Exh 10.14.5 12.31.2013

EX-10.14.5 22 exh1014512312013.htm EXHIBIT 10.14.5 Exh 10.14.5 12.31.2013

EXHIBIT 10.14.5

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)

TABLE OF CONTENTS

Page

----

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

Participation Agreement (TRLI 2001-1C)

Page

----

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

Participation Agreement (TRLI 2001-1C)

Page

----

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

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-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

Participation Agreement (TRLI 2001-1C)

iii

EXHIBITS AND SCHEDULES

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.

Participation Agreement (TRLI 2001-1C)

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)

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)

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)

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)

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

Participation Agreement (TRLI 2001-1C)

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)

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.

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)

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)

(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)

(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.

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)

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)

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)

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.

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)

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.

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)

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)

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;

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)

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)

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)

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)

(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)

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)

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)

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)

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)

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)

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;

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)

(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.

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)

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)

(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;

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)

(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)

(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;

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)

(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)

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)

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)

(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)

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;

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)

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

Participation Agreement (TRLI 2001-1C)

(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;

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

Participation Agreement (TRLI 2001-1C)

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

Participation Agreement (TRLI 2001-1C)

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.

Participation Agreement (TRLI 2001-1C)

(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.

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

Participation Agreement (TRLI 2001-1C)

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

Participation Agreement (TRLI 2001-1C)

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

Participation Agreement (TRLI 2001-1C)

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

Participation Agreement (TRLI 2001-1C)

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.

Participation Agreement (TRLI 2001-1C)

(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.

Participation Agreement (TRLI 2001-1C)

(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.

Participation Agreement (TRLI 2001-1C)

(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.

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

Participation Agreement (TRLI 2001-1C)

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.

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.

Participation Agreement (TRLI 2001-1C)

(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.

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

Participation Agreement (TRLI 2001-1C)

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

Participation Agreement (TRLI 2001-1C)

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;

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

Participation Agreement (TRLI 2001-1C)

(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

Participation Agreement (TRLI 2001-1C)

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;

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

Participation Agreement (TRLI 2001-1C)

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

Participation Agreement (TRLI 2001-1C)

(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

Participation Agreement (TRLI 2001-1C)

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

Participation Agreement (TRLI 2001-1C)

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.

Participation Agreement (TRLI 2001-1C)

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:

Participation Agreement (TRLI 2001-1C)

(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

Participation Agreement (TRLI 2001-1C)

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.

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,

Participation Agreement (TRLI 2001-1C)

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

Participation Agreement (TRLI 2001-1C)

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

Participation Agreement (TRLI 2001-1C)

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.

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

Participation Agreement (TRLI 2001-1C)

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

Participation Agreement (TRLI 2001-1C)

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

(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.

not include:

Participation Agreement (TRLI 2001-1C)

(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

Participation Agreement (TRLI 2001-1C)

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

Participation Agreement (TRLI 2001-1C)

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;

Participation Agreement (TRLI 2001-1C)

(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.

Participation Agreement (TRLI 2001-1C)

(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

Participation Agreement (TRLI 2001-1C)

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

Participation Agreement (TRLI 2001-1C)

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

Participation Agreement (TRLI 2001-1C)

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

Participation Agreement (TRLI 2001-1C)

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).

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

Participation Agreement (TRLI 2001-1C)

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

(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.

Participation Agreement (TRLI 2001-1C)

(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

Participation Agreement (TRLI 2001-1C)

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;

Participation Agreement (TRLI 2001-1C)

(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

Participation Agreement (TRLI 2001-1C)

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;

Participation Agreement (TRLI 2001-1C)

(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: