.




                                              Lessee:


                                              TRINITY RAIL LEASING I L.P.


                                              By TILX GP I, LLC
                                                 its General Partner


                                                 By:
                                                    ----------------------------
                                                    Name:  Eric Marchetto
                                                    Title: Vice President


                                              TILC:


                                              TRINITY INDUSTRIES LEASING COMPANY


                                              By:
                                                 -------------------------------
                                                 Name:  Eric Marchetto
                                                 Title: Vice President



                                              TRMI:


                                              TRINITY RAIL MANAGEMENT, INC.


                                              By:
                                                 -------------------------------
                                                 Name:  Eric Marchetto
                                                 Title:  Vice President





                                          Participation Agreement (TRLI 2001-1C)

<PAGE>


                                       Owner Trustee:


                                       TRLI 2001-1C RAILCAR STATUTORY TRUST,


                                       By: State Street Bank and Trust Company
                                           of Connecticut, National Association,
                                           not in its individual capacity except
                                           as expressly provided herein but
                                           solely as Owner Trustee



                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                            ------------------------------------




                                          Participation Agreement (TRLI 2001-1C)


<PAGE>
                                       Owner Participant:


                                       TRIMARAN LEASING, L.P.


                                       By: Trimaran Leasing Investors, L.L.C.-I,
                                           its General Partner



                                           By: Grant Holdings, Inc.,
                                               its sole member



                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------




                                          Participation Agreement (TRLI 2001-1C)
<PAGE>


                                       Indenture Trustee:


                                       LASALLE BANK NATIONAL ASSOCIATION, not
                                       in its individual capacity except as
                                       expressly provided herein but solely as
                                       Indenture Trustee



                                       By:
                                          --------------------------------------
                                       Name:  Sarah H. Webb
                                       Title: Senior Vice President



                                       Pass Through Trustee:

                                       LASALLE BANK NATIONAL ASSOCIATION, not
                                       in its individual capacity except as
                                       expressly provided herein but solely as
                                       Pass Through Trustee


                                       By:
                                          --------------------------------------
                                       Name:  Sarah H. Webb
                                       Title: Senior Vice President




                                          Participation Agreement (TRLI 2001-1C)

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.17.2
<SEQUENCE>13
<FILENAME>d94851ex10-17_2.txt
<DESCRIPTION>2ND AMENDMENT TO CREDIT AGREEMENT
<TEXT>
<PAGE>

                                                                 EXHIBIT 10.17.2

                      SECOND AMENDMENT TO CREDIT AGREEMENT

     This Second Amendment to Credit Agreement (this "Second Amendment") is
executed effective as of December 10, 2001 (the "Effective Date"), by and among
Trinity Industries, Inc., a Delaware corporation (the "Borrower"), JPMorgan
Chase Bank, successor by merger to The Chase Manhattan Bank, as the
Administrative Agent (the "Administrative Agent"), and the financial
institutions parties hereto as Lenders (individually a "Lender" and collectively
the "Lenders").

                                  WITNESSETH:

     WHEREAS, the Borrower, the Administrative Agent, the Syndication Agent, the
Documentation Agents and the Lenders are parties to that certain Credit
Agreement dated as of June 8, 2001, as amended by that certain First Amendment
to Credit Agreement dated as of October 15, 2001 (as amended, the "Credit
Agreement") (unless otherwise defined herein, all terms used herein with their
initial letter capitalized shall have the meaning given such terms in the Credit
Agreement); and

     WHEREAS, pursuant to the Credit Agreement, the Lenders have made Loans to
the Borrower; and

     WHEREAS, the Borrower has requested that the Lenders amend certain terms of
the Credit Agreement in certain respects; and

     WHEREAS, subject to the terms and conditions herein contained, the Lenders
have agreed to the Borrower's request.

     NOW THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and confessed, the
Borrower, the Administrative Agent and each Lender hereby agree as follows:

     Section 1. AMENDMENTS. In reliance on the representations, warranties,
covenants and agreements contained in this Second Amendment, and subject to the
terms and conditions contained herein, the Credit Agreement is hereby amended
effective as of the Effective Date, in the manner provided in this Section 1.

         1.1 ADDITIONAL DEFINITIONS. Section 1.01 of the Credit Agreement is
amended to add thereto in alphabetical order the definitions of "Collateral
Agent," "Intercreditor Agreement," "Mortgage," "Mortgaged Property," "Second
Amendment" and "Security Agreement" which shall read in full as follows:

         "Collateral Agent" means JPMorgan Chase Bank, as collateral agent under
the terms of the Intercreditor Agreement, and its successors and assigns.

         "Intercreditor Agreement" means that certain Intercreditor Agreement to
be executed in accordance with Section 5.12 by the Borrower, certain of its
Subsidiaries, the Collateral Agent, the Administrative Agent and JPMorgan Chase
Bank, as administrative agent


                                       1

<PAGE>


for the lenders under the Bridge Agreement, in the form approved by the Required
Lenders and as the same may be amended or otherwise modified from time to time.

         "Mortgage" means any mortgage, deed of trust, assignment of leases and
rents, leasehold mortgage or other security document granting a Lien to the
Collateral Agent on any Mortgaged Property to secure the obligations described
in the Intercreditor Agreement. Each Mortgage shall be satisfactory in form and
substance to the Administrative Agent.

         "Mortgaged Property" means each parcel of real property and
improvements thereto owned by the Borrower with respect to which a Mortgage is
granted pursuant to Section 5.12 or the Intercreditor Agreement.

         "Second Amendment" means that certain Second Amendment to Credit
Agreement dated as of December 10, 2001, among the Borrower, the Administrative
Agent and the Lenders.

         "Security Agreement" means one or more security agreements to be
executed in accordance with Section 5.12, and pursuant to the terms of the
Intercreditor Agreement, by the Borrower, certain of its Subsidiaries and the
Collateral Agent, which such agreements shall be satisfactory in form and
substance to the Administrative Agent.

         1.2 AMENDMENTS TO DEFINITIONS. The definitions of "Administrative
Agent," "Chase," "Collateral," "ETC Indebtedness," "Loan Documents," "Permitted
Encumbrances" and "Security Instruments" set forth in Section 1.01 of the Credit
Agreement are amended to read in full as follows:

         "Administrative Agent" means (i) prior to November 10, 2001, The Chase
Manhattan Bank, and (ii) from and after November 10, 2001, JPMorgan Chase Bank,
successor by merger to The Chase Manhattan Bank, in its capacity as
administrative agent for the Lenders hereunder.

         "Chase" means (i) prior to November 10, 2001, The Chase Manhattan Bank,
and (ii) from and after November 10, 2001, JPMorgan Chase Bank, successor by
merger to The Chase Manhattan Bank, in its individual capacity or as an Issuing
Bank, as the case may be, and not as Administrative Agent.

         "Collateral" means the Mortgaged Property, the "Collateral" as defined
in the Security Agreements and any and all property and assets on which Liens
have been granted to the Collateral Agent to secure the indebtedness,
obligations and liabilities of the Borrower and its Subsidiaries under the Loan
Documents.

         "ETC Indebtedness" means equipment trust certificate or other secured
Indebtedness financing created or incurred after the date hereof and secured by
leased rail equipment which is pledged to a trustee acting on behalf of the
holders of such certificates or other secured Indebtedness.

         "Loan Documents" means this Agreement, the First Amendment, the Second
Amendment, the Notes, the Subsidiary Guaranties, the Security Instruments, the
Intercreditor


                                       2

<PAGE>


Agreement, the Letters of Credit, any Certificate of Conversion, any Borrowing
Request, any Interest Election Request, any Assignment and Acceptance, the Fee
Letter, and all other agreements (including Hedging Agreements) relating to this
Agreement entered into from time to time between or among the Borrower (or any
or all of its Subsidiaries) and the Administrative Agent or any Lender (or, with
respect to the Hedging Agreements, any Affiliates of any Lender), and any
document delivered by the Borrower or any of its Subsidiaries in connection with
the foregoing.

         "Permitted Encumbrances" means:

          (a) Liens imposed by law for taxes that are not yet due or are being
     contested in compliance with Section 5.04;

          (b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
     and other like Liens imposed by law, arising in the ordinary course of
     business and securing obligations that are not overdue by more than 30 days
     or are being contested in compliance with Section 5.04;

          (c) pledges and deposits made in the ordinary course of business in
     compliance with workers' compensation, unemployment insurance and other
     social security laws or regulations;

          (d) deposits to secure the performance of bids, trade contracts,
     leases, statutory obligations, surety and appeal bonds, performance bonds
     and other obligations of a like nature, in each case in the ordinary course
     of business;

          (e) judgment liens in respect of judgments that do not constitute an
     Event of Default under clause (k) of Article VII;

          (f) easements, zoning restrictions, rights-of-way and similar
     encumbrances on real property imposed by law or arising in the ordinary
     course of business that do not secure any monetary obligations and do not
     materially detract from the value of the affected property or interfere
     with the ordinary conduct of business of the Borrower or any Subsidiary;
     and

          (g) Liens, if any, securing the Indebtedness described in Sections
     6.01(a), (h), (i), (j), (m) and (n);

provided that the term "Permitted Encumbrances" shall not (except as otherwise
permitted by clause (g) of this definition) include any Lien securing
Indebtedness.

         "Security Instruments" means the Mortgages, the Security Agreements and
any and all other mortgages, deeds of trust, security agreements, pledge
agreements, financing statements and other agreements, documents or instruments
now or hereafter executed and delivered by the Borrower, any of its Subsidiaries
or any other Person as security for the payment and performance of the
indebtedness, obligations and liabilities of the Borrower and its Subsidiaries
under the Loan Documents.


                                       3

<PAGE>




         1.3 AMENDMENT TO PROPERTIES REPRESENTATION. Section 3.05 of the Credit
Agreement is amended to read in full as follows:

          "SECTION 3.05 Properties. (a) Each of the Borrower and its
     Consolidated Subsidiaries has good title to, or valid leasehold interests
     in, all its real and personal property material to its business (including
     its Collateral), except for (i) Permitted Encumbrances and (ii) minor
     defects in title that do not interfere with its ability to conduct its
     business as currently conducted or to utilize such properties for their
     intended purposes.

          (b) Each of the Borrower and its Consolidated Subsidiaries owns, or is
     licensed to use, all trademarks, tradenames, copyrights, patents and other
     intellectual property material to its business, and the use thereof by the
     Borrower and its Consolidated Subsidiaries does not infringe upon the
     rights of any other Person, except for any such infringement that,
     individually or in the aggregate, could not reasonably be expected to
     result in a Material Adverse Effect.

          (c) Neither the Borrower nor any of its Subsidiaries has received
     notice of, or has knowledge of, any pending or contemplated condemnation
     proceeding affecting any Mortgaged Property or any other real property
     owned by it or any sale or disposition thereof in lieu of condemnation.
     Neither any such real property nor any interest therein is subject to any
     right of first refusal, option or other contractual right to purchase such
     real property or interest therein."

         1.4 AMENDMENT TO SECURITY INSTRUMENTS PROVISION. Section 5.10 of the
Credit Agreement is amended to read in full as follows:

          "SECTION 5.10 Security Instruments. If at any time, the ratings
     established by either S&P or Moody's for the Index Debt are reduced to a
     category or level (as established in accordance with the terms of this
     Agreement) below the applicable Security Threshold Rating Level, the
     Borrower will, and will cause each of its Subsidiaries (as applicable) to,
     at the Borrower's expense, execute and deliver to the Administrative Agent
     for the benefit of the Lenders, on or prior to twenty (20) days following
     the reduction of either of the ratings for the Index Debt to a category or
     level below the applicable Security Threshold Rating Level (or on or prior
     to such other date as may be agreed to in writing by the Borrower and the
     Required Lenders), and at such other times as the Required Lenders shall
     request, one or more Security Instruments, in form and substance
     satisfactory to the Administrative Agent, and in such number of
     counterparts as the Administrative Agent or the Collateral Agent shall
     request, for the purpose and with the effect of granting to the Collateral
     Agent as security for the indebtedness, obligations and liabilities of the
     Borrower and its Subsidiaries described in the Intercreditor Agreement, a
     valid first and prior Lien on such assets and property of the Borrower and
     its Material Subsidiaries as the Required Lenders may require, together
     with such other executed documentation as the Administrative Agent or any
     Lender may require or deem necessary to perfect or protect the Collateral
     Agent's Liens on such assets and properties of the Borrower



                                       4
<PAGE>


     and its Subsidiaries, including, without limitation, (i) financing
     statements under the Uniform Commercial Code, (ii) all intellectual
     property assignments for all intellectual property registered in the United
     States of America, (iii) all Collateral the possession of which is
     necessary to perfect the Liens therein, (iv) all other applicable
     documentation under the laws of any jurisdiction required with respect to
     the creation, perfection and protection of Liens, (v) all third-party or
     governmental approvals and consents required for the pledge of the
     Collateral under the Security Instruments, and (vi) opinions of counsel
     (including, without limitation, local counsel), in form and substance
     satisfactory to the Administrative Agent, and covering such matters as the
     Administrative Agent or the Required Lenders shall reasonably request.
     Notwithstanding the foregoing or anything else to the contrary contained
     herein, the assets and property of the Borrower and its Subsidiaries on
     which Liens have been (or will be) granted to secure the indebtedness,
     obligations and liabilities of the Borrower and such Subsidiaries described
     in Sections 6.01(i), (j) and (n) shall not be included as Collateral for
     purposes of this Section 5.10 (including, without limitation, such assets
     and property separately identified in writing by the Borrower or the
     appropriate Subsidiary as reasonably necessary to secure such indebtedness,
     obligations and liabilities that may be incurred by the Borrower or such
     Subsidiary under Sections 6.01(i), (j) and (n)) for as long as such assets
     and property continue to secure (or be separately identified as reasonably
     necessary to secure) such indebtedness, obligations and liabilities."

         1.5 ADDITIONAL AFFIRMATIVE COVENANTS. Article V of the Credit Agreement
is amended to add new Sections 5.11 and 5.12 thereto to read in full as follows:

                  "SECTION 5.11 Compliance With Security Instruments. The
         Borrower will, and will cause each of its Subsidiaries to, comply with
         its obligations under the Intercreditor Agreement and the Security
         Agreements arising in connection with the formation or acquisition of
         any Subsidiary within ten (10) Business Days after such Subsidiary is
         formed or acquired.

                  SECTION 5.12 Collateral Provisions.

                  (a) On or before December 31, 2001, the Borrower shall deliver
         or cause to be delivered to the Administrative Agent, each of the
         following, all in form and substance acceptable to the Administrative
         Agent and the Required Lenders in their sole discretion:

                           (i) the Intercreditor Agreement executed by the
                  Borrower and certain of its Subsidiaries a party thereto;

                           (ii) a Security Agreement executed by the Borrower
                  and certain of its Subsidiaries a party thereto, pursuant to
                  which the Borrower and such Subsidiaries grant to the
                  Collateral Agent a valid first and prior Lien on all of their
                  accounts receivable and inventory;



                                       5
<PAGE>




                           (iii) a Subsidiary Guaranty executed by each of
                  Trinity Rail Group, LLC, Trinity Tank Car, Inc., Trinity Rail
                  Components & Repair, Inc. and Thrall Trinity Freight Car,
                  Inc.;

                           (iv) Uniform Commercial Code, tax and judgment lien
                  search reports listing all documentation on file against the
                  Borrower, each Subsidiary (as applicable) and such other
                  Persons as the Administrative Agent may require in each
                  jurisdiction in which it has a principal place of business and
                  jurisdiction of organization and in which any Collateral is or
                  has been located;

                           (v) subject to the terms of the Intercreditor
                  Agreement and the Security Agreements, such executed
                  documentation as the Collateral Agent or the Administrative
                  Agent may require or deem necessary to perfect or protect the
                  Collateral Agent's Liens in the assets of the Borrower and its
                  Subsidiaries granted pursuant to the Security Agreement
                  described in clause (ii) above, including, without limitation,
                  (A) financing statements under the Uniform Commercial Code,
                  (B) all Collateral the possession of which is necessary to
                  perfect the Lien therein, (C) all other applicable
                  documentation under the laws of any jurisdiction required with
                  respect to the creation, perfection and protection of Liens,
                  and (D) all third-party or governmental approvals and consents
                  required for the pledge of the Collateral under the Security
                  Agreement;

                           (vi) duly executed UCC-3 termination statements and
                  such other documentation as shall be necessary to terminate or
                  release all Liens encumbering the Collateral not otherwise
                  permitted by this Agreement;

                           (vii) evidence that the insurance required by Section
                  5.05 is in effect;

                           (viii) favorable written opinions from counsel to the
                  Borrower and its Subsidiaries addressed to the Lenders and
                  satisfactory to Vinson & Elkins L.L.P., counsel for the
                  Administrative Agent, as to such matters relating to the
                  Intercreditor Agreement, the Security Agreements and the other
                  Loan Documents, as the Administrative Agent may request (and
                  the Borrower hereby instructs its counsel to deliver such
                  opinions to the Administrative Agent for the benefit of the
                  Lenders);

                           (ix) an amendment to the Bridge Agreement, in form
                  and substance satisfactory to the Administrative Agent,
                  executed by the Borrower, JPMorgan Chase Bank, as
                  administrative agent for the lenders under the Bridge
                  Agreement, and the lenders a party to such Bridge Agreement;
                  and

                           (x) such additional information and documentation as
                  the Collateral Agent or the Administrative Agent may require
                  to consummate the transactions contemplated by this Section
                  5.12(a).

                  The Borrower shall, and shall cause each Subsidiary to use,
         commercially reasonable efforts to obtain on or before February 28,
         2002, lien waivers,



                                       6
<PAGE>


         subordination agreements and/or estoppel certificates with respect to
         the Collateral from all of the Borrower's and its applicable
         Subsidiaries' landlords, mortgages and/or lessees.

                  The Borrower's failure to fully and timely satisfy on or
         before December 31, 2001 each requirement set forth in clauses (i)
         through (x) of this Section 5.12(a) shall constitute an immediate Event
         of Default.

                  (b) On or before February 15, 2002, the Borrower shall deliver
         or cause to be delivered to the Administrative Agent, each of the
         following, all in form and substance acceptable to the Administrative
         Agent and the Required Lenders in their sole discretion:

                           (i) a Security Agreement (which may take the form of
                  an amendment and restatement of the Security Agreement
                  delivered pursuant to Section 5.12(a)(ii)) executed by the
                  Borrower and certain of its Subsidiaries, pursuant to which
                  the Borrower and such Subsidiaries grant to the Collateral
                  Agent a valid first and prior Lien on certain equipment, real
                  property and other assets and property of the Borrower and
                  such Subsidiaries (in addition to the Liens granted pursuant
                  to the Security Agreement delivered pursuant to Section
                  5.12(a)(ii)) as shall be required and determined by the
                  Administrative Agent and the Required Lenders;

                           (ii) Uniform Commercial Code, tax and judgment lien
                  search reports listing all documentation on file against the
                  Borrower, each Subsidiary and such other Persons as the
                  Administrative Agent may require in each jurisdiction in which
                  it has a principal place of business and jurisdiction of
                  organization and in which any Collateral is or has been
                  located;

                           (iii) subject to the terms of the Intercreditor
                  Agreement and the Security Agreements, such executed
                  documentation as the Collateral Agent or the Administrative
                  Agent may require or deem necessary to perfect or protect the
                  Collateral Agent's Liens in the assets of the Borrower and its
                  Subsidiaries granted pursuant to the Security Agreement
                  described in clause (i) above, including, without limitation,
                  (A) financing statements under the Uniform Commercial Code,
                  (B) all Collateral the possession of which is necessary to
                  perfect the Lien therein, (C) all other applicable
                  documentation under the laws of any jurisdiction required with
                  respect to the creation, perfection and protection of Liens,
                  and (D) all third-party or governmental approvals and consents
                  required for the pledge of the Collateral under the Security
                  Agreement;

                           (iv) duly executed UCC-3 termination statements and
                  such other documentation as shall be necessary to terminate or
                  release all Liens encumbering the Collateral not otherwise
                  permitted by this Agreement;

                           (v) evidence that the insurance required by Section
                  5.05 is in effect;



                                       7

<PAGE>




                           (vi) favorable written opinions from counsel to the
                  Borrower and its Subsidiaries addressed to the Lenders and
                  satisfactory to Vinson & Elkins L.L.P., counsel for the
                  Administrative Agent, as to such matters relating to the
                  Security Agreements and the other Loan Documents, as the
                  Administrative Agent may request (and the Borrower hereby
                  instructs its counsel to deliver such opinions to the
                  Administrative Agent for the benefit of the Lenders);

                           (vii) as applicable, a Mortgage with respect to each
                  Mortgaged Property executed on behalf of the record owner of
                  such Mortgaged Property with a metes and bounds or other
                  description of the parcel attached thereto and recorded in the
                  applicable real property records;

                           (viii) with respect to each parcel of the Mortgaged
                  Property, a title insurance commitment, all documentation
                  evidencing any exceptions to title reflected thereon (or other
                  evidence of title satisfactory to the Administrative Agent),
                  and, to the extent available, a survey and environmental
                  report relating to such parcel; and

                           (ix) such additional information and documentation as
                  the Collateral Agent or the Administrative Agent may require
                  to consummate the transactions contemplated by this Section
                  5.12(b).

         The Borrower's failure to fully and timely satisfy on or before
February 15, 2002 each requirement set forth in clauses (i) through (ix) of this
Section 5.12(b) shall constitute an immediate Event of Default."

         1.6 AMENDMENT TO LIEN COVENANT. Section 6.02 of the Credit Agreement is
amended to read in full as follows:

                  "SECTION 6.02 Liens. The Borrower will not, and will not
         permit any Subsidiary to, create, incur, assume or permit to exist any
         Lien on any property or asset now owned or hereafter acquired by it, or
         assign or sell any income or revenues (including accounts receivable)
         or rights in respect of any thereof, except:

                  (a) Permitted Encumbrances and Liens created by the Security
         Agreements, the Mortgages, the other Security Instruments and the other
         Loan Documents;

                  (b) any Lien on any property or asset of the Borrower or any
         Subsidiary existing on December 10, 2001 and set forth in Schedule
         6.02;

                  (c) any Lien existing on any property or asset prior to the
         acquisition thereof by the Borrower or any Subsidiary or existing on
         any property or asset of any Person that becomes a Subsidiary after the
         date hereof prior to the time such Person becomes a Subsidiary;
         provided that (i) such Lien is not created in contemplation of or in
         connection with such acquisition or such Person becoming a Subsidiary,
         as the case may be, (ii) such Lien shall not apply to any other


                                       8

<PAGE>


         property or assets of the Borrower or any Subsidiary and (iii) such
         Lien shall secure only those obligations which it secures on the date
         of such acquisition or the date such Person becomes a Subsidiary, as
         the case may be, and extensions, renewals and replacements thereof that
         do not increase the outstanding principal amount thereof; and

                  (d) Liens on fixed or capital assets acquired, constructed or
         improved by the Borrower or any Subsidiary; provided that (i) such
         Liens secure Indebtedness permitted by clause (e) of Section 6.01, (ii)
         such Liens and the Indebtedness secured thereby are incurred prior to
         or within 90 days after such acquisition or the completion of such
         construction or improvement, (iii) the Indebtedness secured thereby
         does not exceed 100% of the cost of acquiring, constructing or
         improving such fixed or capital assets and (iv) such security interests
         shall not apply to any other property or assets of the Borrower or any
         Subsidiary."

         1.7 AMENDMENT TO FUNDAMENTAL CHANGE COVENANT. Section 6.03(a) of the
Credit Agreement is amended to read in full as follows:

                  "(a) Except for the Thrall Merger which is expressly permitted
         hereunder, and except as otherwise set forth herein, the Borrower will
         not, and will not permit any Subsidiary to, (i) merge into or
         consolidate with any other Person, or permit any other Person to merge
         into or consolidate with it, (ii) except for (A) sales of inventory in
         the ordinary course of business, and (B) the sale of assets described
         on Schedule 6.03 (or the sale of the voting securities or other equity
         interests of Subsidiaries whose only substantial assets are those
         described on Schedule 6.03), (y) sell, transfer, lease or otherwise
         dispose of (in one transaction or in a series of transactions) all or
         substantially all of its assets, or all or substantially all of the
         stock of any of its Subsidiaries (in each case, whether now owned or
         hereafter acquired), or (z) sell, transfer lease or otherwise dispose
         of any Collateral, or (iii) liquidate or dissolve, except that, if at
         the time thereof and immediately after giving effect thereto no Default
         shall have occurred and be continuing (A) any Subsidiary may merge into
         the Borrower in a transaction in which the Borrower is the surviving
         corporation, (B) any Subsidiary may merge into any Subsidiary in a
         transaction in which the surviving entity is a Subsidiary, (C) any
         Subsidiary may sell, transfer, lease or otherwise dispose of its assets
         to the Borrower or to another Subsidiary, (D) TRLI may enter into,
         observe and perform its obligations pursuant to, and in accordance
         with, the TRLI Equipment Lease Transaction, and (E) any Subsidiary may
         liquidate or dissolve if the Borrower determines in good faith that
         such liquidation or dissolution is in the best interests of the
         Borrower and is not materially disadvantageous to the Lenders; provided
         that any such merger involving a Person that is not a wholly owned
         Subsidiary immediately prior to such merger shall not be permitted
         unless also permitted by Section 6.04."

         1.8 AMENDMENT TO RESTRICTIVE AGREEMENTS COVENANT. Section 6.08 of the
Credit Agreement is amended to read in full as follows:



                                       9
<PAGE>


                  "SECTION 6.08 Restrictive Agreements. The Borrower will not,
         and will not permit any of its Subsidiaries to, directly or indirectly,
         enter into, incur or permit to exist any agreement or other arrangement
         that prohibits, restricts or imposes any condition upon (a) the ability
         of the Borrower or any Subsidiary to create, incur or permit to exist
         any Lien in favor of the Administrative Agent or the Collateral Agent
         upon any of its property or assets, or (b) the ability of any
         Subsidiary to pay dividends or other distributions with respect to any
         shares of its capital stock or to make or repay loans or advances to
         the Borrower or any other Subsidiary or to Guarantee Indebtedness of
         the Borrower or any other Subsidiary; provided that (i) the foregoing
         shall not apply to restrictions and conditions imposed by law or by
         this Agreement, (ii) the foregoing shall not apply to restrictions and
         conditions existing on the date hereof identified on Schedule 6.08 (but
         shall apply to any extension or renewal of, or any amendment or
         modification expanding the scope of, any such restriction or
         condition), (iii) the foregoing shall not apply to customary
         restrictions and conditions contained in agreements relating to the
         sale of a Subsidiary pending such sale, provided such restrictions and
         conditions apply only to the Subsidiary that is to be sold and such
         sale is permitted hereunder, (iv) clause (a) of the foregoing shall not
         apply to restrictions or conditions imposed by any agreement relating
         to secured Indebtedness permitted by this Agreement if such
         restrictions or conditions apply only to the property or assets
         securing such Indebtedness and (v) clause (a) of the foregoing shall
         not apply to customary provisions in leases and other contracts
         restricting the assignment thereof."

         1.9 AMENDMENT TO DEFAULT PROVISIONS. Article VII of the Credit
Agreement is amended as follows:

                  (a) Clause (d) of Article VII of the Credit Agreement is
         amended to read in full as follows:

                  "(d) the Borrower shall fail to observe or perform any
         covenant, condition or agreement contained in Sections 5.01, 5.02, 5.03
         (with respect to the Borrower's and its Subsidiaries' existence), 5.08,
         5.10, 5.11, 5.12 or in Article VI, in the Security Agreement, in any
         Mortgage or in the Intercreditor Agreement;".

                  (b) New clauses (n), (o) and (p) are added to Article VII of
         the Credit Agreement to read in their entireties as follows and the
         word "or" is deleted from the end of clause (l):

                  "(n) any Lien purported to be created under any Loan Document
         shall cease to be, or shall be asserted by the Borrower or any of its
         Subsidiaries not to be, a valid and perfected Lien on any Collateral,
         with the priority required hereby, except as a result of the sale or
         other disposition of the applicable Collateral in a transaction
         permitted under the Loan Documents;

                  (o) the occurrence of an Event of Default (as defined in the
         Intercreditor Agreement); or


                                       10
<PAGE>


                  (p) either any Subsidiary Guaranty, any Security Agreement,
         the Intercreditor Agreement or any Mortgage shall for any reason cease
         to be in full force and effect and valid, binding and enforceable in
         accordance with its terms after its date of execution, or the Borrower
         or any of its Subsidiaries shall so state in writing."

                  (c) The following provision is added to the end of Article VII
         of the Credit Agreement:

                  "In addition to the other rights and remedies that the Lenders
         may have upon the occurrence of an Event of Default, the Required
         Lenders may direct the Collateral Agent to exercise the rights and
         remedies available to the Collateral Agent under the Intercreditor
         Agreement, the Mortgages and the Security Agreements."

         1.10 AMENDMENT TO AGENT PROVISIONS. The following provision is added to
the end of Article VIII of the Credit Agreement:

                  "The Administrative Agent is authorized to execute the
         Intercreditor Agreement on behalf of each Lender and bind each Lender
         to the terms thereof as if each Lender were directly a party thereto."

         1.11 AMENDMENT TO WAIVERS AND AMENDMENTS PROVISIONS. Section 9.02(b) of
the Credit Agreement is amended to read in full as follows:

                  "(b) Neither this Agreement nor any of the Loan Documents nor
         any provision hereof or thereof may be waived, amended or modified
         except pursuant to an agreement or agreements in writing entered into
         by the Borrower and the Required Lenders or by the Borrower and the
         Administrative Agent with the consent of the Required Lenders; provided
         that no such agreement shall (i) increase the Commitment of any Lender
         without the written consent of such Lender, (ii) reduce the principal
         amount of any Loan or LC Disbursement or reduce the rate of interest
         thereon, or reduce any fees payable hereunder, without the written
         consent of each Lender affected thereby, (iii) postpone the scheduled
         date of payment of the principal amount of any Loan or LC Disbursement,
         or any interest thereon, or any fees payable hereunder, or reduce the
         amount of, waive or excuse any such payment, or postpone the scheduled
         date of expiration of any Commitment, without the written consent of
         each Lender affected thereby, (iv) change Section 2.17(b) or (c) in a
         manner that would alter the pro rata sharing of payments required
         thereby, without the written consent of each Lender, (v) release any
         Material Subsidiary from its obligations under its Subsidiary Guaranty,
         without the written consent of each Lender, (vi) release any material
         portion of the Collateral, without the written consent of each Lender,
         except as expressly permitted hereby, and provided that the
         Administrative Agent or the Collateral Agent shall release (without
         consent from the Lenders) any Collateral sold, transferred or otherwise
         disposed of as permitted by Section 6.03 hereof, or (vii) change any of
         the provisions of this Section 9.02(b) or the definition of



                                       11
<PAGE>


         "Required Lenders" or any other provision hereof specifying the number
         or percentage of Lenders required to waive, amend or modify any rights
         hereunder or make any determination or grant any consent hereunder,
         without the written consent of each Lender; provided further that no
         such agreement shall amend, modify or otherwise affect the rights or
         duties of any Agent or the Issuing Bank hereunder without the prior
         written consent of such Agent or the Issuing Bank, as the case may be."

         Section 2. CONDITIONS PRECEDENT TO EFFECTIVENESS OF AMENDMENT. With the
exception of Section 1.11 hereof, this Second Amendment shall be effective
automatically and without the necessity of any further action by the
Administrative Agent, the Borrower or any Lender when counterparts hereof have
been executed by the Administrative Agent, the Borrower and the Required
Lenders, and each of the following conditions to the effectiveness hereof have
been satisfied:

                  (a) the Administrative Agent shall have received such
         documents and certificates as the Administrative Agent and its counsel
         may reasonably request relating to the organization, existence and good
         standing of the Borrower and each Subsidiary, the power and authority
         of the Borrower and each Subsidiary (as applicable) to execute, deliver
         and perform this Second Amendment and any other legal matters relating
         to the Borrower, any Subsidiary or the Loan Documents, all in form and
         substance satisfactory to the Administrative Agent and its counsel;

                  (b) the Administrative Agent shall have received all fees and
         other amounts due and payable on or prior to the Effective Date,
         including reimbursement or payment of all out-of-pocket expenses
         (including fees, charges and disbursements of counsel) required to be
         reimbursed hereunder or under any other Loan Document;

                  (c) the representations and warranties contained herein and in
         all other Loan Documents, as amended hereby, shall be true and correct
         in all material respects as of the Effective Date as if made on the
         Effective Date, except for such representations and warranties limited
         by their terms to a specific date;

                  (d) after giving effect to this Second Amendment, no Default
         or Event of Default shall exist; and

                  (e) all proceedings taken in connection with the transactions
         contemplated by this Second Amendment and all documentation and other
         legal matters incident thereto shall be satisfactory to the
         Administrative Agent and its counsel.

Section 1.11 hereof will be effective automatically and without the necessity of
any further action by the Administrative Agent, the Borrower or any Lender when
counterparts hereof have been executed by the Administrative Agent, the Borrower
and all Lenders, and each of the foregoing conditions to the effectiveness
hereof have been satisfied.

         Section 3. LEGAL FEES. Upon execution of this Second Amendment by the
Required Lenders, the Borrower shall pay all reasonable fees and expenses of
counsel to the



                                       12

<PAGE>


Administrative Agent incurred by the Administrative Agent in connection with
this Second Amendment and all related documents and transactions.

         Section 4. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. To induce
the Lenders and the Administrative Agent to enter into this Second Amendment,
the Borrower hereby represents and warrants to the Administrative Agent and the
Lenders as follows:

         4.1 REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. Each
representation and warranty of the Borrower contained in the Credit Agreement
and the other Loan Documents is true and correct on the date hereof after giving
effect to the amendments set forth in Section 1 hereof.

         4.2 DUE AUTHORIZATION, NO CONFLICTS. The execution, delivery and
performance by the Borrower of this Second Amendment are within the Borrower's
corporate powers, have been duly authorized by necessary action, require no
action by or in respect of, or filing with, any governmental body, agency or
official and do not violate or constitute a default under any provision of
applicable law or any material agreement binding upon the Borrower or its
Subsidiaries, or result in the creation or imposition of any Lien upon any of
the assets of the Borrower or its Subsidiaries except for Permitted
Encumbrances.

         4.3 VALIDITY AND BINDING EFFECT. This Second Amendment constitutes the
valid and binding obligations of the Borrower enforceable in accordance with its
terms, except as (a) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditor's rights generally, and (b) the
availability of equitable remedies may be limited by equitable principles of
general application.

         4.4 NO DEFENSES. The Borrower has no defenses to payment, counterclaim
or rights of set-off with respect to the indebtedness, obligations and
liabilities of the Borrower under the Loan Documents existing on the date
hereof.

         4.5 ABSENCE OF DEFAULTS. After giving effect to the amendments set
forth in Section 1 hereof, neither a Default nor an Event of Default has
occurred which is continuing.

         Section 5. MISCELLANEOUS.

         5.1 REAFFIRMATION OF LOAN DOCUMENTS. Any and all of the terms and
provisions of the Credit Agreement and the other Loan Documents shall, except as
amended and modified hereby, remain in full force and effect. The Borrower
hereby agrees that the amendments and modifications herein contained shall in no
manner adversely affect or impair the indebtedness, obligations and liabilities
of the Borrower under the Loan Documents.

         5.2 PARTIES IN INTEREST. All of the terms and provisions of this Second
Amendment shall bind and inure to the benefit of the parties hereto and their
respective successors and assigns.

         5.3 COUNTERPARTS. This Second Amendment may be executed in
counterparts, and all parties need not execute the same counterpart; however, no
party shall be



                                       13

<PAGE>


bound by this Second Amendment until counterparts hereof have been executed by
the Borrower and the Required Lenders. Facsimiles shall be effective as
originals.

         5.4 COMPLETE AGREEMENT. THIS SECOND AMENDMENT, THE CREDIT AGREEMENT AND
THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN OR AMONG THE PARTIES.

         5.5 HEADINGS. The headings, captions and arrangements used in this
Second Amendment are, unless specified otherwise, for convenience only and shall
not be deemed to limit, amplify or modify the terms of this Second Amendment,
nor affect the meaning thereof.

     IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
be duly executed by their respective Authorized Officers as of the Effective
Date.

                            [Signature Pages Follow]



                                       14

<PAGE>


                                 SIGNATURE PAGE
                                       TO
                       FIRST AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.
                THE CHASE MANHATTAN BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS


                                     TRINITY INDUSTRIES, INC.

