GENERAL AMERICAN TRANSPORTATION CORP /NY/, 8-K, 1994-08-12

GENERAL AMERICAN TRANSPORTATION CORP /NY/
8-K, 1994-08-12
TRANSPORTATION SERVICES

Previous: MERRILL LYNCH CORPORATE BOND FUND INC/NY, N-30B-2, 1994-08-12

Next: SPIEGEL INC, 10-Q, 1994-08-12

<PAGE> 1

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

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

FORM 8-K
CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

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

Date of Report (Date of earliest event reported) August 12, 1994

GENERAL AMERICAN TRANSPORTATION CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S><C>
New York 2-54754 36-2827991
(State or other jurisdiction (Commission (I.R.S. employer
of incorporation) file number) identification no.)
500 West Monroe Street, Chicago, Illinois 60661
(Address of principal executive offices) (Zip Code)
</TABLE>

Registrant's telephone number, including area code (312) 621-6200

- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
<PAGE> 2

ITEM 7. (FINANCIAL STATEMENTS AND EXHIBITS)

The following documents are being filed in connection with, and
incorporated by reference into, the Registration Statement on Form S-3 (File No.
33-48475) of General American Transportation Corporation ("GATC"), declared
effective on July 31, 1992 and the Registration Statement on Form S-3 (File No.
33-52301) of GATC, declared effective on February 25, 1994.

<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- - ----------------
<S> <C>
1 -- Form of Underwriting Agreement between GATC and the Underwriters named
therein.
4.1 -- Form of Pass Through Trust Supplement No. 3 between GATC and the Pass
Through Trustee relating to the Pass Through Certificates.
4.2 -- Form of Trust Indenture and Security Agreement between the Owner Trustee
and the Indenture Trustee relating to the Equipment Notes.
4.3 -- Form of Equipment Note to be issued by the Owner Trustee (included in
Exhibit 4.2).
4.4 -- Form of Participation Agreement among GATC, the Owner Trustee, the Owner
Participant, the Indenture Trustee and the Pass Through Trustee.
4.5 -- Form of Equipment Lease Agreement between GATC and the Owner Trustee
relating to the Equipment Notes.
4.6 -- Form of Trust Agreement between the Owner Trustee and the Owner
Participant.
</TABLE>

2
<PAGE> 3

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED.

GENERAL AMERICAN
TRANSPORTATION CORPORATION

<TABLE>
<S> <C>
August 12, 1994 By: /s/ MELVIN D. KUSTA
Melvin D. Kusta
Controller
</TABLE>

<PAGE> 1
EXHIBIT 1

GENERAL AMERICAN TRANSPORTATION CORPORATION
PASS THROUGH CERTIFICATES, SERIES 1994-1
UNDERWRITING AGREEMENT

Salomon Brothers Inc
8700 Sears Tower
Chicago, Illinois 60606

Morgan Stanley & Co.
Incorporated
1221 Avenue of the Americas
4th Floor
New York, New York 10020

Dear Sirs:

August 9, 1994

General American Transportation Corporation, a New York corporation (the
"Company"), in connection with the financing of the debt portion of a leveraged
lease transaction in which the Company is lessee, proposes that The First
National Bank of Chicago, as trustee (the "Trustee") of the GATC 1994-1 Pass
Through Trust (the "Pass Through Trust") established under the Pass Through
Trust Agreement, dated as of August 1, 1992 (the "Basic Agreement"), between
the Trustee and the Company, and Supplement No. 3 thereto, dated as of August
9, 1994 (the "Trust Supplement"), between the Trustee and the Company, will
issue and sell $93,425,000 aggregate principal amount of Pass Through
Certificates, Series 1994-1 (the "Pass Through Certificates"), with the
[interest rate and final distribution date set forth on Schedule A hereto to
you, as underwriters (the "Underwriters").

As used in this Agreement the terms "Certificateholder," "Equipment,"
"Equipment Notes," "Excepted Property," "Indenture Estate," "Indenture
Supplement," "Indenture Trustee," "Lease," "Lease Supplement," "Lien,"
"Operative Agreements," "Owner Trustee," "Participation Agreement," "Permitted
Liens," "Rent" and "Trust Estate" shall have the meanings attributed to them in
the Trust Indenture and Security Agreement, dated as of August 9, 1994, between
the Owner Trustee and the Indenture Trustee (the "Indenture"). All other
capitalized terms used herein shall, for the purposes hereof, have the meanings
attributed to them in this Agreement.

The terms which follow, when used in this Agreement, shall have the
meanings indicated. The term "Effective Date" shall mean each date that the
Registration Statement (as hereinafter defined) and any post-effective
amendment or amendments thereto became or become effective. "Execution Time"
shall mean the date and time that this Agreement is executed and delivered by
the parties hereto. The "Basic Prospectus" shall mean the prospectus referred
<PAGE> 2
to in paragraph (a) below contained in the Registration Statement at the
Effective Date. "Preliminary Final Prospectus" shall mean any preliminary
prospectus supplement to the Basic Prospectus which describes the Pass Through
Certificates and the offering thereof and is used prior to filing of the Final
Prospectus, together with the Basic Prospectus. "Final Prospectus" shall mean
the prospectus supplement relating to the Pass Though Certificates that is
first filed pursuant to Rule 424(b) after the Execution Time, together with the
Basic Prospectus. "Registration Statement" shall mean the registration
statement referred to in paragraph (a) below, including incorporated documents,
exhibits and financial statements, as amended at the Execution Time (or, if not
effective at the Execution Time, in the form in which it shall become
effective) and, in the event any post-effective amendment thereto becomes
effective prior to the Closing Date (as hereinafter defined), shall also mean
such registration statement as so amended. "Rule 405", "Rule 415", "Rule 424"
and "Rule 429" refer to such rules or regulations under the Securities Act of
1933, as amended (the "Act"). Any reference herein to the Registration
Statement, the Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus shall be deemed to refer to and include the documents incorporated
by reference therein pursuant to Item 12 of Form S-3 which were filed under the
Securities and Exchange Act of 1934, as amended (the "Exchange Act") on or
before the Effective Date or the issue date of the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case may be; and
any reference herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statement, the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus shall be deemed to refer to and
include the filing of any document under the Exchange Act after the Effective
Date of the Registration Statement, or, the issue date of the Basic Prospectus,
any Preliminary Final Prospectus or the Final Prospectus, as the case may be,
deemed to be incorporated therein by reference. A "Delayed Offering" shall
mean an offering of securities pursuant to Rule 415 which does not commence
promptly after the effective date of a Registration Statement, with the result
that only information required pursuant to Rule 415 need be included in such
Registration Statement at the effective date thereof with respect to the
securities so offered.

1. Representations and Warranties. The Company represents and
warrants to, each Underwriter as set forth below in this Section 1.

(a) The Company meets the requirements for the use of Form S-3 under
the Act and has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (file number 33-52301) on such Form
including a Basic Prospectus, for the registration under the Act of the
offering and sale of up to $650,000,000 of pass through certificates. If the
Company may have filed any amendments thereto, or used a Preliminary Final

-2-
<PAGE> 3
Prospectus, each such amendment or Preliminary Final Prospectus has previously
been furnished to the Underwriters. Such registration statement, as amended,
has become effective. The offering of the Pass Through Certificates is a
Delayed Offering and, accordingly, it is not necessary that any further
information has been included in an amendment to such Registration Statement
prior to the Effective Date with respect to the Pass-Through Certificates and
the offering thereof required by the Act and the rules thereunder to be
included in the Final Prospectus. The Company will next file with the
Commission pursuant to Rules 415, 424(b)(2) or (5) and 429 a final supplement
to the form of prospectus included in such Registration Statement relating to
the Pass-Through Certificates and the offering thereof. As filed, such Final
Prospectus supplement shall include all required information with respect to
the Pass-Through Certificates and the offering thereof and, except to the
extent the Underwriters shall agree in writing to a modification, shall be in
all substantive respects in the form furnished to the Underwriters prior to the
Execution Time or, to the extent not completed at the Execution Time, shall
contain only such specific additional information and other changes (beyond
that contained in the Basic Prospectus and any Preliminary Final Prospectus) as
the Company has advised the Underwriters, prior to the Execution Time, will be
included or made therein.

(b) On the Effective Date, the Registration Statement did or will, and
when the Final Prospectus is first filed (if required) in accordance with Rule
424(b) and on the Closing Date (as hereinafter defined), the Final Prospectus
(and any supplements thereto) will, comply in all material respects with the
applicable requirements of the Act and the Exchange Act, and the respective
rules and regulations thereunder, on the Effective Date, the Registration
Statement did not or will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary
in order to make the statements therein not misleading; on the Effective Date
and on the Closing Date, the Basic Agreement and the Trust Supplement did or
will comply in all material respects with the requirements of the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the rules
thereunder; and, on the Effective Date, the Final Prospectus, if not filed
pursuant to Rule 424(b), did not or will not, and on the date of any filing
pursuant to Rule 424(b) and on the Closing Date, the Final Prospectus (together
with any supplements thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Company makes no
representations or warranties as to (i) that part of the Registration Statement
which shall constitute the Statement of Eligibility (Form T-1) under the Trust
Indenture Act of the Trustee and (ii) the information contained in or omitted
from the Registration Statement or the Final Prospectus (or any supplement
thereto) in reliance upon and in conformity with information

-3-
<PAGE> 4
furnished in writing to the Company by or on behalf of any Underwriter
specifically for use in connection with the preparation of the Registration
Statement or the Final Prospectus (or any supplement thereto).

(c) The consolidated financial statements incorporated by reference in
the Registration Statement, the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus present fairly the consolidated financial
position of the Company and its subsidiaries as at the dates indicated and the
consolidated results of their operations and cash flows for the periods
specified and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis during the periods
involved, except as indicated therein, and the supporting schedules
incorporated by reference in the Registration Statement present fairly the
information required to be stated therein.

(d) The documents incorporated by reference in the Basic Prospectus,
any Preliminary Final Prospectus or the Final Prospectus, at the time they were
or hereafter are filed with the Commission, complied and (in the case of any
amendment or supplement to any such document, or any material incorporated by
reference in any document filed with the Commission after the date as of which
this representation is being made) will comply in all material respects with
the requirements of the Exchange Act, and the rules and regulations thereunder.

(e) Since the respective dates as of which information is given in the
Registration Statement, the Basic Prospectus, any Preliminary Final Prospectus
or the Final Prospectus, except as otherwise stated therein or contemplated
thereby, there has been no material adverse change in the business, properties,
condition (financial or other), or results of operation of the Company and its
subsidiaries taken as a whole.

(f) The Company and each Significant Subsidiary (with such term having
the meaning attributed to it under Rule 405 under the Act) has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of the jurisdiction in which it is chartered or organized, with full
corporate power and authority to own its properties and conduct its business as
described in the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus, and is duly qualified to do business as a foreign corporation
and is in good standing under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties or conducts
material business except in such jurisdictions in which the failure to so
qualify would not have a material adverse effect on the Company taken as a
whole.

(g) The execution and delivery by the Company of this Agreement, the
Participation Agreement, the Basic Agreement, the Trust Supplement and the
Lease and other Operative Agreements to

-4-
<PAGE> 5
which the Company is, or is to be, a party, the consummation by the Company of
the transactions herein and therein contemplated, and the compliance by the
Company with the terms hereof and thereof do not and will not conflict with, or
result in a breach of any of the terms or provisions of, or constitute a
default under, the Articles of Incorporation or By-Laws, as amended, of the
Company or any agreement or instrument binding upon the Company or any of its
subsidiaries that is material to the Company and its subsidiaries taken as a
whole, or any provision of applicable law, judgment, order or decree of any
government, governmental instrumentality or court having jurisdiction over the
Company or any of its subsidiaries; and no consent, approval, authorization,
order or license of, or filing with or notice to any government, governmental
instrumentality, regulatory body or authority or court, domestic or foreign, is
required on the part of the Company for the valid authorization, issuance and
delivery of the Pass Through Certificates and the Equipment Notes, the valid
authorization, execution, delivery and performance by the Company of this
Agreement, the Participation Agreement, the Basic Agreement, the Trust
Supplement and the Lease and other Operative Agreements to which the Company
is, or is to be a party, or the consummation by the Company of the transactions
contemplated by this Agreement, the Participation Agreement, the Basic
Agreement, the Trust Supplement and the Lease and other Operative Agreements to
which the Company is, or is to be, a party, except (x) such as are required
under the Act, the Trust Indenture Act and the securities or Blue Sky laws of
the various states and (y) such filings or recordings with the Interstate
Commerce Commission and the Registrar General of Canada under the Railway Act
of Canada as may be required.

(h) This Agreement, the Participation Agreement, the Basic Agreement,
the Trust Supplement and the Lease and other Operative Agreements to which the
Company is, or is to be, a party, have each been duly authorized by the Company
and, when executed and delivered by the Company, will constitute valid and
binding obligations of the Company, and the Basic Agreement will have been duly
qualified under the Trust Indenture Act. On the Closing Date (as hereinafter
defined), the Lease and other Operative Agreements to which the Company is, or
is to be, a party will constitute the valid and binding obligations of the
Company. The Pass Through Certificates, the Equipment Notes, the Indenture,
the Participation Agreement, the Basic Agreement, the Trust Supplement and the
Lease and other Operative Agreements to which the Company is, or is to be, a
party will conform in all material respects to the descriptions thereof in the
Basic Prospectus, any Preliminary Final Prospectus and the Final Prospectus.

(i) Ernst & Young, who reported on the annual consolidated financial
statements of the Company incorporated by reference in the Registration
Statement, the Basic Prospectus, any Preliminary

-5-
<PAGE> 6
Final Prospectus or the Final Prospectus, are independent auditors as required
by the Act and the rules and regulations thereunder.

(j) Assuming the due authority of the Trustee to execute, deliver and
carry out the terms of the Basic Agreement and the Trust Supplement, the Pass
Through Certificates, when duly executed, authenticated and delivered by the
Trustee in accordance with the terms of the Basic Agreement, the Trust
Supplement and this Agreement, will be duly issued under the Basic Agreement
and the Trust Supplement, and will constitute valid and binding obligations of
the Trustee; and the holders thereof will be entitled to the benefits of the
Basic Agreement and the Trust Supplement.

(k) The Equipment Notes to be issued under the Indenture, when duly
authorized, executed and delivered by the Owner Trustee and duly authenticated
by the Indenture Trustee in accordance with the terms of the Indenture, will be
duly issued under the Indenture and will constitute valid and binding
obligations of the Owner Trustee; and the holders thereof will be entitled to
the benefits of the Indenture.

(l) As of the Closing Date, the Pass Through Certificates will be rated
"A-" by Standard & Poor's Corporation ("S&P") and "A3" by Moody's Investors
Service, Inc. ("Moody's").

2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to cause the Trustee to sell to each Underwriter, and each Underwriter
agrees, severally and not jointly, to purchase from the Trustee, at a purchase
price of 100% of the principal amount thereof plus accrued interest, if any, on
the Pass Through Certificates from August 16, 1994 to the Closing Date, the
principal amount of the Pass Through Certificates set forth opposite such
Underwriter's name in Schedule B hereto.

As compensation to the Underwriters for their commitment and obligations
hereunder in respect of the Pass Through Certificates, including their
undertaking to offer the Pass Through Certificates for sale to the public, the
Company will pay, or cause to be paid to the Underwriters by the Owner Trustee
pursuant to the Participation Agreement, an amount equal to 0.8% of the
aggregate principal amount of the Pass Through Certificates. Such payment
shall be made simultaneously with the payment by the Underwriters to the
Trustee of the purchase price of the Pass Through Certificates as specified in
Section 3 hereof. Payment of such compensation shall be made by Federal funds
check or other immediately available funds to the order of Salomon Brothers
Inc.

3. Delivery and Payment. Delivery of and payment for the Pass Through
Certificates shall be made on the date and at the time and location specified
in Schedule A hereto, which date and time

-6-
<PAGE> 7
may be postponed by agreement between the Underwriters and the Company (such
date and time of delivery and payment for the Pass Through Certificates being
herein called the "Closing Date"). Delivery of the Pass Through Certificates
shall be made to each of the Underwriters' respective accounts at The
Depository Trust Company against payment by the Underwriters of the purchase
price thereof to or upon the order of the Trustee by Federal funds check or
other immediately available funds. The Pass Through Certificates shall be
registered in such names and in such denominations as each Underwriter may
request not less than three full business days in advance of the Closing Date
or such other date as may be agreed upon.

The Company agrees to have the Pass Through Certificates available for
inspection, checking and packaging by the Underwriters in New York, not later
than 1:00 p.m. on the business day prior to the Closing Date.

4. Offering by Underwriters. It is understood that, after this
Agreement has been entered into and the Registration Statement becomes
effective, the Underwriters propose to offer the Pass Through Certificates for
sale to the public as set forth in the Basic Prospectus, any Preliminary Final
Prospectus and the Final Prospectus.

5. Agreements. The Company agrees with the Underwriters that:

(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment thereof,
to become effective and the Basic Agreement to be qualified under the Trust
Indenture Act. Prior to the Closing Date, the Company will not file any
amendment of the Registration Statement or supplement to the Final Prospectus
unless the Company has furnished the Underwriters a copy for your review prior
to filing and will not file any such proposed amendment or supplement to which
the Underwriters reasonably object. Subject to the foregoing sentence, if
filing of the Final Prospectus is required under Rule 424(b), the Company will
cause the Final Prospectus, properly completed, and any supplement thereto to
be filed with the Commission pursuant to the applicable paragraph of Rule
424(b) within the time period prescribed and will provide evidence satisfactory
to the Underwriters of such timely filing. The Company will promptly advise
the Underwriters (i) when the Registration Statement, if not effective at the
Execution Time, and any amendment thereto, shall have become effective, (ii)
when the Final Prospectus, and any supplement thereto, shall have been filed
(if required) with the Commission pursuant to Rule 424(b), (iii) when, prior to
termination of the offering of the Pass Through Certificates, any amendment to
the Registration Statement shall have been filed or become effective, (iv) of
any request by the Commission for any amendment of the Registration Statement
or

-7-
<PAGE> 8
supplement to the Final Prospectus or for any additional information, (v) of
the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the institution or threatening of any
proceeding for that purpose, (vi) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Pass
Through Certificates for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose and (vii) during the period when
a prospectus relating to the Pass Through Certificates is required to be
delivered under the Act, of the mailing or the delivery to the Commission for
filing of any document to be filed pursuant to the Exchange Act. The Company
will use its best efforts to prevent the issuance of any such stop order and,
if issued, to obtain as soon as possible the withdrawal thereof.

(b) If at any time when a prospectus relating to the Pass Through
Certificates is required to be delivered under the Act, any event occurs as a
result of which the Final Prospectus as then supplemented would include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it shall be necessary to
amend the Registration Statement or supplement the Final Prospectus to comply
with the Act or the Exchange Act or the respective rules and regulations
thereunder, the Company promptly will prepare and file with the Commission,
subject to paragraph (a) of this Section 5, an amendment or supplement which
will correct such statement or omission or an amendment which will effect such
compliance.

(c) As soon as practicable, the Company will make generally available
to its security holders and to the Underwriters an earnings statement or
statements of the Company and its subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and the applicable rules and regulations
thereunder.

(d) The Company will furnish to each Underwriter and the Underwriters'
counsel, without charge, a signed copy of the Registration Statement (including
exhibits thereto and materials incorporated by reference therein) and, so long
as delivery of a prospectus by the Underwriters or a dealer may be required by
the Act, as many copies of the Basic Prospectus, each Preliminary Final
Prospectus and the Final Prospectus and any amendments thereof and supplements
thereto as any Underwriter may reasonably request.

(e) The Company will arrange for the qualification of the Pass Through
Certificates for sale under the laws of such jurisdictions as each of you may
designate, will maintain such qualifications in effect so long as required for
the distribution of the Pass Through Certificates; provided, however, that the
Company will not be required to file any general consent to service of process
or qualify to do business in any jurisdiction in order to effect such
qualification.

-8-
<PAGE> 9
(f) Between the date of this Agreement and the Closing Date, the
Company will not without the Underwriters' prior written consent offer, sell,
or enter into any agreement to sell, any public debt securities registered
under the Act which are substantially similar to the Pass Through Certificates
(other than the Pass Through Certificates).

(g) As of the date hereof it is in compliance with all provisions of
Section 1 of Laws of Florida, Chapter 92-198, An Act Relating to Disclosure of
Doing Business with Cuba, and the Company further agrees that if it commences
engaging in business with the government of Cuba or with any person or
affiliate located in Cuba after the date the Registration Statement becomes or
has become effective with the Securities and Exchange Commission or with the
Florida Department of Banking and Finance (the "Department"), whichever date is
later, or if the information reported in the Final Prospectus, if any,
concerning the Company's business with Cuba or with any person or affiliate
located in Cuba changes in any material way, the Company will provide the
Department notice of such business or change, as appropriate, in a form
acceptable to the Department.

6. Conditions to the Obligation of the Underwriters. The
Underwriters' obligation to purchase the Pass Through Certificates shall be
subject to the accuracy of the representations and warranties on the part of
the Company contained herein as of the Execution Time and the Closing Date, to
the accuracy of the statements of the Company made in any certificates
delivered pursuant to the provisions hereof, to the performance by the Company
of its obligations hereunder and to the following additional conditions:

(a) If the Registration Statement has not become effective prior to the
Execution Time, the Registration Statement shall have become effective not
later than (i) 5:00 p.m., New York City time, on the date of determination of
the public offering price, if such determination occurred at or prior to 3:00
p.m., New York City time, on such date or (ii) 12:00 noon on the business day
following the day on which the public offering price was determined, if such
determination occurred after 3:00 p.m., New York City time, on such date; if
filing of the Final Prospectus, or any supplement thereto, is required pursuant
to Rule 424(b), the Final Prospectus, and any such supplement, shall have been
filed in the manner and within the time period required by Rule 424(b); and no
stop order suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been instituted
or threatened.

(b) The representations and warranties of the Company contained in the
Participation Agreement, the Lease and other Operative Agreements shall be true
and correct in all material respects on and as of the Closing Date with the
same effect as

-9-
<PAGE> 10
though such representations and warranties had been made on and as of such
date, and the Company shall have delivered to you a certificate, dated the
Closing Date, signed in each case by the President or any Vice President and
its principal financial or accounting officer to the effect that the signers of
such certificate have carefully examined the Participation Agreement, the Lease
and other Operative Agreements, the Registration Statement, the Preliminary
Final Prospectus and the Final Prospectus and that:

(i) The representations and warranties of the Company in the
Participation Agreement, the Lease and the other Operative Agreements, to
which the Company is, or is to be, a party are true and correct in all
material respects on and as of the Closing Date as if made on and as of
the Closing Date.

(ii) The Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied on
or prior to the Closing Date pursuant to the terms of the Basic
Agreement, the Trust Supplement, the Participation Agreement, the Lease
and the other Operative Agreements, to which the Company is, or is to be,
a party.

(iii) Nothing has come to their attention that would lead either
of them to believe that the Registration Statement contains any untrue
statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

(c) The Company shall have furnished to the Underwriters and the rating
agencies (if so required) the opinion of Ronald J. Ciancio, counsel to the
Company, dated the Closing Date, in form reasonably satisfactory to the
Underwriters, the rating agencies and to Winston & Strawn, special counsel for
the Underwriters, to the effect that:

(i) the Company and each Significant Subsidiary has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or organized,
with full corporate power and authority to own its properties and conduct
its business as described in the Final Prospectus, and is duly qualified
to do business as a foreign corporation and is in good standing under the
laws of each jurisdiction which requires such qualification wherein it
owns or leases material properties or conducts material business, except
in such jurisdictions in which the failure to so qualify would not have a
material adverse effect on the Company and its subsidiaries taken as a
whole;

-10-
<PAGE> 11
(ii) the Company has the corporate power and authority under New
York law to perform its obligations hereunder and under the Participation
Agreement, the Basic Agreement, the Trust Supplement, the Lease and the
other Operative Agreements to which the Company is, or is to be, a party;

(iii) all the outstanding shares of capital stock of each
Significant Subsidiary have been duly and validly authorized and issued
and are fully paid and nonassessable, and, except as otherwise set forth
in the Final Prospectus, all outstanding shares of capital stock of each
Significant Subsidiary are owned by the Company either directly or
through wholly owned subsidiaries free and clear of any perfected
security interest and, to the knowledge of such counsel, after due
inquiry, any other security interests, claims, liens or encumbrances;

(iv) there is no pending or, to the best knowledge of such
counsel, threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries, of a character required to be
disclosed in the Registration Statement or the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus which is not
adequately disclosed, and there is no franchise, contract or other
document of a character required to be described in the Registration
Statement or the Basic Prospectus, any Preliminary Final Prospectus or
the Final Prospectus, or to be filed as an exhibit, which is not
described or filed as required;

(v) the execution and delivery by the Company of this Agreement,
the Participation Agreement, the Basic Agreement, the Trust Supplement,
the Lease and the other Operative Agreements to which the Company is, or
is to be, a party, the consummation by the Company of the transactions
herein and therein contemplated and in the manner herein and therein
contemplated and compliance by the Company with the terms hereof and
thereof, do not and will not conflict with, or result in a breach by the
Company of, any of the terms or provisions of, or constitute a default
under its Articles of Incorporation or By-laws, as amended, or any
indenture or other agreement or instrument known to such counsel to which
the Company is a party or by which the Company is bound that is material
to the Company and its subsidiaries taken as a whole, or any law, rule,
regulation, judgment or order known to such counsel to be applicable to
the Company of any court, regulatory body, administrative agency,
government or governmental body having jurisdiction over the Company,
except that such counsel need express no opinion or belief as to the
accuracy or completeness of the Registration Statement or Final
Prospectus except for the opinions expressed in clause

-11-
<PAGE> 12
(iv) (except that such counsel need not express any opinion as to any
violation of any such law, rule or regulation, judgment or order (a)
which does not materially affect the validity of the Equipment Notes or
the Pass Through Certificates or (b) which reflects conclusions based on
misrepresentations to, concealment of information from or other
fraudulent acts perpetrated on such counsel);

(vi) each document filed pursuant to the Exchange Act and
incorporated by reference in the Final Prospectus (except for the
financial statements, including the notes thereto and related schedules
and other financial and statistical information included or incorporated
by reference therein, as to which such counsel need express no opinion)
appeared on its face, as of its respective filing date, to comply as to
form in all material respects with the requirements of the Exchange Act
and the rules and regulations thereunder; and

(vii) assuming due authorization, execution and delivery of the
Basic Agreement and the Trust Supplement by the Trustee, the Basic
Agreement and the Trust Supplement constitute valid and binding
obligations of the Company enforceable in accordance with their terms,
except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting enforcement of creditors'
rights generally and by general principles of equity.

(d) The Company shall have furnished to the Underwriters and the rating
agencies (if so required) the opinion of Mayer, Brown & Platt, special counsel
to the Company, dated the Closing Date, in form reasonably satisfactory to the
Underwriters, the rating agencies and to Winston & Strawn, special counsel for
the Underwriters, to the effect that:

(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full corporate
power and authority to own its properties and conduct its business as
described in the Final Prospectus;

(ii) the execution and delivery by the Company of this Agreement,
the Participation Agreement, the Basic Agreement, the Trust Supplement,
the Lease and the other Operative Agreements to which the Company is, or
is to be, a party, the consummation by the Company of the transactions
herein and therein contemplated and in the manner herein and therein
contemplated and compliance by the Company with the terms hereof and
thereof, do not and will not conflict with, or result in a breach by the
Company of, any of the terms or provisions of, or constitute a default
under, its Articles of Incorporation or By-laws, as amended;

-12-
<PAGE> 13
(iii) the Pass Through Certificates conform in all material
respects to the description thereof contained in the Final Prospectus,
and such description conforms in all material respects to the rights set
forth in the instruments defining the same;

(iv) no authorization, approval, consent, order or license of or
filing with or giving of notice to any government, governmental
instrumentality, regulatory body or authority or court in the United
States is required on the part of the Company for the valid
authorization, execution, delivery and performance by the Company of this
Agreement, the Participation Agreement, the Basic Agreement, the Trust
Supplement, the Lease and other Operative Agreements to which the Company
is, or is to be, a party, or the consummation by the Company of the
transactions contemplated by this Agreement, the Participation Agreement,
the Basic Agreement, the Trust Supplement, the Lease and other Operative
Agreements to which the Company is, or is to be, a party, except (x) such
as are required under the Act, the Trust Indenture Act and the securities
or Blue Sky laws of the various states and (y) such filings with the
Interstate Commerce Commission as may be required;

(v) the Registration Statement has become effective under the
Act; any filing of the Basic Prospectus, any Preliminary Final Prospectus
and the Final Prospectus, and any supplements thereto, required pursuant
to Rule 424(b) has been made in the manner and within the time period
required by Rule 424(b); the Basic Agreement has become qualified under
the Trust Indenture Act; to the best knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement has been
issued, no proceedings for that purpose have been instituted or
threatened, and the Registration Statement, the Final Prospectus and each
amendment thereof or supplement thereto (other than the financial
statements, including the notes thereto, and related schedules and other
financial and statistical information contained therein as to which such
counsel need express no opinion) comply as to form in all material
respects with the applicable requirements of the Act, the Exchange Act
and the Trust Indenture Act and the respective rules and regulations
thereunder;

(vi) title to the Equipment to be subjected to the Lease will,
when such Equipment shall have been transferred to the Owner Trustee as
provided in the Participation Agreement, be validly vested in the Owner
Trustee, subject to no liens or encumbrances of record at the Interstate
Commerce Commission except for the Lease and the Indenture;

(vii) this Agreement, the Participation Agreement, the Lease, and
all other Operative Agreements to which the Company

-13-
<PAGE> 14
is, or is to be, a party have been duly authorized by the Company and, on
the Closing Date, upon execution and delivery by the parties thereto,
will be valid and binding obligations of the Company enforceable against
the Company in accordance with their terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting enforcement of creditors' rights generally and by general
principles of equity and, except, in the case of the Lease, as limited by
applicable laws which may affect the remedies provided in the Lease,
which laws, however, do not in such counsel's opinion make the remedies
provided in the Lease inadequate for the practical realization of the
rights and benefits provided thereby and, except, in the case of this
Agreement, for the indemnification and contribution provisions hereof as
a result of securities laws or public policy;

(viii) the Equipment Notes, the Indenture, the Participation
Agreement, the Basic Agreement, the Trust Supplement, and the Lease and
other Operative Agreements (to the extent described therein) conform in
all material respects to the descriptions thereof contained in the Final
Prospectus;

(ix) the statements in the Registration Statement and Final
Prospectus under the headings "Federal Income Tax Consequences", "Certain
Illinois Taxes" and "ERISA Considerations", to the extent that they
constitute matters of law or legal conclusions with respect thereto, have
been prepared or reviewed by such counsel and are correct in all material
respects;

(x) the Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended;

(xi) upon consummation of the transactions contemplated by the
Participation Agreement on the Closing Date, the Equipment Notes, when
duly authorized, executed and delivered by the Owner Trustee and duly
authenticated by the Indenture Trustee, will constitute valid and binding
obligations of the Owner Trustee, enforceable against the Owner Trustee
in accordance with their terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
enforcement of creditors' rights generally and by general principles of
equity and the holders of the Equipment Notes will be entitled to the
benefits of the Indenture;

(xii) although counsel is not aware of any judicial authority, the
Pass Through Trust is not required to be registered under the Investment
Company Act of 1940, as amended;

-14-
<PAGE> 15
(xiii) assuming due authorization, execution and delivery of the
Indenture by the parties thereto, the Indenture will subject the
Indenture Estate to the security interests created thereby; and

(xiv) other than taxes, fees or other governmental charges payable
by the Trustee in its individual capacity and not upon the trust created
under the Indenture or the Pass Through Trust, there are no taxes, fees
or other governmental charges payable under the laws of the State of
Illinois or any political subdivision thereof in connection with (x) the
execution and delivery by the Trustee, as Indenture Trustee, of the
Indenture, the Participation Agreement and the other Operative Agreements
to which it is a party or (y) the execution and delivery by the Trustee,
as Pass Through Trustee, of the Basic Agreement and the related Trust
Supplement and the issuance, execution and delivery of the Pass Through
Certificates by the Trustee, as Pass Through Trustee, pursuant to the
Basic Agreement and the Trust Supplement or (z) the issuance,
authentication and delivery of the Equipment Notes.

Each of Ronald J. Ciancio, counsel to the Company, and Mayer, Brown & Platt,
special counsel to the Company, shall also state that while such counsel has
not checked the accuracy or completeness of the statements contained in the
Registration Statement, in the course of such counsel's review and discussion
of the contents of the Registration Statement with certain officers and
employees of the Company, the Underwriters and their counsel and its
independent accountants, but without independent check or verification, such
counsel has no reason to believe that the Registration Statement or any
amendment thereof (other than the financial statements, including the notes
thereto, and related schedules and other financial and statistical information
contained therein as to which such counsel need express no opinion) at the
Effective Date contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Final Prospectus, as amended or
supplemented as of the Closing Date (other than the financial statements,
including the notes thereto, and related schedules and other financial and
statistical information contained therein as to which such counsel need express
no opinion), includes any untrue statement of a material fact or omits to state
a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. In rendering the
foregoing opinions, each such counsel may rely as to matters of fact, to the
extent deemed proper, on certificates of responsible officers of the Company
and public officials.

(e) The Underwriters and the rating agencies (if so required) shall
have received from the Law Department of The First National

-15-
<PAGE> 16
Bank of Chicago, counsel for The First National Bank of Chicago ("First
Chicago"), individually, as Trustee and Indenture Trustee, an opinion, dated
the Closing Date, in form and substance reasonably satisfactory to the
Underwriters, the rating agencies and Winston & Strawn, special counsel for the
Underwriters, to the effect that:

(i) First Chicago is a national banking association duly
organized and validly existing in good standing under the laws of the
United States, and, in its individual capacity or as Trustee or Indenture
Trustee, as the case may be, has full corporate power and authority to
execute, deliver and carry out the terms of the Indenture, the
Participation Agreement, the Basic Agreement, the Trust Supplement and
the other Operative Agreements to which it is, or is to be, a party;

(ii) First Chicago, the Trustee or the Indenture Trustee, as the
case may be, has duly authorized, executed and delivered the
Participation Agreement, the Basic Agreement, the Trust Supplement and
the Indenture; the Basic Agreement, the Trust Supplement and the
Participation Agreement constitute the valid and binding obligations of
First Chicago, the Trustee or the Indenture Trustee, as the case may be,
enforceable against First Chicago, the Trustee or the Indenture Trustee,
as the case may be, in accordance with their respective terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting enforcement of creditors'
rights generally, and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law);

(iii) the Pass Through Certificates have been duly authorized and
validly executed, authenticated, issued and delivered by the Trustee,
pursuant to the Basic Agreement and the Trust Supplement; and the holders
of the Pass Through Certificates are entitled to the benefits of the
Basic Agreement and the Trust Supplement;

(iv) the authorization, execution, delivery and performance by
First Chicago, the Trustee or the Indenture Trustee, as the case may be,
of the Indenture, the Participation Agreement, the Basic Agreement, the
Trust Supplement and the other Operative Agreements to which it is or
will be party and the consummation of the transactions therein
contemplated and compliance with the terms thereof and the issuance of
the Pass Through Certificates thereunder do not and will not result in
the violation of the provisions of the Articles of Association or By-Laws
of First Chicago, and do not and will not conflict with, or result in a
breach of any terms or provisions of, or constitute a default under, or

-16-
<PAGE> 17
result in the creation or the imposition of any lien, charge or
encumbrance upon any property or assets of First Chicago, the Trustee or
the Indenture Trustee, as the case may be, under any indenture, mortgage
or other agreement or instrument known to such counsel to which the
Trustee or the Indenture Trustee, as the case may be, is a party or by
which it or any of its property is bound, or any state or Federal law,
rule or regulation governing First Chicago's, the Trustee's or the
Indenture Trustee's banking or trust powers, or of any judgment, order or
decree known to such counsel to be applicable to First Chicago, the
Trustee or the Indenture Trustee, as the case may be, of any court,
regulatory body, administrative agency, government or governmental body
having jurisdiction of First Chicago, the Trustee or the Indenture
Trustee or its properties;

(v) no authorization, approval, consent, license or order of,
giving of notice to, registration with, or taking of any other action in
respect of, any Federal or state governmental authority or agency
pursuant to any Federal or state law governing the banking or trust
powers of First Chicago, the Trustee or the Indenture Trustee is required
for the authorization, execution, delivery and performance by First
Chicago, the Trustee or the Indenture Trustee of the Indenture, the
Participation Agreement, the Basic Agreement, the Trust Supplement and
the other Operative Agreements to which it is or will be a party or the
consummation of any of the transactions by the Trustee or Indenture
Trustee contemplated thereby or the issuance of the Pass Through
Certificates under the Basic Agreement and the Trust Supplement (except
as shall have been duly obtained, given or taken); and such
authorization, execution, delivery, performance, consummation and
issuance do not conflict with or result in a breach of the provisions of
any such law;

(vi) no filing or recording of any document or instrument was or
is necessary to establish and perfect the security interest created by
the Indenture in all estate, right, title and interest of the Owner
Trustee in and to the Lease (and the Lease Supplement) covering the
Equipment (other than Excepted Property), and to establish and perfect
the Indenture Trustee's estate, right and interest in and to the
Equipment on the date of the Indenture, except for such filings with the
Interstate Commerce Commission as are required; and

(vii) assuming due authorization, execution and delivery of the
Indenture Supplements covering the Equipment by the Owner Trustee, such
Indenture Supplement will, to the extent that Illinois law is applicable
thereto and on the basis of the law on the date of the opinion, subject
the Equipment covered thereby to the security interest created by the
related Indenture.

-17-
<PAGE> 18
Such opinion shall be to such further effect with respect to other legal
matters relating to the Indentures, the Participation Agreements, the Basic
Agreement, the Trust Supplement and the other Operative Agreements, to which
First Chicago, the Trustee or the Indenture Trustee is, or is to be, a party,
and the sale of Pass Through Certificates hereunder as counsel for the
Underwriters may reasonably request. In giving such opinion, the Law
Department of The First National Bank of Chicago (A) may state that no opinion
is expressed as to laws other than the laws of the State of Illinois and
Federal law, (B) may rely as to the opinions expressed in clauses (ii) and
(iii), insofar as they involve matters relating to the laws of the State of New
York, upon the opinions referred to in Section 6(c) and (d) hereof, in which
case the opinion shall state that they believe that they and the Underwriters
are entitled to so rely and (C) may assume as to the opinions expressed in
clause (ii) relating to the Participation Agreement, insofar as they involve
matters relating to the laws of the State of New York, that such Participation
Agreement constitute legal, valid and binding instruments under such laws.

(f) The Underwriters shall have received from Winston & Strawn, special
counsel for the Underwriters, such opinion or opinions, dated the Closing Date,
with respect to the issuance and sale of the Pass Through Certificates, the
Basic Agreement, the Trust Supplement, the Registration Statement, the Final
Prospectus and other related matters as the Underwriters may reasonably
require, and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such matters.

(g) The Company shall have furnished to the Underwriters a certificate
of the Company, signed by the President or any Vice President and the principal
financial officer of the Company, dated the Closing Date, to the effect that
the signers of such certificate have carefully examined the Registration
Statement, the Final Prospectus and this Agreement and that:

(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of the
Closing Date with the same effect as if made on the Closing Date and the
Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
Closing Date;

(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and, to the Company's knowledge,
no proceedings for that purpose have been instituted or threatened; and

(iii) since the date of the most recent financial statements
included in the Final Prospectus, there has been no material adverse
change in the business, properties,

-18-
<PAGE> 19
condition (financial or otherwise) or results of operations of the
Company and its subsidiaries taken as a whole, whether or not arising
from transactions in the ordinary course of business, except as set forth
in or contemplated in the Final Prospectus.

(h) At the Execution Time and at the Closing Date, Ernst & Young shall
have furnished to the Underwriters a letter or letters, dated, respectively, as
of the Execution Time and as of the Closing Date, in form and substance
satisfactory to the Underwriters, confirming that they are independent
accountants within the meaning of the Act and the Exchange Act and the
applicable published rules and regulations thereunder and stating in effect
that:

(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated in the
Registration Statement and the Final Prospectus and reported on by them
comply in form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published
rules and regulations;

(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Company and its subsidiaries; carrying
out certain specified procedures (but not an examination in accordance
with generally accepted auditing standards) which would not necessarily
reveal matters of significance with respect to the comments set forth in
such letter; a reading of the minutes of the meetings of the
stockholders, directors of the Company and standing committees thereof;
and inquiries of certain officials of the Company who have responsibility
for financial and accounting matters of the Company and its subsidiaries
as to transactions and events subsequent to the date of the most recent
audited financial statements included or incorporated in the Final
Prospectus, nothing came to their attention which caused them to believe
that:

(1) any unaudited financial statements included or
incorporated in the Registration Statement and the Final Prospectus
do not comply in form in all material respects with applicable
accounting requirements and with the published rules and
regulations of the Commission with respect to financial statements
included or incorporated in quarterly reports on Form 10-Q under
the Exchange Act; and said unaudited financial statements are not
in conformity with generally accepted accounting principles applied
on a basis substantially consistent with that of the audited
financial statements included or incorporated in the Registration
Statement and the Final Prospectus;

(2) with respect to the period subsequent to the date of
the most recent financial statements (other than

-19-
<PAGE> 20
any capsule information), audited or unaudited, in or incorporated
in the Registration Statement and the Final Prospectus, there were
any changes (except for changes occurring in the normal course of
business), at a specified date not more than five business days
prior to the date of the letter, in the advances to, investments
in or receivables from related parties, or in the capital stock or
long term debt of the Company and its subsidiaries or any decreases
in the shareholders' equity of the Company or consolidated net
current assets or net assets as compared with the amounts shown on
the most recent consolidated balance sheet included or incorporated
in the Registration Statement and the Final Prospectus, or for the
period from the date of the most recent financial statements
included or incorporated in the Registration Statement and the
Final Prospectus to such specified date there were any decreases,
as compared with the corresponding period in the preceding year in
net operating revenues or in income before income taxes and net
income of the Company and its subsidiaries, except in all instances
for changes or decreases set forth in such letter; or

(3) the amounts included in any unaudited "capsule"
information included or incorporated in the Registration Statement
and the Final Prospectus do not agree with the amounts set forth in
the unaudited financial statements for the same periods or were not
determined on a basis substantially consistent with that of the
corresponding amounts in the audited financial statements included
or incorporated in the Registration Statement and the Final
Prospectus; and

(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the general
accounting records of the Company and its subsidiaries) set forth in the
Registration Statement and the Final Prospectus and in Exhibit 12 to the
Registration Statement, agrees with the accounting records of the Company
and it subsidiaries, excluding any questions of legal interpretation.

References to the Final Prospectus in paragraph (h) include any supplement
thereto at the date of the letter.

(i) Subsequent to the Execution Time or, if earlier, the respective
dates as of which information is given in the Registration Statement and the
Final Prospectus there shall not have been (i) any change or decrease specified
in the letters referred to in paragraph (h) of this Section 6 or (ii) any
change,

-20-
<PAGE> 21
or any development involving a prospective change, in or affecting the
business, properties, condition (financial or other), or results of operation
of the Company and its subsidiaries taken as a whole, the effect of which, in
any case referred to in clause (i) or (ii) above, is, in the reasonable
judgment of the Underwriters, so material and adverse as to make it impractical
or inadvisable to proceed with the public offering or the delivery of the Pass
Through Certificates as contemplated by the Registration Statement and the
Final Prospectus.

(j) Subsequent to the Execution Time and prior to the Closing Date,
there shall have been any decrease in the rating of any of the Company's
long-term debt securities by S&P or Moody's or any notice given of any intended
or potential decrease in any such rating or of any review of or possible change
in any such rating that does not indicate the direction of the possible change.

(k) Prior to the Closing Date, the Company shall have furnished or
caused to be furnished to the Underwriters and the rating agencies such further
information, certificates, opinions and documents as either Underwriter or the
rating agencies may reasonably request.

If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or
if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Underwriters and your counsel, this Agreement and all your
obligations hereunder may be canceled at, or at any time prior to, the Closing
Date by the Underwriters. Notice of such cancellation shall be given to the
Company in writing or by telephone or telegraph confirmed in writing.

7. Payment by the Company of Certain Expenses. Whether or not any
sale of the Pass Through Certificates is consummated, the Company agrees to pay
or cause to be paid all of the Company's expenses incident to the performance
of its obligations under this Agreement, the Basic Agreement and the related
Trust Supplement, including, but not limited to:

(i) the preparation, printing and distribution of this
Agreement, the Registration Statement, the Basic Prospectus, the
Preliminary Final Prospectus, the Final Prospectus and all amendments and
supplements to the foregoing, the Basic Agreement, the Trust Supplement
and each of the other Operative Agreements,

(ii) the preparation, issuance and delivery of the Pass Through
Certificates,

-21-
<PAGE> 22
(iii) the fees and disbursements of the Company's counsel and
accountants,

(iv) the qualification of the Pass Though Certificates under
securities or Blue Sky laws in accordance with the provisions of Section
5(e), including filing fees and the fees and disbursements of your
counsel in connection therewith and in connection with the preparation of
any Blue Sky memorandum,

(v) the fees and expenses of the Trustee and the fees and
disbursements of counsel for the Trustee, and

(vi) any fees charged by rating agencies for the rating of the
Pass Through Certificates,

provided, however, that the Company shall be under no obligation to pay or
cause to be paid, the fees and disbursements of your counsel in connection with
item (iv) above, if the sale of the Pass Through Certificates is not
consummated as a result of the breach by the Underwriters of their obligations
hereunder.

In addition to the foregoing, the Company agrees to pay certain fees and
disbursements of the Underwriters' counsel as agreed in the Participation
Agreement.

8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter, the directors, officers,
employees and agents of each Underwriter and each person who controls any
Underwriter within the meaning of either the Act or the Exchange Act against
any and all losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement for the
registration of the Pass Through Certificates as originally filed or in any
amendment thereof, or in the Basic Prospectus, any Preliminary Final Prospectus
or the Final Prospectus, or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action, provided, however, that (i) the Company
will not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with

-22-
<PAGE> 23
written information furnished to the Company by or on behalf of any Underwriter
specifically for inclusion therein, and (ii) such indemnity with respect to the
Basic Prospectus or any Preliminary Final Prospectus shall not inure to the
benefit of any Underwriter (or to the benefit of any person controlling such
Underwriter) if the person asserting any such loss, claim, damage or liability
purchased the Pass Through Certificates which are the subject thereof but did
not receive a copy of the Final Prospectus (or the Final Prospectus as amended
or supplemented), excluding documents incorporated therein by reference, at or
prior to the confirmation of the sale of such Pass Through Certificates, in any
case where (A) such delivery is required by the Act, (B) the untrue statement
or omission of a material fact contained in such Basic Prospectus or
Preliminary Final Prospectus was corrected in the Final Prospectus (or the
Final Prospectus as amended or supplemented) and (C) if a copy of such Final
Prospectus (or Final Prospectus as amended or supplemented) had been so sent or
given, such delivery would have cured the defect giving rise to the claim
asserted by such person. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.

(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter specifically for inclusion in the
documents referred to in clause (a) of this Section 8. This indemnity
agreement will be in addition to any liability which any Underwriter may
otherwise have. The Company acknowledges that the statements set forth under
the heading "Underwriting" in any Preliminary Final Prospectus and the Final
Prospectus constitute the only information furnished in writing by or on behalf
of the Underwriters for inclusion in any Preliminary Final Prospectus or the
Final Prospectus, and the Underwriters confirm that such statements are
correct.

(c) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
this Section 8, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party (i) will not
relieve it from liability under paragraph (a) or (b) above unless and to the
extent it did not otherwise learn of such action and such failure results in
the forfeiture by the indemnifying party of substantial rights and defenses and
(ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party

-23-
<PAGE> 24
shall be entitled to appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ one separate counsel and one
local counsel for all such indemnified parties in such action, and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise
or consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.

(d) In the event that the indemnity provided in paragraph (a) or
(b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company and one or more of
the Underwriters may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company and by the Underwriters from the
offering of the Pass Through Certificates; provided, however, that in no case
shall any Underwriter (except as may be provided in any agreement among
underwriters relating to the offering of the Pass Through Certificates) be
responsible for any amount in excess of the underwriting discount or commission
applicable to the Pass

-24-
<PAGE> 25
Through Certificates purchased by such Underwriter hereunder. If the
allocation provided by the immediately preceding sentence is unavailable for
any reason, the Company and the Underwriters shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company and of the Underwriters in connection
with the statements or omissions which resulted in such Losses as well as any
other relevant equitable considerations. Benefits received by the Company shall
be deemed to be equal to the total net proceeds from the offering (before
deducting expenses), and benefits received by the Underwriters shall be deemed
to be equal to the total underwriting discounts and commissions, in each case
as set forth on the cover page of the Prospectus. Relative fault shall be
determined by reference to whether any alleged untrue statement or omission
relates to information provided by the Company or the Underwriters. The
Company and the Underwriters agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d), no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. For purposes of this Section 8, each
person who controls an Underwriter within the meaning of either the Act or the
Exchange Act and each director, officer, employee and agent of an Underwriter
shall have the same rights to contribution as such Underwriter, and each person
who controls the Company within the meaning of either the Act or the Exchange
Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable terms and
conditions of this paragraph (d).

9. Termination. This Agreement shall be subject to termination in the
Underwriters' absolute discretion by notice given to the Company prior to
delivery of and payment for the Pass Through Certificates, if prior to such
time (i) trading in securities of the Company or of GATX Corporation, the
Company's corporate parent (the "Parent"), shall have been suspended by the
Commission, trading in the Parent's securities shall have been suspended by the
New York Stock Exchange or the Chicago Stock Exchange or trading in securities
generally on the New York Stock Exchange shall have been suspended or limited
or minimum prices shall have been established on such Exchange, (ii) a banking
moratorium shall have been declared either by Federal or New York State
authorities, or (iii) there shall have occurred any outbreak or material
escalation of hostilities, declaration by the United States of a national
emergency or war or other calamity or crisis the effect of which on financial
markets is such as to make it, in the reasonable judgment of the Underwriters,
impracticable to market the Pass Though Certificates.

-25-
<PAGE> 26
If the sale of the Pass Through Certificates provided for herein is not
consummated because any condition to the Underwriters' obligation set forth in
Section 6 hereof is not satisfied, because of any termination pursuant to
Section 9 hereof or because of any refusal, inability or failure on the part of
the Company to perform any agreement herein or comply with any provision hereof
other than by reason of a default by any Underwriter, the Company will
reimburse the Underwriters upon demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by each of you in connection with the proposed purchase and sale of
the Pass Through Certificates.

10. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of
the Company or its officers and of the Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of any Underwriter or the Company or any
of the officers, directors or controlling persons referred to in Section 8
hereof, and will survive delivery of and payment for the Pass Through
Certificates. The provisions of Sections 7 and 8 hereof shall survive the
termination or cancellation of this Agreement.

11. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Underwriters, will be mailed,
delivered or telegraphed and confirmed to them, at the address specified in
Schedule A hereto; or, if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it at 500 West Monroe Street, Chicago, Illinois
60661-3676, Attention: Secretary.

12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8 hereof,
and no other person will have any right or obligation hereunder.

13. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York.

-26-
<PAGE> 27
If the foregoing is in accordance with each of your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
between the Company and the Underwriters.

Very truly yours,

GENERAL AMERICAN TRANSPORTATION
CORPORATION

By ___________________________
Treasurer

The foregoing Agreement is
hereby confirmed and accepted as of the
date first above written.

SALOMON BROTHERS INC

By __________________________

MORGAN STANLEY & CO. INCORPORATED

By __________________________
<PAGE> 28
SCHEDULE A

PASS THROUGH AGGREGATE INTEREST FINAL
CERTIFICATE PRINCIPAL RATE DISTRIBUTION
DESIGNATION AMOUNT DATE

Series 1994-1 $93,425,000 8.42% January 1, 2015

Closing Date, Time and Location: August 16, 1994; 9:00 a.m. Chicago time;
Mayer, Brown & Platt, 190 South LaSalle Street, Chicago, Illinois 60603.

Addresses for notices pursuant to Section 11: Salomon Brothers Inc at Seven
World Trade Center, New York, New York 10048 Attention: Legal Department;
Morgan Stanley & Co. Incorporated at 1221 Avenue of the Americas, 4th Floor,
New York, New York 10020 Attention: May C. Busch.
<PAGE> 29
SCHEDULE B

<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF
PASS THROUGH CERTIFICATES
UNDERWRITERS TO BE PURCHASED
------------ ---------------
<S> <C>
Salomon Brothers Inc $46,713,000

Morgan Stanley & Co. Incorporated $46,712,000
-----------

TOTAL $93,425,000
===========
</TABLE>

<PAGE> 1
EXHIBIT 4.1

TRUST SUPPLEMENT NO. 3
DATED AS OF AUGUST 9, 1994
TO
PASS THROUGH TRUST
AGREEMENT
DATED AS OF AUGUST 1, 1992

GENERAL AMERICAN TRANSPORTATION CORPORATION
AND
THE FIRST NATIONAL BANK OF CHICAGO, AS TRUSTEE

GENERAL AMERICAN TRANSPORTATION CORPORATION
1994-1 PASS THROUGH TRUST
8.42% PASS THROUGH CERTIFICATES, SERIES 1994-1

<PAGE> 2
TRUST SUPPLEMENT

DATED AS OF AUGUST 9, 1994

PASS THROUGH CERTIFICATES, SERIES 1994-1

Table of Contents

<TABLE>
<CAPTION>
SECTION HEADING PAGE
<S> <C> <C>
ARTICLE I THE CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Section 1.01. The Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

ARTICLE II DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Section 2.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

ARTICLE III THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Section 3.01. The Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.02. Acceptance by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

ARTICLE IV MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Section 4.01. Basic Agreement Ratified . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 4.02. Termination of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 4.03. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 4.04. Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
</TABLE>

<PAGE> 3
TRUST SUPPLEMENT
PASS THROUGH CERTIFICATES, SERIES 1994-1

This Trust Supplement No. 3, dated as of August 9, 1994 (herein called
the "Trust Supplement") between General American Transportation Corporation, a
New York corporation (the "Company"), and The First National Bank of Chicago, a
national banking association, as trustee (the "Trustee"), to the Pass Through
Trust Agreement dated as of August 1, 1992, as supplemented, between the
Company and the Trustee (the "Basic Agreement").

W I T N E S S E T H:

WHEREAS, the Company and the Trustee have heretofore executed and
delivered the Basic Agreement, unlimited as to the aggregate principal amount
of Certificates (unless specified herein capitalized terms used herein without
definition have the respective meanings specified heretofore in the Basic
Agreement) which may be issued thereunder;

WHEREAS, the Owner Trustee, acting on behalf of the Owner Participant,
will issue, on a non-recourse basis, four Equipment Notes, among other things,
to finance a portion of the purchase price of Equipment purchased by the Owner
Trustee and leased to the Company pursuant to the Lease;

WHEREAS, pursuant to the terms and conditions of the Basic Agreement
as supplemented by this Trust Supplement (the "Agreement"), the Trustee shall
purchase such Equipment Notes issued by the Owner Trustee of the same tenor as
the Certificates issued thereunder and shall hold such Equipment Notes in trust
for the benefit of the Certificateholders;

WHEREAS, the Trustee hereby declares the creation of this Trust for
the benefit of the Certificateholders, and the initial Certificateholders as
the grantors of the Trust, by their respective acceptances of the Certificates,
join in the creation of this Trust with the Trustee;

WHEREAS, all of the conditions and requirements necessary to make this
Trust Supplement, when duly executed and delivered, a valid, binding and legal
instrument in accordance with its terms and for the purposes herein expressed,
have been done, performed and fulfilled, and the execution and delivery of this
Trust Supplement in the form and with the terms hereof have been in all
respects duly authorized;

WHEREAS, this Trust Supplement is subject to the provisions of the
Trust Indenture Act of 1939, as amended, and shall, to the extent applicable,
be governed by such provision;

<PAGE> 4
NOW THEREFORE, in consideration of the premises herein, it is agreed
between the Company and the Trustee as follows:

ARTICLE I
THE CERTIFICATES

Section 1.01. The Certificates. There is hereby created a series of
Certificates to be issued under the Agreement to be distinguished and known as
"Pass Through Certificates, Series 1994-1" (hereinafter defined as the "Series
1994-1 Certificates"). Each Certificate represents a Fractional Undivided
Interest in the Trust created hereby. The terms and conditions applicable to
the Series 1994-1 Certificates are as follows:

1. The aggregate principal amount of the Series 1994-1
Certificates that shall be authenticated under the Agreement (except for Series
1994-1 Certificates authenticated and delivered pursuant to Sections 3.03, 3.04
and 3.05 of the Basic Agreement) upon their initial issuance is $93,425,000.

2. The Cut-Off Date shall be August 30, 1994.

3. The Regular Distribution Dates with respect to any payment of
Scheduled Payments means each January 1 and July 1 commencing July 1, 1995
until payment of all of the Scheduled Payments to be made under the Equipment
Notes have been made.

4. The Scheduled Payments shall be as set forth in Exhibit C
hereto.

5. The Special Distribution Dates are as follows: with respect to
the prepayment of any Equipment Note, other than pursuant to a refinancing in
accordance with Section 10.2 of the Participation Agreement, the 1st day of the
month on which such prepayment is scheduled to occur pursuant to the terms of
the Indenture; with respect to the prepayment of any Equipment Note pursuant to
a refinancing in accordance with Section 10.2 of the Participation Agreement,
the Refunding Date (as defined in the Participation Agreement); and with
respect to any other Special Payment relating to an Equipment Note, the
earliest 1st day of a month for which it is practicable for the Trustee to give
the applicable notice pursuant to Section 4.02(c) of the Basic Agreement.

6. The Series 1994-1 Certificates shall be in the form attached
hereto as Exhibit A. The Series 1994-1 Certificates shall be Book-Entry
Certificates and shall be subject to the conditions set forth in the Letter of
Representations between the Company and the Clearing Agency attached hereto as
Exhibit B.

<PAGE> 5
7. The proceeds of the Series 1994-1 Certificates shall be used
to purchase the Equipment Notes at the Original Issue Prices specified below:

<TABLE>
<CAPTION>
ORIGINAL PRINCIPAL
EQUIPMENT NOTE ISSUE PRICE AMOUNT MATURITY
<S> <C> <C> <C>
1994-1 100% $ 8,488,000 January 1, 2015
" " $69,147,000 January 1, 2014
" " $ 9,770,000 January 1, 2014
" " $ 6,020,000 January 1, 2014
</TABLE>

8. The Owner Trustee, acting on behalf of the Owner Participant,
will issue on a non-recourse basis, the Equipment Notes, the proceeds of which
shall be used, among other things, to finance a portion of the purchase price
of the Equipment as set forth on Schedule 1 to the Participation Agreement.

9. The related Note Documents are as follows:

(a) Trust Indenture and Security Agreement (GATC
Trust No. 94-1), dated as of August 9, 1994;

(b) Equipment Lease Agreement (GATC Trust No.
94-1), dated as of August 9, 1994;

(d) Indenture Supplement No. I (GATC Trust No.
94-1), dated August 16, 1994;

(e) Indenture Supplement No. II (GATC Trust No.
94-1), dated August 16, 1994;

(f) Indenture Supplement No. III (GATC Trust No.
94-1), dated August 16, 1994;

(g) Indenture Supplement No. IV (GATC Trust No.
94-1), dated August 16, 1994;

(h) Lease Supplement No. I (GATC Trust No. 94-1),
dated August 16, 1994;

(i) Lease Supplement No. II (GATC Trust No.
94-1), dated August 16, 1994;

(j) Lease Supplement No. III (GATC Trust No.
94-1), dated August 16, 1994; and

-3-
<PAGE> 6
(k) Lease Supplement No. IV (GATC Trust No.
94-1), dated August 16, 1994.

ARTICLE II
DEFINITIONS

Section 2.01. Definitions. The following terms, notwithstanding
the definitions therefor in the Basic Agreement, shall have the following
meanings for all purposes relating to the Series 1994-1 Certificates (including
hereunder and under the Basic Agreement):

NONE.

ARTICLE III
THE TRUSTEE

Section 3.01. The Trustee. Subject to Section 7.04 of the Basic
Agreement, the Trustee shall not be responsible in any manner whatsoever for or
in respect of the validity or sufficiency of this Trust Supplement or the due
execution hereof by the Company, or for or in respect of the recitals and
statements contained herein, all of which recitals and statements are made
solely by the Company.

Except as herein otherwise provided, no duties, responsibilities or
liabilities are assumed, or shall be construed to be assumed by the Trustee by
reason of this Trust Supplement other than as set forth in the Basic Agreement,
and this Trust Supplement is executed and accepted on behalf of the Trustee,
subject to all the terms and conditions set forth in the Basic Agreement, upon
the effectiveness thereof, as fully to all intents as if the same were herein
set forth at length.

Section 3.02. Acceptance by Trustee. The Trustee, upon execution and
delivery of this Trust Supplement, acknowledges its acceptance of all right,
title, and interest in and to the Equipment Notes described herein and acquired
pursuant to Section 2.02 of the Basic Agreement and the Participation Agreement
and declares that the Trustee holds and will hold such right, title, and
interest, together with all other property constituting the Trust Property of
the Trust created hereby, for the benefit of all present and future holders of
the Series 1994-1 Certificates, upon the trusts set forth herein and in the
Basic Agreement. By its payment for and acceptance of each Certificate issued
to it hereunder, each initial holder of the Series 1994-1 Certificates as
grantor of the Trust thereby joins in the creation and declaration of the Trust
created hereby.

-4-
<PAGE> 7
ARTICLE IV
MISCELLANEOUS PROVISIONS

Section 4.01. Basic Agreement Ratified. Except and so far as
herein expressly provided, all of the provisions, terms and conditions of the
Basic Agreement are in all respects ratified and confirmed; and the Basic
Agreement and this Trust Supplement shall be taken, read and construed as one
and the same instrument.

Section 4.02. Termination of Trust. The Trust created hereby shall
terminate upon the distribution to all holders of the Series 1994-1
Certificates all amounts required to be distributed to them pursuant to the
Basic Agreement and this Trust Supplement and the disposition of all property
held as part of the Trust Property of the Trust created hereby; provided,
however, that in no event shall the Trust created hereby continue beyond the
expiration of 21 years from the death of the last survivor of all of the
descendants of Joseph P. Kennedy, the late ambassador of the United States to
Great Britain, living on the date of this Trust Supplement.

Section 4.03. Governing Law. THIS TRUST SUPPLEMENT AND THE SERIES
1994-1 CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.

Section 4.04. Execution in Counterparts. This Trust Supplement may
be executed in any number of counterparts, each of which shall be an original,
but such counterparts shall together constitute but one instrument.

-5-
<PAGE> 8
IN WITNESS WHEREOF, the Company and the Trustee have caused this Trust
Supplement to be duly executed by their respective officers thereto duly
authorized, as of the day and year first written above.

GENERAL AMERICAN TRANSPORTATION
CORPORATION

By:____________________________
Name:______________________
Title:_____________________

THE FIRST NATIONAL BANK OF
CHICAGO, AS TRUSTEE

By:____________________________
Name:______________________
Title:_____________________

-6-
<PAGE> 9
EXHIBIT A

FORM OF CERTIFICATE

Unless this certificate is presented by an authorized representative
of DTC, a New York corporation ("DTC"), to Issuer or its agent for registration
of transfer, exchange or payment, and any certificate issued is registered in
the name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE or OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.

General American Transportation Corporation
1994-1 PASS THROUGH TRUST
8.42% Pass Through
Certificate, Series 1994-1
CUSIP _____________
Final Regular Distribution Date: January 1, 2015

evidencing a fractional undivided interest in a trust, the property of
which includes certain Equipment Notes secured by certain railroad rolling
stock leased to General American Transportation Corporation.

Certificate
No. R-1 $93,425,000 Fractional Undivided Interest
representing .000010704 of the Trust per
$1,000 face amount

THIS CERTIFIES THAT CEDE & CO., for value received, is the registered
owner of a $93,425,000 (Ninety Three Million Four Hundred Twenty Five Thousand
Dollars) Fractional Undivided Interest in General American Transportation
Corporation 1994-1 Pass Through Trust (the "Trust") created by The First
National Bank of Chicago, as trustee (the "Trustee"), pursuant to a Pass
Through Trust Agreement dated as of August 1, 1992 and a related Trust
Supplement dated as of August 9, 1994 (collectively, the "Agreement") between
the Trustee and General American Transportation Corporation, a corporation
incorporated under New York law (the "Company"), a summary of certain of the
pertinent provisions of which is set forth below. To the extent not otherwise
defined herein, the capitalized terms used herein have the meanings assigned to
them in the Agreement. This Certificate is one of the duly authorized
Certificates designated as "8.42% Pass Through Certificates, Series

-1-
<PAGE> 10
1994-1" (herein called the "Certificates"). This Certificate is issued under
and is subject to the terms, provisions, and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound. The property of the Trust
includes certain Equipment Notes (the "Trust Property"). The Equipment Notes
are secured by a security interest in railroad rolling stock leased to the
Company.

The Certificates represent fractional undivided interests in the Trust
and the Trust Property, and have no rights, benefits or interest in respect of
any other separate trust established pursuant to the terms of the Agreement for
any other series of certificates issued pursuant thereto.

Subject to and in accordance with the terms of the Agreement, from
funds then available to the Trustee, there will be distributed on each January
1 and July 1 (a "Regular Distribution Date"), commencing on July 1, 1995, to
the person in whose name this Certificate is registered at the close of
business on the day of the month which is 15 days preceding the Regular
Distribution Date, an amount in respect of the Scheduled Payments on the
Equipment Notes due on such Regular Distribution Date, the receipt of which has
been confirmed by the Trustee, equal to the product of the percentage interest
in the Trust evidenced by this Certificate and an amount equal to the sum of
such Scheduled Payments. Subject to and in accordance with the terms of the
Agreement, in the event that Special Payments on the Equipment Notes are
received by the Trustee, from funds then available to the Trustee, there shall
be distributed on the applicable Special Distribution Date, to the Person in
whose name this Certificate is registered at the close of business on the day
of the month which is 15 days preceding the Special Distribution Date, an
amount in respect of such Special Payments on the Equipment Notes, the receipt
of which has been confirmed by the Trustee, equal to the product of the
percentage interest in the Trust evidenced by this Certificate and an amount
equal to the sum of such Special Payments so received. If a Regular
Distribution Date or Special Distribution Date is not a Business Day,
distribution shall be made on the immediately following Business Day. The
Special Distribution Date shall be: with respect to the prepayment of any
Equipment Note, other than pursuant to a refinancing in accordance with Section
10.2 of the Participation Agreement, the 1st day of the month on which such
prepayment is scheduled to occur pursuant to the terms of the Indenture; with
respect to the prepayment of any Equipment Note pursuant to a refinancing in
accordance with Section 10.2 of the Participation Agreement, the Refunding Date
(as defined in the Participation Agreement); and with respect to any other
Special Payment relating to an Equipment Note, the earliest 1st day of a month
for which it is practicable for the Trustee to give the applicable notice
pursuant to Section 4.02(c) of the Basic

<PAGE> 11
Agreement. The Trustee shall mail notice of each Special Payment and the
Special Distribution Date therefor to the Holders of the Certificates.

Distributions on this Certificate will be made by the Trustee (i) by
check mailed to the person entitled thereto or (ii) prior to the time
Definitive Certificates are issued by wire transfer of same-day funds to the
account designated by the Certificateholder to the Trustee on or prior to the
applicable Record Date, without the presentation or surrender of this
Certificate or the making of any notation hereon. Except as otherwise provided
in the Agreement and notwithstanding the above, the final distribution on this
Certificate will be made after notice mailed by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency of the Trustee specified in such notice.

This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.

Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

-3-
<PAGE> 12
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

General American Transportation
Corporation 1994-1 Pass
Through Trust

By: The First National Bank of
Chicago, as Trustee

By: ____________________________
Title

[FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]

Dated: August __, 1994

This is one of the Certificates referred
to in the within-mentioned Agreement.

The First National Bank of
Chicago, as Trustee

By: ___________________________
Authorized Officer

-4-
<PAGE> 13
[REVERSE OF CERTIFICATE]

The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company or the Trustee or any
affiliate thereof. The Certificates are limited in right of payment, all as
more specifically set forth on the face hereof and in the Agreement. All
payments or distributions made to Certificateholders under the Agreement shall
be made only from the Trust Property and only to the extent that the Trustee
shall have sufficient income or proceeds from the Trust Property to make such
payments in accordance with the terms of the Agreement. Each Holder of this
Certificate, by its acceptance hereof, agrees that it will look solely to the
income and proceeds from the Trust Property to the extent available for
distribution to such Holder as provided in the Agreement. This Certificate
does not purport to summarize the Agreement and reference is made to the
Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby. A copy of the Agreement
may be examined during normal business hours at the principal office of the
Trustee, and at such other places, if any, designated by the Trustee, by any
Certificateholder upon request.

The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any
time by the Company and the Trustee with the consent of the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not less
than a majority in interest in the Trust. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Trustee in its capacity as Registrar, or
by any successor Registrar, in the Borough of Manhattan, the City of New York,
duly endorsed or accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Registrar duly executed by the Holder
hereof or such Holder's attorney duly authorized in writing, and thereupon one
or more new Certificates of authorized denominations evidencing the same
aggregate Fractional Undivided Interest in the Trust will be issued to the
designated transferee or transferees.

-1-
<PAGE> 14
The Certificates are issuable only as registered Certificates without
coupons in denominations of $1,000 Fractional Undivided Interest and any
integral multiples of $1,000 in excess thereof except that one Certificate may
be in a denomination of less than $1,000. As provided in the Agreement and
subject to certain limitations therein set forth, Certificates are exchangeable
for new Certificates of authorized denominations and like series evidencing the
same aggregate Fractional Undivided Interest in the Trust, as requested by the
Holder surrendering the same.

No service charge will be made for any such registration of transfer
or exchange, but the Trustee shall require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.

The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Trustee, the Registrar, nor
any such agent shall be affected by any notice to the contrary.

The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant
to the Agreement and the disposition of all property held as part of the Trust
Property.

-2-
<PAGE> 15
[FORM OF TRANSFER NOTICE]

FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto

Insert Taxpayer Identification No.

_____________________________________________________________

Please print or typewrite name and address including postal zip code of
assignee

_____________________________________________________________

the within Certificate and all rights thereunder, hereby irrevocably
constituting and appointing

_____________________________________________________________

attorney to transfer said Certificate on the books of the Trust with
full power of substitution in the premises.

Date:__________________

_______________________________________

NOTICE: The signature to this assignment must correspond with the name
as written upon the face of the within-mentioned instrument in
every particular, without alteration or any change whatever.

-3-

<PAGE> 1
EXHIBIT 4.2

TRUST INDENTURE AND SECURITY AGREEMENT
(GATC TRUST NO. 94-1)

DATED AS OF AUGUST 9, 1994

BETWEEN

STATE STREET BANK AND TRUST COMPANY,

AS OWNER TRUSTEE

AND

THE FIRST NATIONAL BANK OF CHICAGO,

AS INDENTURE TRUSTEE

COVERED HOPPERS AND TANK CARS

<PAGE> 2
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
GRANTING CLAUSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Article I. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.01. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Article II. The Equipment Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.01. Form of Equipment Notes . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.02. Terms of Equipment Notes . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.03. Payment from Indenture Estate Only . . . . . . . . . . . . . . . . . . 8
Section 2.04. Method of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.05. Application of Payments to Principal Amount and Interest . . . . . . . 9
Section 2.06. Termination of Interest in Indenture Estate . . . . . . . . . . . . . . 9
Section 2.07. Transfer of Equipment Notes . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.08. Mutilated, Destroyed, Lost or Stolen Equipment Notes . . . . . . . . . 11
Section 2.09. Payment of Transfer Taxes . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.10. Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.11. Equally and Ratably Secured . . . . . . . . . . . . . . . . . . . . . . 13

Article III. Receipt, Distribution and Application of Income from the Indenture Estate . . 13
Section 3.01. Basic Rent Distribution . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.02. Payments in the Event of Prepayment . . . . . . . . . . . . . . . . . . 13
Section 3.03. Payments after Indenture Event of Default . . . . . . . . . . . . . . . 14
Section 3.04. Other Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.05. Distribution of Excepted Property . . . . . . . . . . . . . . . . . . . 16

Article IV. Remedies of the Indenture Trustee upon an Indenture Event of Default . . . . . 16
Section 4.01. Indenture Events of Default . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.02 Acceleration; Rescission and Annulment . . . . . . . . . . . . . . . . 17
Section 4.03. Remedies with Respect to Indenture Estate . . . . . . . . . . . . . . . 18
Section 4.04. Right to Cure; Option to Purchase; Etc . . . . . . . . . . . . . . . . 21
Section 4.05. Rights of Lessee . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 4.06. Waiver of Existing Defaults . . . . . . . . . . . . . . . . . . . . . . 23

Article V. Duties of the Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . 23
Section 5.01. Action upon Indenture Event of Default . . . . . . . . . . . . . . . . 23
Section 5.02. Action upon Instructions . . . . . . . . . . . . . . . . . . . . . . . 24
Section 5.03. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 5.04. No Duties Except as Specified in Indenture or Instructions . . . . . . . 25
</TABLE>

-i-
<PAGE> 3
TABLE OF CONTENTS (CONT'D)

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Section 5.05. No Action Except under Lease, Indenture or Instructions . . . . . . . . 25
Section 5.06. Disposition of Units . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 5.07. Indenture Supplements for Replacements . . . . . . . . . . . . . . . . 26
Section 5.08. Effect of Replacements . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 5.09. Withholding Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 5.10. Lessee's Right of Quiet Enjoyment . . . . . . . . . . . . . . . . . . . 26

Article VI. The Owner Trustee and the Indenture Trustee . . . . . . . . . . . . . . . . . 27
Section 6.01. Acceptance of Trusts and Duties . . . . . . . . . . . . . . . . . . . . 27
Section 6.02. Absence of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 6.03. No Representations or Warranties as to the Equipment or Documents . . . 27
Section 6.04. No Segregation of Moneys; No Interest; Investments . . . . . . . . . . 28
Section 6.05. Reliance; Agents; Advice of Counsel . . . . . . . . . . . . . . . . . . 28
Section 6.06. Not Acting in Individual Capacity . . . . . . . . . . . . . . . . . . . 29

Article VII. Certain Limitations on Owner Trustee's and Indenture Trustee's Rights . . . . 29

Article VIII. Successor Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 8.01. Notice of Successor Owner Trustee . . . . . . . . . . . . . . . . . . . 29
Section 8.02. Resignation of Indenture Trustee; Appointment of Successor . . . . . . 30

Article IX. Supplements and Amendments to this Indenture and Other Documents . . . . . . . 31
Section 9.01. Supplemental Indentures without Consent of Holders . . . . . . . . . . 31
Section 9.02. Indenture Trustee Protected . . . . . . . . . . . . . . . . . . . . . . 32
Section 9.03. Request of Substance, Not Form . . . . . . . . . . . . . . . . . . . . 33
Section 9.04. Documents Mailed to Holders . . . . . . . . . . . . . . . . . . . . . . 33
Section 9.05. Amendments, Waivers, Etc. of Other Documents . . . . . . . . . . . . . 33

Article X. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 10.01. Termination of Indenture . . . . . . . . . . . . . . . . . . . . . . . 35
Section 10.02. No Legal Title to Indenture Estate in Holders . . . . . . . . . . . . 36
Section 10.03. Sale of Equipment by Indenture Trustee is Binding . . . . . . . . . . 36
Section 10.04. Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 10.05. Discontinuance of Proceedings . . . . . . . . . . . . . . . . . . . . 36
Section 10.06. Indenture and Equipment Notes for Benefit of Owner Trustee,
Indenture Trustee, Owner Participant and Holders Only . . . . . . 37
Section 10.07. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 10.08. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
</TABLE>

-ii-
<PAGE> 4
TABLE OF CONTENTS (CONT'D)

<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Section 10.09. Separate Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 10.10. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 10.11. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 10.12. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 10.13. Normal Commercial Relations . . . . . . . . . . . . . . . . . . . . . 38
Section 10.14. No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . 38

EXHIBIT A - Form of Trust Indenture Supplement
EXHIBIT B - Terms of Equipment Notes
EXHIBIT C - Loan Participants
APPENDIX A - Definitions
ANNEX A - Amortization Schedule

</TABLE>

-iii-
<PAGE> 5
TRUST INDENTURE AND SECURITY AGREEMENT
(GATC TRUST NO. 94-1)

This TRUST INDENTURE AND SECURITY AGREEMENT (GATC Trust No.
94-1) dated as of August 9, 1994 (this "Indenture"), between State Street Bank
and Trust Company, a Massachusetts banking corporation, not in its individual
capacity, except as otherwise expressly set forth in Section 6.03 hereof, but
solely as trustee under the Trust Agreement referred to below and any successor
appointed in accordance with the terms hereof and of the Trust Agreement
(herein in such trustee capacity called the "Owner Trustee"), and The First
National Bank of Chicago, a national banking association, as Indenture Trustee
hereunder and any successor appointed in accordance with the terms hereof
(herein called the "Indenture Trustee");

WITNESSETH:

WHEREAS, the Owner Participant and the Owner Trustee in its
individual capacity have entered into the Trust Agreement whereby, among other
things, (i) the Owner Trustee establishes a certain trust for the use and
benefit of the Owner Participant, subject, however, to the Indenture Estate
created pursuant hereto for the use and benefit of, and with the priority of
payment to, the holders of the Equipment Notes, and (ii) the Owner Trustee is
authorized and directed to execute and deliver this Indenture;

WHEREAS, the Owner Trustee and the Indenture Trustee desire by
this Indenture, among other things, (i) to provide for the issuance by the
Owner Trustee of the Equipment Notes, and (ii) to provide for the assignment,
mortgage and pledge by the Owner Trustee to the Indenture Trustee, as part of
the Indenture Estate hereunder, among other things, of, and the grant of a
security interest in, certain of the Owner Trustee's right, title and interest
in and to the Equipment and the Lease and certain payments and other amounts
received hereunder or thereunder, in accordance with the terms hereof, in
trust, as security for, among other things, the Owner Trustee's obligations for
the equal and ratable benefit of the holders of the Equipment Notes; and

WHEREAS, all things necessary to make this Indenture the
legal, valid and binding obligation of the Owner Trustee and the Indenture
Trustee, for the uses and purposes herein set forth, in accordance with its
terms, have been done and performed and have happened.

GRANTING CLAUSE

NOW, THEREFORE, THIS TRUST INDENTURE AND SECURITY AGREEMENT
WITNESSETH, that, to secure the prompt payment of the principal of and interest
and premium, if any, on and all other amounts due with respect to, the
Equipment Notes from time to time outstanding hereunder and the performance and
observance by the Owner Trustee of all the agreements, covenants and provisions
herein and in the Equipment Notes all for the benefit of the holders of the
Equipment Notes, and for the uses and purposes and subject

<PAGE> 6

to the terms and provisions hereof, and in consideration of the premises
and of the covenants herein contained, and of the acceptance of the Equipment
Notes by the Loan Participant, the Owner Trustee does hereby sell, assign,
transfer, convey, mortgage, pledge, and confirm unto the Indenture Trustee, its
successors and assigns, for the security and benefit of the holders of the
Equipment Notes from time to time, a security interest in and mortgage lien on
all right, title and interest of the Owner Trustee in and to the following
described property, rights, interests and privileges insofar as it does not
constitute Excepted Property (which collectively, including all property
hereafter required to be subjected to the Lien of this Indenture by any
instrument supplemental hereto, but excluding Excepted Property, being herein
called the "Indenture Estate"), to wit:

(1) the Lease, including, without limitation, all amounts
of Basic Rent, Supplemental Rent, insurance proceeds and other
payments of any kind for or with respect to the Equipment, subject to
Lessee's rights under the Lease, including, without limitation,
Lessee's right of quiet enjoyment;

(2) the Equipment, the Replacement Units and all
substitutions therefor in which the Owner Trustee shall from time to
time acquire an interest under the Lease, all as more particularly
described in the Indenture Supplements and Lease Supplements executed
and delivered with respect to the Equipment or any such Replacement
Units or any substitutions therefor, as provided in this Indenture and
the Lease;

(3) all requisition proceeds with respect to the
Equipment or any Unit thereof (to the extent of the Owner Trustee's
interest therein pursuant to the terms of the Lease);

(4) all monies and securities now or hereafter paid or
deposited or required to be paid or deposited with the Indenture
Trustee pursuant to any term of this Indenture, the Lease or the
Participation Agreement or required to be held by the Indenture
Trustee hereunder or thereunder; and

(5) all proceeds of the foregoing.

Notwithstanding the foregoing provisions:

(a) there shall be excluded from the foregoing sale,
assignment, transfer, conveyance, mortgage, pledge or security
interest granted by this Indenture and from the Indenture
Estate all Excepted Property;

(b) (i) the Owner Trustee and the Owner Participant
shall at all times retain the right, to the exclusion of the Indenture
Trustee (A) to Excepted Property and to commence an action at law to
obtain such Excepted Property and (B) to adjust Basic Rent and the
percentages relating to Stipulated Loss Value and Termination Value as
provided in Section 3.4 of the Lease and Section 2.6 of the
Participation Agreement;

-2-
<PAGE> 7
(ii) the Owner Trustee and the Indenture Trustee shall
each retain the right to receive from Lessee all notices,
certificates, reports, filings, opinions of Counsel, copies of all
documents and all information which the Lessee is permitted or
required to give or furnish to the Lessor pursuant to the Lease or to
the Owner Trustee pursuant to any other Operative Agreement and to
exercise the inspection rights provided for in Section 13.2 of the
Lease, to give any notice of default under Section 15 of the Lease and
to retain the right to cause the Lessee to take any action and execute
and deliver such documents and assurances as the Lessor may from time
to time reasonably request pursuant to Section 16.2 of the Lease; and

(iii) so long as no Indenture Event of Default shall have
occurred and be continuing (but subject to the provisions of Section
9.05), the Owner Trustee shall retain the right, to the exclusion of
the Indenture Trustee, to exercise all rights of the Lessor under the
Lease (other than the right to receive any funds to be delivered to
the Lessor under the Lease (except funds which constitute or are
delivered with respect to Excepted Property)); and

(c) the leasehold interest granted to the Lessee under
the Lease shall not be subject to the security interest granted by
this Indenture, and nothing in this Indenture shall affect the rights
of the Lessee under the Lease so long as no Lease Event of Default has
occurred and is continuing.

(d) as between the Owner Trustee and the Indenture
Trustee, nothing contained in this Granting Clause shall prevent the
Owner Trustee, as the Lessor under the Lease, from seeking specific
performance of the covenants of the Lessee under the Lease relating to
the insurance, maintenance, possession and use of the Units and from
maintaining separate insurance with respect to the Units to the extent
permitted by Section 12.5 of the Lease.

TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Indenture Trustee, its successors and assigns, in trust for the
benefit and security of the holders of the Equipment Notes from time to time,
without any priority of any one Equipment Note over any other, and for the uses
and purposes, and subject to the terms and provisions, set forth in this
Indenture.

It is expressly agreed that anything herein contained to the
contrary notwithstanding, the Owner Trustee shall remain liable under each of
the Operative Agreements to which it is a party to perform all of the
obligations, if any, assumed by it thereunder, all in accordance with and
pursuant to the terms and provisions thereof, and the Indenture Trustee and the
holders of the Equipment Notes shall have no obligation or liability under any
of the Operative Agreements to which the Owner Trustee is a party by reason of
or arising out of this assignment, nor shall the Indenture Trustee (unless the
Indenture Trustee shall have become the "Lessor" under the Lease) or the
holders of the Equipment Notes be required or obligated in any manner to
perform or fulfill any obligations of the Owner Trustee under or pursuant to
any of the Operative Agreements to which the Owner Trustee is a party or,
except as herein expressly

-3-
<PAGE> 8
provided, to make any payment, or to make any inquiry as to the nature or
sufficiency of any payment received by it, or present or file any claim, or
take any action to collect or enforce the payment of any amounts which may have
been assigned to it or to which it may be entitled at any time or times.

The Owner Trustee does hereby constitute the Indenture Trustee
the true and lawful attorney of the Owner Trustee, irrevocably, with full power
(in the name of the Owner Trustee or otherwise), upon the occurrence and during
the continuation of an Indenture Event of Default, to ask, require, demand,
receive, compound and give acquittance for any and all moneys and claims for
moneys due and to become due to the Owner Trustee (other than Excepted
Property), under or arising out of the Lease, or to endorse any checks or other
instruments or orders in connection therewith and to file any claims or take
any action or institute any proceedings which the Indenture Trustee may deem to
be necessary or advisable in the premises. The Owner Trustee has directed the
Lessee to make all payments of Rent (other than Excepted Property) payable to
the Owner Trustee by the Lessee and all other amounts which are required to be
paid to or deposited with the Owner Trustee pursuant to the Lease directly to
the Indenture Trustee at such address as the Indenture Trustee shall specify,
for application as provided in this Indenture. The Owner Trustee agrees that
promptly on receipt thereof, it will transfer to the Indenture Trustee any and
all moneys from time to time received by it constituting part of the Indenture
Estate, for distribution by the Indenture Trustee pursuant to this Indenture,
except that the Owner Trustee shall accept for distribution pursuant to the
Trust Agreement any amounts distributed to it by the Indenture Trustee as
expressly provided in this Indenture and any Excepted Property.

The Owner Trustee agrees that at any time and from time to
time, upon the written request of the Indenture Trustee, the Owner Trustee will
promptly and duly execute and deliver or cause to be executed and delivered any
and all such further instruments and documents as the Indenture Trustee may
reasonably deem to be necessary in order to obtain the full benefits of this
assignment and of the rights and powers herein granted.

The Owner Trustee does hereby warrant and represent that it
has not assigned or pledged, and hereby covenants that it will not assign or
pledge, so long as the assignment hereunder shall remain in effect, any of its
right, title or interest hereby assigned, to anyone other than the Indenture
Trustee, and that it will not (other than in respect of Excepted Property),
except as provided in or permitted by this Indenture, accept any payment from
the Lessee, enter into an agreement amending or supplementing any of the
Operative Agreements, execute any waiver or modification of, or consent under
the terms of any of the Operative Agreements (other than the Tax Indemnity
Agreement), settle or compromise any claim (other than claims in respect of
Excepted Property) against the Lessee arising under any of the Operative
Agreements, or submit or consent to the submission of any dispute, difference
or other matter arising under or in respect of any of the Operative Agreements,
to arbitration thereunder.

-4-
<PAGE> 9
IT IS HEREBY COVENANTED AND AGREED by and between the parties
hereto as follows:

ARTICLE I.
DEFINITIONS

Section 1.01. Certain Definitions. Unless the context
otherwise requires, all capitalized terms used herein and not otherwise defined
shall have the meanings set forth in Appendix A hereto for all purposes of this
Indenture. All references to articles, sections, clauses, schedules and
appendices in this Indenture are to articles, sections, clauses, schedules and
appendices in and to this Indenture unless otherwise indicated.

ARTICLE II.
THE EQUIPMENT NOTES

Section 2.01. Form of Equipment Notes. The Equipment Notes
shall be substantially in the form set forth below:

8.42% EQUIPMENT NOTE

(Secured by, among others, Lease Obligations of
General American Transportation Corporation)

Issued in Connection with certain Railroad Rolling Stock

No ______ Chicago, Illinois
_______________, ____
$______________

STATE STREET BANK AND TRUST COMPANY, not in its individual
capacity, but solely as owner trustee (herein in such capacity called the
"Owner Trustee") under that certain Trust Agreement (GATC Trust No. 94-1),
dated as of August 9, 1994, as from time to time supplemented and amended
(herein called the "Trust Agreement"), between the Owner Trustee in its
individual capacity and the institution referred to therein as the "Owner
Participant", hereby promises to pay to _______________________________, or
registered assigns, the principal sum of $__________, in lawful currency of the
United States of America, in installments payable on the dates set forth in
Exhibit A hereto, commencing July 1, 1996 and thereafter to and including
January 1, 2011, each such installment to be in an amount equal to the
corresponding percentage (if any) of the remaining principal amount hereof set
forth in Exhibit A hereto, together with interest thereon on the amount of such
principal amount remaining unpaid from time to time from and including the date
hereof until such principal amount shall be due and payable, payable on July 1,
1995 and on each January 1 and July 1

-5-
<PAGE> 10
thereafter to the maturity date hereof at the rate of 8.42% per annum (computed
on the basis of a 360-day year of twelve 30-day months). Interest on any
overdue principal and (to the extent legally enforceable) on overdue interest
shall be paid from the due date thereof at the rate of 10.42% per annum
(computed on the basis of a 360-day year of twelve 30-day months), payable on
demand.

All payments of principal and interest and premium, if any, to
be made hereunder and under the Trust Indenture and Security Agreement (GATC
Trust No. 94-1), dated as of August 9, 1994 as from time to time amended and
supplemented (herein called the "Indenture", the defined terms therein not
otherwise defined herein being used herein with the same meanings), between the
Owner Trustee and The First National Bank of Chicago, as Indenture Trustee
thereunder for the holder of this Equipment Note and the holders of other
Equipment Notes outstanding thereunder (herein in such capacity called the
"Indenture Trustee") shall be made only from the income and proceeds from the
Indenture Estate and only to the extent that the Indenture Trustee shall have
sufficient income or proceeds from the Indenture Estate to make such payments
in accordance with the terms of Article III of the Indenture. Each holder
hereof, by its acceptance of this Equipment Note, agrees that it will look
solely to the income and proceeds from the Indenture Estate to the extent
available for distribution to the holder hereof as provided in the Indenture
and that none of the Owner Trustee, the Owner Participant, the Indenture
Trustee or their permitted successors and assigns is or shall be personally
liable to the holder hereof for any amount payable under this Equipment Note or
the Indenture or, except as expressly provided in the Participation Agreement
or the Indenture, for any liability under the Participation Agreement or (in
the case of the Owner Trustee or the Indenture Trustee) the Indenture.

Payments with respect to the principal amount hereof, premium,
if any, and interest thereon shall be payable in U.S. dollars in immediately
available funds at the principal bond and trustee administration office of the
Indenture Trustee, or as otherwise provided in the Indenture. Each such
payment shall be made on the date such payment is due and without any
presentment or surrender of this Equipment Note. Whenever the date scheduled
for any payment to be made hereunder or under the Indenture shall not be a
Business Day, then such payment need not be made on such scheduled date but may
be made on the next succeeding Business Day with the same force and effect as
if made on such scheduled date and (provided such payment is made on such next
succeeding Business Day) no interest shall accrue on the amount of such payment
from and after such scheduled date to the time of such payment on such next
succeeding Business Day.

Each holder hereof, by its acceptance of this Equipment Note,
agrees that each payment received by it hereunder shall be applied, first, to
the payment of accrued but unpaid interest on this Equipment Note then due,
second, to the payment of the unpaid principal amount of this Equipment Note
then due, third, to the payment of any premium then due, and fourth, to the
payment of the remaining outstanding principal amount of this Equipment Note;
provided, that the Owner Trustee may only prepay this Equipment Note as
provided in Sections 2.10, 3.02 and 3.03 of the Indenture.

-6-
<PAGE> 11
This Equipment Note is one of the Equipment Notes referred to
in the Indenture which have been or are to be issued by the Owner Trustee
pursuant to the terms of the Indenture and relates to the Units described in
Lease Supplement No. __. The Indenture Estate is held by the Indenture Trustee
as security for the Equipment Notes. Reference is hereby made to the Indenture
for a statement of the rights of the holder of, and the nature and extent of
the security for, this Equipment Note, as well as for a statement of the terms
and conditions of the trusts created by the Indenture, to all of which terms
and conditions in the Indenture each holder hereof agrees by its acceptance of
this Equipment Note.

This Equipment Note is not subject to redemption or prepayment
except as provided in Sections 2.10, 3.02 and 3.03 of the Indenture. This
Equipment Note is subject to purchase by the Owner Trustee without a premium as
provided in Section 4.04(b) of the Indenture. The holder hereof, by its
acceptance of this Equipment Note, agrees to be bound by said provisions.

This Equipment Note is a registered Equipment Note and is
transferable, as provided in the Indenture, only upon surrender of this
Equipment Note for registration of transfer duly endorsed by, or accompanied by
a written statement of transfer duly executed by, the registered holder hereof
or his attorney duly authorized in writing. Prior to the due presentation for
registration of transfer of this Equipment Note, the Owner Trustee and the
Indenture Trustee may deem and treat the registered holder of this Equipment
Note as the absolute owner and holder hereof for the purpose of receiving
payment of all amounts payable with respect hereto and for all other purposes
and shall not be affected by any notice to the contrary.

THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT.
THIS EQUIPMENT NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.

Unless the certificate of authentication hereon has been
executed by or on behalf of the Indenture Trustee by manual signature, this
Equipment Note shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.

In Witness Whereof, the Owner Trustee has caused this
Equipment Note to be executed by one of its authorized officers as of the date
hereof.

STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity,
but solely as Owner Trustee

By:_________________________________________

-7-
<PAGE> 12
[FORM OF INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]

This is one of the Equipment Notes referred to in the within-mentioned
Indenture.

The First National Bank of Chicago,
as Indenture Trustee

By:________________________________________
Authorized Officer

[Here insert from Annex A, the related Amortization Schedule]

Section 2.02. Terms of Equipment Notes. There shall be
issued and delivered to the Loan Participant a single Equipment Note related to
such Lease Supplement executed and delivered in respect of the Units delivered
on the Closing Date in the maturity and bearing the interest rate as set forth
in Exhibit B hereto, in a principal amount equal to that portion of the loan
made by the Loan Participant to the Owner Trustee pursuant to Section 2 of the
Participation Agreement relating to the Units under such Lease Supplement.
Each such Equipment Note shall evidence the loan made by the Loan Participant
in connection with the purchase of the Equipment by the Owner Trustee from the
Lessee, each such Equipment Note to be substantially in the form set forth in
Section 2.01, with deletions and insertions as appropriate, duly authenticated
by the Indenture Trustee and dated the Closing Date of the Equipment, and as
having been issued in connection with the Equipment under a related Lease
Supplement.

The principal amount of and interest on each Equipment Note
issued pursuant to the provisions of this Indenture shall be payable as set
forth in the form thereof contained in Section 2.01 and Annex A. Interest
accrued on the Equipment Notes shall be computed on the basis of a 360-day year
of twelve 30-day months on the principal amount thereof remaining unpaid from
time to time from and including the date thereof to but excluding the date of
payment. The Owner Trustee shall furnish to the Indenture Trustee a copy of
each Equipment Note issued pursuant to the provisions of this Indenture.

The Equipment Notes shall be identical in respect of payment
dates. All Equipment Notes shall be identical except in respect of principal
amount thereof. The aggregate principal amount of Equipment Notes which may be
outstanding at any one time shall be limited to the aggregate amount set forth
in Exhibit B hereto.

No Equipment Note shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose, unless it shall have been
authenticated by or on behalf of the Indenture Trustee by manual signature.

Section 2.03. Payment from Indenture Estate Only. All
payments to be made under the Equipment Notes and this Indenture shall be made
only from the income and the proceeds from the Indenture Estate and only to the
extent that the Indenture Trustee shall have

-8-
<PAGE> 13
received sufficient income or proceeds from the Indenture Estate to make such
payments in accordance with the terms of Article III hereof. Each holder of an
Equipment Note, by its acceptance of such Equipment Note, agrees that it will
look solely to the income and proceeds from the Indenture Estate to the extent
available for distribution to such holder as herein provided and that none of
the Owner Trustee, the Owner Participant, the Indenture Trustee or their
permitted successors and assigns is or shall be personally liable to the holder
of any Equipment Note for any amount payable under such Equipment Note or the
Indenture or, except as expressly provided in the Participation Agreement or
the Indenture, for any liability under the Participation Agreement or (in the
case of the Owner Trustee or the Indenture Trustee) the Indenture.

Section 2.04. Method of Payment. (a) The principal of and
premium, if any, and interest on each Equipment Note will be payable in U.S.
dollars in immediately available funds at the principal corporate trust
administration office of the Indenture Trustee or as otherwise directed in the
manner provided herein. Notwithstanding the foregoing or any provision in any
Equipment Note to the contrary, the Indenture Trustee will pay, or cause to be
paid, if so requested by any holder of an Equipment Note by written notice to
the Owner Trustee and the Indenture Trustee, all amounts payable by the Owner
Trustee hereunder to such holder or a nominee therefor either (i) by
transferring by wire in immediately available funds to an account maintained by
such holder with a bank in the United States the amount to be distributed to
such holder or (ii) by mailing a check denominated in U.S. dollars to such
holder at such address as such holder shall have specified in such notice, in
any case without any presentment or surrender of any Equipment Note, except
that the holder of an Equipment Note shall surrender such Equipment Note to the
Indenture Trustee upon payment in full of the principal amount of and interest
on such Equipment Note and such other sums payable to such holder hereunder or
under the Equipment Note.

(b) Whenever the date scheduled for any payment to be
made hereunder or under any Equipment Note shall not be a Business Day, then
such payment need not be made on such scheduled date but may be made on the
next succeeding Business Day with the same force and effect as if made on such
scheduled date and (provided such payment is made on such next succeeding
Business Day) no interest shall accrue on the amount of such payment from and
after such scheduled date to the time of such payment on such next succeeding
Business Day.

Section 2.05. Application of Payments to Principal Amount and
Interest. In the case of each Equipment Note, each payment of principal
thereof and premium, if any, and interest thereon shall be applied, first, to
the payment of accrued but unpaid interest on such Equipment Note then due
thereunder, second, to the payment of the unpaid principal amount of such
Equipment Note then due thereunder, third, to the payment of any premium then
due thereon and fourth, to the payment of the remaining outstanding principal
amount of such Equipment Note; provided, that the Owner Trustee may only prepay
such Equipment Note in accordance with the provisions of Section 2.10, 3.02 and
3.03 hereof.

Section 2.06. Termination of Interest in Indenture Estate.
A holder shall have no further interest in, or other right with respect to, the
Indenture Estate when and if the

-9-
<PAGE> 14
principal amount of and interest on all Equipment Notes held by such holder and
all other sums payable to such holder hereunder and under such Equipment Notes
and under the Participation Agreement shall have been paid in full.

Section 2.07. Transfer of Equipment Notes. The Indenture
Trustee shall maintain at its corporate trust administration office in Chicago,
Illinois or in the city in which the corporate trust office of a successor
Indenture Trustee is located, a register for the purpose of registering
transfers and exchanges of Equipment Notes. A holder of an Equipment Note
intending to transfer such Equipment Note to a new payee, or to exchange any
Equipment Note or Equipment Notes held by it for an Equipment Note or Equipment
Notes of a different denomination or denominations, may surrender such
Equipment Note or Equipment Notes to the Indenture Trustee at such principal
corporate trust administration office of the Indenture Trustee, together with a
written request from such holder for the issuance of a new Equipment Note or
Equipment Notes, specifying the denomination or denominations (each of which
shall be not less than $1,000,000 or a whole multiple thereof or such smaller
denomination as may be necessary due to the original issuance of Equipment
Notes of the applicable maturity in an aggregate principal amount not evenly
divisible by $1,000,000) of the same, and, in the case of a surrender for
registration of transfer, the name and address of the transferee or
transferees. Promptly upon receipt of such documents, the Owner Trustee will
issue, and the Indenture Trustee will authenticate, a new Equipment Note or
Equipment Notes in the same aggregate principal amount and dated the same date
or dates as, with the same payment schedule, in the form set forth in Section
2.01 in the same maturity and bearing the same interest rate as the Equipment
Note or Equipment Notes surrendered, in such denomination or denominations and
payable to such payee or payees as shall be specified in the written request
from such holder. All Equipment Notes issued upon any registration of transfer
or exchange of Equipment Notes shall be the valid obligations of the Owner
Trustee evidencing the same respective obligations, and entitled to the same
security and benefits under this Indenture, as the Equipment Notes surrendered
upon such registration of transfer or exchange. The Indenture Trustee shall
make a notation on each new Equipment Note or Equipment Notes of the amount of
all payments or prepayments of principal and interest previously made on the
old Equipment Note or Equipment Notes with respect to which such new Equipment
Note or Equipment Notes is or are issued. From time to time, the Indenture
Trustee will provide the Owner Trustee and the Lessee with such information as
it may request as to the registered holders of Equipment Notes. The Owner
Trustee shall not be required to exchange any surrendered Equipment Notes as
above provided during the 10-day period preceding the due date of any payment
on such Equipment Notes.

Prior to the due presentment for registration of transfer of
an Equipment Note, the Owner Trustee and the Indenture Trustee may deem and
treat the registered holder of such Equipment Note as the absolute owner and
holder of such Equipment Note for the purpose of receiving payment of all
amounts payable with respect to such Equipment Note and for all other purposes
and shall not be affected by any notice to the contrary.

The Indenture Trustee will promptly notify the Owner Trustee
and the Lessee of each request for a registration of transfer of an Equipment
Note. The Indenture Trustee will

-10-
<PAGE> 15
promptly cancel and destroy all Equipment Notes surrendered for transfer or
exchange pursuant to this Section.

Section 2.08. Mutilated, Destroyed, Lost or Stolen Equipment
Notes. If any Equipment Note shall become mutilated, destroyed, lost or
stolen, the Owner Trustee shall, upon the written request of the holder of such
Equipment Note, issue, and the Indenture Trustee shall authenticate and deliver
in replacement thereof, a new Equipment Note in the form set forth in Section
2.01, payable to the same holder in the same principal amount, of the same
maturity, with the same payment schedule, bearing the same interest rate and
dated the same date as the Equipment Note so mutilated, destroyed, lost or
stolen. The Indenture Trustee shall make a notation on each new Equipment Note
of the amount of all payments or prepayments of principal and interest
theretofore made on the Equipment Note so mutilated, destroyed, lost or stolen
and the date to which interest on such old Equipment Note has been paid. If
the Equipment Note being replaced has become mutilated, such Equipment Note
shall be surrendered to the Indenture Trustee and forwarded to the Owner
Trustee by the Indenture Trustee. If the Equipment Note being replaced has
been destroyed, lost or stolen, the holder of such Equipment Note shall furnish
to the Owner Trustee and the Indenture Trustee such security or indemnity as
may be required by them to save the Owner Trustee and the Indenture Trustee
harmless and evidence satisfactory to the Owner Trustee and the Indenture
Trustee of the destruction, loss or theft of such Equipment Note and of the
ownership thereof.

Section 2.09. Payment of Transfer Taxes. Upon the transfer
of any Equipment Note or Equipment Notes pursuant to Section 2.07, the Owner
Trustee or the Indenture Trustee may require from the party requesting such new
Equipment Note or Equipment Notes payment of a sum to reimburse the Owner
Trustee or the Indenture Trustee for, or to provide funds for the payment of,
any tax or other governmental charge in connection therewith.

Section 2.10. Prepayments. (a) Each Equipment Note shall be
prepaid in whole or in part by the Owner Trustee on a Rent Payment Date (or, in
the circumstance provided in the last sentence of Section 10.3 of the Lease, on
a Determination Date) upon at least 25 days' prior notice from the Owner
Trustee (or the Lessee on its behalf) to the Indenture Trustee in the event
that the Lease as applicable to any Unit or Units related to such Equipment
Note is terminated pursuant to Section 10 thereof, at a price equal to the sum
of (i) as to principal thereof, an amount equal to the product obtained by
multiplying the unpaid principal amount of such Equipment Note as at the date
of such prepayment (after deducting therefrom the principal installment, if
any, due on or prior to the date of such prepayment) by a fraction, the
numerator of which shall be the Equipment Cost of such Unit or Units and the
denominator of which shall be the aggregate Equipment Cost of all Units
included in the Indenture Estate under the related Indenture Supplement
immediately prior to the date of such prepayment, (ii) as to interest, the
aggregate amount of interest accrued and unpaid in respect of the principal
amount to be prepaid pursuant to clause (i) above on the date of such payment
(after giving effect to the application of any Basic Rent paid on or prior to
the date of such prepayment) and (iii) if prepaid prior to the Premium
Termination Date, a premium in an amount equal to the Make-Whole Amount, if
any, applicable in respect of the principal amount to be prepaid pursuant to
clause (i) above on the date of such prepayment.

-11-
<PAGE> 16
(b) Each Equipment Note shall be prepaid in whole or in
part by the Owner Trustee on a Rent Payment Date upon at least 25 days' prior
notice from the Owner Trustee (or the Lessee on its behalf) to the Indenture
Trustee in connection with the occurrence of an Event of Loss with respect to
any Unit or Units related to such Equipment Note if such Unit or Units are not
replaced pursuant to Section 11.2(i) of the Lease, or in the event Lessee shall
be required to settle for more than 15 Units on a Determination Date pursuant
to Section 11.2 of the Lease, such prepayment shall be made on such
Determination Date, at a price equal to the sum of (i) as to principal thereof,
an amount equal to the product obtained by multiplying the aggregate unpaid
principal amount of such Equipment Note as at such prepayment date (after
deducting therefrom the principal installment, if any, due on such date) by a
fraction, the numerator of which shall be the Equipment Cost of such Unit or
Units and the denominator of which shall be the aggregate Equipment Cost of all
Units included in the Indenture Estate under the related Indenture Supplement
immediately prior to such date, and (ii) as to interest, the aggregate amount
of interest accrued and unpaid in respect of the principal amount to be prepaid
pursuant to clause (i) above to but not including the date of prepayment after
giving effect to the application of any Basic Rent paid on or prior to the date
of such prepayment, but without the payment of any premium.

(c) Each Equipment Note shall be prepaid in whole or in
part by the Owner Trustee on the Determination Date specified by Lessee to
Owner Trustee and Indenture Trustee in accordance with Section 6.9 of the
Participation Agreement, in the event that Lessee exercises the purchase option
under Section 6.9 of the Participation Agreement with respect to the Equipment,
at a price equal to the sum of (i) as to principal thereof, an amount equal to
the product obtained by multiplying the aggregate unpaid principal amount of
such Equipment Note as at the date of any prepayment under Section 6.9 of the
Participation Agreement (after deducting therefrom the principal installment,
if any, due on the prepayment date) by a fraction, the numerator of which shall
be the Equipment Cost of such Unit or Units to be purchased and the denominator
of which shall be the aggregate Equipment Cost of all Units included in the
Indenture Estate immediately prior to the date of such prepayment, (ii) as to
interest, the aggregate amount of interest accrued and unpaid in respect of the
principal amount to be prepaid pursuant to clause (i) above on the date of such
prepayment after giving effect to the application of any Basic Rent paid on or
prior to the date of such prepayment, and (iii) if prepaid prior to the Premium
Termination Date applicable to such Equipment Notes, a premium in an amount
equal to the aggregate Make-Whole Amount, if any, applicable in respect of the
principal amount to be prepaid pursuant to clause (i) above on the date of such
payment.

(d) On the Refunding Date specified by the Lessee to the
Owner Trustee and to the Indenture Trustee in accordance with Section 10.2(f)
of the Participation Agreement, all Equipment Notes shall be prepaid in whole
but not in part on such Refunding Date, in the event of a refunding or
refinancing pursuant to Section 10.2 of the Participation Agreement, at a price
in addition to any other amounts due to the holders of the Equipment Notes
under this Indenture equal to the unpaid principal amount thereof together with
accrued but unpaid interest thereon, plus if prepaid prior to the Premium
Termination Date, a premium in an amount equal to the Make-Whole Amount, if
any.

-12-
<PAGE> 17
(e) The Indenture Trustee shall give prompt notice of any
prepayment of any of the Equipment Notes to all holders of the Equipment Notes
as soon as the Indenture Trustee shall have knowledge that such prepayment is
to occur, which notice shall specify the Equipment Note or Notes to be prepaid,
the principal amount of such Equipment Note or Notes to be prepaid and the date
of prepayment which date shall be not less than 25 days after the date of such
notice.

Section 2.11. Equally and Ratably Secured. All Equipment
Notes at any time outstanding under this Indenture shall be equally and ratably
secured hereby without preference, priority or distinction on account of the
date or dates or the actual time or times of the issue or maturity of such
Equipment Notes so that all Equipment Notes at any time issued and outstanding
hereunder shall have the same rights, Liens and preferences under and by virtue
of this Indenture.

ARTICLE III.
RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME
FROM THE INDENTURE ESTATE

Section 3.01. Basic Rent Distribution. Except as otherwise
provided in Section 3.03, each installment of Interim Interest and Basic Rent
as well as any installment of interest on overdue installments of Basic Rent,
and any other moneys paid over by the Lessee or the Owner Trustee to the
Indenture Trustee for such purpose, shall be distributed by the Indenture
Trustee as promptly as possible (it being understood that any payments of
Interim Interest and Basic Rent received by the Indenture Trustee on a timely
basis and in accordance with the provisions of Section 3.6 of the Lease shall
be distributed on the date received in the funds so received) in the following
order of priority: first, so much of such installment as shall be required for
the purpose shall be distributed and paid to the holders of the Equipment Notes
to pay in full the aggregate amount of the payment or payments of principal,
premium, if any, and interest (as well as any interest on overdue principal or
interest) then due, such distribution to be made ratably, without priority of
one over the other, in the proportion that the amount of such payment or
payments then due with respect to each such Equipment Note bears to the
aggregate amount of payments then due under all such Equipment Notes; and
second, the balance, if any, of such installment remaining thereafter shall be
distributed to the Owner Trustee for distribution in accordance with the terms
of the Trust Agreement. The portion of each such installment distributed to a
holder of an Equipment Note shall be applied by such holder in payment of such
Equipment Note in accordance with the terms of Section 2.05.

Section 3.02. Payments in the Event of Prepayment. (a)
Except as otherwise provided in Section 3.03 or 3.05, in the event of any
prepayment of an Equipment Note or Notes, in whole or in part, in accordance
with the provisions of Section 2.10 any amount received shall in each case be
distributed and paid in the following order of priority: first, so much of
such amount as shall be required for the purpose of prepayment shall be
distributed and paid to the holders of such Equipment Note or Notes to pay the
aggregate amount of the payment of principal, premium, if any, and interest to
be prepaid on such Equipment Note or

-13-
<PAGE> 18
Notes pursuant to Section 2.10, such prepayment to be made ratably to such
Equipment Note or Notes to which such prepayment relates, without priority of
one over any other, in the proportion that the amount to be prepaid on each
such Equipment Note bears to the aggregate amount to be paid on all such
Equipment Notes; and second, the balance, if any, of such amount remaining
thereafter shall be distributed to the Owner Trustee for distribution in
accordance with the terms of the Trust Agreement.

(b) Except as otherwise provided in Section 3.03 or 3.05
hereof, any amounts received directly or through the Lessee from any
governmental authority or other party pursuant to Section 11 of the Lease with
respect to any Unit as the result of an Event of Loss, to the extent that such
amounts are not at the time required to be paid to the Lessee pursuant to said
Section 11, and any amounts of insurance proceeds for damage to the Indenture
Estate received directly or though the Lessee from any insurer pursuant to
Section 12 of the Lease with respect thereto as the result of an Event of Loss,
to the extent such amounts are not at the time required to be paid to the
Lessee pursuant to said Section 12, shall be applied as provided in clause (a)
of this Section 3.02.

Section 3.03. Payments after Indenture Event of Default.
(a) Except as provided in Section 3.05, all payments received and amounts
realized by the Indenture Trustee after an Indenture Event of Default shall
have occurred and be continuing and after the Indenture Trustee has declared
(as assignee from the Owner Trustee of the Lease) the Lease to be in default
pursuant to Section 15 thereof or has declared the Equipment Notes to be
accelerated pursuant to Section 4.02, as the case may be, or has elected to
foreclose or otherwise exercise any remedies under this Indenture (including
any amounts realized by the Indenture Trustee from the exercise of any remedies
pursuant to Section 15 of the Lease, or Article IV), as well as all payments or
amounts then held or thereafter received by the Indenture Trustee as part of
the Indenture Estate while such Indenture Event of Default shall be continuing,
shall be distributed forthwith by the Indenture Trustee in the following order
of priority:

First, so much of such payments or amounts as shall
be required to reimburse the Indenture Trustee for any fees which are
due and payable for its services under this Indenture and any tax,
expense (including reasonable attorney's fees) or other loss incurred
by the Indenture Trustee (to the extent reimbursable and not
previously reimbursed and to the extent incurred in connection with
its duties as Indenture Trustee) shall be distributed to the Indenture
Trustee;

Second, so much of such payments or amounts as shall
be required to reimburse the holders of the Equipment Notes for
payments made by them to the Indenture Trustee pursuant to Section
5.03 (to the extent not previously reimbursed), and to pay such
holders of the Equipment Notes the amounts payable to them pursuant to
the provisions of the Participation Agreement, shall be distributed to
such holders of the Equipment Notes, without priority of one over the
other, in accordance with the amount of the payment or payments made
by, or payable to, each such holder;

-14-
<PAGE> 19
Third, so much of such payments or amounts remaining
as shall be required to pay the principal of, and premium, if any, to
the extent received from the Lessee as Supplemental Rent, and accrued
interest (to the date of distribution) on all Equipment Notes, payable
to the Loan Participant, then due and payable, whether by declaration
of acceleration pursuant to Section 4.02 or otherwise, and in case the
aggregate amount so to be distributed shall be insufficient to pay in
full the aforesaid amounts, then, ratably, without priority of one
over the other, in the proportion that the aggregate unpaid principal
amount of all Equipment Notes held by each such holder, plus the
accrued but unpaid interest thereon to the date of distribution, bears
to the aggregate unpaid principal amount of all Equipment Notes, plus
the accrued but unpaid interest thereon to the date of distribution;
and

Fourth, the balance, if any, of such payments or
amounts remaining thereafter shall be distributed to the Owner Trustee
for distribution in accordance with the terms of the Trust Agreement.

(b) Except as provided in Sections 3.03(a) and 3.05, if
an Indenture Default or Indenture Event of Default shall have occurred and be
continuing, the Indenture Trustee shall not make any distribution to the Owner
Trustee but shall hold amounts otherwise distributable to the Owner Trustee as
collateral security for the obligations secured hereby and invested as provided
in Section 6.04(b) until the earliest to occur of (a) the date on which such
Indenture Default or Indenture Event of Default shall have been cured or
waived, and (b) such acceleration occurs and such amounts are applied pursuant
to Section 3.03(a); provided, that if any amounts are held pursuant to this
Section 3.03(b) for a period of 180 days during which time the Equipment Notes
could, but shall not have been, accelerated, then (x) all amounts then held by
the Indenture Trustee under this Section 3.03(b) with respect to such Indenture
Default or Indenture Event of Default which have been so held for at least 90
days shall on the 181st day be distributed to the Owner Trustee for
distribution in accordance with the terms of the Trust Agreement and (y) any
such amounts which are being held pursuant to this Section 3.03(b) with respect
to such Indenture Default or Indenture Event of Default but which have not been
held for at least 90 days shall, on the 91st day following the date on which
such amount was initially received by the Indenture Trustee, thereafter be
distributed to the Owner Trustee for distribution in accordance with the terms
of the Trust Agreement.

Section 3.04. Other Payments. Except as otherwise provided
in Section 3.03 or 3.05, (e) any payments received by the Indenture Trustee for
which no provision as to the application thereof is made in the Lease or the
Participation Agreement or elsewhere in this Article III, and (f) all payments
received and amounts realized by the Indenture Trustee under the Lease or
otherwise with respect to the Equipment to the extent received or realized at
any time after payment in full of the principal of and interest and premium, if
any, on all Equipment Notes, as well as any other amounts remaining as part of
the Indenture Estate after payment in full of the principal of and interest and
premium, if any, shall be distributed forthwith by the Indenture Trustee in the
order of priority set forth in Section 3.03(a), except that in the case of any
payment described in clause (b) above, such payment shall be distributed
omitting clause "third" of such Section 3.03(a) on all Equipment Notes issued
hereunder.

-15-
<PAGE> 20
Any payments received by the Indenture Trustee for which
provision as to the application thereof is made in the Lease or the
Participation Agreement but not elsewhere in this Indenture shall be applied to
the purposes for which such payments were made in accordance with the
provisions of the Lease or the Participation Agreement, as the case may be.

Section 3.05. Distribution of Excepted Property. All
amounts constituting Excepted Property received by the Indenture Trustee shall
be paid promptly by the Indenture Trustee to the Person or Persons entitled
thereto.

ARTICLE IV.

REMEDIES OF THE INDENTURE TRUSTEE UPON AN INDENTURE
EVENT OF DEFAULT

Section 4.01. Indenture Events of Default. The following
events shall constitute "Indenture Events of Default" and each such Indenture
Event of Default shall be deemed to exist and continue so long as, but only so
long as, it shall not have been remedied:

(a) subject to Section 4.04(a), a Lease Event of
Default (other than a Lease Event of Default by reason of a default by
the Lessee to pay any amounts which are part of the Excepted
Property); or

(b) default by the Owner Trustee in making any
payment when due of principal of, premium, if any, or interest on, any
Equipment Note or Equipment Notes, and the continuance of such default
unremedied for 10 Business Days after the same shall have become due
and payable; or

(c) any failure by the Owner Trustee or the Owner
Participant to observe or perform any covenant or obligation of them
or any of them, in this Indenture or the Equipment Notes (other than
as set forth in clause (b) above) or in the Participation Agreement,
if such failure is not remedied within a period of 30 days after there
has been given to the Owner Trustee, the Owner Participant and the
Lessee by the Indenture Trustee or by any holder of an Equipment Note
a written notice specifying such failure and requiring it to be
remedied; or

(d) any representation or warranty made by the
Owner Trustee (except to the extent made with respect to State Street
Bank and Trust Company, in its individual capacity) or the Owner
Participant under the Participation Agreement, or by the Owner Trustee
hereunder, or by any representative of the Owner Trustee or the Owner
Participant in any document or certificate furnished to the Indenture
Trustee or the Loan Participant in connection herewith or therewith or
pursuant hereto or thereto, shall prove at any time to have been
incorrect in any material respect as of the date made and such
incorrectness shall remain material and continue unremedied for a
period of 30 days after there has been given to the Owner Trustee and
the Owner Participant a written notice specifying such incorrectness,
stating that such incorrectness is a default hereunder and

-16-
<PAGE> 21

requiring it to be remedied by the Indenture Trustee or by any holder of
an Equipment Note; or

(e) the Owner Trustee (as Owner Trustee and not
in its individual capacity) or the Owner Participant shall consent to
the appointment of a custodian, receiver, trustee or liquidator of
itself or of a substantial part of its property or shall make a
general assignment for the benefit of creditors; or

(f) the Owner Trustee (as Owner Trustee and not
in its individual capacity) or the Owner Participant shall file, or
consent by answer or otherwise to the filing against it of, a petition
for relief or reorganization or arrangement or any other petition in
bankruptcy, for liquidation or to take advantage of any bankruptcy or
insolvency law of any jurisdiction; or

(g) an order, judgment or decree shall be entered
by any court of competent jurisdiction appointing, without the consent
of the Owner Trustee (as Owner Trustee and not in its individual
capacity) or the Owner Participant, a receiver, trustee or liquidator
of the Indenture Estate, the Owner Trustee (as Owner Trustee and not
in its individual capacity) or the Owner Participant, or of any
substantial part of its property, or granting any order for relief in
respect of the Owner Trustee (as Owner Trustee and not in its
individual capacity) or the Owner Participant under the Federal
bankruptcy laws, and any such order, judgment or decree of appointment
shall remain in force undismissed, unstayed or unvacated for a period
of 60 days after the date of entry thereof; or

(h) a petition against the Owner Trustee (as
Owner Trustee and not in its individual capacity) or the Owner
Participant, in a proceeding under the Federal bankruptcy laws or
other insolvency law, as now or hereafter in effect, shall be filed
and shall not be withdrawn or dismissed within 60 days thereafter, or
if, under the provisions of any law providing for reorganization or
winding-up of corporations which may apply to the Owner Trustee (as
Owner Trustee and not in its individual capacity) or the Owner
Participant, any court of competent jurisdiction shall assume
jurisdiction, custody or control of the Indenture Estate, the Owner
Trustee (as Owner Trustee and not in its individual capacity) or the
Owner Participant or of any substantial part of its property and such
jurisdiction, custody or control shall remain in force unrelinquished,
unstayed or unterminated for a period of 60 days.

Notwithstanding any provision herein to the contrary, if an Indenture Event of
Default described in clause (e), (f), (g) or (h) of this Section 4.01 results
solely from the bankruptcy, reorganization, compromise, arrangement,
insolvency, readjustment of debt, dissolution or liquidation of Owner Trustee
solely in its individual capacity, and can be cured by the appointment of a
substitute Owner Trustee without adversely affecting the rights of the
Indenture Trustee hereunder, then Indenture Trustee shall refrain from the
exercise of any of the rights, powers or remedies pursuant to this Article IV
for a period of 45 days provided Owner

-17-
<PAGE> 22
Participant is diligently seeking to, and does replace the bank or trust
company then serving as Owner Trustee which replacement shall be deemed to cure
such Indenture Event of Default.

Section 4.02. Acceleration; Rescission and Annulment. If an
Indenture Event of Default occurs and is continuing, the Indenture Trustee may,
and upon the directions of a Majority in Interest shall, subject to Section
4.04, declare the unpaid principal amount of all Equipment Notes then
outstanding and accrued interest thereon to be due and payable. At any time
after the Indenture Trustee has declared the unpaid principal amount of all
Equipment Notes then outstanding to be due and payable and prior to the sale of
any of the Indenture Estate pursuant to this Article IV, a Majority in
Interest, by written notice to the Owner Trustee, the Lessee and the Indenture
Trustee, may rescind and annul such declaration and thereby annul its
consequences if: (i) there has been paid to or deposited with the Indenture
Trustee an amount sufficient to pay all overdue installments of interest on the
Equipment Notes, and the principal of and premium, if any, on any Equipment
Notes that have become due otherwise than by such declaration of acceleration,
(ii) the rescission would not conflict with any judgment or decree, and (iii)
all other Indenture Defaults and Indenture Events of Default, other than
nonpayment of principal or interest on the Equipment Notes that have become due
solely because of such acceleration, have been cured or waived.

Section 4.03. Remedies with Respect to Indenture Estate.
(9) After an Indenture Event of Default shall have occurred and so long as
such Indenture Event of Default shall be continuing, then and in every such
case the Indenture Trustee, as assignee hereunder of the Lease or as mortgagee
hereunder of the Equipment or otherwise, may, and when required pursuant to the
provisions of Article V hereof shall, subject to Sections 4.04 and 4.05,
exercise any or all of the rights and powers and pursue any and all of the
remedies pursuant to Section 15 of the Lease and this Article IV and may
recover judgment in its own name as Indenture Trustee against the Indenture
Estate and may take possession of all or any part of the Indenture Estate, and
may exclude the Owner Trustee and the Owner Participant and all persons
claiming under any of them wholly or partly therefrom; provided, however, that
nothing in this Indenture shall permit or require the Indenture Trustee to take
any action contrary to, or to disturb, the Lessee's rights under the Lease,
except in accordance with the provisions of the Lease. The Indenture Trustee,
after the occurrence of any Indenture Event of Default, shall give the Owner
Participant and the Owner Trustee 10 Business Days' (or such shorter period as
practical) prior notice of the date before which the Indenture Trustee shall
not exercise any remedy which would result in the exclusion of the Owner
Trustee from the Indenture Estate or any part thereof; provided, however, such
notice period shall not be in addition to any other notice period provided
herein and; provided, further, that the failure to give such notice shall have
no effect on any action taken by the Indenture Trustee.

(b) Subject to Section 4.04 and Section 4.05, the
Indenture Trustee may, if at the time such action may be lawful and always
subject to compliance with any mandatory legal requirements, either with or
without taking possession, and either before or after taking possession, and
without instituting any legal proceedings whatsoever, and having first given
notice of such sale by registered mail to the Owner Trustee, the Owner
Participant and the Lessee once at least 20 days prior to the date of such sale
or the date on which the Indenture

-18-
<PAGE> 23
Trustee enters into a binding contract for a private sale, and any other notice
which may be required by law, sell and dispose of the Indenture Estate, or any
part thereof, or interest therein, at public auction to the highest bidder or
at private sale in one lot as an entirety or in separate lots, and either for
cash or on credit and on such terms as the Indenture Trustee may determine, and
at any place (whether or not it be the location of the Indenture Estate or any
part thereof) and time designated in the notice above referred to; provided,
however, that, notwithstanding any provision herein to the contrary, the
Indenture Trustee shall not sell any of the Indenture Estate or exercise any
other remedies which would result in the exclusion of the Owner Trustee from
the Indenture Estate or any part thereof unless a declaration of acceleration
has been made pursuant to Section 4.02; provided further, that, in the event
the circumstances contemplated by Section 4.04(c) exist, the Indenture Trustee
shall not be allowed to deliver the notice required by this Section 4.03(b)
until the earlier of (x) such time as such circumstances no longer exist or (y)
the expiration of the 90 day period set forth in Section 4.04(c). Any such
public sale or sales may be adjourned from time to time by announcement at the
time and place appointed for such sale or sales, or for any such adjourned sale
or sales, without further notice, and the Indenture Trustee or the holder or
holders of any Equipment Notes, or any interest therein, may bid and become the
purchaser at any such public sale. The Indenture Trustee may exercise such
right without possession or production of the Equipment Notes or proof of
ownership thereof, and as representative of the holders may exercise such right
without including the holders as parties to any suit or proceeding relating to
foreclosure of any property in the Indenture Estate. The Owner Trustee hereby
irrevocably constitutes the Indenture Trustee the true and lawful
attorney-in-fact of the Owner Trustee (in the name of the Owner Trustee or
otherwise) for the purpose of effectuating any sale, assignment, transfer or
delivery for enforcement of the Lien of this Indenture, whether pursuant to
foreclosure or power of sale or otherwise, to execute and deliver all such
bills of sale, assignments and other instruments as the Indenture Trustee may
consider necessary or appropriate, with full power of substitution, the Owner
Trustee hereby ratifying and confirming all that such attorney or any
substitute shall lawfully do by virtue hereof. Nevertheless, if so requested
by the Indenture Trustee or any purchaser, the Owner Trustee shall ratify and
confirm any such sale, assignment, transfer or delivery, by executing and
delivering to the Indenture Trustee or such purchaser all bills of sale,
assignments, releases and other proper instruments to effect such ratification
and confirmation as may be designated in any such request.

(c) Subject to Section 4.04 and Section 4.05, the Owner
Trustee agrees, to the fullest extent that it lawfully may, that, in case one
or more of the Indenture Events of Default shall have occurred and be
continuing, then, in every such case, the Indenture Trustee may take possession
of all or any part of the Indenture Estate and may exclude the Owner Trustee
and the Owner Participant and all persons claiming under any of them wholly or
partly therefrom. At the request of the Indenture Trustee, the Owner Trustee
shall promptly execute and deliver to the Indenture Trustee such instruments of
title and other documents as the Indenture Trustee may deem necessary or
advisable to enable the Indenture Trustee or an agent or representative
designated by the Indenture Trustee, at such time or times and place or places
as the Indenture Trustee may specify, to obtain possession of all or any part
of the Indenture Estate. If the Owner Trustee shall fail for any reason to
execute and deliver such instruments and documents to the Indenture Trustee,
the Indenture Trustee may pursue all or part of the Indenture Estate

-19-
<PAGE> 24
wherever it may be found and may enter any of the premises of the Lessee
wherever the Indenture Estate may be or be supposed to be and search for the
Indenture Estate and, subject to Section 4.05, take possession of and remove
the Indenture Estate. Upon every such taking of possession, the Indenture
Trustee may, from time to time, at the expense of the Indenture Estate, make
all such expenditures for maintenance, insurance, repairs, replacements,
alterations, additions and improvements to any of the Indenture Estate, as it
may deem proper. In each such case, the Indenture Trustee shall have the right
to use, operate, store, control or manage the Indenture Estate, and to carry on
the business and to exercise all rights and powers of the Owner Trustee
relating to the Indenture Estate, as the Indenture Trustee shall deem best,
including the right to enter into any and all such agreements with respect to
the maintenance, operation, leasing or storage of the Indenture Estate or any
part thereof as the Indenture Trustee may determine; and the Indenture Trustee
shall be entitled to collect and receive all tolls, rents, revenues, issues,
income, products and profits of the Indenture Estate and every part thereof,
without prejudice, however, to the right of the Indenture Trustee under any
provision of this Indenture to collect and receive all cash held by, or
required to be deposited with, the Indenture Trustee hereunder. Such tolls,
rents, revenues, issues, income, products and profits shall be applied to pay
the expenses of holding and operating the Indenture Estate and of conducting
the business thereof, and of all maintenance, repairs, replacements,
alterations, additions and improvements, and to make all payments which the
Indenture Trustee may be required or may elect to make, if any, for taxes,
assessments, insurance or other proper charges upon the Indenture Estate or any
part thereof (including the employment of engineers and accountants to examine,
inspect and make reports upon the properties and books and records of the
Indenture Estate), and all other payments which the Indenture Trustee may be
required or authorized to make under any provision of this Indenture, as well
as just and reasonable compensation for the services of the Indenture Trustee,
and of all persons properly engaged and employed by the Indenture Trustee,
including the reasonable expenses of the Indenture Trustee.

(d) If an Indenture Event of Default occurs and is
continuing and the Indenture Trustee shall have obtained possession of a Unit,
the Indenture Trustee shall not be obligated to use or operate such Unit or
cause such Unit to be used or operated directly or indirectly by itself or
through agents or other representatives or to lease, license or otherwise
permit or provide for the use or operation of such Unit or Equipment by any
other Person unless (i) the Indenture Trustee shall have been able to obtain
insurance in kinds, at rates and in amounts satisfactory to it in its
discretion to protect the Indenture Estate and the Indenture Trustee, as
trustee and individually, against any and all liability for loss or damage to
such Unit and for public liability and property damage resulting from use or
operation of such Unit and (ii) funds are available in the Indenture Estate to
pay for all such insurance or, in lieu of such insurance, the Indenture Trustee
is furnished with indemnification from the holders of the Equipment Notes or
any other Person upon terms and in amounts satisfactory to the Indenture
Trustee in its discretion to protect the Indenture Estate and the Indenture
Trustee, as trustee and individually, against any and all such liabilities.

(e) Notwithstanding anything contained herein, so long as
the Pass Through Trustee under any Pass Through Trust Agreement is the
registered holder of any Equipment Note issued hereunder, the Indenture Trustee
is not authorized or empowered to acquire title to

-20-
<PAGE> 25
any Indenture Estate or take any action with respect to any Indenture Estate so
acquired by it if such acquisition or action would cause the trust created by
the Trust Agreement or the Pass Through Trust Agreement to fail to qualify as a
"grantor trust" for federal income tax purposes.

Section 4.04. Right to Cure; Option to Purchase; Etc.

(a) Right to Cure. (A) If there shall occur a Lease
Event of Default in respect of the payment of Basic Rent pursuant to Section
14(a) of the Lease, then as long as no other Indenture Event of Default (other
than arising from such failure to pay Basic Rent or which is concurrently being
cured pursuant to this Section 4.04(a)) shall have occurred and be continuing
the Owner Participant or the Owner Trustee may (but need not) pay to the
Indenture Trustee, at any time prior to the expiration of a period of 10
Business Days (a "10-Day Period") after receiving written notice of such
default from the Indenture Trustee (prior to the expiration of which 10-Day
Period the Indenture Trustee shall not declare the Lease in default pursuant to
Section 15 thereof or exercise any of the rights, powers or remedies pursuant
to such Section 15 or this Article IV), an amount equal to the full amount of
such payment of Basic Rent, together with any interest due thereon on account
of the delayed payment thereof, and such payment by the Owner Participant or
the Owner Trustee shall be deemed to cure any Indenture Event of Default which
arose from such failure of the Lessee (but such cure shall not relieve the
Lessee of any of its obligations and shall not cure any other Indenture Event
of Default) or (B) if there shall occur a Lease Event of Default in respect of
any other payment of Rent (other than Basic Rent) or a Lease Event of Default
shall have occurred and be continuing, which Lease Event of Default is curable
by the payment of money (it being understood that actions such as the obtaining
of insurance or the procuring of maintenance services can be so effected), then
as long as no other Indenture Event of Default (other than arising from such
Lease Event of Default or which is concurrently being cured pursuant to this
Section 4.04(a)) shall have occurred and be continuing the Owner Participant or
the Owner Trustee may (but need not) pay to the Indenture Trustee, at any time
prior to the expiration of a period of 30 days (a "30-Day Period") after
receiving written notice of such Lease Event of Default from the Indenture
Trustee (prior to the expiration of which 30-Day Period the Indenture Trustee
shall not declare the Lease in default pursuant to Section 15 thereof or
exercise any of the rights, powers or remedies pursuant to such Section 15 of
this Article IV), an amount equal to the full amount of such payment of Rent,
together with any interest due thereon on account of the delayed payment
thereof or otherwise make such payment as shall effect such cure, and such
payment by the Owner Participant or the Owner Trustee shall be deemed to cure
any Indenture Event of Default which arose from such Lease Event of Default
(but such cure shall not relieve the Lessee of any of its obligations);
provided however, Owner Participant and Owner Trustee, collectively, shall not
be entitled to (x) cure more than three consecutive or six total defaults in
the payment of Basic Rent, or (y) cure other Lease Events of Default if the
outstanding amount which has been paid by the Owner Participant or the Owner
Trustee and not reimbursed to such parties by the Lessee pursuant to this
clause (y) exceeds in the aggregate $5,000,000, as adjusted annually for
inflation as of January 1 of each calendar year, by the percentage change in
the Consumer Price Index, All Urban Consumers, All Cities, as compared to the
prior calendar year as published by the Bureau of Labor Statistics of the
United States Department of Labor. Upon any cure by the Owner Participant or
the Owner Trustee in accordance with the first sentence of this Section
4.04(a),

-21-
<PAGE> 26
the Owner Participant or the Owner Trustee shall, to the extent of their
respective payments, be subrogated to the rights of the Indenture Trustee, as
assignee hereunder of the Owner Trustee to receive such payment of Rent (and
any interest due thereon on account of the delayed payment thereof) or right of
reimbursement, and shall be entitled to receive such payment upon its receipt
by the Indenture Trustee as aforesaid (but in each case only if all amounts of
principal and interest at the time due and payable on the Equipment Notes shall
have been paid in full); provided that neither the Owner Participant nor the
Owner Trustee shall attempt to recover any such amount paid by it on behalf of
the Lessee pursuant to this Section 4.04(a) except by demanding of the Lessee
payment of such amount or by commencing an action against the Lessee to require
the payment of such amount.

(b) Option to Purchase Equipment Notes. In the event
that (i) at any time one or more Lease Events of Default shall have occurred
and any such Lease Event of Default shall have continued for a period of 180
days or more during which time the Equipment Notes could, but shall not, have
been accelerated pursuant to Section 4.02, (ii) the Equipment Notes shall have
been accelerated pursuant to Section 4.02, (iii) the Indenture Trustee, as
assignee hereunder of the Lease, shall have exercised (or given notice of its
intention to exercise) any remedy in respect of the Units under the Lease, or
(iv) the Indenture Trustee shall commence foreclosure of the Lien of this
Indenture or otherwise exercise remedies which would result in the exclusion of
the Owner Trustee from the Indenture Estate or any part thereof (or give notice
of its intention to foreclose or exercise remedies), then and in any such case,
so long as the Lessee and its Affiliates do not individually or in the
aggregate own more than 20% of the Beneficial Interest, upon 30 days' notice
from the Owner Trustee to the Indenture Trustee designating a date of purchase
(the "Purchase Date") which shall be a Determination Date, each holder of an
Equipment Note agrees that it will, upon and subject to receipt by the
Indenture Trustee from the Owner Trustee or its nominee of an amount equal to
the aggregate unpaid principal amount of all Equipment Notes, together with
accrued interest thereon to the Purchase Date, plus all other sums then due and
payable to such holder of an Equipment Note hereunder, but, except in the case
of purchase of the Equipment Notes pursuant to clause (iv) above if the right
to exercise any remedies arises because of an Indenture Event of Default
arising from action attributable to the Owner Trustee or the Owner Participant,
without any Make-Whole Amount or other premium, forthwith sell, assign,
transfer and convey to the Owner Trustee or its nominee on the Purchase Date
all of the right, title and interest of such holder in and to the Equipment
Notes then held by such holder, and the Owner Trustee or its nominee shall
assume all of such holder's obligations under the Participation Agreement;
provided that the Owner Trustee or its nominee must purchase all and not less
than all of the Equipment Notes then outstanding.

(c) Restrictions on Certain Actions. Notwithstanding any
provision of this Indenture to the contrary, the Indenture Trustee shall not
foreclose the Lien of this Indenture or otherwise exercise remedies hereunder
which would result in the exclusion of the Owner Trustee from the Indenture
Estate or any part thereof as a result of an Indenture Event of Default that
constitutes or occurs solely by virtue of one or more Lease Events of Default
(at a time when no other Indenture Event of Default unrelated to any Lease
Event of Default shall have occurred and be continuing) unless the Indenture
Trustee as security assignee of the Owner Trustee has

-22-
<PAGE> 27
proceeded or is then currently proceeding, to the extent it is then entitled to
do so hereunder and under the Lease and is not then stayed or otherwise
prevented from doing so by operation of law, to exercise one (or more, as it
shall in its good faith discretion determine) of the comparable remedies
provided for in Section 15 of the Lease with respect to the Equipment, provided
that in the event the Indenture Trustee shall be so stayed or otherwise
prevented from exercising such remedies under the Lease, it shall in any event
refrain from so foreclosing or exercising such other remedies hereunder for a
period of not less than 90 days, and further provided that in the event the
Lessee as debtor in a proceeding under Chapter 11 of the Bankruptcy Code (or
any trustee appointed for the Lessee as debtor in any such bankruptcy case)
shall have affirmed the Lease and no Lease Event of Default other than as
specified in Section 14(h) or Section 14(i) of the Lease has occurred and is
continuing, with the approval of the bankruptcy court having jurisdiction over
such case, under Section 365 of the Bankruptcy Code or any amended or successor
version thereof, the Indenture Trustee shall refrain from so foreclosing or
exercising such other remedies hereunder.

Section 4.05. Rights of Lessee. Notwithstanding the
provisions of this Indenture, including, without limitation, Section 4.03, so
long as no Lease Event of Default shall have occurred and be continuing,
neither the Indenture Trustee nor the Owner Trustee shall take any action
contrary to, or disturb, the Lessee's rights under the Lease, except in
accordance with the provisions of the Lease, including, without limitation, (i)
the right to receive all monies due and payable to it in accordance with the
provisions of the Lease and (ii) the Lessee's rights to possession and use of,
and of quiet enjoyment of, the Equipment.

Section 4.06. Waiver of Existing Defaults. A Majority in
Interest by notice to the Indenture Trustee on behalf of all holders of the
Equipment Notes may waive any past default hereunder and its consequences,
except a default: (i) in the payment of the principal of, premium, if any, or
interest on any Equipment Note, or (ii) in respect of a covenant or provision
hereof which under Article IX hereof cannot be modified or amended without the
consent of the holder of each Equipment Note affected. Upon any such waiver,
such default shall cease to exist, and any Indenture Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other default
or impair any right consequent thereon.

ARTICLE V.
DUTIES OF THE INDENTURE TRUSTEE

Section 5.01. Action upon Indenture Event of Default. If
any payments of Interim Interest or Basic Rent or payments of the principal or
interest or premium, if any, on the Equipment Notes due and payable on any Rent
Payment Date shall not have been paid in full on such Rent Payment Date, the
Indenture Trustee shall give telephonic notice within one Business Day
(followed by prompt written notice) to the Owner Trustee, the Owner
Participant, the Loan Participant and the Lessee specifying the amount and
nature of such deficiency in payment. In the event the Indenture Trustee shall
have knowledge of an Indenture Event of Default or an Indenture Default, the
Indenture Trustee shall give prompt notice of such Indenture Event of Default
or Indenture Default to the Lessee, the Owner Trustee, the Owner Participant

-23-
<PAGE> 28
and the Loan Participant by telegram, telex, or telephone (to be promptly
confirmed in writing). In the event the Owner Trustee shall have knowledge of
an Indenture Event of Default or an Indenture Default, the Owner Trustee shall
give notice of such Indenture Event of Default or Indenture Default in the same
manner to the Lessee, the Indenture Trustee, the Owner Participant and the Loan
Participant. Subject to the terms of Section 5.03, the Indenture Trustee shall
take such action, or refrain from taking such action, with respect to such
Indenture Event of Default or Indenture Default as the Indenture Trustee shall
be instructed in writing by a Majority in Interest. If the Indenture Trustee
shall not have received instructions as above provided within 20 days after the
mailing of notice of such Indenture Event of Default or such Indenture Default
to the Loan Participant by the Indenture Trustee, the Indenture Trustee may,
but shall not be obligated to, take such action, or refrain from taking such
action, with respect to such Indenture Event of Default or Indenture Default as
it shall determine to be advisable in the best interests of the Loan
Participant. Any provision of this Section 5.01 to the contrary
notwithstanding, the Indenture Trustee shall not declare the Lease to be in
default solely in respect of the Lessee's failure to make any payment of Basic
Rent within 5 Business Days after the same shall have become due, unless the
10-Day Period within which, pursuant to Section 4.04(a), the Owner Participant
or the Owner Trustee are entitled to cure such failure shall have expired. For
all purposes of this Indenture, in the absence of actual knowledge, neither the
Owner Trustee nor the Indenture Trustee shall be deemed to have knowledge of an
Indenture Event of Default (except, in the case of the Indenture Trustee, the
failure of the Lessee to pay any installment of Basic Rent that is required to
be paid directly to the Indenture Trustee within the 5 Business Days after the
same shall become due or the failure of the Lessee to maintain insurance as
required under Section 12 of the Lease if the Indenture Trustee shall receive
notice thereof from an insurer or insurance broker) unless notified in writing
by the Lessee, the Owner Trustee, one or more Loan Participants or the Owner
Participant; and "actual knowledge" (as used in the foregoing clause) of the
Owner Trustee or the Indenture Trustee shall mean actual knowledge of an
officer in the Corporate Trust Administration of the Owner Trustee or the
Corporate Trust Department of the Indenture Trustee, as the case may be.

Section 5.02 Action upon Instructions. Subject to the terms
of Sections 5.01 and 5.03, upon the written instructions at any time and from
time to time of a Majority in Interest, the Indenture Trustee shall take such
of the following actions as may be specified in such instructions (subject to
the rights of the other parties thereto, except to the extent assigned
hereunder): (i) subject to and solely to the extent permitted by the terms
hereof and of the Lease, give such notice, direction or consent, or exercise
such right, remedy or power hereunder or under the Lease or in respect of any
part or all of the Indenture Estate or take such other action as shall be
specified in such instructions; and (ii) after an Indenture Event of Default
shall have occurred and so long as such Indenture Event of Default shall be
continuing, approve as satisfactory to it all matters required by the terms of
the Lease to be satisfactory to the Owner Trustee, it being understood that
without the written instructions of a Majority in Interest the Indenture
Trustee shall not take any action described in clauses (i) and (ii) above.

Upon the expiration or earlier termination of the Lease Term
with respect to any Unit under the Lease and after payment of the portion of
the principal of, together with interest and premium, if any, on the Equipment
Notes in accordance with the terms of this Indenture,

-24-
<PAGE> 29
or, if and so long as no Indenture Event of Default shall have occurred and be
continuing, upon the transfer by the Owner Trustee to the Lessee or its
designee of any Unit pursuant to Section 10 or 11 of the Lease or the retention
by the Owner Trustee of any Unit pursuant to Section 10.3 of the Lease, then
the Indenture Trustee shall in either such case, upon the written request of
the Owner Trustee, and receipt by the Indenture Trustee of funds necessary to
prepay the Equipment Notes required to be prepaid in connection with such
purchase, termination, retention or Event of Loss, execute and deliver to, or
as directed in writing by, the Owner Trustee an appropriate instrument (in due
form for recording) furnished by the Owner Trustee or the Lessee releasing such
property from the Lien of this Indenture.

Section 5.03 Indemnification. (a) The Indenture Trustee
shall not be required to take any action or refrain from taking any action
under Section 5.01 (other than the first two sentences thereof) or 5.02 or
Article IV if it shall have reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk is not reasonably
assured to it. The Indenture Trustee shall not be required to take any action
under Section 5.01 or 5.02 or Article IV, nor shall any other provision of this
Indenture be deemed to impose a duty on the Indenture Trustee to take any
action, if the Indenture Trustee shall have been advised in writing by
independent counsel that such action is contrary to the terms hereof or of the
Lease or the Participation Agreement, or is otherwise contrary to law.

(b) Each Loan Participant may, but shall not be required
to, participate in any indemnification of the Indenture Trustee given pursuant
to paragraph (a) of this Section 5.03. Each Loan Participant so participating
shall be entitled to reimbursement for such participation in accordance with
Article III.

Section 5.04. No Duties Except as Specified in Indenture or
Instructions. The Indenture Trustee shall not have any duty or obligation to
manage, control, use, sell, dispose of or otherwise deal with the Equipment or
any other part of the Indenture Estate, or to otherwise take or refrain from
taking any action under, or in connection with, this Indenture, the Lease, or
the Participation Agreement, except as expressly provided by the terms of this
Indenture or as expressly provided in written instructions received pursuant to
the terms of Section 5.01 or 5.02; and no implied duties or obligations shall
be read into this Indenture against the Indenture Trustee. Each of the Owner
Trustee (only in its individual capacity) and the Indenture Trustee
nevertheless agrees that it will, at its own cost and expense, promptly take
such action as may be necessary duly to discharge any liens or encumbrances on
any part of the Indenture Estate, or on any properties of the Owner Trustee
assigned, pledged or mortgaged as part of the Indenture Estate, which result
from claims against it in its individual capacity not related to the ownership
of the Equipment (in the case of the Owner Trustee), administration of the
Indenture Estate (in the case of the Indenture Trustee) or any other
transaction under this Indenture or the Trust Agreement or any document
included in the Indenture Estate.

Section 5.05. No Action Except under Lease, Indenture or
Instructions. The Indenture Trustee agrees that it will not manage, control,
use, sell, dispose of or otherwise deal with the Equipment or other property
constituting part of the Indenture Estate except (i) as required by the terms
of the Lease and the Participation Agreement, (ii) in accordance with the

-25-
<PAGE> 30
powers granted to, or the authority conferred upon, the Indenture Trustee
pursuant to this Indenture, or (iii) in accordance with the express terms
hereof or with written instructions pursuant to Section 5.01 or 5.02.

Section 5.06. Disposition of Units. At any time and from
time to time prior to the expiration of the Lease Term, any Unit for which the
provisions of Section 11.4(a) of the Lease has been satisfied may be disposed
of in accordance with the provisions of Section 11.4(a) of the Lease, and the
Owner Trustee shall, from time to time, direct the Indenture Trustee to,
provided no Lease Event of Default shall have occurred and be continuing,
execute and deliver to it, or as directed in writing by the Owner Trustee, an
appropriate instrument furnished by the Owner Trustee or the Lessee releasing
such Unit from the Lien of the Indenture, but only in respect of such Unit.

Section 5.07. Indenture Supplements for Replacements. In
the event of a Replacement Unit being substituted as contemplated by Section
11.2 of the Lease, the Owner Trustee and the Indenture Trustee agree for the
benefit of the holders of the Equipment Notes and the Lessee, subject to
compliance by the Lessee with its obligations set forth in Section 11 of the
Lease, to execute and deliver an Indenture Supplement substantially in the form
of Exhibit A hereto and, provided no Lease Event of Default or Lease Default
shall have occurred and be continuing, execute and deliver to the Lessee an
appropriate instrument releasing the Unit being replaced from the Lien of the
Indenture.

Section 5.08 Effect of Replacements. In the event of the
substitution of a Replacement Unit, all provisions of this Indenture relating
to the Unit or Units being replaced shall be applicable to such Replacement
Unit with the same force and effect as if such Replacement Unit was the same
Unit being replaced.

Section 5.09. Withholding Taxes. The Indenture Trustee, as
agent for the Owner Trustee, shall exclude and withhold from each payment of
principal, premium, if any, and interest and other amounts due hereunder or
under the Equipment Notes any and all withholding taxes applicable thereto as
required by law. The Indenture Trustee agrees to act as such withholding agent
and, in connection therewith, whenever any present or future taxes or similar
charges are required to be withheld with respect to any amounts payable in
respect of the Equipment Notes, to withhold such amounts and timely pay the
same to the appropriate authority in the name of and on behalf of the holders
of the Equipment Notes, that it will file any necessary withholding tax returns
or statements when due, and that, as promptly as possible after the payment
thereof, it will deliver to each holder of an Equipment Note appropriate
documentation showing the payment thereof, together with such additional
documentary evidence as such holders may reasonably request from time to time.

Section 5.10. Lessee's Right of Quiet Enjoyment.
Notwithstanding any of the provisions of this Indenture to the contrary, so
long as Lessee is in compliance with its obligations under the Lease (including
applicable grace periods) and no Lease Event of Default has occurred and is
continuing unremedied, the Indenture Trustee will comply with Section 8 of the
Participation Agreement to the same extent as if it were the Lessor under the
Lease. Each

-26-
<PAGE> 31
holder of an Equipment Note, by its acceptance thereof, consents in all
respects to the terms of the Lease and the Participation Agreement and agrees
to the provisions of this Section 5.10.

ARTICLE VI.
THE OWNER TRUSTEE AND THE INDENTURE TRUSTEE

Section 6.01. Acceptance of Trusts and Duties. The
Indenture Trustee accepts the trusts hereby created and applicable to it and
agrees to perform the same but only upon the terms of this Indenture and agrees
to receive and disburse all moneys received by it constituting part of the
Indenture Estate in accordance with the terms hereof. The Indenture Trustee
shall not be answerable or accountable under any circumstances, except for its
own willful misconduct or gross negligence (or negligence or willful misconduct
in the case of application or investment of moneys constituting the Indenture
Estate) or breach of any of its representations or warranties or covenants set
forth herein or in the Participation Agreement, or the performance of its
obligations under the last sentence of Section 5.04; and the Owner Trustee
shall not be liable for any action or inaction of the Indenture Trustee and the
Indenture Trustee shall not be liable for any action or inaction of the Owner
Trustee. The Owner Trustee shall not be deemed a trustee for, or agent of, the
holders of the Equipment Notes for any purpose.

Section 6.02. Absence of Duties. Except in accordance with
written instructions or requests furnished pursuant to Section 5.01 or Section
5.02 and except as provided in, and without limiting the generality of, Section
5.04, the Indenture Trustee shall have no duty (i) to see to any registration
of the Equipment or any recording or filing of the Lease, or of this Indenture
or any other document, or to see to the maintenance of any such registration,
recording or filing, (ii) to see to any insurance on the Equipment or to effect
or maintain any such insurance, whether or not the Lessee shall be in default
with respect thereto, (iii) to confirm, verify or inquire into the failure to
receive any financial statements of the Lessee or (iv) to inspect the Equipment
at any time or ascertain or inquire as to the performance or observance of any
of the Lessee's covenants under the Lease with respect to the Equipment.
Notwithstanding the foregoing, the Indenture Trustee will furnish to any Loan
Participant, so long as such Loan Participant or its nominees shall hold any of
the Equipment Notes, promptly upon receipt thereof, duplicates or copies of all
reports, notices, requests, demands, certificates, financial statements and
other instruments furnished to the Indenture Trustee under this Indenture, to
the extent that the same shall not have been furnished to the Indenture Trustee
and the Loan Participants pursuant to the Lease.

Section 6.03. No Representations or Warranties as to the
Equipment or Documents. Neither the Owner Trustee nor the Owner Trustee in its
individual capacity nor the Indenture Trustee makes or shall be deemed to have
made (i) any representation or warranty, express or implied, as to the value,
condition, design, operation, merchantability or fitness for use of the
Equipment or as to their title thereto, or any other representation or warranty
with respect to the Equipment whatsoever, or (ii) any representation or
warranty as to the validity, legality or enforceability of this Indenture, the
Trust Agreement, the Participation Agreement, the Equipment Notes, the Lease,
any Lease Supplement, any Indenture Supplement or any other document or
instrument or as to the correctness of any statement contained in any thereof

-27-
<PAGE> 32
(except as to the representations and warranties made by the Owner Trustee in
its individual capacity as set forth in Section 3.1 of the Participation
Agreement), except that the Owner Trustee and the Indenture Trustee each in its
individual capacity hereby confirms the representations and warranties made by
it in its individual capacity in Sections 3.1 and 3.3, respectively, of the
Participation Agreement.

Section 6.04. No Segregation of Moneys; No Interest;
Investments. (a) Subject to Section 6.04(b), no moneys received by the
Indenture Trustee hereunder need be segregated in any manner except to the
extent required by law, and any such moneys may be deposited under such general
conditions for the holding of trust funds as may be prescribed by law
applicable to the Indenture Trustee, and, except as otherwise agreed by the
Owner Trustee or the Indenture Trustee, as the case may be, neither the Owner
Trustee nor the Indenture Trustee shall be liable for any interest thereon.

(b) Any amounts held by the Indenture Trustee pursuant to
the express terms of this Indenture or the Lease and not required to be
distributed as herein provided shall be invested and reinvested by the
Indenture Trustee from time to time in Specified Investments at the written
direction and at the risk and expense of the Lessee, except that in the absence
of any such direction, such amounts need not be invested and reinvested and
except that after a Lease Event of Default shall have occurred and be
continuing, such amounts shall be so invested and reinvested by the Indenture
Trustee in Indenture Investments. Any net income or gain realized as a result
of any such investments or reinvestment shall be held as part of the Indenture
Estate and shall be applied by the Indenture Trustee at the same times, on the
same conditions and in the same manner as the amounts in respect of which such
income or gain was realized are required to be distributed in accordance with
the provisions hereof or of the Lease pursuant to which such amounts were
required to be held and if no Lease Event of Default shall have occurred and be
continuing any excess shall be paid to the Lessee. Any such Specified
Investments or Indenture Investments may be sold or otherwise reduced to cash
(without regard to maturity date) by the Indenture Trustee whenever necessary
to make any application as required by such provisions. The Indenture Trustee
shall have no liability for any loss resulting from any such investment or
reinvestment other than by reason of the willful misconduct or gross negligence
of the Indenture Trustee.

Section 6.05. Reliance; Agents; Advice of Counsel. The
Indenture Trustee shall incur no liability to anyone acting upon any signature,
instrument, notice, resolution, request, consent, order, certificate, report,
opinion, bond or other document or paper believed by it to be genuine and
believed by it to be signed by the proper party or parties. The Indenture
Trustee may accept a copy of a resolution of the Board of Directors of any
party to the Participation Agreement, certified by the Secretary or an
Assistant Secretary of such party as duly adopted and in full force and effect,
as conclusive evidence that such resolution has been duly adopted by said Board
and that the same is in full force and effect. As to any fact or matter the
manner of ascertainment of which is not specifically described herein, the
Indenture Trustee may for all purposes hereof rely on a certificate, signed by
an officer of the Lessee, as to such fact or matter, and such certificate shall
constitute full protection to the Indenture Trustee for any action taken or
omitted to be taken by it in good faith in reliance thereon. The Indenture
Trustee shall

-28-
<PAGE> 33
furnish to the Owner Trustee upon request such information and copies of such
documents as the Indenture Trustee may have and as are necessary for the Owner
Trustee to perform its duties under Article II hereof. The Indenture Trustee
shall assume, and shall be fully protected in assuming, that the Owner Trustee
is authorized by the Trust Agreement to enter into this Indenture and to take
all action permitted to be taken by it pursuant to the provisions hereof, and
need not inquire into the authorization of the Owner Trustee with respect
thereto. In the administration of the trusts hereunder, the Indenture Trustee
may execute any of the trusts or powers hereof and perform its powers and
duties hereunder directly or through agents or attorneys and may, at the
reasonable expense of the Indenture Estate, consult with independent counsel,
accountants and other skilled persons to be selected and employed by it, and
the Indenture Trustee shall not be liable for anything done, suffered, or
omitted in good faith by it in accordance with the written advice or opinion of
any such independent counsel, accountants or other skilled persons acting
within such persons' area of competence (so long as the Indenture Trustee shall
have exercised reasonable care in selecting such persons).

Section 6.06. Not Acting in Individual Capacity. The Owner
Trustee and the Indenture Trustee each acts hereunder solely as trustee
hereunder and, in the case of the Owner Trustee, under the Trust Agreement and
not in its individual capacity unless otherwise expressly provided; and all
Persons, other than the holders of Equipment Notes to the extent expressly
provided in this Indenture, having any claim against the Owner Trustee or the
Indenture Trustee by reason of the transactions contemplated hereby shall,
subject to the Lien and priorities of payment as herein provided, look only to
the Indenture Estate for payment or satisfaction thereof.

ARTICLE VII.
CERTAIN LIMITATIONS ON OWNER TRUSTEE'S
AND INDENTURE TRUSTEE'S RIGHTS

Each of the Owner Trustee and the Indenture Trustee agree that
it shall have no right against the holders of the Equipment Notes or the
Indenture Estate (except in the case of the Indenture Trustee as expressly
provided in Section 4.03 hereof) for any fee as compensation for its services
hereunder or any expenses or disbursements incurred in connection with the
exercise and performance of its powers and duties hereunder or any
indemnification against liability which it may incur in the exercise and
performance of such powers and duties but, on the contrary, shall look solely
to the Lessee for such payment and indemnification and that neither the Owner
Trustee nor the Indenture Trustee shall have any lien on nor security interest
in the Indenture Estate as security for such compensation, expenses, reasonable
counsel fees, if any, disbursements and indemnification.

-29-
<PAGE> 34
ARTICLE VIII.
SUCCESSOR TRUSTEES

Section 8.01. Notice of Successor Owner Trustee. In the
case of any appointment of a successor Owner Trustee pursuant to the Trust
Agreement or any merger, conversion, consolidation or sale of substantially all
the business involving the Owner Trustee pursuant to the Trust Agreement, the
successor Owner Trustee shall give prompt written notice thereof to the
Indenture Trustee, the Lessee and the holders of all Equipment Notes at the
time outstanding.

Section 8.02. Resignation of Indenture Trustee; Appointment
of Successor. The resignation or removal of the Indenture Trustee and the
appointment of a successor Indenture Trustee shall become effective only upon
the successor Indenture Trustee's acceptance of appointment as provided in this
Section 8.02. The Indenture Trustee or any successor thereto may resign at any
time without cause by giving at least 30 days' prior written notice to the
Owner Trustee, the Owner Participant, the Lessee and the holders of the
Equipment Notes. A Majority in Interest may at any time remove the Indenture
Trustee without cause by an instrument in writing delivered to the Owner
Trustee, the Owner Participant, the Lessee and the Indenture Trustee. The
Owner Trustee may remove the Indenture Trustee if: (1) the Indenture Trustee
fails to comply with Section 8.02(c); (2) the Indenture Trustee is adjudged a
bankrupt or an insolvent; (3) a receiver or public officer takes charge of the
Indenture Trustee or its property; or (4) the Indenture Trustee becomes
incapable of performing its duties hereunder.

(a) In the case of the resignation or removal of the
Indenture Trustee, the Owner Trustee shall, unless otherwise directed by a
Majority in Interest, promptly appoint a successor Indenture Trustee, provided
that a Majority in Interest may appoint, within one year after such resignation
or removal, a successor Indenture Trustee which may be other than the successor
Indenture Trustee appointed as provided above, and such successor Indenture
Trustee appointed as provided above shall be superseded by the successor
Indenture Trustee so appointed by a Majority in Interest. If a successor
Indenture Trustee shall not have been appointed and accepted its appointment
hereunder within 60 days after the Indenture Trustee gives notice of
resignation or is removed as provided above, the retiring Indenture Trustee,
the Lessee, the Owner Trustee or a Majority in Interest may petition any court
of competent jurisdiction for the appointment of a successor Indenture Trustee.
Any successor Indenture Trustee so appointed by such court shall immediately
and without further act be superseded by any successor Indenture Trustee
appointed as provided in the proviso to the first sentence of this paragraph
(a) within one year from the date of the appointment by such court.

(b) Any successor Indenture Trustee, however appointed,
shall execute and deliver to the Owner Trustee and the Lessee and to the
predecessor Indenture Trustee an instrument accepting such appointment, and
thereupon such successor Indenture Trustee, without further act, shall become
vested with all the estates, properties, rights, powers, duties and trusts of
the predecessor Indenture Trustee hereunder in the trusts hereunder applicable
to it with like effect as if originally named the Indenture Trustee herein; but
nevertheless, upon the written request of such successor Indenture Trustee,
such predecessor Indenture Trustee shall execute

-30-
<PAGE> 35
and deliver an instrument transferring to such Indenture Trustee, upon the
trusts herein expressed applicable to it, all the estates, properties, rights,
powers and trusts of such predecessor Indenture Trustee, and such Indenture
Trustee shall duly assign, transfer, deliver and pay over to such successor
Indenture Trustee all moneys or other property then held by such predecessor
Indenture Trustee hereunder.

(c) The Indenture Trustee shall be a bank or trust
company organized under the laws of the United States or any State thereof
having a combined capital and surplus of at least $100,000,000, if there be
such an institution willing, able and legally qualified to perform the duties
of the Indenture Trustee hereunder upon reasonable or customary terms.

(d) Any corporation into which the Indenture Trustee may
be merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Indenture
Trustee shall be a party, or any corporation to which substantially all the
corporate trust business of the Indenture Trustee may be transferred, shall,
subject to the terms of paragraph (c) of this Section, be the Indenture Trustee
under this Indenture without further act.

ARTICLE IX.
SUPPLEMENTS AND AMENDMENTS
TO THIS INDENTURE AND OTHER DOCUMENTS

Section 9.01. Supplemental Indentures without Consent of
Holders. (a) The Owner Trustee and the Indenture Trustee, at any time and
from time to time, without notice to or the consent of any holders of any
Equipment Notes, may enter into one or more indentures supplemental hereto for
any of the following purposes:

(i) to correct or amplify the description of any
property at any time subject to the Lien of this Indenture or better
to assure, convey and confirm unto the Indenture Trustee any property
subject or required to be subject to the Lien of this Indenture or to
subject to the Lien of this Indenture any Unit or Units substituted
for any Unit or Units in accordance with the Lease; provided, however,
that indenture supplements entered into for the purpose of subjecting
to the Lien of this Indenture any Unit or Units substituted for any
in accordance with the Lease need only be executed by the Owner
Trustee; or

(ii) to evidence the succession of another trustee
to the Owner Trustee and the assumption by any such successor of the
covenants of the Owner Trustee herein and in the Equipment Notes
contained, or to evidence (in accordance with Article VIII) the
succession of a new Indenture Trustee hereunder; or

(iii) to add to the covenants of the Owner Trustee,
for the benefit of the holders of the Equipment Notes, or to surrender
any right or power herein conferred upon the Owner Trustee; or

-31-
<PAGE> 36
(iv) to cure any ambiguity, to correct or
supplement any provision herein which may be defective or inconsistent
with any other provision herein, or to make any other provisions with
respect to matters or questions arising hereunder so long as any such
action does not adversely affect the interests of the holders of the
Equipment Notes;

provided that no such supplement to this Indenture or waiver or modification of
the terms hereof shall adversely affect in a substantive manner the interests
of the Lessee without the Lessee's prior written consent, and in no event shall
the terms of the proviso to Section 4.03(a) or Section 4.05 be so altered or
modified without such Lessee consent.

(b) Supplemental Indentures with Consent of Majority In
Interest. With the written consent of a Majority in Interest, the Owner
Trustee (but only on the written request of the Owner Participant) may, and the
Indenture Trustee, subject to Section 9.02 hereof, shall, at any time and from
time to time, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of modifying in any manner the
rights and obligations of holders of the Equipment Notes and of the Owner
Trustee under this Indenture; provided, however, without the consent of each
holder of an Equipment Note affected thereby, no such supplemental indenture
shall:

(1) except as expressly provided by Section
9.01(c), change the final maturity of the principal of any Equipment
Note, or change the dates or amounts of payment of any installment of
the principal of, premium, if any, or interest on any Equipment Note,
or reduce the principal amount thereof or the premium, if any, or
interest thereon, or change to a location outside the United States
the place of payment where, or the coin or currency in which, any
Equipment Note or the premium, if any, or interest thereon is payable,
or impair the right to institute suit for the enforcement of any such
payment of principal or premium, if any, or interest on or after the
date such principal or premium, if any, or interest becomes due and
payable; or

(2) create any Lien with respect to the Indenture
Estate ranking prior to, or on a parity with, the security interest
created by this Indenture except such as are permitted by this
Indenture, or deprive any holder of an Equipment Note of the benefit
of the Lien on the Indenture Estate created by this Indenture; or

(3) reduce the percentage in principal amount of
the Equipment Notes, the consent of whose holders is required for any
such supplemental indenture, or the consent of whose holders is
required for any waiver (of compliance with certain provisions of this
Indenture, or of certain defaults hereunder and their consequences)
provided for in this Indenture; or

(4) modify any provisions of this Section
9.01(b), except to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the
holder of each Equipment Note affected thereby;

-32-
<PAGE> 37
provided that no such supplement to this Indenture or waiver or modification of
the terms hereof shall adversely affect in a substantive manner the interests
of the Lessee without the Lessee's prior written consent, and in no event shall
the terms of the proviso to Section 4.03(a) or Section 4.05 be so altered or
modified without such Lessee consent.

Section 9.02. Indenture Trustee Protected. If in the
opinion of the Indenture Trustee any document required to be executed pursuant
to the terms of Section 9.01 adversely affects any right, duty, immunity or
indemnity in favor of the Indenture Trustee under this Indenture, the
Participation Agreement or the Lease, the Indenture Trustee may in its
discretion decline to execute such document.

Section 9.03. Request of Substance, Not Form. It shall not
be necessary for the consent of the holders of Equipment Notes under Section
9.01(b) to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such consent shall approve the substance thereof.

Section 9.04. Documents Mailed to Holders. Promptly after
the execution by the Indenture Trustee of any document entered into pursuant to
Section 9.01(b), the Indenture Trustee shall mail, by first-class mail, postage
prepaid, a conformed copy thereof to each holder of an Equipment Note at its
address last known to the Indenture Trustee, but the failure of the Indenture
Trustee to mail such conformed copies shall not impair or affect the validity
of such document.

Section 9.05. Amendments, Waivers, Etc. of Other Documents.
(a) Without the consent of a Majority in Interest, the respective parties to
the Lease, the Participation Agreement and the Trust Agreement may not modify,
amend or supplement any of such agreements, or give any consent, waiver,
authorization or approval thereunder, for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions thereof or of
modifying in any manner the rights of the respective parties thereunder;
provided, however, that the actions specified in subsection (b) of this Section
9.05 may be taken, except as otherwise expressly provided therein, without the
consent of the Indenture Trustee or of a Majority in Interest or any holder of
an Equipment Note.

(b) Subject to the provisions of subsection (c) of this
Section 9.05, the respective parties to the Lease, the Trust Agreement and the
Participation Agreement, at any time and from time to time without the consent
of the Indenture Trustee or of a Majority in Interest or any holder of an
Equipment Note, may:

(1) so long as no Indenture Event of Default
shall have occurred and be continuing, modify, amend or supplement the
Lease, or give any consent, waiver, authorization or approval with
respect thereto, except that without the consent of a Majority in
Interest, the parties to the Lease shall not modify, amend or
supplement, or give any consent, waiver, authorization or approval for
the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions thereof or of modifying in any
manner the rights of the respective parties thereunder, with respect

-33-
<PAGE> 38
to the following provisions of the Lease: Sections 2, 3.1 (if the
result thereof would be to shorten the Basic Term to a period shorter
than the period ending with the final maturity of the Equipment
Notes), 3.2, 3.3, 3.4, 3.5, 3.6 (except insofar as it relates to the
address or account information of the Owner Trustee or Indenture
Trustee) (other than as such Sections 3.1 through 3.6 may be amended
pursuant to Section 3.4 of the Lease as originally executed), 4, 6
(but only to the extent such Section is made operative by Section 15),
7, 8, 9, 10 (except that additional requirements may be imposed on the
Lessee's ability to terminate the Lease with respect to a Unit), 11
(except that additional requirements may be imposed on the Lessee's
ability to replace a Unit subject to an Event of Loss), 12 (except
that additional insurance requirements may be imposed on the Lessee),
13, 14, 15, 16, 17, 18, 19, 20, 21, 22 (if the result thereof would be
to provide any renewal or purchase option contained in such Section
prior to the final maturity of the Equipment Notes), 24, 25.1, 25.4,
25.6, 25.10, and any definition of terms used in the Lease, to the
extent that any modification of such definition would result in a
modification of the Lease not permitted as aforesaid in this clause
(1) of subsection (b); provided that, in the event an Indenture Event
of Default shall have occurred and be continuing, the Indenture
Trustee shall have all rights of the Owner Trustee as "Lessor" under
the Lease to modify, amend or supplement the Lease or give any
consent, waiver, authorization or approval thereunder, for the purpose
of adding any provisions to or changing in any manner or eliminating
any of the provisions thereof or of modifying in any manner the rights
of the "Lessor" thereunder;

(2) modify, amend or supplement the Trust
Agreement, or give any consent, waiver, authorization or approval with
respect thereto, except that without the consent of a Majority of
Interest, the parties to the Trust Agreement shall not modify, amend
or supplement, or give any consent, waiver, authorization or approval
for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions thereof or of modifying in any
manner the rights of the respective parties thereunder, with respect
to Sections 2.1, 2.2, 3.1, 4.4, 7.1, 7.2, 9.1, 10.1, 10.2, 10.7, 10.11
or any other Section of the Trust Agreement if such action would
materially adversely affect the interest of the Loan Participants, and
any definition of terms used in the Trust Agreement, to the extent
that any modification of such definition would result in a
modification of the Trust Agreement not permitted pursuant to this
subsection (b);

(3) modify, amend or supplement the Participation
Agreement, or give any consent, waiver, authorization or approval with
respect thereto, except that without the consent of a Majority of
Interest, the parties to the Participation Agreement shall not modify,
amend or supplement, or give any consent, waiver, authorization or
approval for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions thereof or of
modifying in any manner the rights of the respective parties
thereunder, with respect to the following provisions of the
Participation Agreement: Sections 1, 2, 3, 4, 5, 6, 7, 10.2, 10.5,
10.7, 10.9 and 10.13(a), each provision of the Participation Agreement
which specifically refers to the Indenture Trustee or Loan
Participants and any definition of terms used in the Participation

-34-
<PAGE> 39
Agreement, to the extent that any modification of such definition
would result in a modification of the Participation Agreement not
permitted pursuant to this subsection (b); and

(4) modify, amend or supplement any of said
agreements in order to cure any ambiguity, to correct or supplement
any provision thereof which may be defective or inconsistent with any
other provision thereof or any provision of this Indenture, or to make
any other provision with respect to matters or questions arising
thereunder or under this Indenture which shall not be inconsistent
with the provisions of this Indenture, provided any such action shall
not adversely affect the interests of the holders of the Equipment
Notes.

(c) No modification, amendment, supplement, consent,
waiver, authorization or approval with respect to the Lease or the
Participation Agreement, whether effected pursuant to subsection (a) or
pursuant to subsection (b) of this Section 9.05, and anything in such
subsections or elsewhere in this Indenture to the contrary notwithstanding,
shall, without the consent of the holder of each Equipment Note affected
thereby:

(1) modify, amend or supplement the Lease in such
a way as to extend the time of payment of Basic Rent or Stipulated
Loss Value and any other amounts payable under, or as provided in, the
Lease upon the occurrence of an Event of Loss or Termination Value and
any other amounts payable under, or as provided in, the Lease upon
termination thereof or reduce the amount of any installment of Basic
Rent so that the same is less than the payment of interest and
principal on the Equipment Notes, as the case may be, to be made from
such installment of Basic Rent or reduce the aggregate amount of
Stipulated Loss Value and any other amounts payable under, or as
provided in, the Lease upon the occurrence of an Event of Loss so that
the same is less than the accrued interest on and principal of the
Equipment Notes required to be paid at the time of such payments, or
reduce the amount of Termination Value and any other amounts payable
under, or as provided in, the Lease upon termination thereof so that
the same is less than the accrued interest on and principal of the
Equipment Notes required to be paid at the time of such payments; or

(2) modify, amend or supplement the Lease in such
a way as to, or consent to any assignment of the Lease or give any
consent, waiver, authorization or approval which would, release the
Lessee from its obligation in respect of payment of Basic Rent or
Stipulated Loss Value and any other amounts payable under, or as
provided in, the Lease upon the occurrence of an Event of Loss, or
Termination Value and any other amounts payable under, or as provided
in, the Lease upon termination thereof, except for any such assignment
pursuant to Section 6.8 of the Participation Agreement, and except as
provided in the Lease.

(d) Anything contained in this Section 9.05 or otherwise
in this Indenture to the contrary notwithstanding, whether or not an Indenture
Event of Default shall have occurred and be continuing, the Indenture Trustee
shall not modify, amend or supplement the Lease or

-35-
<PAGE> 40
any other Operative Agreement with respect to which rights have been assigned
to the Indenture Trustee as part of the Indenture Estate, or give any consent,
waiver, authorization or approval thereunder, in any manner that would
materially adversely affect the interest of the Owner Trustee or the Owner
Participant.

ARTICLE X.
MISCELLANEOUS

Section 10.01. Termination of Indenture. With respect to
each Unit, this Indenture and the trusts created hereby shall terminate and
this Indenture shall be of no further force or effect upon the earliest to
occur of (i) the termination of the Lease Term with respect to such Unit by
Lessee pursuant to Section 10 or Section 22.1 thereof and upon payment in full
to the Indenture Trustee of the amounts required to be paid pursuant to Section
2.10(a) in respect of such Unit, (ii) the termination of the Lease with respect
to such Unit pursuant to Section 11 thereof and upon payment in full to the
Indenture Trustee of the amounts required to be paid pursuant to Section
2.10(b) in respect of such Unit, and (iii) the payment in full of the principal
amount of and interest on all Equipment Notes outstanding hereunder and all
other sums payable to the Indenture Trustee and the holders of the Equipment
Notes hereunder and under such Equipment Notes and under the Participation
Agreement.

Section 10.02. No Legal Title to Indenture Estate in
Holders. No holder of an Equipment Note shall have legal title to any part of
the Indenture Estate. No transfer, by operation of law or otherwise, of any
Equipment Note or other right, title and interest of any holder of an Equipment
Note in and to the Indenture Estate or hereunder shall operate to terminate
this Indenture or the trusts hereunder or entitle any successor or transferee
of such holder to an accounting or to the transfer to it of legal title to any
part of the Indenture Estate.

Section 10.03. Sale of Equipment by Indenture Trustee is
Binding. Any sale or other conveyance of the Equipment by the Indenture
Trustee made pursuant to the terms of this Indenture or the Lease shall bind
the holders of the Equipment Notes, the Owner Trustee and the Owner Participant
and shall be effective to transfer or convey all right, title and interest of
the Indenture Trustee, the Owner Trustee, the Owner Participant and such
holders of the Equipment Notes in and to the Equipment. No purchaser or other
grantee shall be required to inquire as to the authorization, necessity,
expediency or regularity of such sale or conveyance or as to the application of
any sale or other proceeds with respect thereto by the Indenture Trustee.

Section 10.04. Remedies Cumulative. Each and every right,
power and remedy herein specifically given to the Indenture Trustee or
otherwise in this Indenture shall be cumulative and shall be in addition to
every other right, power and remedy herein specifically given or now or
hereafter existing at law, in equity or by statute, and each and every right,
power and remedy whether specifically herein given or otherwise existing may be
exercised from time to time and as often and in such order as may be deemed
expedient by the Indenture Trustee, and the exercise or the beginning of the
exercise of any power or remedy shall not be construed to be a waiver of the
right to exercise at the time or thereafter any other right, power

-36-
<PAGE> 41
or remedy. No delay or omission by the Indenture Trustee in the exercise of
any right, remedy or power or in the pursuance of any remedy shall impair any
such right, power or remedy or be construed to be a waiver of any default on
the part of the Owner Trustee or the Lessee or to be an acquiescence therein.

Section 10.05. Discontinuance of Proceedings. In case the
Indenture Trustee shall have proceeded to enforce any right, power or remedy
under this Indenture by foreclosure, entry or otherwise, and such proceedings
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Indenture Trustee, then and in every such case the
Owner Trustee, the Owner Participant, the Indenture Trustee and the Lessee
shall be restored to their former positions and rights hereunder with respect
to the Indenture Estate, and all rights, remedies and powers of the Indenture
Trustee shall continue as if no such proceedings had been undertaken (but
otherwise without prejudice).

Section 10.06. Indenture and Equipment Notes for Benefit of
Owner Trustee, Indenture Trustee, Owner Participant and Holders Only. Nothing
in this Indenture, whether express or implied, shall be construed to give to
any Person other than the Owner Trustee (individually and as trustee), the
Indenture Trustee, the Owner Participant (as set forth herein) and the holders
of the Equipment Notes any legal or equitable right, remedy or claim under or
in respect of this Indenture or any Equipment Note.

Section 10.07. Notices. Unless otherwise expressly
specified or permitted by the terms hereof, all notices required or permitted
under the terms and provisions hereof shall be in writing, and shall become
effective when deposited in the United States mail, with proper postage for
first class registered or certified mail prepaid, when delivered personally,
or, if promptly confirmed by mail as provided above, when dispatched by
telegram, telex or other written telecommunication addressed (i) if to the
Owner Trustee, at its office at 225 Franklin Street, Boston, Massachusetts
02110, Attention: Corporate Trust Department, (ii) if to the Indenture
Trustee, at its office at One First National Plaza, Suite 0126, Chicago,
Illinois, 60670-0126, Attention: Corporate Trust Division (GATC Trust No.
94-1), (iii) if to the Loan Participant, at such address as is set forth on
Schedule 2 of the Participation Agreement or, if not so specified, at the
address set forth in the register maintained pursuant to Section 2.07 hereof,
or at such address as such Loan Participant shall have furnished by notice to
the Owner Trustee and the Indenture Trustee, (iv) if to the Lessee, at 500 West
Monroe, Chicago, Illinois 60601, Attention: Treasurer, (v) if to the Owner
Participant, c/o BNY Leasing Corporation at 1290 Avenue of the Americas, New
York, New York 10104, Attention: Chief Financial Officer, and (vi) if to any of
the foregoing Persons, at such other address as such Person shall from time to
time designate by written notice to the other parties hereto in accordance with
this Section 10.07.

Notwithstanding the foregoing provisions, for purposes of
Sections 4.01, 4.02, 4.04, 5.01 and 5.02, written notice shall be deemed given
when it is in fact received (by mail or otherwise) by any addressee at the
respective addresses specified above.

-37-
<PAGE> 42
Section 10.08. Severability. Any provision of this
Indenture which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction. In the event
of any inconsistency or conflict between any provision of this Indenture and
any provision of the Trust Agreement, such provision in this Indenture shall
govern and control.

Section 10.09. Separate Counterparts. This Indenture may be
executed in any number of counterparts (and each of the parties hereto shall
not be required to execute the same counterpart). Each counterpart of this
Indenture including a signature page executed by each of the parties hereto
shall be an original counterpart of this Indenture, but all of such
counterparts together shall constitute one instrument.

Section 10.10. Successors and Assigns. All covenants and
agreements contained herein shall be binding upon, and inure to the benefit of,
the Owner Trustee and its successors and permitted assigns, the Owner
Participant and its successors and permitted assigns, and the Indenture
Trustee and its successors and permitted assigns, and each holder of an
Equipment Note, all as herein provided. Any request, notice, direction,
consent, waiver or other instrument or action by any holder of an Equipment
Note shall bind the successors and assigns of such holder.

Section 10.11. Headings. The headings of the various
Articles and Sections herein are for convenience of reference only and shall
not define or limit any of the terms or provisions hereof.

Section 10.12. Governing Law. This Indenture shall in all
respects be governed by, and construed in accordance with, the laws of the
State of New York, including all matters of construction, validity and
performance.

Section 10.13. Normal Commercial Relations. Anything
contained in this Indenture to the contrary notwithstanding, the Owner
Participant, the Owner Trustee or the Indenture Trustee or any affiliate of the
Owner Participant, the Owner Trustee or the Indenture Trustee may enter into
commercial banking or other financial transactions, and conduct banking or
other commercial relationships, with the Lessee, any holder of an Equipment
Note or the Indenture Trustee (in its individual capacity or otherwise) fully
to the same extent as if this Indenture were not in effect, including, without
limitation, the making of loans or other extensions of credit for any purpose
whatsoever.

Section 10.14. No Recourse Against Others. No director,
officer, employee or stockholder, as such, of Lessee, Owner Trustee, Owner
Participant or Indenture Trustee shall have any liability for any obligations
of Lessee, Owner Participant, Owner Trustee or Indenture Trustee or under the
Equipment Notes or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each holder of the Equipment
Notes by

-38-
<PAGE> 43
accepting an Equipment Note waives and releases all such liability. The waiver
and release are part of the consideration of the Equipment Notes.

-39-
<PAGE> 44
In Witness Whereof, the parties hereto have caused this
Indenture to be duly executed by their respective officers or
attorneys-in-fact, as the case may be, thereunto duly authorized, as of the day
and year first above written.

THE FIRST NATIONAL BANK OF CHICAGO,
as Indenture Trustee

By:_______________________________
Name:
Title:

STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity
except as set forth in Section 6.03
hereof, but solely as Owner Trustee

By:_______________________________
Name:
Title:

-40-
<PAGE> 45
State of Illinois )
) SS
County of Cook )

On this ____ day of August, 1994, before me personally
appeared ____________, to me personally known, who being by me duly sworn, say
that he is ______________ of The First National Bank of Chicago, that said
instrument was signed on such date on behalf of said corporation by authority
of its Board of Directors, and he acknowledged that the execution of the
foregoing instrument was the free act and deed of said corporation.

______________________
Notary Public

[Notarial Seal]

My commission expires:

State of )
) SS
County of )

On this ____ day of August, 1994, before me personally
appeared ___________________, to me personally known, who being by me duly
sworn, say that he is the ________________________ of State Street Bank and
Trust Company, that said instrument was signed on such date on behalf of said
corporation by authority of its Board of Directors, and he acknowledged that
the execution of the foregoing instrument was the free act and deed of said
corporation.

______________________
Notary Public

[Notarial Seal]

My commission expires:

-41-
<PAGE> 46
EXHIBIT A

TRUST INDENTURE SUPPLEMENT NO. _
(GATC TRUST NO. 94-1)

This Indenture Supplement No. _ (GATC Trust No. 94-1), dated
August 16, 1994 (this "Indenture Supplement"), of State Street Bank and Trust
Company, a Massachusetts banking corporation, not in its individual capacity
but solely as trustee (the "Owner Trustee") under the Trust Agreement (GATC
Trust No. 94-1), dated as of August 9, 1994 (the "Trust Agreement"), between
the Owner Trustee in its individual capacity and BNY Capital Funding Corp., a
New York corporation, as Owner Participant;

WITNESSETH:

WHEREAS, the Trust Indenture and Security Agreement (GATC
Trust No. 94-1) dated as of August 9, 1994 (the "Indenture"), between the Owner
Trustee and The First National Bank of Chicago as Indenture Trustee (the
"Indenture Trustee"), provides for the execution and delivery of Indenture
Supplements thereto substantially in the form hereof each of which shall
particularly describe the Units covered by a related Lease Supplement under the
Lease, by having attached thereto a copy of such related Lease Supplement, and
shall specifically mortgage such Units to the Indenture Trustee;

WHEREAS, the Indenture includes the Units described in the
copy of Lease Supplement No. __ attached hereto and made a part hereof; and

[WHEREAS, an executed counterpart of the Indenture is attached
to this Indenture Supplement;]

NOW, THEREFORE, in order to secure the prompt payment of the
principal of, and premium, if any, and interest on all of the Equipment Notes
from time to time outstanding under the Indenture and the performance and
observance by the Owner Trustee of all the agreements, covenants and provisions
in the Indenture for the benefit of the holders of the Equipment Notes and in
the Equipment Notes, subject to the terms and conditions of the Indenture, and
in consideration of the premises and of the covenants contained in the
Indenture and of the acceptance of the Equipment Notes by the holders thereof,
and of the sum of $1.00 paid to the Owner Trustee by the Indenture Trustee at
or before the delivery hereof, the receipt whereof is hereby acknowledged, the
Owner Trustee (i) has sold, assigned, transferred, pledged and confirmed, and
does hereby sell, assign, transfer, pledge and confirm, a security interest in
and mortgage lien on all right, title and interest of the Owner Trustee in and
to the property comprising the Equipment described in the copy of Lease
Supplement No. __ attached hereto, and (ii) has sold, assigned, transferred and
set over, a security interest in and mortgage lien on all of the right, title
and interest of the Owner Trustee under, in and to such Lease Supplement
(excluding, however, any rights to Excepted Property thereunder), referred to
above, to the Indenture Trustee, its successors and assigns, in the trust
created by the Indenture for the benefit of the holders from time to time of
the Equipment Notes.

A-1
<PAGE> 47
To have and to hold all and singular the aforesaid property
unto the Indenture Trustee, its successors and assigns, in trust for the
benefit and security of the holders from time to time of the Equipment Notes
and for the uses and purposes and subject to the terms and provisions set forth
in the Indenture.

This Supplement shall be construed as supplemental to the
Indenture and shall form a part of it, and the Indenture is hereby incorporated
by reference herein and is hereby ratified, approved and confirmed.

This Supplement may be executed by the Owner Trustee in
separate counterparts, each of which when so executed and delivered is an
original, but all such counterparts shall together constitute but one and the
same Supplement.

AND FURTHER, the Owner Trustee hereby acknowledges that the
Equipment referred to in the aforesaid Lease Supplement attached hereto and
made a part hereof has been delivered to the Owner Trustee and is included in
the property of the Owner Trustee covered by all the terms and conditions of
the Trust Agreement, subject to the pledge or mortgage thereof under the
Indenture.

IN WITNESS WHEREOF, the Owner Trustee has caused this
Indenture Supplement to be duly executed by one of its duly authorized
officers, as of the day and year first above written.

STATE STREET BANK AND TRUST COMPANY,
not in its individual
capacity, but solely as Owner
Trustee

By:__________________________
Name:
Title:

A-2
<PAGE> 48
State of )
) SS
County of )

On this ____ day of August, 1994, before me personally
appeared ___________________, to me personally known, who being by me duly
sworn, say that he is __________________________ of State Street Bank and Trust
Company, that said instrument was signed on such date on behalf of said
corporation by authority of its Board of Directors, and he acknowledged that
the execution of the foregoing instrument was the free act and deed of said
corporation.

Notary Public

[Notarial Seal]
My commission expires:

A-3
<PAGE> 49
EXHIBIT B

TERMS OF EQUIPMENT NOTES

<TABLE>
<CAPTION>
Maximum Aggregate
Principal Amount Interest Rate Final Maturity
- - ----------------- ------------- --------------
<S> <C> <C>
$ 8,488,000 8.42% January 1, 2015
$69,147,000 8.42% January 1, 2014
$ 9,770,000 8.42% January 1, 2014
$ 6,020,000 8.42% January 1, 2014
</TABLE>

B-1
<PAGE> 50
EXHIBIT C

LOAN PARTICIPANT

<TABLE>
<CAPTION>
PERCENTAGE OF
EQUIPMENT NOTES LOAN PARTICIPANT PRINCIPAL AMOUNT
- - --------------- ---------------- ----------------
<S> <C> <C>
Equipment Notes The First National Bank of Chicago, as Trustee 100%
under the Pass Through Trust Agreement, dated as of
August 1, 1992, between The First National Bank of
Chicago and General American Transportation
Corporation, as supplemented by Trust Supplement
No. 3 thereto dated as of August 9, 1994
</TABLE>

C-1
<PAGE> 51
ANNEX A

AMORTIZATION SCHEDULE

8.42% EQUIPMENT NOTE

1994-1A

AA-1
<PAGE> 52
ANNEX A

AMORTIZATION SCHEDULE

8.42% EQUIPMENT NOTE

1994-1B

AA-2
<PAGE> 53
ANNEX A

AMORTIZATION SCHEDULE

8.42% EQUIPMENT NOTE

1994-1C

AA-3
<PAGE> 54
ANNEX A

AMORTIZATION SCHEDULE

8.42% EQUIPMENT NOTE

1994-1D

AA-4

<PAGE> 1
EXHIBIT 4.3

8.42% EQUIPMENT NOTE

(Secured by, among others, Lease Obligations of
General American Transportation Corporation)

Issued in Connection with certain Railroad Rolling Stock

No ______ Chicago, Illinois
_______________, ____
$______________

STATE STREET BANK AND TRUST COMPANY, not in its individual capacity, but
solely as owner trustee (herein in such capacity called the "Owner Trustee")
under that certain Trust Agreement (GATC Trust No. 94-1), dated as of August 9,
1994, as from time to time supplemented and amended (herein called the "Trust
Agreement"), between the Owner Trustee in its individual capacity and the
institution referred to therein as the "Owner Participant", hereby promises to
pay to _______________________________, or registered assigns, the principal
sum of $__________, in lawful currency of the United States of America, in
installments payable on the dates set forth in Exhibit A hereto, commencing
July 1, 1996 and thereafter to and including January 1, 2015, each such
installment to be in an amount equal to the corresponding percentage (if any)
of the remaining principal amount hereof set forth in Exhibit A hereto,
together with interest thereon on the amount of such principal amount remaining
unpaid from time to time from and including the date hereof until such
principal amount shall be due and payable, payable on July 1, 1995 and on each
January 1 and July 1 thereafter to the maturity date hereof at the rate of
8.42% per annum (computed on the basis of a 360-day year of twelve 30-day
months). Interest on any overdue principal and (to the extent legally
enforceable) on overdue interest shall be paid from the due date thereof at the
rate of 8.42% per annum (computed on the basis of a 360-day year of twelve
30-day months), payable on demand.

<PAGE> 2
holder hereof as provided in the Indenture and that none of the Owner Trustee,
the Owner Participant, the Indenture Trustee or their permitted successors and
assigns is or shall be personally liable to the holder hereof for any amount
payable under this Equipment Note or the Indenture or, except as expressly
provided in the Participation Agreement or the Indenture, for any liability
under the Participation Agreement or (in the case of the Owner Trustee or the
Indenture Trustee) the Indenture.

Payments with respect to the principal amount hereof, premium, if any, and
interest thereon shall be payable in U.S. dollars in immediately available
funds at the principal bond and trustee administration office of the Indenture
Trustee, or as otherwise provided in the Indenture. Each such payment shall be
made on the date such payment is due and without any presentment or surrender
of this Equipment Note. Whenever the date scheduled for any payment to be made
hereunder or under the Indenture shall not be a Business Day, then such payment
need not be made on such scheduled date but may be made on the next succeeding
Business Day with the same force and effect as if made on such scheduled date
and (provided such payment is made on such next succeeding Business Day) no
interest shall accrue on the amount of such payment from and after such
scheduled date to the time of such payment on such next succeeding Business
Day.

Each holder hereof, by its acceptance of this Equipment Note, agrees that
each payment received by it hereunder shall be applied, first, to the payment
of accrued but unpaid interest on this Equipment Note then due, second, to the
payment of the unpaid principal amount of this Equipment Note then due, third,
to the payment of any premium then due, and fourth, to the payment of the
remaining outstanding principal amount of this Equipment Note; provided, that
the Owner Trustee may only prepay this Equipment Note as provided in Sections
2.10, 3.02 and 3.03 of the Indenture.

This Equipment Note is one of the Equipment Notes referred to in the
Indenture which have been or are to be issued by the Owner Trustee pursuant to
the terms of the Indenture and relates to the Units described in Lease
Supplement No. __. The Indenture Estate is held by the Indenture Trustee as
security for the Equipment Notes. Reference is hereby made to the Indenture
for a statement of the rights of the holder of, and the nature and extent of
the security for, this Equipment Note, as well as for a statement of the terms
and conditions of the trusts created by the Indenture, to all of which terms
and conditions in the Indenture each holder hereof agrees by its acceptance of
this Equipment Note.

This Equipment Note is not subject to redemption or prepayment except as
provided in Sections 2.10, 3.02 and 3.03 of the Indenture. This Equipment Note
is subject to purchase by the Owner Trustee without a premium as provided in
Section 4.04(b) of the Indenture. The holder hereof, by its acceptance of this
Equipment Note, agrees to be bound by said provisions.

2
<PAGE> 3
This Equipment Note is a registered Equipment Note and is transferable, as
provided in the Indenture, only upon surrender of this Equipment Note for
registration of transfer duly endorsed by, or accompanied by a written
statement of transfer duly executed by, the registered holder hereof or his
attorney duly authorized in writing. Prior to the due presentation for
registration of transfer of this Equipment Note, the Owner Trustee and the
Indenture Trustee may deem and treat the registered holder of this Equipment
Note as the absolute owner and holder hereof for the purpose of receiving
payment of all amounts payable with respect hereto and for all other purposes
and shall not be affected by any notice to the contrary.

THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
AND MAY NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT. THIS EQUIPMENT NOTE SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.

Unless the certificate of authentication hereon has been executed by or on
behalf of the Indenture Trustee by manual signature, this Equipment Note shall
not be entitled to any benefit under the Indenture or be valid or obligatory
for any purpose.

In Witness Whereof, the Owner Trustee has caused this Equipment Note to be
executed by one of its authorized officers as of the date hereof.

STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity,
but solely as Owner Trustee

By:______________________________________________________

[FORM OF INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]

This is one of the Equipment Notes referred to in the within-mentioned
Indenture.

The First National Bank of Chicago,
as Indenture Trustee

By:______________________________________________________
Authorized Officer

[Here insert from Annex A, the related Amortization Schedule]

<PAGE> 1
EXHIBIT 4.4

Participation Agreement

(GATC Trust No. 94-1)

Dated as of August 9, 1994

Among

General American Transportation Corporation,
as Lessee

State Street Bank and Trust Company,
as Owner Trustee

BNY Capital Funding Corp.,
as Owner Participant

The First National Bank of Chicago,
as Indenture Trustee

And

The First National Bank of Chicago,
as Pass Through Trustee

Covered Hoppers and Tank Cars

<PAGE> 2
Table of Contents

<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 1. DEFINITIONS; INTERPRETATION OF THIS AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

SECTION 2. SALE AND PURCHASE; PARTICIPATION IN EQUIPMENT COST; CLOSING; TRANSACTION COSTS . . . . . . . . . . . . . 2
Section 2.1. Sale and Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.2. Participation in Equipment Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.3. Closing Date; Procedure for Participation . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.4. Owner Participant's Instructions to the Owner Trustee; Satisfaction of Conditions . . . . . 4
Section 2.5. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.6. Calculation of Adjustments to Basic Rent, Stipulated
Loss Value and Termination Value; Confirmation and Verification . . . . . . . . . . . . . . 7
Section 2.7. Postponement of Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

SECTION 3. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.1. Representations and Warranties of the Owner Trustee . . . . . . . . . . . . . . . . . . . . 11
Section 3.2. Representations and Warranties of the Lessee . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.3. Representations and Warranties of the Indenture Trustee . . . . . . . . . . . . . . . . . . 17
Section 3.4. Representations, Warranties and Covenants Regarding Beneficial Interest and Equipment
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 3.5. Representations and Warranties of the Pass Through Trustee . . . . . . . . . . . . . . . . . 19
Section 3.6. Representations and Warranties of the Owner Participant . . . . . . . . . . . . . . . . . . 21
Section 3.7. Opinion Acknowledgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

SECTION 4. CLOSING CONDITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 4.1. Conditions Precedent to Investment by Each Participant . . . . . . . . . . . . . . . . . . . 23
Section 4.2. Additional Conditions Precedent to Investment by Pass Through Trustee . . . . . . . . . . . 27
Section 4.3. Additional Conditions Precedent to Investment by Owner Participant . . . . . . . . . . . . . 27
Section 4.4. Conditions Precedent to the Obligation of the Lessee . . . . . . . . . . . . . . . . . . . . 28

SECTION 5. FINANCIAL AND OTHER REPORTS OF THE LESSEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

SECTION 6. CERTAIN COVENANTS OF THE PARTICIPANTS, THE TRUSTEES AND THE LESSEE . . . . . . . . . . . . . . . . . . . 30
Section 6.1. Restrictions on Transfer of Beneficial Interest . . . . . . . . . . . . . . . . . . . . . . 30
Section 6.2. Lessor's Liens Attributable to the Owner Participant . . . . . . . . . . . . . . . . . . . . 33
Section 6.3. Lessor's Liens Attributable to the Owner Trustee . . . . . . . . . . . . . . . . . . . . . . 33
</TABLE>

- i -
<PAGE> 3
<TABLE>
<S> <C>
Section 6.4. Liens Created by the Indenture Trustee and the Loan Participant . . . . . . . . . . . . . . 34
Section 6.5. Covenants of Owner Trustee, Owner Participant and Indenture Trustee . . . . . . . . . . . . 34
Section 6.6. Amendments to Operative Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 6.7. Covenant of the Lessee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 6.8. Merger Covenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 6.9. Lessee's Purchase in Certain Circumstances . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 6.10. Owner Participant an Affiliate of Lessee . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 6.11. Corporate Existence; Place of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 6.12. No Impairment of Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

SECTION 7. LESSEE'S INDEMNITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 7.1. General Tax Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 7.2. General Indemnification and Waiver of Certain Claims . . . . . . . . . . . . . . . . . . . . 44

SECTION 8. LESSEE'S RIGHT OF QUIET ENJOYMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

SECTION 9. SUCCESSOR INDENTURE TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

SECTION 10. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 10.1. Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 10.2. Refinancing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 10.3. Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 10.4. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 10.5. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 10.6. No Guarantee of Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 10.7. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 10.8. Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 10.9. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 10.10. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 10.11. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 10.12. Headings and Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 10.13. Limitations of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 10.14. Maintenance of Non-Recourse Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 10.15. Ownership of and Rights in Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
</TABLE>

- ii -
<PAGE> 4
EXHIBITS

Exhibit A - Insurance
Exhibit B - Insurance Requirements

SCHEDULES

Schedule 1 - Description of Equipment and Designation of Functional Groups
Schedule 2 - Payment Information for Participants
Schedule 3 - Schedule of Basic Rent Payments
Schedule 4 - Schedule of Stipulated Loss Value
Schedule 5 - Schedule of Termination Value
Schedule 6 - Terms of Equipment Notes
Schedule 7 - Early Purchase Information
Schedule 8 - Basic Term Purchase Information

- iii -
<PAGE> 5
PARTICIPATION AGREEMENT (GATC TRUST NO. 94-1)

This Participation Agreement (GATC Trust No. 94-1), dated as of August
9, 1994 (this "Agreement"), among (i) General American Transportation
Corporation, a New York corporation (herein, together with its successors and
assigns, called the "Lessee"), (ii) State Street Bank and Trust Company, a
Massachusetts banking corporation, not in its individual capacity except as
expressly stated herein, but solely as trustee under the Trust Agreement (as
hereinafter defined) (herein in such capacity, together with its successors and
assigns, called the "Owner Trustee"), (iii) BNY Capital Funding Corp., a New
York corporation (herein, together with its successors and assigns, called the
"Owner Participant"), (iv) The First National Bank of Chicago, a national
banking association, as trustee under the Indenture (as defined below) (herein
in such capacity, together with its successors and assigns, called the
"Indenture Trustee"), and (v) The First National Bank of Chicago, 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 (as hereinafter defined) (herein in such capacity, together with its
successors and assigns, called the "Pass Through Trustee" or the "Loan
Participant"). The Owner Participant and the Loan Participant are herein
sometimes referred to together as the "Participants".

WITNESSETH:

WHEREAS, concurrently with the execution and delivery of this
Agreement, the Owner Participant has entered into the Trust Agreement (GATC
Trust No. 94-1) pursuant to which the Owner Trustee agrees, 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 the Units of Equipment described in Schedule 1 hereto from the Lessee
and concurrently therewith lease such Units of Equipment to the Lessee;

WHEREAS, pursuant to the Pass Through Trust Agreement, on the Closing
Date, a grantor trust will be created to facilitate the financing contemplated
hereby;

WHEREAS, concurrently with the execution and delivery of this
Agreement, the Owner Trustee has entered into the Indenture with the Indenture
Trustee pursuant to which Indenture the Owner Trustee agrees, among other
things, for the benefit of the holder or holders of the Equipment Notes, to
issue to the Pass Through Trustee as Loan Participant, the Equipment Notes as
evidence of the loan made by the Loan Participant participating in the
financing of the Equipment Cost for the Equipment;

WHEREAS, pursuant to the terms of the Trust Agreement, the Owner
Trustee is authorized and directed by the Owner Participant (i) to accept
delivery of the Bill of Sale evidencing the purchase and transfer of title of
each Unit to the Owner Trustee and (ii) to 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

<PAGE> 6
Trustee, each Unit of Equipment to be delivered on the Closing Date, such lease
to be evidenced by the execution and delivery of a Lease Supplement covering
such Units;

WHEREAS, concurrently with the execution and delivery of this
Agreement, the Lessee and the Owner Participant have entered into the Tax
Indemnity Agreement relating to the Equipment; and

WHEREAS, the proceeds from the sale of the Equipment Notes 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 by the Owner Trustee contemplated hereby.

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.

The capitalized terms used in this Agreement (including the foregoing
recitals) and not otherwise defined herein shall have the respective meanings
specified in Appendix A hereto, unless the context hereof shall otherwise
require. All references to Sections, Schedules and Exhibits herein are to
Sections, Schedules and Exhibits of this Agreement unless otherwise indicated.

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

Section 2.1. Sale and Purchase. Subject to the terms and
conditions hereof and on the basis of the representations and warranties set
forth herein, the Lessee agrees to sell to the Owner Trustee and the Owner
Trustee agrees to purchase from the Lessee, on the Closing Date, the Units
described in Schedule 1 as hereinafter provided, and in connection therewith,
the Owner Trustee agrees to pay to the Lessee the cost for each of the various
Units as specified in Schedule 1; provided, however, that the Owner Trustee
shall not be obligated to purchase on the Closing Date any Unit that is
destroyed, damaged, defective, in unsuitable condition or otherwise
unacceptable to the Lessee for lease pursuant to the Lease. The Lessee shall
deliver said Units of Equipment to the Owner Trustee and the Owner Trustee
shall accept such delivery on a delivery date as more fully provided herein
(the "Closing Date"); provided that the Closing Date shall occur on or prior to
September 30, 1994.

Section 2.2. Participation in Equipment Cost.

(a) Equity Participation. Subject to the terms and conditions
hereof and on the basis of the representations and warranties set forth herein,
on the Closing Date the Owner Participant

- 2 -
<PAGE> 7
agrees to participate in the payment of the 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 aggregate
Equipment Cost for the 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 shall not exceed $39,000,000. 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 the payment
of the Equipment Cost for the Units as provided in Section 2.3.

(b) Debt Participation. Subject to the terms and conditions
hereof and on the basis of the representations and warranties set forth herein,
on the Closing Date the Loan Participant agrees to participate in the payment
of the Equipment Cost for the Units delivered on the Closing Date by making a
secured loan, to be evidenced by the Equipment Notes, to the Owner Trustee in
the amount equal to the product of the aggregate Equipment Cost for the Units
delivered on the Closing Date and the percentage set forth opposite such Loan
Participant's name in Schedule 2 (the Loan Participant's "Commitment"). The
aggregate amount of the Loan Participant's Commitment shall not exceed
$94,000,000. The Equipment Notes shall bear interest at the rates set forth on
Schedule 6.

(c) Interim Interest Payment. On the Basic Term Commencement
Date, the Owner Trustee covenants and agrees that it will pay, using funds that
are to be advanced by the Owner Participant on such date, to the Indenture
Trustee the interest (the "Interim Interest") due and payable to the Loan
Participant on such date under the Equipment Notes. The Owner Participant
shall have no personal liability to advance such funds and shall notify the
Owner Trustee and the Lessee at least five Business Days prior to the Basic
Term Commencement Date if the Owner Participant will not advance the Interim
Interest to the Owner Trustee. The Owner Trustee shall promptly notify the
Lessee if the Owner Participant fails to advance the Interim Interest pursuant
to this Section 2.2(c). The Owner Participant hereby agrees to the terms and
conditions set forth in Section 3.5 of the Lease.

Section 2.3. Closing Date; Procedure for Participation.

(a) Notice of Closing Date. Not later than the Pricing Date, the
Lessee shall give the Owner Participant, the Indenture Trustee, the Owner
Trustee and the Loan Participant notice (a "Notice of Delivery") by telex,
telegraph, facsimile or other form of telecommunication or telephone (to be
promptly confirmed in writing) of the Closing Date, which Notice of Delivery
shall specify in reasonable detail the number and type of Units to be delivered
on such date, the aggregate 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 such Units. Prior to 12:00
noon, New York City time, on the Closing Date, 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

- 3 -
<PAGE> 8
the Units specified in Section 2.3(b), the Loan Participant shall make the
amount of such Loan Participant's Commitment for the 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 The First National Bank of Chicago, One
First National Plaza, Suite 0126, Chicago, Illinois, 60670-0126, ABA No.
070100013, Corporate Trust Clearing Account No. 48115377, For credit to trust
number 19-202748-1, Attention S. McGrath -- GATC Trust No. 94-1. The making
available by the Owner Participant of the amount of its Commitment for the
Equipment Cost shall be deemed a waiver of the Notice of Delivery by the Owner
Participant and the Owner Trustee and the making available by the Loan
Participant of the amount of its Commitment for the 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 beginning at 11:00 A.M., Chicago time, on the
Closing Date at the offices of Mayer, Brown & Platt, 190 South LaSalle Street,
Chicago, Illinois 60603 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 Loan Participant's
Commitment in respect of the Units delivered on the Closing Date, the Indenture
Trustee on behalf of the Owner Trustee shall, subject 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, pay to the Lessee from
the funds then held by it, in immediately available funds, an amount equal to
the Equipment Cost for the Units delivered on the Closing Date, and
simultaneously therewith, (i) the Lessee shall deliver the Units to the Owner
Trustee, (ii) the Owner Trustee shall, pursuant to the Lease, lease and deliver
the Equipment delivered on the Closing Date to the Lessee, and the Lessee,
pursuant to the Lease, shall accept delivery of the Units under the Lease, such
lease, delivery and acceptance of the Units under the Lease shall be
conclusively evidenced by the execution and delivery by the Lessee and Owner
Trustee of Lease Supplements covering the related Functional Group or Groups of
Equipment so delivered as described in Schedule 1, and (iii) the Owner Trustee
shall execute and deliver an Equipment Note to the Loan Participant relating to
each such Lease Supplement. Each of the Lessee, the Owner Participant, the
Owner Trustee, the Loan Participant and the Indenture Trustee hereby agree to
take all actions required to be taken by it in connection therewith and
pursuant to 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 its 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 2.1 of the Trust Agreement with respect
to the Units on the Closing Date.

- 4 -
<PAGE> 9
(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 it with respect to such Units.

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 to the Owner Trustee, the following (the "Transaction Costs") if evidenced
by an invoice delivered to the Owner Participant and approved by the Lessee
prior to the Basic Term Commencement Date:

(i) the cost of reproducing, printing and filing the
Operative Agreements, the Equipment Notes, the Pass Through
Certificates, the Registration Statement, the Basic Prospectus, the
Preliminary Final Prospectus, the Final Prospectus and the
Underwriting Agreement and all amendments and supplements to the
foregoing, including all costs and fees in connection with filing the
Registration Statement and 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 agencies in
connection with rating the Pass Through Certificates;

(ii) the reasonable fees and expenses of Lord Day & Lord,
Barrett Smith, special counsel for the Owner Participant, in the
amount of (or if Section 2.5(c) applies, not to exceed) $100,000, plus
disbursements, for their services rendered in connection with the
negotiation, execution and delivery of this Participation Agreement
and the Operative Agreements related hereto;

(iii) all costs and fees in connection with the qualification
of the Pass Through Certificates under securities or Blue Sky laws in
accordance with the provisions of Section 5(e) of the Underwriting
Agreement, including filing fees and the fees and disbursements of
Winston & Strawn in connection therewith and in connection with the
preparation of any Blue Sky memorandum;

(iv) the reasonable fees and expenses of Ernst & Young,
accountants of the Lessee, for their services rendered in connection
with issuing "comfort letters" to the Underwriters;

(v) the reasonable fees and expenses of Winston & Strawn,
special counsel for the Underwriters, for their services rendered in
connection with the preparation of docu-

- 5 -

<PAGE> 10
mentation, negotiation, execution and delivery of the Preliminary Final
Prospectus, the Final Prospectus, the Underwriting Agreement, this
Participation Agreement and the Operative Agreements related hereto;

(vi) the reasonable fees and expenses of Alvord & Alvord,
special ICC counsel, and McCarthy & Tetrault, special Canadian
counsel, for the Owner Participant and the Indenture Trustee;

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

(viii) the commissions payable to the Underwriters in
connection with the sale of the Pass Through Certificates;

(ix) the initial fees and expenses of the Owner Trustee;

(x) the initial fees and expenses of the Indenture Trustee;

(xi) the reasonable fees and expenses of R.L. Banks &
Associates, Inc. for their services rendered in connection with
delivering the Appraisal required by Section 4.3(a); and

(xii) the costs incurred in connection with any adjustment
pursuant to Section 2.6(a).

Notwithstanding the foregoing, Transaction Costs shall not include
internal costs and expenses such as salaries and overhead of whatsoever kind or
nature of, nor costs incurred by, parties to this Participation Agreement
pursuant to arrangements with third parties for services (other than those
expressly referred to above), such as travel expenses, computer time
procurement, financial analysis and consulting, advisory services and costs of
a similar nature.

(b) Upon the consummation of the transactions contemplated by this
Agreement, the Lessee agrees to pay when due: (i) the reasonable expenses
(including reasonable legal fees and expenses) of the Owner Trustee, the
Indenture Trustee and the Participants incurred subsequent to the delivery of
the Equipment on the Closing Date, in connection with any supplements,
amendments, modifications, alterations, waivers or consents of any of the
Operative Agreements which are (1) requested by, or necessitated by action or
inaction on the part of, the Lessee or by any applicable law or regulation
(other than laws or regulations solely relating to the business of the Lessor
or the Owner Participant) or entered into in connection with, or as a result
of, a Lease Default or (2) necessary or required to effectuate the purpose or
intent of any Operative Agreement (including costs incurred in connection with
any adjustment pursuant to Section 2.6);

- 6 -

<PAGE> 11
(ii) the ongoing reasonable fees and expenses (including reasonable legal fees
and expenses) of the Owner Trustee under the Trust Agreement; (iii) the ongoing
reasonable fees and expenses of the Indenture Trustee under the Operative
Agreements; and (iv) the ongoing reasonable fees and expenses of the Pass
Through Trustee under the Pass Through Trust Agreement.

(c) If the transactions contemplated hereby are not consummated as
a result of (i) the Lessee's default in its obligations to consummate the
transactions contemplated hereby, (ii) the Lessee's failure to consummate the
transactions contemplated hereby after the satisfaction or waiver of the
conditions set forth in Section 4 (other than conditions the satisfaction of
which are solely in the control of the Lessee), or (iii) subject to the next
sentence, in any other circumstance, the Lessee shall pay all Transaction
Costs. Notwithstanding anything contained herein to the contrary, if the
transactions contemplated hereby are not consummated as a result of (x) the
Owner Participant's default in its obligations to consummate the transactions
hereunder, or (y) the Owner Participant's failure to make its equity investment
as required by Section 2.2(a) after the conditions specified in Section 4 have
been satisfied or waived by it in writing (other than conditions the
satisfaction of which are solely in the control of the Owner Participant), the
Owner Participant shall pay its expenses and the expenses of its counsel in
connection with the transactions contemplated hereby.

(d) Notwithstanding the foregoing provisions of this Section 2.5,
except as specifically provided in Section 7.2 or in any other Operative
Agreement, the Lessee shall have no liability for any costs or expenses
relating to any voluntary transfer of the Owner Participant's interest in the
Equipment including any transfer prior to the Closing Date of the Owner
Participant's obligation to fund its participation pursuant to Section 2 (other
than in connection with any transfer pursuant to Sections 10.2, 11.4, 22.1 or
22.3 of the Lease or Section 6.9 hereof or a Lease Event of Default) and no
such costs or expenses shall constitute Transaction Costs and the Lessee will
not have any obligation with respect to the costs and expenses resulting from
any voluntary transfer of any equity interest by any transferee of the Owner
Participant, whenever occurring (other than in connection with a Lease Event of
Default).

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 August 16, 1994 or (B) the Transaction Costs paid by the
Owner Participant pursuant to Section 2.5 prior to the Basic Term Commencement
Date are less or more than 1% of the Total Equipment Cost or (C) a refinancing
contemplated by Section 10.2 occurs, then, in each such case, the Owner
Participant shall recalculate the payments or amounts, as the case may be, of
Basic Rent, Stipulated Loss Values, Termination Values, Early Purchase Price
and Basic Term Purchase Price, (i) to preserve the Net Economic Return that the
Owner Participant would have realized had the Closing Date been August 16,
1994, had the Transaction Costs equaled 1% of the Total Equipment Cost or had
such refinancing not occurred, and (ii) to minimize to the greatest extent
possible, consistent with the foregoing clause (i), the present value
(discounted semiannually at an interest rate per annum equal to the Debt Rate)
of the payments of Basic Rent.

- 7 -

<PAGE> 12
Any such recalculation performed due to the occurrence of an event described in
clause (A) or (B) above shall be made prior to the Basic Term Commencement
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, Termination Values, Early Purchase Price and
Basic Term Purchase Price with respect to the Basic Term initially set forth in
Schedules 3, 4, 5, 7 and 8 to this Participation Agreement (other than those
assumptions changed as a result of any of the events described in clauses (A)
through (C) 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) and 4.08(1) of Revenue Procedure 75-28, as
amended calculated, except in the case of a refinancing pursuant to Section
10.2 or any rent adjustment pursuant to Section 5(a)(3)(B) of the Tax Indemnity
Agreement, without taking into account any change after the Closing Date in or
to Section 467 of the Code (and any regulations thereunder) and such
requirements of Revenue Procedure 75-28.

(b) Confirmation and Verification. Upon completion of any
recalculation described above in this Section 2.6, a duly authorized officer of
the Owner Participant shall provide a certificate to the Lessee either (x)
stating that the payments of Basic Rent, Stipulated Loss Values, Termination
Values, Early Purchase Price and Basic Term Purchase Price with respect to the
Basic Term as are then set forth in Schedules 3, 4, 5, 7 and 8 of this
Participation Agreement do not require change, or (y) setting forth such
adjustments to the payments of Basic Rent, Stipulated Loss Values, Termination
Values, Early Purchase Price or Basic Term Purchase Price with respect to the
Basic Term as have been calculated by the Owner Participant in accordance with
Section 2.6(a) above. Such certificate shall describe in reasonable detail the
basis for any such adjustments. Any such adjustment shall become effective on
the thirty-first (31st) day following delivery by the Owner Participant of such
certificate to the Lessee unless Lessee, prior to such day, requests
verification pursuant to the following sentence. Any such adjustment and
corresponding adjustments to the Stipulated Loss Values, Termination Values,
Early Purchase Price and Basic Term Purchase Price will be computed on a basis
consistent with that used by the Owner Participant in the original calculation
of Basic Rent. If the Lessee shall so request, the recalculation of any such
adjustments described in this Section 2.6 shall be verified by a nationally
recognized firm of independent accountants selected by the Owner Participant
and reasonably acceptable to the Lessee and any such recalculation of such
adjustment as so verified shall be binding on the Lessee and the Owner
Participant. Such accounting firm shall be requested to make its determination
within 30 days. The Owner Participant shall provide to a representative of
such accounting firm, on a confidential basis, such information as it may
reasonably require, including the original assumptions used by the Owner
Participant and the methods used by the Owner Participant in the original
calculation of, and any recalculation of, Basic Rent, Stipulated Loss Values,
Termination Values, Early Purchase Price and Basic Term Purchase Price and such
other information as is necessary to determine whether the computation is
accurate and in conformity with the provisions of this Agreement, provided that
in no event shall the Owner Participant have any obligation to provide the
Lessee with any such information;

- 8 -

<PAGE> 13
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. 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) of the Basic Rent (discounted
semiannually at a rate per annum equal to the Debt Rate) under this Lease
calculated as of the Closing Date, as compared to the net present value of
Basic Rent proposed by the Owner Participant, by more than the greater of (x)
10 basis points or (y) 10% 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, and shall take into account any underpayment or overpayment,
together with interest thereon at the Debt Rate, resulting from an earlier
effectiveness of the original adjustment.

(c) Compliance. Notwithstanding the foregoing, any adjustment
made to the payments of Basic Rent, Stipulated Loss Values, Termination Values
or Early Purchase Price with respect to the Basic Term, pursuant to the
foregoing, shall comply with the following requirements: (i) each installment
of Basic Rent (together with any Advance payable under Section 3.5 of the
Lease), 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 Notes required to be paid on the due date of such installment of
Basic Rent, and (ii) Stipulated Loss Value, Termination Value 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, premium, if
any, and all unpaid interest on the Equipment Notes, accrued to the date on
which Stipulated Loss Value, Termination Value 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) The scheduled Closing Date may be postponed from time to time
with respect to all of the Units for any reason (but to no later than 15 days
following such scheduled Closing Date) if the Lessee gives the Owner
Participant, the Indenture Trustee, the Pass Through Trustee and the Owner
Trustee telex, telegraphic, facsimile or telephonic (confirmed in writing)
notice of the postponement and notice of the date to which such Closing Date
has been postponed, the notice of postponement to be received by each party no
later than 5:30 P.M., New York City

- 9 -

<PAGE> 14
time, on the originally scheduled Closing Date, and the term "Closing Date" as
used in this Agreement shall mean the postponed "Closing Date".

(b) In the event of any postponement of the originally scheduled
Closing Date pursuant to this Section 2.7 (the originally scheduled Closing
Date being referred to as the "Scheduled Closing Date" for the purposes of this
Section 2.7): (i) the Lessee will reimburse the Owner Participant for the loss
of the use of its funds with respect to each such Unit occasioned by such
postponement or failure to deliver or accept (unless such failure to accept is
caused by a default by the Owner Participant hereunder or by the Owner Trustee
(acting pursuant to instructions from the Owner Participant) under the Trust
Agreement, the Lease or the Indenture) by paying to the Owner Participant on
demand interest at the Debt Rate, for the period from and including the
Scheduled Closing Date to but excluding the earlier of the date upon which such
funds are returned to the Owner Participant (unless such funds are returned
after 1:00 p.m. (New York City time) in which case such date of return shall be
included) or the actual Closing Date; provided that the Lessee shall in any
event pay to the Owner Participant at least one day's interest at the Debt Rate
on the amount of such funds, unless the Owner Participant shall have received,
prior to 1:00 p.m. (New York City 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), and (ii) the Indenture Trustee will return not
later than 10:00 A.M. New York City time, on the first Business Day following
the Scheduled Closing Date, any funds which it shall have received from the
Owner Participant as its Commitment for such Units, absent joint instructions
from the Lessee and the Owner Participant to retain such funds until the
specified date of postponement established under Section 2.7(a).

(c) The Indenture Trustee agrees that, in the event it has
received telephonic notice (to be confirmed promptly in writing) from the
Lessee on the Scheduled Closing Date that such Scheduled Closing Date is to be
postponed, it will if instructed in the aforementioned notice from the Lessee
(which notice shall specify the securities 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 it from the Owner Participant with respect to its Commitment
in Specified Investments in accordance with the Lessee's instructions. Any
such Specified Investments purchased by the Indenture Trustee upon instructions
from the Lessee shall be held in trust by the Indenture Trustee (but not as
part of the Indenture Estate under the Indenture) for the benefit of the Owner
Participant whose funds are invested in Specified Investments upon instructions
from the Lessee and any net profits on the investment of such funds (including
interest), if any, shall be for the account of and shall on the Closing Date,
or on the date such funds are returned to the Owner Participant, be paid over
to, the Lessee. The Lessee shall pay to the Indenture Trustee on the Closing
Date (if such Unit or Units are delivered and accepted pursuant hereto) the
amount of any net loss on the investment of such funds invested at the
instruction of the Lessee. If the funds furnished by the Owner Participant
with respect to such Unit or Units are required to be returned to the Owner
Participant, the Lessee shall, on the date on which such funds are so required
to be returned, reimburse the Indenture Trustee, for the benefit of the Owner
Participant, for any net losses

- 10 -
<PAGE> 15
incurred on such investments. The Indenture Trustee shall not be liable for
failure to invest such funds or for any losses incurred on such investments
except for its own willful misconduct or gross negligence. In order to obtain
funds for the payment of Equipment Cost for such Unit or Units or to return
funds furnished by the Owner Participant to the Indenture Trustee for the
benefit of the Owner Participant with respect to such Unit or Units, the
Indenture Trustee is authorized to sell any Specified Investments purchased as
aforesaid with the funds received by it from the Owner Participant in
connection with such Unit or Units.

(d) Notwithstanding the provisions of Section 2.7(a), the Owner
Participant shall not be under any obligation to make its Commitment available
beyond 11:00 A.M. (New York City time) on September 30, 1994.

SECTION 3. REPRESENTATIONS AND WARRANTIES.

Section 3.1. Representations and Warranties of the Owner Trustee.
The Owner Trustee, both in its individual capacity and as Owner Trustee (except
that (x) the representations and warranties in Sections 3.1(a)(i), 3.1(a)(ii),
3.1(b)(i) and 3.1(b)(iii) are made by the Owner Trustee solely in its
individual capacity and (y) the representations and warranties in Sections
3.1(c) and 3.1(k) are made by the Owner Trustee solely in its capacity as
such), represents and warrants to the Owner Participant, each of the other
Trustees 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) the Owner Trustee (i) is a Massachusetts banking corporation
duly organized and validly existing in good standing under the laws of the
Commonwealth of Massachusetts, (ii) has full corporate power and authority to
carry on its business as now conducted and to enter into 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
enter into and perform its obligations under each of the Owner Trustee
Agreements;

(b) (i) the Owner Trustee, in its individual capacity, 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) the Owner Trustee in its trust capacity and, to the extent
expressly provided therein, in its individual capacity, has duly authorized,
executed and delivered each of the other Owner Trustee Agreements and, as of
the Closing Date, the Equipment Notes, the Lease Supplement and the Indenture
Supplement to be delivered on the Closing Date, and (iii) the Trust Agreement
constitutes a legal, valid and binding obligation of the Owner Trustee, in its
individual capacity, enforceable against it in its individual capacity in
accordance with its terms except as the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general principles of equity;

- 11 -
<PAGE> 16
(c) assuming the due authorization, execution and delivery of the
Trust Agreement by the Owner Participant, each of the Owner Trustee Agreements
(other than the Trust Agreement) to which it is a party constitutes, or when
entered into will constitute, a legal, valid and binding obligation of the
Owner Trustee, enforceable against it in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the rights of creditors generally
and by general principles of equity;

(d) neither the execution and delivery by the Owner Trustee, in
its individual capacity or as Owner Trustee, as the case may be, of the Owner
Trustee Agreements or the Equipment Notes to be delivered on the Closing Date,
nor the consummation by the Owner Trustee, in its individual capacity or as
Owner Trustee, as the case may be, of any of the transactions contemplated
hereby or thereby, nor the compliance by the Owner Trustee, in its individual
capacity, or as 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 [certificate of incorporation] or [by-laws], 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 the
Owner Trustee in its individual capacity is a party or by which it is bound, or
contravenes or will contravene any law, governmental rule or regulation of the
United States of America or the Commonwealth of Massachusetts governing the
banking or trust powers of the Owner Trustee, or any judgment or order
applicable to or binding on it;

(e) there are no Taxes payable by the Owner Trustee, either in its
individual capacity or as Owner Trustee, imposed by the Commonwealth of
Massachusetts or any political subdivision thereof or by the United States of
America in connection with the execution and delivery by the Owner Trustee in
its individual capacity of the Trust Agreement, and, in its individual capacity
or as Owner Trustee, as the case may be, of this Agreement, the other Owner
Trustee Agreements (other than the Trust Agreement) or the Equipment Notes to
be delivered on the Closing Date solely because the Owner Trustee in its
individual capacity is a Massachusetts banking corporation with its principal
place of business in Boston, Massachusetts and performs certain of its duties
as Owner Trustee in the Commonwealth of Massachusetts; and there are no Taxes
payable by the Owner Trustee, in its individual capacity or as Owner Trustee,
as the case may be, imposed by the Commonwealth of Massachusetts 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 the Owner Trustee for services
rendered in connection with the transactions contemplated hereby) solely
because the Owner Trustee in its individual capacity is a Massachusetts banking
corporation with its principal place of business in Boston, Massachusetts and
performs certain of its duties as Owner Trustee in the Commonwealth of
Massachusetts;

(f) there are no pending or, to its knowledge, threatened actions
or proceedings against the Owner Trustee, either in its individual capacity or
as Owner Trustee, before any court or

- 12 -
<PAGE> 17

administrative agency which individually or in the aggregate, if determined
adversely to it, would materially adversely affect the ability of the Owner
Trustee, in its individual capacity or as Owner Trustee, as the case may be, to
perform its obligations under the Trust Agreement, the other Owner Trustee
Agreements or the Equipment Notes 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 at Boston, Massachusetts,
and the Owner Trustee, in its individual capacity, 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 Massachusetts or local governmental authority or agency or any United
States federal governmental authority or agency regulating the banking or trust
powers of the Owner Trustee, in its individual capacity, is required for the
execution and delivery of, or the carrying out by, the Owner Trustee in its
individual capacity or as 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 of
any Liens attributable to the Owner Trustee in its individual capacity except
Liens created by the terms of the Operative Agreements;

(j) the proceeds received by the Owner Trustee from the Owner
Participant pursuant to the Trust Agreement will be administered by it in
accordance with Article IV 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 security interest created pursuant to
the Indenture and the Indenture Supplement in respect of the Units delivered on
the Closing Date; and

(l) to its knowledge, no Indenture Default or Indenture Event of
Default has occurred and is continuing.

Section 3.2. Representations and Warranties of the Lessee. The
Lessee represents and warrants to the Trustees and the Owner Participant that,
as of the date hereof:

(a) the Lessee is a corporation duly organized, validly existing,
and in good standing under the laws of the State of New York, 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

- 13 -

<PAGE> 18
under the Lessee Agreements, has the corporate 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 Lessee Agreements;

(b) the Lessee Agreements have been duly authorized by all
necessary corporate action (no shareholder approval being required), executed
and delivered (or in the case of the Lease Supplement in respect of the Units
delivered on the Closing Date will on the Closing Date have been duly executed
and delivered) by the Lessee, and constitute (or in the case of the Lease
Supplement in respect of the Units delivered on the Closing Date will on the
Closing Date constitute) the legal, valid and binding obligations of the
Lessee, enforceable against the Lessee in accordance with their respective
terms except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of creditors
generally and by general principles of equity;

(c) the execution, delivery and performance by the Lessee of each
Lessee Agreement and 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 certificate of
incorporation or by-laws 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 property is bound or affected;

(d) except for those matters discussed in the financial statements
provided to the Participants under Section 3.2(e), there are no proceedings
pending or, to the knowledge of the Lessee, threatened against the Lessee or
any Subsidiary in any court or before any governmental authority or arbitration
board or tribunal which individually or in the aggregate would, if determined
adversely to it, materially and adversely affect the financial condition or
business of the Lessee and its consolidated Subsidiaries, taken as a whole, or
impair the ability of the Lessee to perform its obligations under the Lessee
Agreements or which questions the validity of any Lessee Agreement or any
action taken or to be taken pursuant thereto. Neither the Lessee nor any
Subsidiary is in default with respect to any order of any court or governmental
authority or arbitration board or tribunal, the default under which would
affect adversely the ability of the Lessee to perform its obligations under the
Lessee Agreements;

(e) the audited consolidated balance sheets and consolidated
statements of income and retained earnings and cash flows of the Lessee for the
fiscal year ended December 31, 1993, fairly present, in conformity with
generally accepted accounting principles, the consolidated financial position
of the Lessee and its Subsidiaries as of such date and the results of their
operations for the period then ended. The unaudited consolidated balance
sheets and consolidated statements of income and retained earnings and cash
flows of the Lessee and its Subsidiaries for the three-month period ended March
31, 1994, fairly present, in conformity with generally accepted accounting
principles consistently applied (except for the absence of footnotes in the
March 31, 1994 financial statements), the consolidated financial position of
the Lessee and its

- 14 -

<PAGE> 19
Subsidiaries as of such date and the results of their operations for the period
then ended, subject to normal year-end adjustments. Since December 31, 1993,
there has been no material adverse change in the condition, financial or
otherwise, of the Lessee and its consolidated Subsidiaries, taken as a whole,
as shown on the financial statements of Lessee as of such date;

(f) no consent, approval or authorization of, or filing,
registration or qualification with, or the giving of notice to, any trustee or
any holder of indebtedness of Lessee or any governmental authority on the part
of the Lessee is required in connection with the execution and delivery by the
Lessee of the Lessee Agreements, other than notices required to be filed with
the ICC and the Registrar General of Canada, which ICC notice shall have been
filed on the Closing Date and which Canadian notice shall be filed promptly
following the Closing Date;

(g) the Lease, the Indenture, the Lease Supplements in respect of
the Units delivered on the Closing Date and the Indenture Supplements in
respect of the Units delivered on the Closing Date will on or before the
Closing Date be duly filed with the ICC pursuant to 48 U.S.C. Section 11303 and
deposited with the Registrar General of Canada pursuant to Section 90 of the
Railway Act of Canada and such filing with the ICC pursuant to 49 U.S.C.
Section 11303 will perfect the Owner Trustee's and the Indenture Trustee's
rights in such Operative Agreements and in the Units, and such deposit with the
Registrar General of Canada will perfect the Owner Trustee's and the Indenture
Trustee's rights in such Operative Agreements and in the Units and no other
filing, recording or deposit with, or giving of notice to any other federal,
state, provincial or local government or agency thereof is necessary in order
to protect the rights of the Owner Trustee and the Indenture Trustee in such
Operative Agreements or in such Units in the United States, any state thereof,
the District of Columbia or to protect the rights of the Owner Trustee and the
Indenture Trustee in such Operative Agreements or in such Units in Canada or
any province thereof;

(h) the Equipment is covered by the insurance required by Section
12 of the Lease and all premiums due prior to the Closing Date in respect of
such insurance shall have been paid in full;

(i) the Lessee has timely filed all United States Federal income
tax returns and all other material tax returns which are required to be filed
by it and has paid all taxes due pursuant to such returns or pursuant to any
assessment made against the Lessee or any of its assets (other than
assessments, the payment of which is being contested in good faith by
appropriate proceedings by the Lessee and none of which are material), and no
tax liens have been filed and no claims are being asserted with respect to any
such taxes, fees or other charges which could reasonably be expected to have a
materially adverse effect on its ability to perform its obligations under the
Lessee Agreements. The provision for taxes on the books of the Lessee is
adequate for all open years, and for its current fiscal period;

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

- 15 -
<PAGE> 20
(k) the Lessee is not an "investment company" or an "affiliated
person" of an "investment company" within the meaning of the Investment Company
Act of 1940;

(l) 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 a
"Prohibited Transaction" under ERISA. The representation made by the Lessee in
the preceding clause is made in reliance upon and subject to the accuracy of
the representation of the Owner Participant in Section 3.6(h) of this
Agreement;

(m) on the Closing Date, Lessee shall have, and the Bill of Sale
to be delivered on the Closing Date shall convey, to the Owner Trustee all
legal and beneficial title to the Units being delivered on the Closing Date,
free and clear of all Liens (other than Permitted Liens of the type described
in clause (ii) with respect to sublessees, and in clauses (iii), (iv), (vi) and
(vii) of the definition thereof), and such conveyance is not void or voidable
under any applicable law;

(n) the financial statements referred to in Section 3.2(e) do not,
nor does the Registration Statement relating to the Pass Through Certificates
or any written statement furnished by the Lessee or on behalf of the Lessee in
connection with the negotiation of the Lease or any other Operative Agreement,
contain any untrue statement of a material fact or omit a material fact
necessary to make the statements contained therein or herein not misleading.
There is no fact which the Lessee has not disclosed in writing which materially
affects adversely or, so far as the Lessee can now reasonably foresee, will
materially affect adversely the properties, business, prospects, profits or
condition (financial or otherwise) of the Lessee and its Subsidiaries, taken as
a whole;

(o) none of the transactions contemplated by the Operative
Agreements (including, without limitation, the use of the proceeds from the
sale of the Equipment Notes) will result in a violation of Section 7 of the
Securities Exchange Act of 1934, as amended, or any regulations issued pursuant
thereto, including, without limitation, Regulations G, T, U and X of the Board
of Governors of the Federal Reserve System, 12 C.F.R., Chapter II. None of the
proceeds from the sale of the Equipment Notes will be used to purchase or carry
(or refinance any borrowing the proceeds of which were used to purchase or
carry) any "security" within the meaning of the Securities Exchange Act of
1934, as amended;

(p) the Lessee is not in violation of any term of any charter
instrument, by-law or in any material respect of any other material 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, 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 the Lessee to perform its obligations under the
Operative Agreements to which it is a party, and has obtained all licenses,
permits, franchises and other governmental authorizations material to the
conduct of its business;

- 16 -
<PAGE> 21
(q) on the Closing Date all sales, use or transfer taxes due and
payable upon the purchase of the Equipment by the Lessor and on the lease
thereof to the Lessee will have been paid or such transactions will then be
exempt from any such taxes and the Lessee will cause any required forms or
reports in connection with such taxes to be filed in accordance with applicable
laws and regulations. No taxes, fees or other charges in connection with the
execution and delivery of the Operative Agreements or the issuance and sale of
the Equipment Notes to be delivered on the Closing Date are payable;

(r) 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 Lessee, except for the fees of GATX
Lease Funding, Inc., which Lessee agrees will be paid by it, and of Salomon
Brothers Inc and Morgan Stanley & Co. Incorporated, which shall be included in
Transaction Costs, and Lessee agrees that it will hold the Owner Participant,
the Owner Trustee and the Indenture Trustee harmless from any claim, demand or
liability for any other broker's or finder's or placement fees or commission
alleged to have been incurred as a result of any action by Lessee in connection
with such transactions;

(s) each Unit of the Equipment, 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 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

(t) the Lessee is not subject to regulation as a "holding
company," an "affiliate" of a "holding company," or a "subsidiary company" of a
"holding company," within the meaning of the Public Utility Holding Company Act
of 1935, as amended.

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

(a) the Indenture Trustee is a national banking association duly
organized and validly existing and 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 pertaining to its banking,
trust and fiduciary powers to execute, deliver and carry out the terms of 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 law or its
articles of association or by-laws or the provisions of any indenture,
mortgage, contract or other agreement to which it is a party or by which it is
bound;

- 17 -
<PAGE> 22
(c) this Agreement has been duly executed and delivered and
constitutes, and the other Indenture Trustee Agreements, when executed and
delivered, will constitute its legal, valid and binding obligation enforceable
against it in accordance with its terms;

(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
governmental authority or regulatory body of the United States of America
governing the Indenture Trustee in its trust capacity, is required for the due
execution, delivery and performance by the Indenture Trustee of the Indenture
Trustee Agreements, except as have been previously obtained, given or taken;

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

(g) neither the Indenture Trustee, nor any Person authorized to
act on behalf of the Indenture Trustee, has directly or indirectly offered any
interest in the Trust Estate or the Equipment Notes 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, the
Underwriters and the initial purchasers of the Pass Through Certificates.

Section 3.4. Representations, Warranties and Covenants Regarding
Beneficial Interest and Equipment Notes.

(a) The Owner Trustee represents and warrants to the Lessee, each
of the other Trustees and the Owner Participant that, as of the date hereof and
as of the Closing Date, neither the Owner Trustee nor any Person authorized or
employed by the Owner Trustee as agent or otherwise in connection with the
placement of the Beneficial Interest or the Equipment Notes or any similar
interest has offered any of the Beneficial Interest or the Equipment Notes or
any similar interest for sale to, or solicited offers to buy any thereof from,
or otherwise approached or negotiated with respect thereto with, any
prospective purchaser.

(b) The Lessee represents and warrants to the Trustees and the
Owner Participant 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 in connection with the placement of the Beneficial Interest or the
Equipment Notes or any similar interest has offered any of the Beneficial
Interest or the Equipment Notes or similar interest for sale to, or solicited
offers to buy any thereof from, or otherwise approached or negotiated with
respect thereto with, any Person

- 18 -
<PAGE> 23

other than the Owner Participant and not more than 35 other institutional
investors with respect to the Beneficial Interest, and, except for the issue
and sale of the Pass Through Certificates as contemplated by the Registration
Statement, the Pass Through Trustee with respect to the Equipment Notes.

(c) Each of the Owner Trustee, the Owner Participant and the
Lessee agree, as to its own actions only, severally but not jointly that
neither the Owner Trustee, the Owner Participant nor the Lessee nor anyone
acting on behalf of the Owner Trustee, the Owner Participant or the Lessee will
offer the Beneficial Interest, the Equipment Notes, 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 Notes, or any
part thereof so as to bring the issuance and sale of the Beneficial Interest,
the Equipment Notes, or any part thereof within the provisions of Section 5 of
the Securities Act of 1933, as amended, except as provided for in the
Registration Statement.

Section 3.5. Representations and Warranties of the Pass Through
Trustee. The Pass Through Trustee represents and warrants to the Owner
Participant, the other Trustees, 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 pertaining to its banking,
trust and fiduciary powers to execute, deliver and carry out the terms of the
Pass Through Trust Agreement, the Pass Through Trust Supplement and this
Agreement;

(b) the Pass Through Trust Agreement, the Pass Through Trust
Supplement and this Agreement have been duly authorized, executed and delivered
by the Pass Through Trustee; this Agreement, the Pass Through Trust Supplement
and the Pass Through Trust Agreement constitute the legal, valid and binding
obligation of the Pass Through Trustee enforceable against it in accordance
with its terms;

(c) the execution, delivery and performance by the Pass Through
Trustee of the Pass Through Trust Agreement, the Pass Through Trust Supplement
and this Agreement, the purchase by the Pass Through Trustee of the Equipment
Notes pursuant to this Agreement, and the issuance of the Pass Through
Certificates pursuant to the Pass Through Trust Agreement and the Pass Through
Trust Supplement, do not contravene any law, rule or regulation of any United
States of America 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 by-laws or any agreement or instrument to
which the Pass Through Trustee is a party or by which it or any of its
properties may be bound;

(d) neither the execution and delivery by the Pass Through Trustee
of the Pass Through Trust Agreement, the Pass Through Trust Supplement or this
Agreement nor the

- 19 -
<PAGE> 24
consummation by the Pass Through Trustee of any of the transactions
contemplated hereby or 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 United States of America governmental authority or agency or
any Federal governmental authority or agency regulating the Pass Through
Trustee's banking, trust or fiduciary powers;

(e) there are no pending or 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 effect the ability of the Pass Through Trustee to perform
its obligations under this Agreement, the Pass Through Trust Supplement or the
Pass Through Trust Agreement;

(f) the Pass Through Trustee is not in default under the Pass
Through Trust Agreement, as supplemented by the Pass Through Trust Supplement;

(g) the Pass Through Trustee is not directly or indirectly
controlling, controlled by or under common control with the Owner Participant,
the Owner Trustee, the Underwriters or the Lessee;

(h) the Pass Through Trustee is purchasing the Equipment Notes 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 the Registration Statement; and

(i) except for the issue and sale of the Pass Through Certificates
contemplated hereby, 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 each Owner Trustee and the Owner Participant, and
the Pass Through Trustee is not in default under the Pass Through Trust
Agreement.

Section 3.6. Representations and Warranties of the Owner
Participant. The Owner Participant represents and warrants to the Trustees and
the Lessee that, as of the date hereof:

(a) the Owner Participant is a New York corporation duly
organized, validly existing and in good standing under the laws of New York and
has full corporate power and authority to carry on its business as now
conducted;

(b) the Owner Participant has the requisite power and authority to
enter into the Owner Participant Agreements and to perform its obligations
thereunder, and the execution, delivery and

- 20 -
<PAGE> 25

performance 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 incorporation or by-laws 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 property is bound or
affected;

(c) the Owner Participant Agreements have been duly authorized by
all necessary corporate actions on the part of the Owner Participant, do not
require any approval not already obtained of the shareholders 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 duly
executed and delivered by the Owner Participant and (assuming the due
authorization, execution and delivery by each other party thereto) 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 of any Lessor's Liens 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 financial condition or its 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 account with no present
intention of distributing such Beneficial Interest or any part thereof in any
manner which would violate the Securities Act of 1933, as amended, 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 of 1933, as amended; 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 of 1933, as amended, and that neither the
Owner Trustee nor the Lessee contemplates filing, or is legally required to
file, any such registration statement;

- 21 -
<PAGE> 26
(h) with respect to the source of the amount to be advanced by the
Owner Participant pursuant to Section 2.2, no part of such amount constitutes
assets of any employee benefit plan subject to Title I of ERISA or Section 4975
of the Code; and

(i) no broker's or finder's or placement fee or commission will be
payable with respect to the transactions contemplated by the Operative
Agreements as a result of any action by the Owner Participant.

Section 3.7. Opinion Acknowledgment. Each of the parties hereto,
with respect to such party, expressly consents to the rendering by its counsel
of the opinion referred to in Section 4.1(e) and acknowledges that such opinion
shall be deemed to be rendered at the request and upon the instructions of such
party.

SECTION 4. CLOSING CONDITIONS.

Section 4.1. Conditions Precedent to Investment by Each
Participant. The obligation of each Participant to make its investment
specified with respect to such Participant in Section 2 on the Closing Date
shall be subject to the following conditions (except that paragraph (k) and
clause (i) of paragraph (p) shall not be conditions precedent to the Owner
Participant's obligations hereunder and paragraph (n) and (s) and clause (ii)
of paragraph (p) shall not be conditions precedent to the Loan Participant's
obligations hereunder):

(a) Execution of Operative Agreements. On or before the Closing
Date, this Agreement, the Trust Agreement, the Lease, the Lease Supplements in
respect of the Units delivered on the Closing Date, the Indenture, the
Indenture Supplements in respect of the Units delivered on the Closing Date,
the Equipment Notes, the Pass Through Trust Agreement and the Pass Through
Trust Supplement shall each be satisfactory in form and substance to such
Participant, shall have been duly executed and delivered by the parties thereto
(except that the execution and delivery of the documents referred to above
(other than this Agreement) by a party hereto or thereto shall not be a
condition precedent to such party's obligations hereunder), shall each be in
full force and effect and executed counterparts of each shall have been
delivered to such Participant or its counsel on or before the Closing Date; and
no event shall have occurred and be continuing that constitutes a Lease Default
or an Indenture Default.

(b) Recordation and Filing. On or before the Closing Date the
Lessee shall have caused the Lease, the Lease Supplements in respect of Units
delivered on the Closing Date, the Indenture and the Indenture Supplements in
respect of the Units delivered on the Closing Date, to be duly filed, recorded
and deposited with the ICC in conformity with 49 U.S.C. Section 11303 and with
the Registrar General of Canada pursuant to Section 90 of the Railway Act of
Canada 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 90
within 21 days of the Closing Date, and the Lessee shall furnish the Indenture
Trustee, the Owner Trustee and each Participant proof thereof.

- 22 -
<PAGE> 27
(c) Representations and Warranties of Lessee. On the Closing
Date, the representations and warranties of the Lessee contained in Section 3.2
and Section 3.4(b) hereof shall be true and correct in all material respects as
of the Closing Date as though then made on and as of such date, except to the
extent that such representations and warranties relate solely to an earlier
date (in which case such representations and warranties were true and correct
on and as of such earlier date), and the Owner Trustee, the Indenture Trustee
and each Participant shall have received an Officer's Certificate dated such
date from 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 Owner Trustee. On the
Closing Date, the representations and warranties of 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 the Lessee, the Indenture
Trustee, the Pass Through Trustee and each Participant shall have received an
Officer's Certificate dated such date from the Owner Trustee and the Owner
Trustee shall have performed and complied with all agreements and conditions
herein contained which are required to be performed or complied with by the
Owner Trustee 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) the Lessee's special counsel and counsel for the
Lessee (which counsel shall be the General Counsel or Assistant General Counsel
of the Parent), (ii) counsel to the Owner Trustee, (iii) special counsel to the
Owner Participant, (iv) special counsel to the Guarantor, (v) counsel to the
Pass Through Trustee, (vi) counsel to the Indenture Trustee, (vii) special ICC
counsel and (viii) special Canadian counsel, in form and substance satisfactory
to each Participant; provided that, except as otherwise provided herein,
receipt by a party hereto of a favorable written opinion from counsel to such
party shall not be a condition precedent to such party's obligations hereunder.

(f) Title. On the Closing Date, after giving effect to the
transactions contemplated hereby, 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) with respect to sublessees, and in clauses (iii), (iv), (vi) and (vii) of
the definition thereof).

(g) Bill of Sale. On the Closing Date the Lessee shall have
delivered to the Owner Trustee (with copies to the Indenture Trustee and each
Participant) the Bill of Sale, in form and substance reasonably satisfactory to
the Owner Trustee, dated such date covering the Units to be settled for on such
date, transferring to the Owner Trustee legal and beneficial title to such
Units

- 23 -
<PAGE> 28

free of all claims, liens and encumbrances of any nature and warranting to the
Owner Trustee that at the time of delivery of each such Unit, the Lessee 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) with respect to sublessees, and in clauses
(iii), (iv), (vi) and (vii) of the definition thereof).

(h) Insurance Certificate and Opinion. On or before the Closing
Date, the Indenture Trustee and each Participant shall have received (x) any
certificate relating to insurance that is required pursuant to Section 12 of
the Lease and (y) a certificate from a nationally recognized insurance broker
in the form attached hereto as Exhibit A.

(i) Corporate Documents. Each of the Participants shall have
received such documents and evidence with respect to the Lessee, the Owner
Participant, the Owner Trustee, the Pass Through Trustee and the Indenture
Trustee as the Participants may reasonably request in order to establish the
consummation of the transactions contemplated by this Agreement, the taking of
all corporate and other proceedings in connection therewith and compliance with
the conditions herein or therein set forth.

(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) Closing Certificate of Owner Participant. On the Closing
Date, the Lessee, the Indenture Trustee and the Pass Through Trustee shall have
received an Officer's Certificate dated such date from the Owner Participant,
to the effect that the representations and warranties of the Owner Participant
contained in Section 3.6 are true and correct in all respects on the Closing
Date with the same effect as though made on and as of said 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 that the Owner Participant has 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) Closing Notice. The Indenture Trustee and the Participants
shall have received the Notice of Delivery required pursuant to Section 2.3.

(m) Closing Certificate of Indenture Trustee. On the Closing
Date, the Lessee, the Owner Trustee and each Participant shall have received an
Officer's Certificate dated such date from the Indenture Trustee, to the effect
that the representations and warranties of the Indenture Trustee contained in
Section 3.3 are true and correct in all respects on the Closing Date with the
same effect as though made on and as of said date, except to the extent that
such representations

- 24 -
<PAGE> 29

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 that the Indenture Trustee has 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) Closing Certificate of the Pass Through Trustee. On the
Closing Date, the Lessee, the Owner Trustee and the Owner Participant shall
have received an Officer's Certificate dated such date from the Pass Through
Trustee, to the effect that the representations and warranties of the Pass
Through Trustee contained in Section 3.5 are true and correct in all respects
on the Closing Date with the same effect as though made on and as of said 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 that the Pass Through Trustee
has 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.

(o) No Illegality. No change shall have occurred after the date
of the execution and delivery of this Agreement in applicable law or
regulations thereunder or interpretations thereof by regulatory authorities
that, in the opinion of such Participant or its counsel, would make it illegal
for such Participant to enter into any transaction contemplated by the
Operative Documents.

(p) Participants' Investments. (i) The Owner Participant shall
have made available its 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 its Commitment in the amount specified in, and otherwise in
accordance with, Sections 2.2(b) and 2.3.

(q) Consents. All approvals and consents of any trustees or
holders of any indebtedness or obligations of the Lessee which are required in
connection with the transactions contemplated by this Agreement, shall have
been duly obtained and be in full force and effect.

(r) Governmental Actions. All actions, if any, required to have
been taken on or prior to the Closing Date in connection with the transactions
contemplated by this Agreement 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 on the Closing
Date shall have been issued, and all such orders, permits, waivers, exemptions,
authorizations and approvals shall be in full force and effect, on the Closing
Date.

(s) Tax Indemnity Agreement. On or before the Closing Date, the
Tax Indemnity Agreement shall be satisfactory in form and substance to the
Owner Participant, shall have been

- 25 -
<PAGE> 30

duly executed and delivered by the Lessee and, assuming due authorization,
execution and delivery by the Owner Participant, shall be in full force and
effect.

(t) Securities Act Compliance. On or before the Closing Date, the
Registration Statement shall have become effective under the Securities Act of
1933, as amended (the "Act"); if filing of the Final Prospectus, or any
supplement thereto is required pursuant to Rule 424(b) as promulgated pursuant
to the Act, the Final Prospectus and any such supplement, shall have been filed
in the manner and within the time period required by Rule 424(b); and no stop
order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been instituted or
threatened.

(u) 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 Lessee and to deliver such Units to Lessee. The
Lessee shall have authorized its representative (who shall be the same
individual designated by the Lessee under this paragraph) to accept delivery of
the Units from the Owner Trustee as Lessor pursuant to the Lease.

Section 4.2. Additional Conditions Precedent to Investment by
Pass Through Trustee. The obligation of the Pass Through Trustee to purchase
and pay for the Equipment Notes to be purchased by it pursuant to Sections
2.2(b) and 2.3 on the Closing Date shall be subject to the additional
conditions that the Equipment Notes to be delivered on the Closing Date shall
have been duly authorized, executed and delivered to the Pass Through Trustee
by a duly authorized officer of the Owner Trustee and duly authenticated by the
Indenture Trustee and that on the Closing Date the Pass Through Trustee shall
have received the proceeds from the sale of the Pass Through Certificates.

Section 4.3. Additional Conditions Precedent to Investment by
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 following additional conditions:

(a) Appraisal. On or before the Closing Date, the Owner
Participant shall have received an opinion (the "Appraisal") of R.L. Banks and
Associates, Inc., satisfactory in form and substance to the Owner Participant,
concluding that: (i) the fair market value of the Equipment being delivered on
the Closing Date is equal to the Total Equipment Cost with respect to such
Equipment; (ii) the Basic Rents for the Basic Term are fair market rents; (iii)
at the expiration of the Basic Term, (A) the remaining economic life of such
Equipment will be at least equal to 20% of the economic life of such Equipment
as estimated in the Appraisal and (B) 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 the Equipment will have a fair market
value of at least 20% of the Total Equipment Cost with respect to such
Equipment; (iv) as of the Early Purchase Date, the estimated fair market value
of the Equipment being delivered on the Closing

- 26 -
<PAGE> 31

Date, taking into account inflation or deflation from and after the Closing
Date, will be less than the Early Purchase Price; (v) as of the end of the
Basic Term, the estimated fair market value of the Equipment being delivered on
the Closing Date, taking into account inflation or deflation from and after the
Closing Date, will be less than the Basic Term Purchase Price; (vi) the
Equipment being delivered on the Closing Date is not Limited Use Property and
(vii) Basic Rents from the Early Purchase Date to the end of the Basic Term are
fair market rents; provided that the Lessee makes no representation as to the
fair market value, useful life 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, any information
supplied by Lessee in connection therewith.

(b) Opinion with Respect to Certain Tax Aspects. On the Closing
Date, the Owner Participant shall have received the opinion of Lord Day & Lord,
Barrett Smith 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.

Section 4.4. Conditions Precedent to the Obligation of the
Lessee. The obligation of the Lessee with respect to the sale of the Units to
the Owner Trustee and acceptance of the Units under the Lease is subject to the
following conditions as of the Closing Date:

(a) Corporate Documents. On or before the Closing Date, the
Lessee shall have received such documents and evidence with respect to the
Owner Participant, the Owner Trustee, the Indenture Trustee and the Pass
Through Trustee as the Lessee may reasonably request in order to establish the
consummation of the transactions contemplated by this Agreement, 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), and an
executed counterpart of each thereof shall have been delivered to the Lessee or
its special counsel.

(c) Representations and Warranties True. On the Closing Date, the
representations and warranties of the Owner Trustee, the Indenture Trustee, the
Pass Through Trustee and the Owner Participant 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 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(n), addressed to the Lessee and
certifying as to the foregoing matters insofar as they relate to the

- 27 -
<PAGE> 32

Owner Trustee, the Owner Participant, the Indenture Trustee and the Pass
Through Trustee, as the case may be.

(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 clause (i) therein), addressed to the Lessee.

(e) No Threatened Proceedings. No action or proceeding shall have
been instituted nor shall governmental action be threatened before any court or
governmental agency, nor shall any order, judgment or decree have been issued
or proposed to be issued by any court or governmental agency at the time of the
Closing Date, to set aside, restrain, enjoin or prevent the completion and
consummation of this Agreement or the transactions contemplated hereby.

(f) Participants' Investments. (i) The Owner Participant shall
have made available its 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 its Commitment in the amount specified in, and otherwise in
accordance with, Sections 2.2(b) and 2.3.

(g) Guarantee. The Guarantor shall have executed the Guarantee.

SECTION 5. FINANCIAL AND OTHER REPORTS OF THE LESSEE.

The Lessee agrees that it will furnish directly to each Participant
the following:

(a) unless included in a Form 10-Q delivered under clause (c)
below within the 60-day period specified in this clause (a), as soon as
available and in any event within 60 days after the end of each quarterly
period, except the last, of each fiscal year, consolidated balance sheets of
each of the Lessee and Parent and their respective consolidated Subsidiaries as
at the end of such period, together with the related consolidated statements of
income and cash flows of each of the Lessee and Parent and their respective
consolidated Subsidiaries for the period beginning on the first day of such
fiscal year and ending on the last day of such quarterly period, setting forth
in each case (except for the consolidated 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) unless included in a Form 10-K delivered under clause (c)
below within the 120-day period specified in this clause (b), as soon as
available and in any event within 120 days after the last day of each fiscal
year, a copy of each of the Lessee's and Parent's annual audited report
covering the operations of the Lessee and Parent and their respective
consolidated Subsidiaries, including consolidated balance sheets, and related
consolidated statements of income and retained earnings and consolidated
statement of cash flows of each of the Lessee and Parent and their respective
consolidated Subsidiaries 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

- 28 -

<PAGE> 33
in accordance with generally accepted accounting principles applied on a
consistent basis, which statements will have been certified by a firm of
independent public accountants of recognized national standing selected by the
Lessee;

(c) as soon as available, one copy of each Annual Report on Form
10-K (or any successor form) and Quarterly Report on Form 10-Q (or any
successor form) filed by each of the Lessee and Parent with the Securities and
Exchange Commission or any successor agency;

(d) within the time period prescribed in subparagraph (b) above, a
certificate, signed by the Treasurer or principal financial officer of the
Lessee, to the effect that the signer has reviewed the activities of the Lessee
during the immediately preceding fiscal year and that he is not aware of any
default in compliance by the Lessee with any of the covenants, terms and
provisions of the Participation Agreement or the Lease (except as specified),
and if a Lease Default or Lease Event of Default shall exist, specifying such
Lease Default or Lease Event of Default and the nature and status thereof;

(e) promptly, all material reports or statements which the Lessee
may make to, or file with, the Securities and Exchange Commission or any
successor thereto (excluding such reports or statements which are treated as
confidential and not available to the public, in accordance with applicable
law, by the Securities and Exchange Commission, for so long as such
confidentiality shall be maintained); and

(f) promptly, such additional information with respect to the
financial condition or business of the Lessee as any Participant 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 sell, convey, assign, pledge,
mortgage or otherwise transfer any of its Beneficial Interest prior to the
expiration or earlier termination of the Lease Term without the Lessee's
consent (which consent shall not be unreasonably withheld) and absent
indemnifying the Lessee to its reasonable satisfaction unless:

(a) the Person to whom such transfer is to be made (a
"Transferee") is (i) an institutional or corporate investor with 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 US$75,000,000 determined in accordance
with generally accepted accounting principles or (ii) any Affiliate of any such
institutional or corporate investor if such investor guarantees the obligations
so assumed by such Affiliate pursuant to an instrument or instruments identical
to the Guarantee in all material respects or otherwise reasonably satisfactory
to the Lessee, the Owner Trustee and the Indenture Trustee 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

- 29 -
<PAGE> 34

shall remain liable for all of its obligations under this Agreement and the
other Operative Agreements;

(b) the Owner Participant is not in default under the Lease;

(c) neither the Transferee nor any of its Affiliates shall be a
direct competitor (other than as a passive investor or loan participant in the
financing of equipment or facilities used in full service railcar leasing) of
the Lessee in the business of leasing rail cars under full service operating
leases; provided, that no Transferee or Affiliate thereof shall be deemed to
(i) be engaged in full service railcar leasing or (ii) hold (directly or
indirectly) any material interest in any business that is competitive with
Lessee's full service 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 full service railcar leasing or any
re-leasing or sale of any rail equipment which is returned to or repossessed by
or on behalf of the Owner Participant or any Affiliate of the Owner Participant
from a lessee or borrower in connection with a lease financing or lender
transaction entered into by the Owner Participant or such Affiliate as a
passive lessor, investor or lender;

(d) the Indenture Trustee and the Lessee shall have received 10
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; provided, however, that such 10 days prior written notice need not
be given to the Indenture Trustee and the Lessee if such sale, conveyance,
assignment, pledge, mortgage or other transfer is to an Affiliate of the Owner
Participant;

(e) so long as any Interim Interest has become due and payable but
has not been paid by, or reimbursed by, the Owner Participant, the Lessee shall
have consented in writing to such transfer;

(f) such Transferee enters into an agreement or agreements in form
and substance reasonably satisfactory to the Lessee, the Owner Trustee and 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;

(g) such transfer complies in all respects with and does not
violate any applicable federal securities law and the securities law of any
applicable state;

- 30 -
<PAGE> 35
(h) an opinion of counsel of the Transferee (which counsel shall
be reasonably acceptable to the Lessee and the Indenture Trustee and which may
be internal counsel of the Transferee), confirming (i) the existence, 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 subparagraph (f) above is the legal, valid, binding
and enforceable obligation of the Transferee (subject to customary
qualifications as to bankruptcy and equitable principles) and (iii) compliance
of the transfer with applicable federal securities laws and material laws of
the Transferee's domicile and other material laws applicable to the Transferee,
shall be provided, prior to such transfer, to the Lessee and the Indenture
Trustee, which opinion shall be in form and substance reasonably satisfactory
to each of them;

(i) except as specifically consented to in writing by the Lessee
and the Indenture Trustee, the terms of the Operative Agreements shall not be
altered;

(j) such transfer shall not result in an increase in the Lessee's
obligations under Section 7.1 or 7.2 or under the Tax Indemnity Agreement;

(k) no Owner Participant shall hold less than 10% of the
Beneficial Interest after giving effect to such transfer; and the Beneficial
Interest shall be held by not more than six Owner Participants;

(l) all reasonable expenses of the parties hereto (including,
without limitation, 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 or the Transferee;

(m) such transfer (i) does not involve the use of an amount which
constitutes assets of an employee benefit plan subject to Title I of ERISA or
Section 4975 of the Code or (ii) will not constitute a prohibited transaction
under ERISA;

(n) as a result of such transfer, no Indenture Default
attributable to the Owner Participant or the Owner Trustee shall have occurred
and be continuing;

(o) as long as no Lease Event of Default has 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 described in paragraph (c) of this Section 6.1;

(p) 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

- 31 -
<PAGE> 36
(q) the Owner Participant shall deliver an Officer's Certificate
certifying as to compliance with the transfer requirements contained herein.

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 as provided in Section
6.1(l) hereof and except in the case of a transfer to a Transferee described in
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 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 immediately prior to such transfer of any of its
representations, warranties, covenants or obligations set forth in the
Operative Agreements or for any fraudulent or willful misconduct. Any transfer
or assignment of the Beneficial Interest in violation of this Section 6.1 shall
be of no effect as between the parties to this Agreement. Subject to the
rights of the Lessee pursuant to subsection 6.1(o), 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. No
consent of the Lessee otherwise required hereunder shall be required if any
Lease Event of Default shall have occurred and be continuing. 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 Operative Agreements.

Section 6.2. Lessor's Liens Attributable to the Owner
Participant. The Owner Participant hereby unconditionally agrees with and for
the benefit of the other parties to this Agreement that the Owner Participant
will not directly or indirectly create, incur, assume or suffer to exist any
Lessor's Liens on or against any part of the Trust Estate or the Equipment
attributable to the Owner Participant, and the Owner Participant agrees that it
will, 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 (by bonding or otherwise,
so long as Lessee's operation and use of the Equipment and the interest of the
Indenture Trustee in the Indenture Estate is not impaired); 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 by the
Lessee under the Lease or the rights of the Indenture Trustee under the
Indenture.

Section 6.3. Lessor's Liens Attributable to the Owner Trustee.
The Owner Trustee, in its individual capacity, hereby unconditionally agrees
with and for the benefit of the other

- 32 -
<PAGE> 37
parties to this Agreement that the Owner Trustee in its individual capacity
will not directly or indirectly create, incur, assume or suffer to exist any
Lessor's Liens on or against any part of the Trust Estate or the Equipment
attributable to the Owner Trustee in its individual capacity, and the Owner
Trustee in its individual capacity agrees that it will, 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 attributable to the Owner Trustee in its individual
capacity (by bonding or otherwise, so long as Lessee's operation and use of the
Equipment and the interest of the Indenture Trustee in the Indenture Estate is
not impaired); provided that the Owner Trustee 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 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 the Lessee, the Owner Trustee, the Owner Participant and the
Loan Participant that it shall not cause or permit to exist any Lien on the
Equipment or all or any portion of any 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 and any 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, the Operative Agreements, (iii) claims
against the Indenture Trustee in its individual capacity relating to Taxes or
expenses that are not indemnified against by the Lessee pursuant to Section 7
attributable to the actions of the Indenture Trustee, solely in its individual
capacity, 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 Indenture Estate or the Operative Agreements, other than a
transfer permitted by the Operative Agreements and that 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 the Lessee, the
Owner Trustee, the Owner Participant and the Indenture Trustee that it shall
not cause or permit to exist any Lien on the Equipment or all or any portion of
any Trust Estate or the Indenture Estate arising as a result of (i) claims
against such Loan Participant not related to its interest in the Equipment and
any Trust Estate, (ii) acts of such Loan Participant not contemplated by, or
failure of such Loan Participant to take any action it is expressly required to
perform by, the Operative Agreements, (iii) claims against such Loan
Participant relating to Taxes or expenses that are not indemnified against by
the Lessee pursuant to Section 7, or (iv) claims against such Loan Participant
arising out of the transfer by such Loan Participant of all or any portion of
its interest in the Equipment, the Indenture Estate or the Operative
Agreements, other than a transfer permitted by the Operative Agreements and
that such Loan Participant will, at its own cost and expense (and

- 33 -
<PAGE> 38

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. The Owner Participant, and the Owner Trustee in its
individual and trust capacity, hereby agree, as to their own actions only,
severally and not jointly, with the Lessee, the Loan Participant and the
Indenture Trustee (a) 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 Lessee, the Loan Participant or the Indenture Trustee without the
prior written consent of such party and (b) not to terminate or revoke the
Trust Agreement or the trusts 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 pursuant to Section
7.1 thereof or prior to the expiration or early termination of the Lease. Each
of the Owner Trustee 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 any provision herein or in any of the Operative Agreements to
the contrary, the Indenture Trustee's obligation to take or refrain from taking
any actions, or to use its discretion (including, but not limited to, the
giving or withholding of consent or approval and the exercise of any rights or
remedies under such Operative Agreements), and any liability therefor, shall,
in addition to any other limitations provided herein or in the other Operative
Agreements, be limited by the provisions of the Indenture.

Section 6.6. Amendments to Operative Agreements. The Trustees
and Participants will not terminate the Operative Agreements to which the
Lessee is not or will not be a party, or amend, supplement, waive or modify
such Operative Agreements in any manner that increases the obligations or
liabilities, or decreases the rights, of the Lessee under such Operative
Agreements, 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). The Owner
Participant and the Trustees (as applicable) agree that, in any event, they
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. Covenant of the Lessee. The Lessee hereby agrees
with the Owner Trustee, each Participant and the Indenture Trustee to deliver
to the Owner Trustee on the Closing Date the Bill of Sale evidencing the
purchase and transfer of title of each Unit to be settled for on the Closing
Date.

Section 6.8. Merger Covenant. The Lessee shall not consolidate
with or merge into any other Person, or permit any other Person to merge into
it, or convey, transfer or lease substantially all of its assets as an entirety
to any Person unless (i) the Person formed by such consolidation or surviving
such merger (if other than the Lessee) or the Person which acquires by
conveyance, transfer or lease substantially all of the assets of the Lessee as
an entirety is a corporation organized and existing under the laws of the
United States or any state thereof or the

- 34 -
<PAGE> 39

District of Columbia and shall execute and deliver to the Owner Trustee, the
Owner Participant and the Indenture Trustee an agreement containing the
assumption by such successor corporation of the due and punctual performance
and observance of each covenant and condition of this Agreement and each of the
other Lessee Agreements to be performed or observed by the Lessee, (ii)
immediately prior to and immediately after giving effect to such transaction,
no Lease Default or Lease Event of Default shall have occurred, whether as a
result of such consolidation or merger or such conveyance, transfer or lease or
otherwise, (iii) the Lessee shall have made all filings necessary or
appropriate in the reasonable opinion of the Owner Trustee and the Indenture
Trustee in order to preserve and protect the rights of the Lessor under the
Lease and of the Indenture Trustee under the Indenture and (iv) there shall
have been delivered to the Owner Participant, the Owner Trustee and the
Indenture Trustee an Officer's Certificate of the successor to the Lessee (or
such Person as is the surviving corporation) and an opinion of counsel (which
may be such Person's in-house counsel) in form and substance reasonably
satisfactory to the Owner Participant, the Owner Trustee and the Indenture
Trustee, each stating that such consolidation, merger, conveyance, transfer or
lease and the assumption agreement mentioned in clause (i) above comply with
this Section 6.8. Upon such consolidation or merger, or any conveyance,
transfer or lease of substantially all of the assets of the Lessee as an
entirety in accordance with this Section 6.8, the successor corporation formed
by such consolidation or into which the Lessee is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Lessee under this Agreement and
the other Operative Agreements with the same effect as if such successor
corporation had been named as the Lessee herein.

Section 6.9. Lessee's Purchase in Certain Circumstances. If an
Owner Participant, any subsequent transferee or any Affiliate thereof is or
acquires, is acquired by, merges or otherwise consolidates with any company or
Affiliate thereof engaged in full service railcar leasing, whether or not a
direct competitor to the Lessee or any Affiliate thereof, or any Person that
has a material interest (whether held directly or indirectly) in an enterprise
that engages in a business that is competitive with the Lessee's full service
railcar leasing business, the Lessee may, on a Determination Date which is
designated by the Lessee by written notice to the Owner Trustee and the
Indenture Trustee not less than 25 days prior to such Determination Date,
purchase the Equipment for a purchase price equal to the greater of Termination
Value or the Fair Market Sales Value, each calculated as of such Determination
Date, plus in either case all accrued and unpaid Rent for the Equipment as of
the date of purchase and any Make-Whole Amount then payable on the Equipment
Notes pursuant to Section 2.10(c) of the Indenture; provided, that Lessee's
rights to purchase the Equipment pursuant to this Section 6.9 shall terminate
90 days after receipt by Lessee of written notice from the Owner Participant or
any subsequent transferee or any Affiliate thereof, of any such acquisition,
merger or consolidation; provided further, that an institutional investor which
is a passive investor in the financing of equipment or facilities used in full
service railcar leasing shall not, solely by reason of such investment, be
deemed to be engaged in such businesses; provided, further, that none of any
Owner Participant or any subsequent transferee or Affiliate thereof shall be
deemed to (i) be engaged in full service railcar leasing or (ii) hold (directly
or indirectly) any material interest in any business that is competitive with
Lessee's full service railcar leasing business, solely by reason of any sale,
lease or other

- 35 -
<PAGE> 40

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 full service railcar leasing or any re-leasing or sale of
any rail equipment which is returned to or repossessed by or on behalf of the
Owner Participant or any Affiliate from a lessee or borrower in connection with
a lease financing or lender transaction entered into by the Owner Participant
or such Affiliate as a passive lessor, investor or lender. In the event of
such a purchase by or on behalf of Lessee under this Section 6.9, payment of
the purchase price, together with all other amounts due and owing by Lessee
under the Operative Agreements, shall be made 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 against Lessor's Liens.

Section 6.10. Owner Participant an Affiliate of Lessee. If at
any time the original or any successor Owner Participant shall be an Affiliate
of the Lessee, such Owner Participant and the Lessee agree that notwithstanding
Section 9.05 of the Indenture they will not vote its Beneficial Interest to
modify, amend or supplement any provision of the Lease or this Agreement or
give, or permit the Owner Trustee to give, any consent, waiver, authorization
or approval thereunder if any such action would adversely affect in a material
manner the Indenture Trustee or any holder of an Equipment Note unless such
action shall have been consented to by a Majority in Interest.

Section 6.11. Corporate Existence; Place of Business. The Lessee
shall at all times maintain its corporate existence except as permitted by
Section 6.8; and it shall do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate rights, powers,
privileges and franchises except for any corporate right, power, privilege or
franchise that it in good faith determines is no longer necessary or desirable
in the conduct of its business.

Section 6.12. No Impairment of Warranties. From and after the
Closing Date and throughout the Lease Term, the Lessee shall not take any
action (or fail to take any action) if the result of such action (or failure to
act) would abrogate or invalidate or otherwise materially adversely affect the
validity of any warranties applicable to the Units which would otherwise be
available with respect to the Units.

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 Owner Participant, its Affiliates, the Owner Trustee
both in its individual capacity and as trustee, the Indenture Trustee both in
its individual capacity and as trustee, each of their respective successors or
assigns permitted under the terms of the Operative Agreements,

- 36 -
<PAGE> 41

any officer, director, employee or agent of any of the foregoing, the Trust
Estate and the Indenture Estate.

(b) Taxes Indemnified. 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 the Lessee is required to make any payment 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, provided, however, that no such
additional amounts shall be paid by the Lessee and the Lessee assumes no
responsibility regarding any withholdings imposed by reason of any transfer of
the Equipment or any interest in the Operative Agreements by the Lessor or the
Owner Participant other than any Transfer which occurs during the continuance
of a Lease Default or Lease Event of Default. If, for any reason, the Lessee
is required to make any payment to a taxing authority with respect to, or as a
result of, any withholding tax imposed on any Tax Indemnitee in respect of the
transactions contemplated by the Operative Agreements which withholding tax is
not the responsibility of the Lessee under this Section 7.1 then such Tax
Indemnitee shall pay to the Lessee within 30 days of a demand an amount which
equals the amount paid by the Lessee with respect to, or as a result of, such
withholding tax, plus interest computed at such Tax Indemnitee's cost of funds
rate during the period commencing on the date the Lessee shall have paid an
additional amount pursuant to the first sentence of this paragraph and ending
on the date the Lessee actually receives such payment. Subject to the
exclusions stated in subsection (c) below, the Lessee agrees to indemnify and
hold harmless each Tax Indemnitee, on an After-Tax Basis, taking into account
the income tax consequences to the Tax Indemnitee of the accrual or receipt of
an indemnity payment, against all fees (including, without limitation, license,
documentation or other fees and registration fees), taxes (including, without
limitation, income, gross receipts, franchise, sales, use, rental, turnover,
business, occupation, excise, value-added, tangible and intangible personal
property and stamp taxes), levies, assessments, imposts, duties, charges or
withholdings of any nature, together with any and all penalties, additions to
tax, fines or interest thereon ("Taxes") imposed upon any Tax Indemnitee, the
Lessee or any Person in possession of the Equipment or all or any part of the
Equipment by any federal, state or local government, political subdivision, or
taxing authority in the United States or its possessions, by any government or
taxing authority of or in a foreign country or by any international authority,
upon, with respect to or in connection with:

(i) the Equipment or any part of any of the Equipment or
interest therein;

(ii) the acquisition, financing, ownership, leasing,
possession, purchase, acceptance, rejection, condition, registration,
return, use, storage, operation, return, transfer of title,
maintenance, repair, improvement, replacement, substitution, delivery,
redelivery, non-delivery, transport, preparation, assembly, insurance,
construction, manufacture, insuring, modification, transfer, control,
occupancy, servicing, mortgaging, location, refinancing, disposition,
subleasing, repossession, abandonment, sale or other application

- 37 -
<PAGE> 42
or disposition of or with respect to the Equipment or any part of any
of the Equipment or interest therein;

(iii) the rental payments, receipts of earnings arising
from any Unit of Equipment or payable pursuant to the Lease;

(iv) the Equipment Notes, their issuance, acquisition,
transfer or refinancing or (as between the Lessee and any Tax
Indemnitee other than the Indenture Estate) the payment of principal,
interest or premium or other amounts with respect thereto; and

(v) the Operative Agreements or otherwise in connection
with the transactions contemplated thereby.

(i) In the case of the Owner Participant, the Owner
Trustee or the Trust Estate, Income Taxes (as defined in Section
7.1(l), below) imposed by (A) the United States federal government,
other than any United States federal Income Taxes imposed by way of
deduction or withholding upon or with respect to payments on any
Equipment Notes, together with any penalties, fines, additions to Tax
or interest related thereto (provided that this subclause (A) shall
not be construed as preventing Lessee from recouping any such
deduction or withholding from the Indenture Trustee, the Pass Through
Trustee or any Certificateholder or as giving to the Indenture Trustee
a right to indemnification by the Lessee for Taxes payable pursuant to
Section 5.09 of the Indenture), (B) any state or local tax
jurisdiction in the United States (unless such Tax Indemnitee would
not have been subject to tax in such jurisdiction but for this
transaction (including the operation or presence of any Unit (or part
thereof) and other leasing transactions between the Lessee (or its
Affiliates) and the Owner Participant (or its Affiliates) or the
Lessee making payment from or performing other actions in such
jurisdiction)), provided, however, that for purposes of this clause
(B), the determination of (y) whether any Tax Indemnitee is treated as
being incorporated or having its principal place of business in any
state or local tax jurisdiction under this clause (B), or (z) whether
any such Tax Indemnitee is deemed to be subject to tax in any state or
local tax jurisdiction but for this transaction under this clause (B),
shall be made by treating each corporation which is a Tax Indemnitee
on a stand-alone basis and without regard to any Affiliates, related
Tax Indemnitees or other entities, except to the extent that such Tax
Indemnitee files combined or consolidated tax returns in such state or
local jurisdiction, respectively, with one or more Affiliates which
are also Tax Indemnitees, (C) any foreign government or any political
subdivision or taxing authority thereof or any territory or possession
of the United States or by any international authority except to the
extent such Income Taxes would not have been imposed by such
jurisdiction but for the use, location, operation, presence or
registration of any Unit or part thereof in such jurisdiction or the
activities of the Lessee or any of its Affiliates in such jurisdiction
or the making of any

- 38 -
<PAGE> 43

payments from such jurisdiction by or on behalf of the Lessee pursuant
to the Operative Agreements or (D) any government or jurisdiction
described in (A), (B) or (C) of this clause (i) because the applicable
Tax Indemnitee is not a resident of the United States for tax
purposes.