                                     By:
                                        ----------------------------------------
                                     Name:
                                          --------------------------------------
                                     Title:
                                           -------------------------------------



                                [Signature Page]



<PAGE>


                                 SIGNATURE PAGE
                                       TO
                       FIRST AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.
                THE CHASE MANHATTAN BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS

                                    JPMORGAN CHASE BANK (successor in interest
                                    by merger to The Chase Manhattan Bank),
                                    individually and as Administrative Agent

                                    By:
                                       -----------------------------------------
                                    Name:  Mike Lister
                                    Title: Vice President





                                [Signature Page]


<PAGE>



                                 SIGNATURE PAGE
                                       TO
                       FIRST AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.
                THE CHASE MANHATTAN BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS

                                     DRESDNER BANK AG, NEW YORK AND
                                     GRAND CAYMAN BRANCHES, as a Lender



                                     By:
                                        ----------------------------------------
                                     Name:
                                          --------------------------------------
                                     Title:
                                           -------------------------------------



                                     By:
                                        ----------------------------------------
                                     Name:
                                          --------------------------------------
                                     Title:
                                           -------------------------------------



                                [Signature Page]






<PAGE>


                                 SIGNATURE PAGE
                                       TO
                       FIRST AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.
                THE CHASE MANHATTAN BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS

                                     THE BANK OF TOKYO - MITSUBISHI, LTD.,
                                     as a Lender


                                     By:
                                        ----------------------------------------
                                     Name:
                                          --------------------------------------
                                     Title:
                                           -------------------------------------



                                     By:
                                        ----------------------------------------
                                     Name:
                                          --------------------------------------
                                     Title:
                                           -------------------------------------



                                [Signature Page]




<PAGE>


                                 SIGNATURE PAGE
                                       TO
                       FIRST AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.
                THE CHASE MANHATTAN BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS


                                     BANK ONE, NA, as a Lender


                                     By:
                                        ----------------------------------------
                                     Name:
                                          --------------------------------------
                                     Title:
                                           -------------------------------------



                                [Signature Page]




<PAGE>


                                 SIGNATURE PAGE
                                       TO
                       FIRST AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.
                THE CHASE MANHATTAN BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS

                                     SUNTRUST BANK, as a Lender


                                     By:
                                        ----------------------------------------
                                     Name:
                                          --------------------------------------
                                     Title:
                                           -------------------------------------



                                [Signature Page]





<PAGE>


                                 SIGNATURE PAGE
                                       TO
                       FIRST AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.
                THE CHASE MANHATTAN BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS

                                     WACHOVIA BANK, N.A., as a Lender



                                     By:
                                        ----------------------------------------
                                     Name:
                                          --------------------------------------
                                     Title:
                                           -------------------------------------



                                [Signature Page]





<PAGE>


                                 SIGNATURE PAGE
                                       TO
                       FIRST AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.
                THE CHASE MANHATTAN BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS

                                     BNP PARIBAS, as a Lender


                                     By:
                                        ----------------------------------------
                                     Name:
                                          --------------------------------------
                                     Title:
                                           -------------------------------------


                                     By:
                                        ----------------------------------------
                                     Name:
                                          --------------------------------------
                                     Title:
                                           -------------------------------------



                                [Signature Page]





<PAGE>


                                 SIGNATURE PAGE
                                       TO
                       FIRST AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.
                THE CHASE MANHATTAN BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS

                                     THE ROYAL BANK OF SCOTLAND plc,
                                     as a Lender



                                     By:
                                        ----------------------------------------
                                     Name:
                                          --------------------------------------
                                     Title:
                                           -------------------------------------



                                [Signature Page]





<PAGE>


                                 SIGNATURE PAGE
                                       TO
                       FIRST AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.
                THE CHASE MANHATTAN BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS

                                     THE BANK OF NOVA SCOTIA, as a Lender


                                     By:
                                        ----------------------------------------
                                     Name:
                                          --------------------------------------
                                     Title:
                                           -------------------------------------



                                [Signature Page]





<PAGE>


                                 SIGNATURE PAGE
                                       TO
                       FIRST AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.
                THE CHASE MANHATTAN BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS

                                     THE BANK OF NEW YORK, as a Lender



                                     By:
                                        ----------------------------------------
                                     Name:
                                          --------------------------------------
                                     Title:
                                           -------------------------------------



                                [Signature Page]





<PAGE>


                                 SIGNATURE PAGE
                                       TO
                       FIRST AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.
                THE CHASE MANHATTAN BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS

                                     COMERICA BANK, as a Lender



                                     By:
                                        ----------------------------------------
                                     Name:
                                          --------------------------------------
                                     Title:
                                           -------------------------------------



                                [Signature Page]

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.17.3
<SEQUENCE>14
<FILENAME>d94851ex10-17_3.txt
<DESCRIPTION>3RD AMENDMENT TO CREDIT AGREEMENT
<TEXT>
<PAGE>
                                                                 EXHIBIT 10.17.3


                       THIRD AMENDMENT TO CREDIT AGREEMENT

     This Third Amendment to Credit Agreement (this "Third Amendment") is
executed effective as of February 8, 2002 (the "Effective Date"), by and among
Trinity Industries, Inc., a Delaware corporation (the "Borrower"), JPMorgan
Chase Bank, successor by merger to The Chase Manhattan Bank, as the
Administrative Agent (the "Administrative Agent"), and the financial
institutions parties hereto as Lenders (individually a "Lender" and collectively
the "Lenders").


                                  WITNESSETH:

     WHEREAS, the Borrower, the Administrative Agent and the Lenders are parties
to that certain Credit Agreement dated as of June 8, 2001, as amended by that
certain (i) First Amendment to Credit Agreement dated as of October 15, 2001,
and (ii) Second Amendment to Credit Agreement dated as of December 10, 2001 (as
amended, the "Credit Agreement") (unless otherwise defined herein, all terms
used herein with their initial letter capitalized shall have the meaning given
such terms in the Credit Agreement); and

     WHEREAS, pursuant to the Credit Agreement, the Lenders have made Loans to
the Borrower; and

     WHEREAS, the Borrower has requested that the Lenders amend certain terms of
the Credit Agreement in certain respects; and

     WHEREAS, subject to the terms and conditions herein contained, the Lenders
have agreed to the Borrower's request.

     NOW THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and confessed, the
Borrower, the Administrative Agent and each Lender hereby agree as follows:

     Section 1. AMENDMENTS. In reliance on the representations, warranties,
covenants and agreements contained in this Third Amendment, and subject to the
terms and conditions contained herein, the Credit Agreement is hereby amended
effective as of the Effective Date, in the manner provided in this Section 1.

     1.1 ADDITIONAL DEFINITIONS. Section 1.01 of the Credit Agreement is amended
to add thereto in alphabetical order the definitions of "Equity Contribution,"
"ETC Transaction" and "Third Amendment" which shall read in full as follows:

     "Equity Contribution" means a cash contribution to the equity capital of
the Borrower in an amount not less than $20,000,000, such contribution to be
made in connection with the Borrower's equity sell program to Acqua Wellington.

     "ETC Transaction" means the completion, closing and funding of equipment
trust certificate financing to the Borrower in a principal amount of not less
than $200,000,000.


                                       1
<PAGE>
     "Third Amendment" means that certain Third Amendment to Credit Agreement
dated as of February 8, 2002, among the Borrower, the Administrative Agent and
the Lenders.

     1.2 AMENDMENT TO DEFINITION. The definition of "Loan Documents" set forth
in Section 1.01 of the Credit Agreement is amended to read in full as follows:

     "Loan Documents" means this Agreement, the First Amendment, the Second
Amendment, the Third Amendment, the Notes, the Subsidiary Guaranties, the
Security Instruments, the Intercreditor Agreement, the Letters of Credit, any
Certificate of Conversion, any Borrowing Request, any Interest Election Request,
any Assignment and Acceptance, the Fee Letter, and all other agreements
(including Hedging Agreements) relating to this Agreement entered into from time
to time between or among the Borrower (or any or all of its Subsidiaries) and
the Administrative Agent or any Lender (or, with respect to the Hedging
Agreements, any Affiliates of any Lender), and any document delivered by the
Borrower or any of its Subsidiaries in connection with the foregoing.

     1.3 AMENDMENT TO COLLATERAL PROVISIONS. Section 5.12(b) of the Credit
Agreement is amended to read in full as follows:

     "(b) In the event that the Borrower has timely delivered a Certificate of
Conversion to the Administrative Agent in accordance with Section 2.01(b), and
either of the following has not occurred: (1) receipt by the Borrower of the
Equity Contribution on or before March 31, 2002, or (2) completion, closing and
funding of the ETC Transaction on or before March 31, 2002, then in any such
event, on or before May 1, 2002 (such date being referred to herein as the
"Collateral Delivery Date"), the Borrower shall deliver or cause to be delivered
to the Administrative Agent, each of the following, all in form and substance
acceptable to the Administrative Agent and the Required Lenders in their sole
discretion:

          (i) a Security Agreement (which may take the form of an amendment and
     restatement of the Security Agreement delivered pursuant to Section
     5.12(a)(ii)) executed by the Borrower and certain of its Subsidiaries,
     pursuant to which the Borrower and such Subsidiaries grant to the
     Collateral Agent a valid first and prior Lien on certain equipment, real
     property and other assets and property of the Borrower and such
     Subsidiaries (in addition to the Liens granted pursuant to the Security
     Agreement delivered pursuant to Section 5.12(a)(ii)) as shall be required
     and determined by the Administrative Agent and the Required Lenders;

          (ii) Uniform Commercial Code, tax and judgment lien search reports
     listing all documentation on file against the Borrower, each Subsidiary and
     such other Persons as the Administrative Agent may require in each
     jurisdiction in which it has a principal place of business and jurisdiction
     of organization and in which any Collateral is or has been located;

          (iii) subject to the terms of the Intercreditor Agreement and the
     Security Agreements, such executed documentation as the Collateral Agent or
     the


                                       2
<PAGE>
     Administrative Agent may require or deem necessary to perfect or protect
     the Collateral Agent's Liens in the assets of the Borrower and its
     Subsidiaries granted pursuant to the Security Agreement described in clause
     (i) above, including, without limitation, (A) financing statements under
     the Uniform Commercial Code, (B) all Collateral the possession of which is
     necessary to perfect the Lien therein, (C) all other applicable
     documentation under the laws of any jurisdiction required with respect to
     the creation, perfection and protection of Liens, and (D) all third-party
     or governmental approvals and consents required for the pledge of the
     Collateral under the Security Agreement;

          (iv) duly executed UCC-3 termination statements and such other
     documentation as shall be necessary to terminate or release all Liens
     encumbering the Collateral not otherwise permitted by this Agreement;

          (v) evidence that the insurance required by Section 5.05 is in effect;

          (vi) favorable written opinions from counsel to the Borrower and its
     Subsidiaries addressed to the Lenders and satisfactory to Vinson & Elkins
     L.L.P., counsel for the Administrative Agent, as to such matters relating
     to the Security Agreements and the other Loan Documents, as the
     Administrative Agent may request (and the Borrower hereby instructs its
     counsel to deliver such opinions to the Administrative Agent for the
     benefit of the Lenders);

          (vii) as applicable, a Mortgage with respect to each Mortgaged
     Property executed on behalf of the record owner of such Mortgaged Property
     with a metes and bounds or other description of the parcel attached thereto
     and recorded in the applicable real property records;

          (viii) with respect to each parcel of the Mortgaged Property, a title
     insurance commitment, all documentation evidencing any exceptions to title
     reflected thereon (or other evidence of title satisfactory to the
     Administrative Agent), and, to the extent available, a survey and
     environmental report relating to such parcel; and

          (ix) such additional information and documentation as the Collateral
     Agent or the Administrative Agent may require to consummate the
     transactions contemplated by this Section 5.12(b).

     The Borrower's failure to fully and timely satisfy on or before the
Collateral Delivery Date each requirement set forth in clauses (i) through (ix)
of this Section 5.12(b) shall constitute an immediate Event of Default."

     Section 2. CONDITIONS PRECEDENT TO EFFECTIVENESS OF AMENDMENT. This Third
Amendment shall be effective automatically and without the necessity of any
further action by the Administrative Agent, the Borrower or any Lender when
counterparts hereof have been executed by the Administrative Agent, the Borrower
and the Required Lenders, and each of the following conditions to the
effectiveness hereof have been satisfied:


                                       3
<PAGE>

          (a) the Administrative Agent shall have received such documents and
     certificates as the Administrative Agent and its counsel may reasonably
     request relating to the organization, existence and good standing of the
     Borrower and each Subsidiary, the power and authority of the Borrower and
     each Subsidiary (as applicable) to execute, deliver and perform this Third
     Amendment and any other legal matters relating to the Borrower, any
     Subsidiary or the Loan Documents, all in form and substance satisfactory to
     the Administrative Agent and its counsel;

          (b) the representations and warranties contained herein and in all
     other Loan Documents, as amended hereby, shall be true and correct in all
     material respects as of the Effective Date as if made on the Effective
     Date, except for such representations and warranties limited by their terms
     to a specific date;

          (c) after giving effect to this Third Amendment, no Default or Event
     of Default shall exist; and

          (d) all proceedings taken in connection with the transactions
     contemplated by this Third Amendment and all documentation and other legal
     matters incident thereto shall be satisfactory to the Administrative Agent
     and its counsel.

     Section 3. LEGAL FEES. Upon execution of this Third Amendment by the
Required Lenders, the Borrower shall pay all reasonable fees and expenses of
counsel to the Administrative Agent incurred by the Administrative Agent in
connection with this Third Amendment and all related documents and transactions.

     Section 4. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. To induce the
Lenders and the Administrative Agent to enter into this Third Amendment, the
Borrower hereby represents and warrants to the Administrative Agent and the
Lenders as follows:

         4.1 REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. Each
representation and warranty of the Borrower contained in the Credit Agreement
and the other Loan Documents is true and correct on the date hereof after giving
effect to the amendments set forth in Section 1 hereof.

         4.2 DUE AUTHORIZATION, NO CONFLICTS. The execution, delivery and
performance by the Borrower of this Third Amendment are within the Borrower's
corporate powers, have been duly authorized by necessary action, require no
action by or in respect of, or filing with, any governmental body, agency or
official and do not violate or constitute a default under any provision of
applicable law or any material agreement binding upon the Borrower or its
Subsidiaries, or result in the creation or imposition of any Lien upon any of
the assets of the Borrower or its Subsidiaries except for Permitted
Encumbrances.

         4.3 VALIDITY AND BINDING EFFECT. This Third Amendment constitutes the
valid and binding obligations of the Borrower enforceable in accordance with its
terms, except as (a) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditor's rights generally, and (b) the
availability of equitable remedies may be limited by equitable principles of
general application.


                                       4
<PAGE>


         4.4 NO DEFENSES. The Borrower has no defenses to payment, counterclaim
or rights of set-off with respect to the indebtedness, obligations and
liabilities of the Borrower under the Loan Documents existing on the date
hereof.

         4.5 ABSENCE OF DEFAULTS. After giving effect to the amendments set
forth in Section 1 hereof, neither a Default nor an Event of Default has
occurred which is continuing.

     Section 5.  MISCELLANEOUS.

         5.1 REAFFIRMATION OF LOAN DOCUMENTS. Any and all of the terms and
provisions of the Credit Agreement and the other Loan Documents shall, except as
amended and modified hereby, remain in full force and effect. The Borrower
hereby agrees that the amendments and modifications herein contained shall in no
manner adversely affect or impair the indebtedness, obligations and liabilities
of the Borrower under the Loan Documents.

         5.2 PARTIES IN INTEREST. All of the terms and provisions of this Third
Amendment shall bind and insure to the benefit of the parties hereto and their
respective successors and assigns.

         5.3 COUNTERPARTS. This Third Amendment may be executed in counterparts,
and all parties need not execute the same counterpart; however, no party shall
be bound by this Third Amendment until counterparts hereof have been executed by
the Borrower and the Required Lenders. Facsimiles shall be effective as
originals.

         5.4 COMPLETE AGREEMENT. THIS THIRD AMENDMENT, THE CREDIT AGREEMENT AND
THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN OR AMONG THE PARTIES.

         5.5 HEADINGS. The headings, captions and arrangements used in this
Third Amendment are, unless specified otherwise, for convenience only and shall
not be deemed to limit, amplify or modify the terms of this Third Amendment, nor
affect the meaning thereof.

     IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to
be duly executed by their respective Authorized Officers as of the Effective
Date.

                            [Signature Pages Follow]


                                       5
<PAGE>


                                 SIGNATURE PAGE
                                       TO
                       THIRD AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.,
                  JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS




                                    TRINITY INDUSTRIES, INC.

                                    By:
                                       -----------------------------------------
                                    Name:
                                         ---------------------------------------
                                    Title:
                                          --------------------------------------



                                [Signature Page]

<PAGE>
                                 SIGNATURE PAGE
                                       TO
                       THIRD AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.,
                  JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS



                                    JPMORGAN CHASE BANK (successor in interest
                                    by merger to The Chase Manhattan Bank),
                                    individually and as Administrative Agent



                                    By:
                                        ----------------------------------------
                                        Mike Lister,
                                        Vice President




                                [Signature Page]

<PAGE>
                                 SIGNATURE PAGE
                                       TO
                       THIRD AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.,
                  JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS



                                    DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN
                                    BRANCHES, as a Lender



                                    By:
                                       -----------------------------------------
                                    Name:
                                         ---------------------------------------
                                    Title:
                                          --------------------------------------



                                    By:
                                       -----------------------------------------
                                    Name:
                                         ---------------------------------------
                                    Title:
                                          --------------------------------------





                                [Signature Page]

<PAGE>
                                 SIGNATURE PAGE
                                       TO
                       THIRD AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.,
                  JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS



                                    THE BANK OF TOKYO - MITSUBISHI, LTD.,
                                    as a Lender



                                    By:
                                       -----------------------------------------
                                    Name:
                                         ---------------------------------------
                                    Title:
                                          --------------------------------------



                                    By:
                                       -----------------------------------------
                                    Name:
                                         ---------------------------------------
                                    Title:
                                          --------------------------------------





                                [Signature Page]
<PAGE>
                                 SIGNATURE PAGE
                                       TO
                       THIRD AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.,
                  JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS



                                    BANK ONE, NA, as a Lender



                                    By:
                                       -----------------------------------------
                                    Name:
                                         ---------------------------------------
                                    Title:
                                          --------------------------------------




                                [Signature Page]

<PAGE>
                                 SIGNATURE PAGE
                                       TO
                       THIRD AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.,
                  JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS



                                    SUNTRUST BANK, as a Lender




                                    By:
                                       -----------------------------------------
                                    Name:
                                         ---------------------------------------
                                    Title:
                                          --------------------------------------




                                [Signature Page]
<PAGE>
                                 SIGNATURE PAGE
                                       TO
                       THIRD AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.,
                  JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS



                                    WACHOVIA BANK, N.A., as a Lender



                                    By:
                                       -----------------------------------------
                                    Name:
                                         ---------------------------------------
                                    Title:
                                          --------------------------------------




                                [Signature Page]
<PAGE>
                                 SIGNATURE PAGE
                                       TO
                       THIRD AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.,
                  JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS



                                    BNP PARIBAS, as a Lender



                                    By:
                                       -----------------------------------------
                                    Name:
                                         ---------------------------------------
                                    Title:
                                          --------------------------------------



                                    By:
                                       -----------------------------------------
                                    Name:
                                         ---------------------------------------
                                    Title:
                                          --------------------------------------



                                [Signature Page]
<PAGE>
                                 SIGNATURE PAGE
                                       TO
                       THIRD AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.,
                  JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS



                                    THE ROYAL BANK OF SCOTLAND plc, as a Lender



                                    By:
                                       -----------------------------------------
                                    Name:
                                         ---------------------------------------
                                    Title:
                                          --------------------------------------



                                [Signature Page]

<PAGE>
                                 SIGNATURE PAGE
                                       TO
                       THIRD AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.,
                  JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS



                                    THE BANK OF NOVA SCOTIA, as a Lender



                                    By:
                                       -----------------------------------------
                                    Name:
                                         ---------------------------------------
                                    Title:
                                          --------------------------------------



                                [Signature Page]
<PAGE>
                                 SIGNATURE PAGE
                                       TO
                       THIRD AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.,
                  JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS



                                    THE BANK OF NEW YORK, as a Lender



                                    By:
                                       -----------------------------------------
                                    Name:
                                         ---------------------------------------
                                    Title:
                                          --------------------------------------



                                [Signature Page]
<PAGE>
                                 SIGNATURE PAGE
                                       TO
                       THIRD AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.,
                  JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS



                                    COMERICA BANK, as a Lender



                                    By:
                                       -----------------------------------------
                                    Name:
                                         ---------------------------------------
                                    Title:
                                          --------------------------------------



                                [Signature Page]

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.18.1
<SEQUENCE>15
<FILENAME>d94851ex10-18_1.txt
<DESCRIPTION>1ST AMENDMENT TO TERM CREDIT AGREEMENT
<TEXT>
<PAGE>

                                                                 Exhibit 10.18.1


                    FIRST AMENDMENT TO TERM CREDIT AGREEMENT

     This First Amendment to Term Credit Agreement (this "First Amendment") is
executed effective as of December 10, 2001 (the "Effective Date"), by and among
Trinity Industries, Inc., a Delaware corporation (the "Borrower"), JPMorgan
Chase Bank, successor by merger to The Chase Manhattan Bank, as the
Administrative Agent (the "Administrative Agent"), and the financial
institutions parties hereto as Lenders (individually a "Lender" and collectively
the "Lenders").

                                  WITNESSETH:

     WHEREAS, the Borrower, the Administrative Agent and the Lenders are parties
to that certain Term Credit Agreement dated as of October 15, 2001 (the "Credit
Agreement") (unless otherwise defined herein, all terms used herein with their
initial letter capitalized shall have the meaning given such terms in the Credit
Agreement); and

     WHEREAS, pursuant to the Credit Agreement, the Lenders have made a term
loan to the Borrower; and

     WHEREAS, the Borrower has requested that the Lenders amend certain terms of
the Credit Agreement in certain respects; and

     WHEREAS, subject to the terms and conditions herein contained, the Lenders
have agreed to the Borrower's request.

     NOW THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and confessed, the
Borrower, the Administrative Agent and each Lender hereby agree as follows:

     Section 1. AMENDMENTS. In reliance on the representations, warranties,
covenants and agreements contained in this First Amendment, and subject to the
terms and conditions contained herein, the Credit Agreement is hereby amended
effective as of the Effective Date, in the manner provided in this Section 1.

          1.1  ADDITIONAL DEFINITIONS. Section 1.01 of the Credit Agreement is
amended to add thereto in alphabetical order the definitions of "Collateral
Agent," "Intercreditor Agreement," "Mortgage," "Mortgaged Property," "First
Amendment" and "Security Agreement" which shall read in full as follows:

          "Collateral Agent" means JPMorgan Chase Bank, as collateral agent
under the terms of the Intercreditor Agreement, and its successors and assigns.

          "First Amendment" means that certain First Amendment to Term Credit
Agreement dated as of December 10, 2001, among the Borrower, the Administrative
Agent and the Lenders.


                                       1


<PAGE>


          "Intercreditor Agreement" means that certain Intercreditor Agreement
to be executed in accordance with Section 5.09 by the Borrower, certain of its
Subsidiaries, the Collateral Agent, the Administrative Agent and JPMorgan Chase
Bank, as administrative agent for the lenders under the Revolving Credit
Agreement, in the form approved by the Required Lenders and as the same may be
amended or otherwise modified from time to time.

          "Mortgage" means any mortgage, deed of trust, assignment of leases and
rents, leasehold mortgage or other security document granting a Lien to the
Collateral Agent on any Mortgaged Property to secure the obligations described
in the Intercreditor Agreement. Each Mortgage shall be satisfactory in form and
substance to the Administrative Agent.

          "Mortgaged Property" means each parcel of real property and
improvements thereto owned by the Borrower with respect to which a Mortgage is
granted pursuant to Section 5.09 or the Intercreditor Agreement.

          "Security Agreements" means one or more security agreements to be
executed in accordance with Section 5.09, and pursuant to the terms of the
Intercreditor Agreement, by the Borrower, certain of its Subsidiaries and the
Collateral Agent, which shall be satisfactory in form and substance to the
Administrative Agent.

          1.2  AMENDMENTS TO DEFINITIONS. The definitions of "Administrative
Agent," "Chase," "Collateral," "ETC Indebtedness," "Loan Documents" and
"Security Instruments" set forth in Section 1.01 of the Credit Agreement are
amended to read in full as follows:

          "Administrative Agent" means (i) prior to November 10, 2001, The Chase
Manhattan Bank, and (ii) from and after November 10, 2001, JPMorgan Chase Bank,
successor by merger to The Chase Manhattan Bank, in its capacity as
administrative agent for the Lenders hereunder.

          "Chase" means (i) prior to November 10, 2001, The Chase Manhattan
Bank, and (ii) from and after November 10, 2001, JPMorgan Chase Bank, successor
by merger to The Chase Manhattan Bank, in its individual capacity or as an
Issuing Bank, as the case may be, and not as Administrative Agent.

          "Collateral" means the Mortgaged Property, the "Collateral" as defined
in the Security Agreements and any and all property and assets on which Liens
have been granted to the Collateral Agent to secure the indebtedness,
obligations and liabilities of the Borrower and its Subsidiaries under the Loan
Documents.

          "ETC Indebtedness" means equipment trust certificate or other secured
Indebtedness financing created or incurred after the date hereof and secured by
leased rail equipment which is pledged to a trustee acting on behalf of the
holders of such certificates or other secured Indebtedness.

          "Loan Documents" means this Agreement, the First Amendment, the Notes,
the Subsidiary Guaranties, the Security Instruments, the Intercreditor
Agreement, any Interest Election Request, any Assignment and Acceptance, the Fee
Letter, and all other agreements (including Hedging Agreements) relating to this
Agreement entered into from time to time


                                       2


<PAGE>


between or among the Borrower (or any or all of its Subsidiaries) and the
Administrative Agent or any Lender (or, with respect to the Hedging Agreements,
any Affiliates of any Lender), and any document delivered by the Borrower or any
of its Subsidiaries in connection with the foregoing.

          "Security Instruments" means the Mortgages, the Security Agreements
and any and all other mortgages, deeds of trust, security agreements, pledge
agreements, financing statements and other agreements, documents or instruments
now or hereafter executed and delivered by the Borrower, any of its Subsidiaries
or any other Person as security for the payment and performance of the
indebtedness, obligations and liabilities of the Borrower and its Subsidiaries
under the Loan Documents.

          1.3  AMENDMENT TO SECURITY INSTRUMENTS PROVISION. Section 5.05 of the
Credit Agreement is amended to read in full as follows:

          "SECTION 5.05 Security Instruments. If at any time, the ratings
     established by either S&P or Moody's for the Index Debt are reduced to a
     category or level (as established in accordance with the terms of this
     Agreement) below the applicable Security Threshold Rating Level, the
     Borrower will, and will cause each of its Subsidiaries (as applicable) to,
     at the Borrower's expense, execute and deliver to the Administrative Agent
     for the benefit of the Lenders, on or prior to twenty (20) days following
     the reduction of either of the ratings for the Index Debt to a category or
     level below the applicable Security Threshold Rating Level (or on or prior
     to such other date as may be agreed to in writing by the Borrower and the
     Required Lenders), and at such other times as the Required Lenders shall
     request, one or more Security Instruments, in form and substance
     satisfactory to the Administrative Agent, and in such number of
     counterparts as the Administrative Agent or the Collateral Agent shall
     request, for the purpose and with the effect of granting to the Collateral
     Agent as security for the indebtedness, obligations and liabilities of the
     Borrower and its Subsidiaries described in the Intercreditor Agreement, a
     valid first and prior Lien on such assets and property of the Borrower and
     its Subsidiaries as the Required Lenders may require, together with such
     other executed documentation as the Administrative Agent or any Lender may
     require or deem necessary to perfect or protect the Collateral Agent's
     Liens on such assets and properties of the Borrower and its Subsidiaries,
     including, without limitation, (i) financing statements under the Uniform
     Commercial Code, (ii) all intellectual property assignments for all
     intellectual property registered in the United States of America, (iii) all
     Collateral the possession of which is necessary to perfect the Liens
     therein, (iv) all other applicable documentation under the laws of any
     jurisdiction required with respect to the creation, perfection and
     protection of Liens, (v) all third-party or governmental approvals and
     consents required for the pledge of the Collateral under the Security
     Instruments, and (vi) opinions of counsel (including, without limitation,
     local counsel), in form and substance satisfactory to the Administrative
     Agent, and covering such matters as the Administrative Agent or the
     Required Lenders shall reasonably request. Notwithstanding the foregoing or
     anything else to the contrary contained herein, the assets and property of
     the Borrower and its


                                       3


<PAGE>

     Subsidiaries on which Liens have been (or will be) granted to secure the
     indebtedness, obligations and liabilities of the Borrower and such
     Subsidiaries described in Sections 6.01(i), (j) and (n) of the Revolving
     Credit Agreement shall not be included as Collateral for purposes of this
     Section 5.05 (including, without limitation, such assets and property
     separately identified in writing by the Borrower or the appropriate
     Subsidiary as reasonably necessary to secure such indebtedness, obligations
     and liabilities that may be incurred by the Borrower or such Subsidiary
     under Sections 6.01(i), (j) and (n) of the Revolving Credit Agreement) for
     as long as such assets and property continue to secure (or be separately
     identified as reasonably necessary to secure) such indebtedness,
     obligations and liabilities."

          1.4  ADDITIONAL AFFIRMATIVE COVENANTS. Article V of the Credit
Agreement is amended to add new Sections 5.08 nd 5.09 thereto to read in full as
follows:

          "SECTION 5.08 Compliance With Security Instruments. The Borrower will,
     and will cause each of its Subsidiaries to, comply with its obligations
     under the Intercreditor Agreement and the Security Agreements arising in
     connection with the formation or acquisition of any Subsidiary within ten
     (10) Business Days after such Subsidiary is formed or acquired.

          "SECTION 5.09 Collateral Provisions.

               (a)  On or before December 31, 2001, the Borrower shall deliver
     or cause to be delivered to the Administrative Agent, each of the
     following, all in form and substance acceptable to the Administrative Agent
     and the Required Lenders in their sole discretion:

                    (i)  the Intercreditor Agreement executed by the Borrower
          and certain of its Subsidiaries a party thereto;

                    (ii) a Security Agreement executed by the Borrower and
          certain of its Subsidiaries a party thereto, pursuant to which the
          Borrower and such Subsidiaries grant to the Collateral Agent a valid
          first and prior Lien on all of their accounts receivable and
          inventory;

                    (iii) a Subsidiary Guaranty executed by each of Trinity Rail
          Group, LLC, Trinity Tank Car, Inc., Trinity Rail Components & Repair,
          Inc. and Thrall Trinity Freight Car, Inc.;

                    (iv) Uniform Commercial Code, tax and judgment lien search
          reports listing all documentation on file against the Borrower, each
          Subsidiary (as applicable) and such other Persons as the
          Administrative Agent may require in each jurisdiction in which it has
          a principal place of business and jurisdiction of organization and in
          which any Collateral is or has been located;


                                       4


<PAGE>


                    (v)  subject to the terms of the Intercreditor Agreement and
          the Security Agreements, such executed documentation as the Collateral
          Agent or the Administrative Agent may require or deem necessary to
          perfect or protect the Collateral Agent's Liens in the assets of the
          Borrower and its Subsidiaries granted pursuant to the Security
          Agreement described in clause (ii) above, including, without
          limitation, (A) financing statements under the Uniform Commercial
          Code, (B) all Collateral the possession of which is necessary to
          perfect the Lien therein, (C) all other applicable documentation under
          the laws of any jurisdiction required with respect to the creation,
          perfection and protection of Liens, and (D) all third-party or
          governmental approvals and consents required for the pledge of the
          Collateral under the Security Agreement;

                    (vi) duly executed UCC-3 termination statements and such
          other documentation as shall be necessary to terminate or release all
          Liens encumbering the Collateral not otherwise permitted by this
          Agreement;

                    (vii) evidence that the insurance required by Section 5.05
          of the Revolving Credit Agreement is in effect;

                    (viii) favorable written opinions from counsel to the
          Borrower and its Subsidiaries addressed to the Lenders and
          satisfactory to Vinson & Elkins L.L.P., counsel for the Administrative
          Agent, as to such matters relating to the Intercreditor Agreement, the
          Security Agreements and the other Loan Documents, as the
          Administrative Agent may request (and the Borrower hereby instructs
          its counsel to deliver such opinions to the Administrative Agent for
          the benefit of the Lenders);

                    (ix) an amendment to the Revolving Credit Agreement, in form
          and substance satisfactory to the Administrative Agent, executed by
          the Borrower, JPMorgan Chase Bank, as administrative agent for the
          lenders under the Revolving Credit Agreement, and the lenders a party
          to such Revolving Agreement; and

                    (x)  such additional information and documentation as the
          Collateral Agent or the Administrative Agent may require to consummate
          the transactions contemplated by this Section 5.09(a).

          The Borrower shall, and shall cause each Subsidiary to use,
     commercially reasonable efforts to obtain on or before February 28, 2002,
     lien waivers, subordination agreements and/or estoppel certificates with
     respect to the Collateral from all of the Borrower's and its applicable
     Subsidiaries' landlords, mortgages and/or lessees.


                                       5


<PAGE>


          The Borrower's failure to fully and timely satisfy on or before
December 31, 2001 each requirement set forth in clauses (i) through (x) of this
Section 5.09(a) shall constitute an immediate Event of Default.

               (b)  On or before February 15, 2002, the Borrower shall deliver
     or cause to be delivered to the Administrative Agent, each of the
     following, all in form and substance acceptable to the Administrative Agent
     and the Required Lenders in their sole discretion:

                    (i)  a Security Agreement (which may take the form of an
          amendment and restatement of the Security Agreement delivered pursuant
          to Section 5.09(a)(ii)) executed by the Borrower and certain of its
          Subsidiaries, pursuant to which the Borrower and certain of its
          Subsidiaries grant to the Collateral Agent a valid first and prior
          Lien on certain equipment, real property and other assets and property
          of the Borrower and such Subsidiaries (in addition to the Liens
          granted pursuant to the Security Agreement delivered pursuant to
          Section 5.09(a)(ii)) as shall be required and determined by the
          Administrative Agent and the Required Lenders;

                    (ii) Uniform Commercial Code, tax and judgment lien search
          reports listing all documentation on file against the Borrower, each
          Subsidiary and such other Persons as the Administrative Agent may
          require in each jurisdiction in which it has a principal place of
          business and jurisdiction of organization and in which any Collateral
          is or has been located;

                    (iii) subject to the terms of the Intercreditor Agreement
          and the Security Agreements, such executed documentation as the
          Collateral Agent or the Administrative Agent may require or deem
          necessary to perfect or protect the Collateral Agent's Liens in the
          assets of the Borrower and its Subsidiaries granted pursuant to the
          Security Agreement described in clause (i) above, including, without
          limitation, (A) financing statements under the Uniform Commercial
          Code, (B) all Collateral the possession of which is necessary to
          perfect the Lien therein, (C) all other applicable documentation under
          the laws of any jurisdiction required with respect to the creation,
          perfection and protection of Liens, and (D) all third-party or
          governmental approvals and consents required for the pledge of the
          Collateral under the Security Agreement;

                    (iv) duly executed UCC-3 termination statements and such
          other documentation as shall be necessary to terminate or release all
          Liens encumbering the Collateral not otherwise permitted by this
          Agreement;


                                       6


<PAGE>


                    (v)  evidence that the insurance required by Section 5.05 of
          the Revolving Credit Agreement is in effect;

                    (vi) favorable written opinions from counsel to the Borrower
          and its Subsidiaries addressed to the Lenders and satisfactory to
          Vinson & Elkins L.L.P., counsel for the Administrative Agent, as to
          such matters relating to the Security Agreements and the other Loan
          Documents, as the Administrative Agent may request (and the Borrower
          hereby instructs its counsel to deliver such opinions to the
          Administrative Agent for the benefit of the Lenders);

                    (vii) as applicable, a Mortgage with respect to each
          Mortgaged Property executed on behalf of the record owner of such
          Mortgaged Property with a metes and bounds or other description of the
          parcel attached thereto and recorded in the applicable real property
          records;

                    (viii) with respect to each parcel of the Mortgaged
          Property, a title insurance commitment, all documentation evidencing
          any exceptions to title reflected thereon (or other evidence of title
          satisfactory to the Administrative Agent), and, to the extent
          available, a survey and environmental report relating to such parcel;
          and

                    (ix) such additional information and documentation as the
          Collateral Agent or the Administrative Agent may require to consummate
          the transactions contemplated by this Section 5.09(b).

          The Borrower's failure to fully and timely satisfy on or before
     February 15, 2002 each requirement set forth in clauses (i) through (ix) of
     this Section 5.09(b) shall constitute an immediate Event of Default."

          1.5  AMENDMENT TO DEFAULT PROVISIONS. Article VII of the Credit
Agreement is amended as follows:

               (a)  Clause (d) of Article VII of the Credit Agreement is amended
     to read in full as follows:

          "(d) the Borrower shall fail to observe or perform any covenant,
     condition or agreement contained in Sections 5.01, 5.02, 5.03 (with respect
     to the Borrower's and its Subsidiaries' existence), 5.09 or in Article VI,
     in any Security Agreement, in any Mortgage or in the Intercreditor
     Agreement;".

               (b)  New clauses (o), (p) and (q) are added to Article VII of the
     Credit Agreement to read in their entireties as follows and the word "or"
     is deleted from the end of clause (m):


                                       7


<PAGE>


          "(o) any Lien purported to be created under any Loan Document shall
     cease to be, or shall be asserted by the Borrower or any of its
     Subsidiaries not to be, a valid and perfected Lien on any Collateral, with
     the priority required hereby, except as a result of the sale or other
     disposition of the applicable Collateral in a transaction permitted under
     the Loan Documents;

          (p)  the occurrence of an Event of Default (as defined in the
     Intercreditor Agreement); or

          (q)  either any Subsidiary Guaranty, any Security Agreement, the
     Intercreditor Agreement or any Mortgage shall for any reason cease to be in
     full force and effect and valid, binding and enforceable in accordance with
     its terms after its date of execution, or the Borrower or any of its
     Subsidiaries shall so state in writing."

               (c)  The following provision is added to the end of Article VII
     of the Credit Agreement:

          "In addition to the other rights and remedies that the Lenders may
     have upon the occurrence of an Event of Default, the Required Lenders may
     direct the Collateral Agent to exercise the rights and remedies available
     to the Collateral Agent under the Intercreditor Agreement, the Mortgage and
     the Security Agreement."

          1.6  AMENDMENT TO AGENT PROVISIONS. The following provision is added
to the end of Article VIII of the Credit Agreement:

          "The Administrative Agent is authorized to execute the Intercreditor
     Agreement on behalf of each Lender and bind each Lender to the terms
     thereof as if each Lender were directly a party thereto."

          1.7  AMENDMENT TO WAIVERS AND AMENDMENTS PROVISIONS. Section 9.02(b)
of the Credit Agreement is amended to read in full as follows:

          "(b) Neither this Agreement nor any of the Loan Documents nor any
     provision hereof or thereof may be waived, amended or modified except
     pursuant to an agreement or agreements in writing entered into by the
     Borrower and the Required Lenders or by the Borrower and the Administrative
     Agent with the consent of the Required Lenders; provided that no such
     agreement shall (i) reduce the principal amount of the Loan or reduce the
     rate of interest thereon, or reduce any fees payable hereunder, without the
     written consent of each Lender affected thereby, (ii) postpone the
     scheduled date of payment of the principal amount of the Loan, or any
     interest thereon, or any fees payable hereunder, or reduce the amount of,
     waive or excuse any such payment, without the written consent of each
     Lender affected thereby, (iii) change Section 2.12(b) or (c) in a manner
     that would alter the pro rata sharing of payments required thereby, without
     the written consent of each Lender, (iv) release any Material Subsidiary
     from its obligations under its Subsidiary Guaranty, without the written
     consent of each Lender, (v)


                                       8


<PAGE>


     release any material portion of the Collateral, without the written consent
     of each Lender, except as expressly permitted hereby, and provided that the
     Administrative Agent or the Collateral Agent shall release (without consent
     from the Lenders) any Collateral sold, transferred or otherwise disposed of
     as permitted by Section 6.03 of the Revolving Credit Agreement, or (vi)
     change any of the provisions of this Section 9.02(b) or the definition of
     "Required Lenders" or any other provision hereof specifying the number or
     percentage of Lenders required to waive, amend or modify any rights
     hereunder or make any determination or grant any consent hereunder, without
     the written consent of each Lender; provided further that no such agreement
     shall amend, modify or otherwise affect the rights or duties of any Agent
     hereunder without the prior written consent of such Agent.

     Section 2. CONDITIONS PRECEDENT TO EFFECTIVENESS OF AMENDMENT. With the
exception of Section 1.7 hereof, this First Amendment shall be effective
automatically and without the necessity of any further action by the
Administrative Agent, the Borrower or any Lender when counterparts hereof have
been executed by the Administrative Agent, the Borrower and the Required
Lenders, and each of the following conditions to the effectiveness hereof have
been satisfied:

               (a)  the Administrative Agent shall have received such documents
     and certificates as the Administrative Agent and its counsel may reasonably
     request relating to the organization, existence and good standing of the
     Borrower and each Subsidiary, the power and authority of the Borrower and
     each Subsidiary (as applicable) to execute, deliver and perform this First
     Amendment and any other legal matters relating to the Borrower, any
     Subsidiary or the Loan Documents, all in form and substance satisfactory to
     the Administrative Agent and its counsel;

               (b)  the Administrative Agent shall have received all fees and
     other amounts due and payable on or prior to the Effective Date, including
     reimbursement or payment of all out-of-pocket expenses (including fees,
     charges and disbursements of counsel) required to be reimbursed hereunder
     or under any other Loan Document;

               (c)  the representations and warranties contained herein and in
     all other Loan Documents, as amended hereby, shall be true and correct in
     all material respects as of the Effective Date as if made on the Effective
     Date, except for such representations and warranties limited by their terms
     to a specific date;

               (d)  after giving effect to this First Amendment, no Default or
     Event of Default shall exist; and

               (e)  all proceedings taken in connection with the transactions
     contemplated by this First Amendment and all documentation and other legal
     matters incident thereto shall be satisfactory to the Administrative Agent
     and its counsel.

Section 1.7 hereof will be effective automatically and without the necessity of
any further action by the Administrative Agent, the Borrower or any Lender when
counterparts hereof have been


                                       9


<PAGE>


executed by the Administrative Agent, the Borrower and all Lenders, and each of
the foregoing conditions to the effectiveness hereof have been satisfied.

     Section 3. LEGAL FEES. Upon execution of this First Amendment by the
Required Lenders, the Borrower shall pay all reasonable fees and expenses of
counsel to the Administrative Agent incurred by the Administrative Agent in
connection with this First Amendment and all related documents and transactions.

     Section 4. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. To induce the
Lenders and the Administrative Agent to enter into this First Amendment, the
Borrower hereby represents and warrants to the Administrative Agent and the
Lenders as follows:

             4.1  REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. Each
representation and warranty of the Borrower contained in the Credit Agreement
and the other Loan Documents is true and correct on the date hereof after giving
effect to the amendments set forth in Section 1 hereof.

             4.2  DUE AUTHORIZATION, NO CONFLICTS. The execution, delivery and
performance by the Borrower of this First Amendment are within the Borrower's
corporate powers, have been duly authorized by necessary action, require no
action by or in respect of, or filing with, any governmental body, agency or
official and do not violate or constitute a default under any provision of
applicable law or any material agreement binding upon the Borrower or its
Subsidiaries, or result in the creation or imposition of any Lien upon any of
the assets of the Borrower or its Subsidiaries except for Permitted Encumbrances
(as defined in the Revolving Credit Agreement).

             4.3  VALIDITY AND BINDING EFFECT. This First Amendment constitutes
the valid and binding obligations of the Borrower enforceable in accordance with
its terms, except as (a) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditor's rights generally,
and (b) the availability of equitable remedies may be limited by equitable
principles of general application.

             4.4  NO DEFENSES. The Borrower has no defenses to payment,
counterclaim or rights of set-off with respect to the indebtedness, obligations
and liabilities of the Borrower under the Loan Documents existing on the date
hereof.

             4.5  ABSENCE OF DEFAULTS. After giving effect to the amendments set
forth in Section 1 hereof, neither a Default nor an Event of Default has
occurred which is continuing.

     Section 5. MISCELLANEOUS.

             5.1  REAFFIRMATION OF LOAN DOCUMENTS. Any and all of the terms and
provisions of the Credit Agreement and the other Loan Documents shall, except as
amended and modified hereby, remain in full force and effect. The Borrower
hereby agrees that the amendments and modifications herein contained shall in no
manner adversely affect or impair the indebtedness, obligations and liabilities
of the Borrower under the Loan Documents.


                                       10


<PAGE>


          5.2  PARTIES IN INTEREST. All of the terms and provisions of this
First Amendment shall bind and inure to the benefit of the parties hereto and
their respective successors and assigns.

          5.3  COUNTERPARTS. This First Amendment may be executed in
counterparts, and all parties need not execute the same counterpart; however, no
party shall be bound by this First Amendment until counterparts hereof have been
executed by the Borrower and the Required Lenders. Facsimiles shall be effective
as originals.

          5.4  COMPLETE AGREEMENT. THIS FIRST AMENDMENT, THE CREDIT AGREEMENT
AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES
WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN OR AMONG THE PARTIES.

          5.5  HEADINGS. The headings, captions and arrangements used in this
First Amendment are, unless specified otherwise, for convenience only and shall
not be deemed to limit, amplify or modify the terms of this First Amendment, nor
affect the meaning thereof.

     IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
be duly executed by their respective Authorized Officers as of the Effective
Date.

                            [Signature Pages Follow]









                                       11

<PAGE>


                                 SIGNATURE PAGE
                                       TO
                       FIRST AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.
                THE CHASE MANHATTAN BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS


                                        TRINITY INDUSTRIES, INC.


                                        By:
                                            ------------------------------------
                                        Name:
                                               ---------------------------------
                                        Title:
                                               ---------------------------------









                                [Signature Page]


<PAGE>


                                 SIGNATURE PAGE
                                       TO
                       FIRST AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.
                THE CHASE MANHATTAN BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS




                                        JPMORGAN CHASE BANK
                                        (successor in interest by merger to
                                        The Chase Manhattan Bank), individually
                                        and as Administrative Agent


                                        By:
                                            ------------------------------------
                                            Name:  Mike Lister
                                            Title: Vice President









                                [Signature Page]


<PAGE>


                                 SIGNATURE PAGE
                                       TO
                       FIRST AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.
                THE CHASE MANHATTAN BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS




                                        DRESDNER BANK AG, NEW YORK AND
                                        GRAND CAYMAN BRANCHES, as a Lender


                                        By:
                                            ------------------------------------
                                        Name:
                                               ---------------------------------
                                        Title:
                                               ---------------------------------


                                        By:
                                            ------------------------------------
                                        Name:
                                               ---------------------------------
                                        Title:
                                               ---------------------------------









                                [Signature Page]


<PAGE>


                                 SIGNATURE PAGE
                                       TO
                       FIRST AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.
                THE CHASE MANHATTAN BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS




                                        THE BANK OF TOKYO - MITSUBISHI, LTD.,
                                        as a Lender


                                        By:
                                            ------------------------------------
                                        Name:
                                               ---------------------------------
                                        Title:
                                               ---------------------------------


                                        By:
                                            ------------------------------------
                                        Name:
                                               ---------------------------------
                                        Title:
                                               ---------------------------------









                                [Signature Page]


<PAGE>


                                 SIGNATURE PAGE
                                       TO
                       FIRST AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.
                THE CHASE MANHATTAN BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS




                                        BANK ONE, NA, as a Lender


                                        By:
                                            ------------------------------------
                                        Name:
                                               ---------------------------------
                                        Title:
                                               ---------------------------------









                                [Signature Page]


<PAGE>


                                 SIGNATURE PAGE
                                       TO
                       FIRST AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.
                THE CHASE MANHATTAN BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS




                                        SUNTRUST BANK, as a Lender


                                        By:
                                            ------------------------------------
                                        Name:
                                               ---------------------------------
                                        Title:
                                               ---------------------------------









                                [Signature Page]


<PAGE>


                                 SIGNATURE PAGE
                                       TO
                       FIRST AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.
                THE CHASE MANHATTAN BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS




                                        BNP PARIBAS, as a Lender


                                        By:
                                            ------------------------------------
                                        Name:
                                               ---------------------------------
                                        Title:
                                               ---------------------------------


                                        By:
                                            ------------------------------------
                                        Name:
                                               ---------------------------------
                                        Title:
                                               ---------------------------------









                                [Signature Page]


<PAGE>


                                 SIGNATURE PAGE
                                       TO
                       FIRST AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.
                THE CHASE MANHATTAN BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS




                                        THE ROYAL BANK OF SCOTLAND plc,
                                        as a Lender


                                        By:
                                            ------------------------------------
                                        Name:
                                               ---------------------------------
                                        Title:
                                               ---------------------------------









                                [Signature Page]


<PAGE>


                                 SIGNATURE PAGE
                                       TO
                       FIRST AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.
                THE CHASE MANHATTAN BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS




                                        THE BANK OF NOVA SCOTIA, as a Lender


                                        By:
                                            ------------------------------------
                                        Name:
                                               ---------------------------------
                                        Title:
                                               ---------------------------------









                                [Signature Page]


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.18.2
<SEQUENCE>16
<FILENAME>d94851ex10-18_2.txt
<DESCRIPTION>2ND AMENDMENT TO TERM CREDIT AGREEMENT
<TEXT>
<PAGE>

                                                                 EXHIBIT 10.18.2

                    SECOND AMENDMENT TO TERM CREDIT AGREEMENT

     This Second Amendment to Term Credit Agreement (this "Second Amendment") is
executed effective as of February 8, 2002 (the "Effective Date"), by and among
Trinity Industries, Inc., a Delaware corporation (the "Borrower"), JPMorgan
Chase Bank, successor by merger to The Chase Manhattan Bank, as the
Administrative Agent (the "Administrative Agent"), and the financial
institutions parties hereto as Lenders (individually a "Lender" and collectively
the "Lenders").

                                  WITNESSETH:

     WHEREAS, the Borrower, the Administrative Agent and the Lenders are parties
to that certain Term Credit Agreement dated as of October 15, 2001, as amended
by that certain First Amendment to Term Credit Agreement dated as of December
10, 2001 (as amended, the "Credit Agreement") (unless otherwise defined herein,
all terms used herein with their initial letter capitalized shall have the
meaning given such terms in the Credit Agreement); and

     WHEREAS, pursuant to the Credit Agreement, the Lenders have made a term
loan to the Borrower; and

     WHEREAS, the Borrower has requested that the Lenders amend certain terms of
the Credit Agreement in certain respects; and

     WHEREAS, subject to the terms and conditions herein contained, the Lenders
have agreed to the Borrower's request.

     NOW THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and confessed, the
Borrower, the Administrative Agent and each Lender hereby agree as follows:

     Section 1. AMENDMENTS. In reliance on the representations, warranties,
covenants and agreements contained in this Second Amendment, and subject to the
terms and conditions contained herein, the Credit Agreement is hereby amended
effective as of the Effective Date, in the manner provided in this Section 1.

         1.1 ADDITIONAL DEFINITION. Section 1.01 of the Credit Agreement is
amended to add thereto in alphabetical order the definition of "Second
Amendment" which shall read in full as follows:

         "Second Amendment" means that certain Second Amendment to Term Credit
Agreement dated as of February 8, 2002, among the Borrower, the Administrative
Agent and the Lenders.

         1.2 AMENDMENT TO DEFINITION. The definition of "Loan Documents" set
forth in Section 1.01 of the Credit Agreement is amended to read in full as
follows:

                                       1
<PAGE>

         "Loan Documents" means this Agreement, the First Amendment, the Second
Amendment, the Notes, the Subsidiary Guaranties, the Security Instruments, the
Intercreditor Agreement, any Interest Election Request, any Assignment and
Acceptance, the Fee Letter, and all other agreements (including Hedging
Agreements) relating to this Agreement entered into from time to time between or
among the Borrower (or any or all of its Subsidiaries) and the Administrative
Agent or any Lender (or, with respect to the Hedging Agreements, any Affiliates
of any Lender), and any document delivered by the Borrower or any of its
Subsidiaries in connection with the foregoing.

         1.3 AMENDMENT TO COLLATERAL PROVISIONS. Section 5.09(b) of the Credit
Agreement is amended to read in full as follows:

         "(b) [Intentionally Deleted]."

     Section 2. CONDITIONS PRECEDENT TO EFFECTIVENESS OF AMENDMENT. This Second
Amendment shall be effective automatically and without the necessity of any
further action by the Administrative Agent, the Borrower or any Lender when
counterparts hereof have been executed by the Administrative Agent, the Borrower
and the Required Lenders, and each of the following conditions to the
effectiveness hereof have been satisfied:

          (a) the Administrative Agent shall have received such documents and
     certificates as the Administrative Agent and its counsel may reasonably
     request relating to the organization, existence and good standing of the
     Borrower and each Subsidiary, the power and authority of the Borrower and
     each Subsidiary (as applicable) to execute, deliver and perform this Second
     Amendment and any other legal matters relating to the Borrower, any
     Subsidiary or the Loan Documents, all in form and substance satisfactory to
     the Administrative Agent and its counsel;

          (b) the representations and warranties contained herein and in all
     other Loan Documents, as amended hereby, shall be true and correct in all
     material respects as of the Effective Date as if made on the Effective
     Date, except for such representations and warranties limited by their terms
     to a specific date;

          (c) after giving effect to this Second Amendment, no Default or Event
     of Default shall exist; and

          (d) all proceedings taken in connection with the transactions
     contemplated by this Second Amendment and all documentation and other legal
     matters incident thereto shall be satisfactory to the Administrative Agent
     and its counsel.

     Section 3. LEGAL FEES. Upon execution of this Second Amendment by the
Required Lenders, the Borrower shall pay all reasonable fees and expenses of
counsel to the Administrative Agent incurred by the Administrative Agent in
connection with this Second Amendment and all related documents and
transactions.

     Section 4. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. To induce the
Lenders and the Administrative Agent to enter into this Second Amendment, the
Borrower hereby represents and warrants to the Administrative Agent and the
Lenders as follows:

                                       2
<PAGE>

         4.1 REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. Each
representation and warranty of the Borrower contained in the Credit Agreement
and the other Loan Documents is true and correct on the date hereof after giving
effect to the amendments set forth in Section 1 hereof.

         4.2 DUE AUTHORIZATION, NO CONFLICTS. The execution, delivery and
performance by the Borrower of this Second Amendment are within the Borrower's
corporate powers, have been duly authorized by necessary action, require no
action by or in respect of, or filing with, any governmental body, agency or
official and do not violate or constitute a default under any provision of
applicable law or any material agreement binding upon the Borrower or its
Subsidiaries, or result in the creation or imposition of any Lien upon any of
the assets of the Borrower or its Subsidiaries except for Permitted Encumbrances
(as defined in the Revolving Credit Agreement).

         4.3 VALIDITY AND BINDING EFFECT. This Second Amendment constitutes the
valid and binding obligations of the Borrower enforceable in accordance with its
terms, except as (a) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditor's rights generally, and (b) the
availability of equitable remedies may be limited by equitable principles of
general application.

         4.4 NO DEFENSES. The Borrower has no defenses to payment, counterclaim
or rights of set-off with respect to the indebtedness, obligations and
liabilities of the Borrower under the Loan Documents existing on the date
hereof.

         4.5 ABSENCE OF DEFAULTS. After giving effect to the amendments set
forth in Section 1 hereof, neither a Default nor an Event of Default has
occurred which is continuing.

Section 5.        MISCELLANEOUS.

         5.1 REAFFIRMATION OF LOAN DOCUMENTS. Any and all of the terms and
provisions of the Credit Agreement and the other Loan Documents shall, except as
amended and modified hereby, remain in full force and effect. The Borrower
hereby agrees that the amendments and modifications herein contained shall in no
manner adversely affect or impair the indebtedness, obligations and liabilities
of the Borrower under the Loan Documents.

         5.2 PARTIES IN INTEREST. All of the terms and provisions of this Second
Amendment shall bind and inure to the benefit of the parties hereto and their
respective successors and assigns.

         5.3 COUNTERPARTS. This Second Amendment may be executed in
counterparts, and all parties need not execute the same counterpart; however, no
party shall be bound by this Second Amendment until counterparts hereof have
been executed by the Borrower and the Required Lenders. Facsimiles shall be
effective as originals.

         5.4 COMPLETE AGREEMENT. THIS SECOND AMENDMENT, THE CREDIT AGREEMENT AND
THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF


                                       3
<PAGE>

PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN
ORAL AGREEMENTS BETWEEN OR AMONG THE PARTIES.

         5.5 HEADINGS. The headings, captions and arrangements used in this
Second Amendment are, unless specified otherwise, for convenience only and shall
not be deemed to limit, amplify or modify the terms of this Second Amendment,
nor affect the meaning thereof.

     IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
be duly executed by their respective Authorized Officers as of the Effective
Date.

                            [Signature Pages Follow]


                                       4
<PAGE>


                                 SIGNATURE PAGE
                                       TO
                      SECOND AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.,
                  JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS


                                         TRINITY INDUSTRIES, INC.


                                         By:
                                             -----------------------------------
                                         Name:
                                               ---------------------------------
                                         Title:
                                               ---------------------------------


                                [Signature Page]


<PAGE>


                                 SIGNATURE PAGE
                                       TO
                      SECOND AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.,
                  JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS



                                        JPMORGAN CHASE BANK (successor in
                                        interest by merger to The Chase
                                        Manhattan Bank), individually and as
                                        Administrative Agent


                                        By:
                                            ------------------------------------
                                             Mike Lister,
                                             Vice President



                                [Signature Page]


<PAGE>



                                 SIGNATURE PAGE
                                       TO
                      SECOND AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.,
                  JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS


                                        DRESDNER BANK AG, NEW YORK AND GRAND
                                        CAYMAN BRANCHES, as a Lender



                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                              ----------------------------------


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                              ----------------------------------



                                [Signature Page]


<PAGE>



                                 SIGNATURE PAGE
                                       TO
                      SECOND AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.,
                  JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS



                                        THE BANK OF TOKYO - MITSUBISHI, LTD., as
                                        a Lender



                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                              ----------------------------------


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                              ----------------------------------



                                [Signature Page]


<PAGE>



                                 SIGNATURE PAGE
                                       TO
                      SECOND AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.,
                  JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS



                                        BANK ONE, NA, as a Lender


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                              ----------------------------------



                                [Signature Page]


<PAGE>



                                 SIGNATURE PAGE
                                       TO
                      SECOND AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.,
                  JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS



                                        SUNTRUST BANK, as a Lender


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                              ----------------------------------


                                [Signature Page]


<PAGE>



                                 SIGNATURE PAGE
                                       TO
                      SECOND AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.,
                  JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS



                                        BNP PARIBAS, as a Lender


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                              ----------------------------------


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                              ----------------------------------



                                [Signature Page]


<PAGE>



                                 SIGNATURE PAGE
                                       TO
                      SECOND AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.,
                  JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS




                                        THE ROYAL BANK OF SCOTLAND plc, as a
                                        Lender


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                              ----------------------------------


                                [Signature Page]


<PAGE>



                                 SIGNATURE PAGE
                                       TO
                      SECOND AMENDMENT TO CREDIT AGREEMENT
                                  BY AND AMONG
                            TRINITY INDUSTRIES, INC.,
                  JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT
            AND THE FINANCIAL INSTITUTIONS PARTIES THERETO AS LENDERS



                                        THE BANK OF NOVA SCOTIA, as a Lender


                                         By:
                                             -----------------------------------
                                         Name:
                                               ---------------------------------
                                         Title:
                                               ---------------------------------



                                [Signature Page]



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>17
<FILENAME>d94851ex21.txt
<DESCRIPTION>LISTING OF SUBSIDIARIES
<TEXT>
<PAGE>
                                                                      EXHIBIT 21


                            TRINITY INDUSTRIES, INC.
                   Listing of Subsidiaries of the Registrant


The Registrant has no parent.
At March 1, 2002, the operating subsidiaries of the Registrant were:


<Table>
<Caption>
                                                                          Percentage of
                                                          Organized     voting securities
                                                          under the        owned by the
Name of subsidiary                                         laws of          Registrant
- ------------------                                        ---------     -----------------

<S>                                                       <C>             <C>
Apromat, S.A. - Arad                                       Romania              50%
Astra Vagoane, S.A. - Arad                                 Romania              96%
Concrete Supply.Net, Inc.                                  Texas               100%
ICPV S.A. - Arad                                           Romania              89%
International Industrial Indemnity Co.                     Vermont             100%
MEVA, S.A. - Drobeta Turnu-Severin                         Romania              80%
Reunion General Agency, Inc.                               Texas               100%
Syro, Inc.                                                 Ohio                100%
Transit Mix Concrete & Materials Company                   Delaware            100%
   Transit Mix Concrete - Baytown, Inc.                    Texas               100%
Transit Mix Concrete & Materials Company of Louisiana      Louisiana           100%
Trinity Argentina S.R.L.                                   Argentina           100%
Trinity EE, Inc.                                           Delaware            100%
Trinity E-Ventures, Inc.                                   Delaware            100%
Trinity Equipment Co., Inc.                                Delaware            100%
Trinity Equipment Manufacturing Company, Inc.              Delaware            100%
Trinity Fitting & Flange Group, Inc.                       Delaware            100%
Trinity Industries Buffalo, Inc.                           Delaware            100%
Trinity Industries International Holdings AG               Switzerland         100%
   Administradora Especializada, S. de R.L. de C.V         Mexico              100%
   Grupo Tatsa, S. de R.L. de C.V.                         Mexico              100%
      Trinity Industries de Mexico, S. de R.L. de C.V.     Mexico              100%
   Servicios Corporativos Tatsa, S. de R.L. de C.V         Mexico              100%
   Trinity Industries do Brasil, Ltda.                     Brazil              100%
   Trinity Industries GmbH                                 Switzerland         100%
      Wagonmarket, spol. s r.o.                            Slovak Republic     100%
   Trinity Rail do Brasil, Ltda.                           Brazil              100%
Trinity Industries Leasing Company                         Delaware            100%
Trinity Industries Transportation, Inc.                    Texas               100%
Trinity Marine Products, Inc.                              Delaware            100%
Trinity Materials, Inc.                                    Delaware            100%
Trinity Mining Services, Inc.                              Delaware            100%
Trinity Rail Group, LLC                                    Delaware            100%
   Thrall Europa, s.r.o.                                   Czech Republic      100%
      Thrall Vagonka Studerka, a.s.                        Czech Republic       95%
   Thrall International Holdings LLC                       Illinois             99%
      Thrall Europa Gmbh                                   Switzerland         100%
      Thrall Europa (UK)                                   England & Wales     100%
   Thrall Company                                          Delaware            100%
         Rail Project, s.r.o.                              Slovak Republic     100%
</Table>
<PAGE>
<Table>
<S>                                                       <C>             <C>
   Thrall Trinity Freight Car, Inc.                        Delaware            100%
      Trinity DIFCO, Inc.                                  Delaware            100%
         DIFCO, Inc.                                       Ohio                100%
   Trinity Rail Components & Repair, Inc                   Delaware            100%
      McConway and Torley Corporation                      Pennsylvania        100%
            MCT Properties, Inc.                           Delaware            100%
            McConway and Torley - Anniston, Inc.           Delaware            100%
      Standard Forged Products, Inc.                       Delaware            100%
      Trinity Railcar Repair, Inc.                         Delaware            100%
   Trinity Tank Car, Inc.                                  Delaware            100%
Trinity Rail, Inc.                                         Delaware            100%
   Trinity Rail Management, Inc.                           Delaware            100%
      TILX GP I, LLC                                       Delaware            100%
      TILX LP I, LLC                                       Delaware            100%
Trinity Structural Towers, Inc.                            Delaware            100%
TRN Investment Company, Inc.                               Delaware            100%
   TRN, Inc.                                               Delaware            100%
      TRM Business Trust                                   Delaware            100%
Waldorf Properties, Inc.                                   Delaware            100%
</Table>

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