(ii) Taxes imposed with respect to any period after the
earliest of (x) the return of possession of the Equipment to the Owner
Participant or the placement of the Equipment in storage at the
request of the Owner Participant, in either case pursuant to Section 6
of the Lease, (y) the termination of the Lease Term pursuant to
Section 22.1 or Section 22.3 of the Lease, or (z) the discharge in
full of the Lessee's obligation to pay the Termination Value or the
Stipulated Loss Value and all other amounts due, if any, under Section
10 or 11.2 of the Lease, as the case may be, with respect to the
Equipment; provided that the exclusion set forth in this clause (ii)
shall not apply to Taxes to the extent such Taxes relate to events
occurring or matters arising prior to or simultaneously with such
time;

(iii) As to any Tax Indemnitee, Taxes to the extent caused
by any misrepresentation or breach of warranty or covenant under the
Operative Agreements or by the gross negligence or willful misconduct
of such Tax Indemnitee;

(iv) As to any Tax Indemnitee, Taxes which become payable
as a result of a sale, assignment, transfer or other disposition
(whether voluntary or involuntary) by such Tax Indemnitee of all or
any portion of its interest in the Equipment or any part thereof, the
Trust Estate or any of the Operative Agreements or rights created
thereunder other than as a result of the substitution, modification or
improvement of the Equipment or any part thereof or a disposition
which occurs as the result of the exercise of remedies for a Lease
Event of Default, any disposition which occurs during the continuance
of a Lease Event of Default or a purchase of any Unit pursuant to the
Lease; provided, that, notwithstanding the foregoing, Lessee shall not
be obligated to indemnify any 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 Tax Indemnitee or
any Taxes imposed as a result of the status of the Tax Indemnitee as
other than a resident of the United States for tax purposes;

(v) Taxes which result from the Owner Trustee's engaging
on behalf of the Trust Estate in transactions unrelated to those
permitted or contemplated by the Operative Agreements;

(vi) As to any Tax Indemnitee, Taxes to the extent they
exceed the Taxes that would have been imposed had the initial Tax
Indemnitee not transferred, sold or otherwise disposed of any interest
held by such Tax Indemnitee pursuant to any of the Operative
Agreements; and

- 39 -
<PAGE> 44
(vii) Taxes imposed on the Owner Trustee based on the
Owner Trustee's fee for services under the Trust Agreement.

(d) All Tax Obligations in this Section, etc. Notwithstanding any
other provision anywhere contained in the Operative Agreements, it is
understood that except as provided in Section 6.2, with respect to the Owner
Participant, and Section 6.3, with respect to the Owner Trustee, and except as
provided in Section 5.03 of the Indenture, the Owner Participant and the Owner
Trustee shall have no obligations with respect to Taxes or other charges to the
Indenture Trustee or the Loan Participant imposed under Section 7.16 of the
Pass Through Trust Agreement or Section 5.09 of the Indenture, or otherwise.

(e) Payments to Lessee.

(i) If any Tax Indemnitee shall realize a Tax benefit
(net of any Tax detriment not otherwise paid or indemnified against
by the Lessee hereunder) as a result of any Taxes paid or indemnified
against by the Lessee under this Section 7.1 (whether by way of
deduction, credit, allocation or apportionment or otherwise), such
Tax Indemnitee shall pay to the Lessee an amount equal to the amount
of such Tax benefit, increased by the Tax Indemnitee's additional
saved Taxes attributable to the payment being made to the Lessee
hereunder; provided, however, that in no event shall the aggregate
amount paid by any Tax Indemnitee to the Lessee with respect to any
realized Tax benefit exceed the aggregate amount previously advanced
by the Lessee with respect to such Taxes but provided, further, that
such excess shall be carried forward to reduce or offset any future
obligations of the Lessee to such Tax Indemnitee under this Section
7.1.

(ii) Upon receipt by a Tax Indemnitee of a refund or
credit of all or part of any Taxes paid or indemnified against by the
Lessee, such Tax Indemnitee shall pay to the Lessee an amount equal to
the amount of such refund plus any interest received by or credited to
such Tax Indemnitee with respect to such refund increased or
decreased, as the case may be, by the Tax Indemnitee's net additional
or saved taxes attributable to the receipt of such amounts from the
taxing authority and the payment being made to the Lessee hereunder.

(iii) The Tax Indemnitee shall in good faith file its Tax
returns and deal with taxing authorities to seek and claim any such
tax benefits or refunds.

(f) Procedures. Any amount payable to a Tax Indemnitee pursuant
to paragraph (b) shall be paid within 30 days after receipt of a written demand
therefor from such Tax Indemnitee accompanied by a written statement describing
in reasonable detail the basis for such indemnity and the computation of the
amount so payable, provided that such amount need not be paid prior to (i) the
date on which such Taxes are due, or (ii) in the case of amounts which are
being contested pursuant to paragraph (g) hereof, the time such Taxes are due
and payable pursuant to the resolution of such contest (including all appeals).
Any amount payable to the Lessee pursuant

- 40 -
<PAGE> 45

to paragraph (e) shall be paid within 30 days after the Tax Indemnitee realizes
a net tax benefit or receives a refund giving rise to a payment under paragraph
(e), and shall be accompanied by a written statement by the Tax Indemnitee
setting forth in reasonable detail the basis for computing the amount of such
payment. Within 15 days following the Lessee's receipt of any computation from
the Tax Indemnitee, the Lessee may request that the accounting firm that
regularly prepares the certified financial statements of the Tax Indemnitee
determine whether such computations of the Tax Indemnitee are correct. Such
accounting firm shall be requested to make the determination contemplated by
this paragraph (f) within 30 days of its selection. In the event such
accounting firm shall determine that such computations are incorrect, then such
firm shall determine what it believes to be the correct computations. The Tax
Indemnitee shall cooperate with such accounting firm and supply it with all
information necessary to permit it to accomplish such determination on a
confidential basis. The computations of such accounting firm shall be final,
binding and conclusive upon the parties and the Lessee shall have no right to
inspect the books, records or tax returns of the Tax Indemnitee to verify such
computation or for any other purpose. All fees and expenses of the accounting
firm payable under this Section 7.1(f) shall be borne by the Lessee except that
if such accounting firm determines that the Tax Indemnitee's computations were
incorrect and understated the payments owing to the Lessee or overstated the
payments owing to such Tax Indemnitee by 10% or more of the correct amount as
determined by such accounting firm, then the Tax Indemnitee shall bear the fees
and expenses of such accounting firm.

(g) Contest. If a written claim is made against a Tax Indemnitee
for Taxes with respect to which the Lessee may be liable for indemnity
hereunder, the Tax Indemnitee shall give the Lessee prompt notice in writing of
such claim (and in any event within 30 days after its receipt) and shall
promptly furnish the Lessee with copies of the claim and all other writings
received from the taxing authority relating to the claim; provided however,
that the failure of such Tax Indemnitee to timely provide such written notice
shall not affect the Lessee's obligations under this Section 7.1(g) except to
the extent that the same materially adversely affects the ability of the Lessee
to contest such Taxes. The Tax Indemnitee shall not pay such claim prior to
the 30 days after providing the Lessee with such written notice, unless
required to do so by law or unless deferral of payment would cause material
adverse consequences to the Tax Indemnitee. The Tax Indemnitee shall in good
faith, with due diligence and at the Lessee's expense, if requested in writing
by the Lessee, contest (including pursuing all appeals permitted hereby) in the
name of the Tax Indemnitee (or, if requested by the Lessee and permissible as a
matter of law, in the name of the Lessee), or shall permit the Lessee to
contest in either the name of the Lessee or with the Tax Indemnitee's consent,
in the name of the Tax Indemnitee the validity, applicability or amount of such
Taxes by,

(i) resisting payment thereof if practical;

(ii) not paying the same except under protest if protest
is necessary and proper;

- 41 -
<PAGE> 46
(iii) if the payment be made, using reasonable efforts to
obtain a refund thereof in appropriate administrative and judicial
proceedings; or

(iv) taking such other reasonable action as is reasonably
requested by the Lessee from time to time.

provided, however, that to the extent the contest is carried on in the name of
the Lessee or an Affiliate, or is brought in the name of a Tax Indemnitee and
involves only Taxes for which the Lessee is or will be liable hereunder, such
contest shall be undertaken by the Lessee at the Lessee's expense (unless at
any time the Tax Indemnitee determines in its reasonable good faith judgment
that based upon the Lessee's conduct of such contest the Lessee's continued
control of such contest is reasonably likely to have a material adverse impact
on the Tax Indemnitee) and at no-after-tax cost to any Tax Indemnitee, but if
such contest would involve any other Taxes or any Taxes in the nature of a tax
on net income then such Tax Indemnitee may in its sole discretion control such
contest (including selecting the forum for such contest). In no event shall
any Tax Indemnitee be required or the Lessee be permitted to contest any Taxes
for which the Lessee is obligated to indemnify pursuant to this Section unless:
(i) such Lessee shall have acknowledged 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 Indemnitee or the Lessee, as the case may be, shall not
prevail in the contest of such claim; (ii) such Tax Indemnitee shall have
received the opinion of tax counsel (which may, in the case of Taxes imposed by
a taxing authority located in the United States, include in-house counsel of
the Lessee) selected by the Lessee and satisfactory to the Tax Indemnitee
furnished at Lessee's sole expense, to the effect that a reasonable basis
consistent with ABA Opinion 85-352 exists for contesting such claim or, in the
event of an appeal, that it is more likely than not that an appellate court
will reverse or substantially modify the adverse determination (and provided
that no appeal shall be required to the United States Supreme Court); (iii) the
Lessee shall have agreed to pay such Tax Indemnitee on demand (and at no
after-tax cost to any Tax Indemnitee) all reasonable costs and expenses that
such Tax Indemnitee actually incurs in connection with contesting such claim
(including, without limitation, all costs, expenses, reasonable legal and
accounting fees, disbursements, penalties, interest and additions to the
Taxes); (iv) no Lease Event of Default shall have occurred and shall have been
continuing; (v) such Tax Indemnitee shall have determined that the action to be
taken will not result in any risk of imposition of criminal penalties or
substantial danger of sale, forfeiture or loss of, or the creation of any Lien
(except if such Lessee shall have adequately bonded such Lien or otherwise made
provision to protect the interests of such Tax Indemnitee in a manner
reasonably satisfactory to such Tax Indemnitee) on the Equipment or any portion
thereof or any interest therein; and (vi) if such contest shall be conducted in
a manner requiring the payment of the claim, the Lessee shall have paid the
amount required (at no after-tax cost to such Tax Indemnitee). 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 the Lessee 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.

- 42 -
<PAGE> 47
In no event will a Tax Indemnitee be required to contest any Taxes if
such Tax Indemnitee shall waive its right to an indemnity under this Section
7.1. Unless a Tax Indemnitee obtains the consent of the Lessee, which consent
shall not be unreasonably withheld (provided, however, the Lessee shall not be
considered to have unreasonably withheld such consent because of (i) any
failure by the Lessee to consider any issue or dispute of the Tax Indemnitee
not directly related to the claim giving rise to the contest rights in issue or
(ii) the Lessee's consideration of the effects of such settlement on issues of
the Lessee which are not the subject of such claim), the settlement of any
contest required under Section 7.1 by a Tax Indemnitee shall constitute a
waiver by such Tax Indemnitee of its rights to indemnification hereunder as to
such contest and as to any future claims for which the Lessee's right to
contest shall have been precluded by such Tax Indemnitees' failure to contest.

(h) For purposes of this Section 7.1 and Section 7.2, in
determining the order in which any Tax Indemnitee utilizes withholding or other
foreign taxes as a credit against such Tax Indemnitee's United States income
taxes, such Tax Indemnitee shall be deemed to utilize (i) first, all foreign
taxes other than those described in clause (ii) below; provided, however, that
such other foreign taxes which are carried back to the taxable year for which a
determination is being made (other than any carrybacks which are known to be
available at the time such determination is made) pursuant to such clause (i)
shall be deemed utilized after the foreign taxes described in clause (ii)
below, and (ii) then, on a pro rata basis, all foreign taxes (including fees,
taxes and other charges hereunder) with respect to which such Tax Indemnitee is
entitled to obtain indemnification pursuant to an indemnification provision
contained in any lease, loan agreement, financing document or participation
agreement (including the Lease).

(i) In the event any reports with respect to 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
as required the interests of each Tax Indemnitee in such item 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 reasonably 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.

(j) The provisions of this Section 7.1 shall continue in full
force and effect, notwithstanding the expiration or termination of any
Operative Agreement, until all obligations hereunder have been met and all
liabilities hereunder paid in full.

(k) Any amount payable to the Lessee pursuant to the terms of this
Section 7.1 shall not be paid or retained by the Lessee if at the time of such
payment or retention a Lease Default relating to Sections 14(a), 14(b), 14(g)
or 14(h) or a Lease Event of Default shall have occurred and be continuing.
Such otherwise paid or retained amounts may be applied by the related Tax
Indemnitee to satisfy the obligations of the Lessee under the Operative
Agreements. At such time

- 43 -
<PAGE> 48

as there shall not be continuing any such Lease Default or Lease Event of
Default, such amount shall be paid to the Lessee without interest to the extent
not previously applied in accordance with the preceding sentence.

(l) For purposes of this Section 7.1, the term "Income Tax" means
any Tax based on or measured by or with respect to gross, adjusted gross or net
income (including without limitation, capital gains 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 sales, use, rental, value-added (other than a value-added tax
which is a tax or is in the nature of a tax on net or adjusted gross income),
excise, or property taxes shall not constitute an Income Tax).

Section 7.2. General Indemnification and Waiver of Certain Claims.

(a) Claims Defined. For the purposes of this Section 7.2,
"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, as defined herein, or any Unit and,
except as otherwise expressly provided in this Section 7.2, 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 this Section
7.2, "Indemnified Person" means the Owner Participant, the Owner Trustee (both
in its individual capacity and as Owner Trustee), the Indenture Trustee and the
Pass Through Trustee, 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, the Indenture Trustee and the Pass Through Trustee, as
applicable, together with the Owner Participant, the Owner Trustee, the
Indenture Trustee and the Pass Through Trustee, 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 and the Pass Through
Trustee, respectively).

(c) Claims Indemnified. Whether or not any Unit is accepted under
the Lease, or a closing occurs with respect thereto, and subject to the
exclusions stated in subsection (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):

- 44 -
<PAGE> 49
(i) this Agreement or any other Operative Agreement or
any of the transactions contemplated hereby and thereby or any Unit or
the ownership, lease, operation, possession, modification,
improvement, abandonment, use, non-use, maintenance, sublease,
substitution, control, repair, storage, alteration, transfer or other
application or disposition, return, overhaul, testing, servicing,
replacement or registration of any Unit (including, without
limitation, injury, death or property damage of passengers, shippers
or others, and environmental control, noise and pollution regulations,
or the discharge, spillage, release or escape of Hazardous Substances
or damage to the environment (including, without limitation, clean-up
costs, response costs, costs of corrective actions and natural
resource damages)) whether or not in compliance with the terms of the
Lease, or by any of the commodities, items or materials from time to
time contained in any Unit, whether or not in compliance with the
terms of the Lease, or by the inadequacy of any Unit or deficiency or
defect in any Unit or by any other circumstances in connection with
any Unit, or by the performance of any Unit or any risks relating
thereto, or by any interruption of service, loss of business or
anticipated profits or consequential damages;

(ii) the construction, manufacture, financing,
refinancing, design, purchase, acceptance, rejection, delivery,
non-delivery or condition of any Unit (including, without limitation,
latent and other defects, whether or not discoverable, and any claim
for patent, trademark or copyright infringement);

(iii) any act or omission (whether negligent or otherwise)
or any breach of or failure to perform or observe, or any other
non-compliance with, any covenant, condition or agreement to be
performed by, or other obligation of, Lessee under any of the
Operative Agreements, or the falsity of any representation or warranty
of the Lessee in any of the Operative Agreements or in any document or
certificate delivered 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;

(v) any violation of law, rule, regulation or order by
the Lessee or any sublessee or their respective directors, officers,
employees, agents or servants; and

(vi) any transfer of Equipment Notes or Pass Through
Certificates being deemed to result in a "prohibited transaction"
under ERISA or the Code.

(d) Lessee's Claims Excluded. The following are excluded from the
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 (i) in the case of the
exercise by the Lessee of a purchase option with respect to such Unit
under Section 22.1 or 22.3 of the Lease, the exercise by the Lessee

- 45 -
<PAGE> 50
of an early termination option with respect to such Unit under Section
10 of the Lease, the occurrence of an Event of Loss with respect to
such Unit under Section 11 of the Lease, or the election to replace
such Unit under Section 8.1(b), 8.3 or 9.1 of the Lease, the last to
occur of (x) the payment of all amounts due from the Lessee in
connection with any such event, (y) the release of the Lien of the
Indenture on such Unit, and (z) legal transfer of title to such Unit
to any Person other than Lessor, except in the case of a retention of
any Unit by Lessor pursuant to the terms and provisions of Section
10.3 of the Lease, and in the case of any such retention, upon the
effective date of the termination of the Lease Term with respect to
such Unit retained by Lessor pursuant to Section 10.3 or (ii) in all
other cases (except in any case where remedies are being exercised
under Section 15 of the Lease), the last 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, (y) with respect to each Unit, the
return of such Unit to the Lessor in accordance with the terms of the
Lease (it being understood that, so long as any Unit is in storage as
provided in Section 6.1(c) of the Lease, the date of return thereof
for the purpose of this clause (ii) shall be the last day of the
Storage Period), and (z) the release of the Lien of the Indenture on
such Unit, except, in any instance referenced in the foregoing clause
(i), to the extent such Claim is fairly attributable to acts or events
occurring prior to any such date or occurrence;

(ii) Claims which are Taxes, whether or not the Lessee is
required to indemnify therefor under Section 7.1 hereof or the Tax
Indemnity Agreement;

(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 (y) any breach of
any covenant to be performed by such Indemnified Person under any of
the Operative Agreements, or the falsity of any representation or
warranty of such Indemnified Person in any of the Operative Agreements
or in a document or certificate delivered in connection therewith;

(iv) any Claim to the extent attributable to any transfer
by the Lessor of the Equipment or any portion thereof or any transfer
by the Owner Participant of all or any portion of its interest in the
Trust Estate other than (A) any transfer after a Lease Default or
Lease Event of Default, (B) the transfer of the Equipment or any Owner
Participant's interest in the Equipment to the Lessee, (C) the
transfer of the Equipment to a third party pursuant to Lessee's
election to terminate the Lease or (D) any transfer of the Equipment
pursuant to Section 6.9;

(v) with respect to any particular Indemnified Person,
any Claim resulting from the imposition of any Lessor's Lien
attributable to such Indemnified Person; or

(vi) with respect to any particular Indemnified Person,
any Claim, to the extent the risk thereof has been assumed by such
Indemnified Person in connection with the exercise by such Indemnified
Person of the right of inspection granted under

- 46 -
<PAGE> 51

Section 6.2, inspection or restenciling under Section 6.3 or
inspection under Section 13.2 of the Lease.

(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 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 to the extent that failure to give notice of any action,
suit or proceeding against such Indemnified Person shall have a material
adverse affect on Lessee's ability to defend such Claim or recover proceeds
under any insurance policies maintained by Lessee hereunder. The Lessee shall,
after obtaining knowledge thereof, promptly notify each Indemnified Person of
any indemnified Claim affecting such 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 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.

Notwithstanding any of the foregoing to the contrary, the Lessee shall
not be entitled to control and assume responsibility for the defense of such
claim or liability 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, (3) the amounts
involved, in the good faith opinion of such Indemnified Person, are likely to
have a materially adverse effect on the business of such Indemnified Person
other than the ownership, leasing and financing of the Equipment, (4) 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 or (5) such claim or liability
involves the possibility of criminal sanctions or liability to such Indemnified
Person. 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, at its own expense, in respect of any such
proceeding as to which the Lessee shall have acknowledged in writing its
obligation to indemnify the Indemnified Person pursuant to this Section 7.2,
and at the expense of 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. 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

- 47 -
<PAGE> 52

an Indemnified Person to contest any Claim or to assume responsibility for or
control of any judicial proceeding with respect thereto.

(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. So long as no
Lease Event of Default shall have occurred and be continuing, 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.

(h) Waiver of Certain Claims. The Lessee hereby waives and
releases any Claim now or hereafter existing against any Indemnified Person
arising out of death or personal injury to personnel of the Lessee, pollution
incidents, loss or damage to property of the Lessee, or the loss of profits or
use of any property of the Lessee, which may result from or arise out of the
condition, use or operation of the Equipment during the Lease Term, including
without limitation any latent or patent defect whether or not discoverable.

(i) No Guaranty. The general indemnification provisions of this
Section 7.2 do not constitute a guaranty by the Lessee that the principal of,
interest on or any amounts payable with respect to the Equipment Notes will be
paid.

SECTION 8. LESSEE'S RIGHT OF QUIET ENJOYMENT.

Each party to this Agreement acknowledges notice of, and consents in
all respects to, the terms of the Lease, and expressly, severally and as to its
own actions only, agrees that, so long as no Lease Event of Default has
occurred and is continuing, it shall not take or cause to be taken any action
contrary to Lessee's rights under the Lease, including, without limitation, the
right to possession, use and quiet enjoyment by Lessee or any permitted
sublessee of the Equipment.

SECTION 9. SUCCESSOR INDENTURE TRUSTEE.

In the event that the Indenture Trustee gives notice of its
resignation pursuant to Section 8.02 of the Trust Indenture, the Owner Trustee
shall promptly appoint a successor Indenture Trustee reasonably acceptable to
the Lessee and the Pass Through Trustee.

SECTION 10. MISCELLANEOUS.

Section 10.1. Consents. Each Participant covenants and agrees
(subject, in the case of the Loan Participant, to all of the terms and
provisions of the Trust Indenture) that it shall not unreasonably withhold its
consent to any consent requested of the Owner Trustee or the Indenture

- 48 -
<PAGE> 53

Trustee, as the case may be, under the terms of the Operative Agreements that
by its terms is not to be unreasonably withheld by the Owner Trustee or the
Indenture Trustee.

Section 10.2. Refinancing. So long as no Lease Default or Lease
Event of Default shall be in existence, the Lessee shall have the right not
more than twice during the Lease Term to request the Owner Participant and the
Owner Trustee to effect an optional prepayment of all, and not less than all,
of the Equipment Notes pursuant to Section 2.10(d) of the Indenture as part of
a refunding or refinancing operation. The Owner Participant agrees to
cooperate in good faith with the Lessee in effecting any such refunding or
refinancing and, as soon as practicable after receipt of such request, the
Owner Participant and the Lessee will enter into good faith negotiations in
order to document the terms of such refunding or refinancing as follows:

(a) the Lessee, the Owner Participant, the Indenture Trustee, the
Owner Trustee, and any other appropriate parties will enter into a financing or
loan agreement (which may involve an underwriting agreement in connection with
a public offering), in form and substance reasonably satisfactory to the
parties thereto, providing for (i) the issuance and sale by the Owner Trustee
or such other party as may be appropriate on the date specified in such
agreement (for the purposes of this Section 10.2, the "Refunding Date") of debt
securities in an aggregate principal amount (in the lawful currency of the
United States) equal to the principal amount of the Equipment Notes outstanding
on the Refunding Date, having the same maturity date as said Equipment Notes
and having a weighted average life which is not less than or greater than the
Remaining Weighted Average Life of said Equipment Notes by more than three
months, (ii) the application of the proceeds of the sale of such debt
securities to the prepayment of all such Equipment Notes on the Refunding Date,
and (iii) payment by Lessee to the Person or Persons entitled thereto of all
other amounts, in respect of accrued interest, any Make Whole Amount or other
premium, if any, payable on such Refunding Date;

(b) the Lessee and the Owner Trustee will amend the Lease in a
manner in form and substance reasonably satisfactory to the Owner Participant
such that (i) if the Refunding Date is not a Rent Payment Date and the accrued
and unpaid interest on the Equipment Notes is not otherwise paid pursuant to
Section 10.2(a), the Lessee shall on the Refunding Date prepay that portion of
the next succeeding installment of Basic Rent as shall equal the aggregate
interest accrued on the Equipment Notes outstanding to the Refunding Date, (ii)
Basic Rent payable in respect of the period from and after the Refunding Date
shall be recalculated to preserve the Net Economic Return which the Owner
Participant would have realized had such refunding not occurred, provided that
the net present value of Basic Rent shall be minimized to the extent consistent
therewith, and (iii) amounts payable in respect of Stipulated Loss Value, Early
Purchase Price, Basic Term Purchase Price and Termination Value from and after
the Refunding Date shall be appropriately recalculated to preserve the Net
Economic Return which the Owner Participant would have realized had such
refunding not occurred (it being agreed that any recalculations pursuant to
subclauses (ii) and (iii) of this clause (b) shall be performed in accordance
with the requirements of Section 2.6 hereof);

- 49 -
<PAGE> 54
(c) the Owner Trustee will enter into an agreement to provide for
the securing thereunder of the debt securities issued by the Owner Trustee
pursuant to clause (a) of this Section 10.2 in like manner as the Equipment
Notes and/or will enter into such amendments and supplements to the Indenture
as may be necessary to effect such refunding or refinancing, which agreements,
amendments and/or supplements shall be reasonably satisfactory in form and
substance to the Owner Participant; provided that, no such agreement or
amendment shall provide for any increase in the security for the new debt
securities; and provided further that, notwithstanding the foregoing (but
subject to the provisions of clause (a) above), the Lessee reserves the right
to set the economic terms and other terms not customarily negotiated between an
owner participant and a lender of the refunding or refinancing transaction to
be so offered to the extent that they are passed through to the Lessee in, or
define rights or obligations of the Lessee under, the Operative Agreements;
provided, further, that no such amendment or supplement will increase the
obligations or impair the rights of the Owner Participant under the Operative
Agreements without the consent of the Owner Participant;

(d) in the case of a refunding or refinancing involving a public
offering of debt securities, neither the Owner Trustee nor the Owner
Participant shall be an "issuer" for securities law purposes or an "obligor"
within the meaning of the Trust Indenture Act of 1939, as amended, the offering
materials (including any registration statement) for the refunding or
refinancing transaction shall be reasonably satisfactory to the Owner
Participant and the Lessee shall provide satisfactory indemnity to the Owner
Trustee and Owner Participant with respect thereto;

(e) unless otherwise agreed by the Owner Participant, the Lessee
shall pay to the Owner Trustee as Supplemental Rent an amount equal to the
Make-Whole Amount or other premium, if any, payable in respect of Equipment
Notes outstanding on the Refunding Date, and all reasonable fees, costs,
expenses of such refunding or refinancing;

(f) the Lessee shall give the Indenture Trustee not less than 25
days prior written notice of the Refunding Date;

(g) the Owner Participant, the Owner Trustee, the Indenture
Trustee and the Pass Through Trustee shall have received (i) such opinions of
counsel as they may reasonably request concerning compliance with the
Securities Act of 1933, as amended, and any other applicable law relating to
the sale of securities and (ii) such other opinions of counsel and such
certificates and other documents, each in form and substance satisfactory to
them, as they may reasonably request in connection with compliance with the
terms and conditions of this Section 10.2; and

(h) all necessary authorizations, approvals and consents shall
have been obtained;

provided, however, that the Lessee will, to the extent then known, promptly
provide to the Owner Participant, the Owner Trustee, the Indenture Trustee and
the Pass Through Trustee substantially final terms and conditions of any such
refunding or refinancing within 20 days prior to the execution and delivery of
the documents contemplated hereunder in connection therewith; and

- 50 -
<PAGE> 55

provided, further, that (v) no refunding or refinancing of the Equipment Notes
will be permitted unless within 20 days after receipt by the Owner Participant
of a request from the Lessee to effect a refunding or refinancing pursuant to
this Section 10.2 and of information regarding the terms of such refunding or
refinancing necessary to render the opinion referred to below, the Lessee has
provided the Owner Participant with (a) a tax opinion from Mayer, Brown & Platt
or other tax counsel reasonably acceptable to the Owner Participant to the
effect that the Owner Participant would have a reasonable basis within the
meaning of Section 6662(d)(2)(B)(ii) of the Code not to report any adverse
federal income tax consequences as a result of such refunding or refinancing
and (b) an agreement to indemnify the Owner Participant against any adverse
federal income tax consequence suffered as a result of such refinancing or
refunding; alternatively, in the event such reasonable basis tax opinion cannot
be provided and the Lessee wishes to effect such refunding or refinancing, the
Lessee will, at such time as the Lessee receives written notice from the Owner
Participant that the Owner Participant has filed any income tax return wherein
such adverse income tax consequences are recognized, make an indemnity payment
to the Owner Participant in the incremental amount of such adverse tax
consequence (on an After-Tax Basis) attributable to such refunding or
refinancing; (w) the Lessee shall pay to or reimburse the Participants, the
Owner Trustee and the Indenture Trustee for all costs and expenses (including
reasonable attorneys' and accountants' fees) paid or incurred by them in
connection with such refunding or refinancing; (x) no refunding or refinancing
of the Equipment Notes will be permitted if it shall cause the Owner
Participant to account for the transaction contemplated hereby as other than a
"leveraged lease" under the Financial Accounting Standards Board ("FASB")
Statement No. 13, as amended (including any amendment effected by means of the
adoption by FASB of a new statement in lieu of FASB Statement No. 13); (y) no
refunding or refinancing of the Equipment Notes may, without the consent of the
Owner Participant, constitute assets of any "employee benefit plan" (as defined
in Section 3(3) of ERISA) or any other entity subject to Section 4975 of the
Code other than a "governmental plan" or "church plan" (as defined in Section
3(32) of ERISA) organized in a jurisdiction not having prohibitions on
transactions with such governmental plan or church plan substantially similar
to those contained in Section 406 of ERISA or Section 4975 of the Code; and (z)
in no event, in connection with or after giving effect to such refunding or
refinancing shall the Owner Participant be exposed to any unindemnified non-de
minimis risk (including tax risk) to which it is not exposed prior to such
refunding or refinancing.

Section 10.3. Amendments and Waivers. Except as otherwise
provided in the Indenture, no term, covenant, agreement or condition of this
Agreement may be terminated, amended or compliance therewith waived (either
generally or in a particular instance, retroactively or prospectively) except
by an instrument or instruments in writing executed by each party against which
enforcement of the termination, amendment or waiver is sought.

Section 10.4. Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all communications and notices provided for
herein shall be in writing or by facsimile, and any such notice shall become
effective (i) upon personal delivery thereof, including, without limitation, by
overnight mail or courier service, (ii) in the case of notice by United States
mail, certified or registered, postage prepaid, return receipt requested, upon
receipt thereof, or (iii) in

- 51 -
<PAGE> 56
the case of notice by facsimile, upon confirmation of receipt thereof, provided
such transmission is promptly further confirmed by any of the methods set forth
in clauses (i) or (ii) above, in each case addressed to each party hereto at
its address set forth below or, in the case of any such party hereto, at such
other address as such party may from time to time designate by written notice
to the other parties hereto:

If to the Lessee:
General American Transportation Corporation
500 West Monroe Street
Chicago, Illinois 60601
Attention: Treasurer
(GATC Trust No. 94-1)
Facsimile: (312) 621-6645
Confirmation No.:(312) 621-6200

If to the Owner Trustee:
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
Attention: Corporate Trust Department
Facsimile: __________________
Confirmation No.: ____________

with a copy to:

the Owner Participant at the
address set forth below

If to the Owner Participant:
BNY Capital Funding Corp.
c/o BNY Leasing Corporation
1290 Avenue of the Americas
29th Floor
New York, New York 10104
Attention: Chief Financial Officer
Facsimile: (212) 246-1803
Confirmation No.: (212) 408-4917

- 52 -
<PAGE> 57
If to the Indenture Trustee or the Pass Through Trustee:
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust Services Division
Facsimile: (312) 407-1708
Confirmation No.: (312) 407-2996

Section 10.5. Survival. All warranties, representations,
indemnities and covenants made by any party hereto, herein or in any
certificate or other instrument delivered by any such party or on the behalf of
any such party under this Agreement, shall be considered to have been relied
upon by each other party hereto and shall survive the consummation of the
transactions contemplated hereby on the Closing Date regardless of any
investigation made by any such party or on behalf of any such party.

Section 10.6. No Guarantee of Debt. Nothing contained herein or
in the Lease, the Trust Indenture, the Trust Agreement, the Pass Through Trust
Agreement or the Tax Indemnity Agreement or in any certificate or other
statement delivered by the Lessee in connection with the transactions
contemplated hereby shall be deemed to be (i) a guarantee by the Lessee to the
Owner Trustee, the Owner Participant, the Indenture Trustee or the Loan
Participant that the Equipment will have any residual value or useful life, or
(ii) a guarantee by the Indenture Trustee or the Lessee of payment of the
principal of, premium, if any, or interest on the Equipment Notes.

Section 10.7. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of, and shall be enforceable by,
the parties hereto and their respective successors and assigns as permitted by
and in accordance with the terms hereof, including each successive holder of
the Beneficial Interest permitted under Section 6.1 hereof and each successive
holder of any Equipment Note issued and delivered pursuant to this Agreement or
the Indenture. Except as expressly provided herein or in the other Operative
Agreements, no party hereto may assign their interests herein without the
consent of the parties hereto.

Section 10.8. Business Day. Notwithstanding anything herein or in
any other Operative Agreement to the contrary, if the date on which any payment
is to be made pursuant to this Agreement or any other Operative Agreement is
not a Business Day, the payment otherwise payable on such date shall be payable
on the next succeeding Business Day with the same force and effect as if made
on such succeeding Business Day and (provided such payment is made on such
succeeding Business Day) no interest shall accrue on the amount of such payment
from and after such scheduled date to the time of such payment on such next
succeeding Business Day.

Section 10.9. Governing Law. This agreement shall be in all
respects governed by and construed in accordance with the laws of the State of
New York including all matters of construction, validity and performance;
provided, however, that the parties hereto shall be entitled to all rights
conferred by any applicable federal statute, rule or regulation.

- 53 -
<PAGE> 58
Section 10.10. Severability. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.

Section 10.11. Counterparts. This Agreement may be executed in any
number of counterparts, each executed counterpart constituting an original but
all together only one Agreement.

Section 10.12. Headings and Table of Contents. The headings of the
Sections of this Agreement and the Table of Contents are inserted for purposes
of convenience only and shall not be construed to affect the meaning or
construction of any of the provisions hereof.

Section 10.13. Limitations of Liability.

(a) Liabilities of Participants. Neither the Indenture Trustee,
the Owner Trustee nor any Participant shall have any obligation or duty to the
Lessee, to any other Participant or to others with respect to the transactions
contemplated hereby, except those obligations or duties of such Participant
expressly set forth in this Agreement and the other Operative Agreements, and
neither the Indenture Trustee nor any Participant shall be liable for
performance by any other party hereto of such other party, obligations or
duties hereunder. Without limitation of the generality of the foregoing, under
no circumstances whatsoever shall the Indenture Trustee or any Participant be
liable to the Lessee for any action or inaction on the part of the Owner
Trustee in connection with the transactions contemplated herein, whether or not
such action or inaction is caused by willful misconduct or gross negligence of
the Owner Trustee unless such action or inaction is at the direction of the
Indenture Trustee or any Participant, as the case may be, and such direction is
expressly permitted hereby.

(b) No Recourse to the Owner Trustee. It is expressly understood
and agreed by and between the Owner Trustee, the Lessee, the Owner Participant,
the Indenture Trustee, and the Loan Participant, and their respective
successors and permitted assigns that, subject to the proviso contained in this
Section 10.13(b), all representations, warranties and undertakings of the Owner
Trustee hereunder shall be binding upon the Owner Trustee, only in its capacity
as Owner Trustee under the Trust Agreement, and (except as expressly provided
herein) the Owner Trustee shall not be liable in its individual capacity for
any breach thereof, except for its gross negligence or willful misconduct, or
for breach of its covenants, representations and warranties contained herein,
except to the extent covenanted or made in its individual capacity; provided,
however, that nothing in this Section 10.13(b) shall be construed to limit in
scope or substance those representations and warranties of the Owner Trustee
made expressly in its individual capacity set forth herein. The term "Owner
Trustee" as used in this Agreement shall include any successor trustee under
the Trust Agreement, or the Owner Participant if the trust created thereby is
revoked.

- 54 -
<PAGE> 59
Section 10.14. Maintenance of Non-Recourse Debt. The parties hereto
agree that if the Owner Trustee becomes a debtor subject to the reorganization
provisions of the Bankruptcy Code, 11 U.S.C. Section 101 et seq. (the
"Bankruptcy Code") or any successor provision, the parties hereto will make an
election under 1111(b)(1)(A)(i) of the Bankruptcy Code. If (a) the Owner
Trustee becomes a debtor subject to the reorganization provisions of the
Bankruptcy Code or any successor provision, (b) pursuant to such reorganization
provisions the Owner Trustee is required, by reason of the Owner Trustee being
held to have recourse liability to the Pass Through Trustee or the Indenture
Trustee, directly or indirectly, to make payment on account of any amount
payable under the Equipment Notes or any of the other Operative Agreements and
(c) the Pass Through Trustee and/or the Indenture Trustee actually receives any
Excess Amount (as hereinafter defined) which reflects any payment by the Owner
Trustee on account of (b) above, then the Pass Through Trustee and/or the
Indenture Trustee, as the case may be, shall promptly refund to the Owner
Trustee such Excess Amount. For purposes of this Section 10.14 "Excess Amount"
means the amount by which such payment exceeds the amount which would have been
received by the Pass Through Trustee or the Indenture Trustee if the Owner
Trustee had not become subject to the recourse liability referred to in (b)
above.

Section 10.15. Ownership of and Rights in Units. The sale of the
Units contemplated hereby is intended for all purposes to be a true sale of all
of the Lessee's right, title and interest in and to the Units to the Owner
Trustee, which shall be the legal owner thereof. Upon consummation of the sale
and leaseback transactions contemplated hereby, the Lessee's interest in the
Units is intended to be that of a lessee only. It is intended that for federal
and state income tax purposes the Owner Participant will be the owner of the
Units. The rights of the Indenture Trustee in and to the Units pursuant to the
Indenture is intended to be that of a secured party holding a security
interest, subject to the Lease and the rights of the Lessee thereunder. No
holder of an Equipment Note is intended to have any right, title or interest in
or to the Units except as a beneficiary of the security interest granted by the
Owner Trustee to the Indenture Trustee pursuant to the Indenture in trust for
the equal and ratable benefit of the holders from time to time of the Equipment
Notes.

* * * * *

- 55 -
<PAGE> 60

In Witness Whereof, the parties hereto have caused this Participation
Agreement to be executed and delivered, all as of the date first above
written.;

Lessee:

GENERAL AMERICAN TRANSPORTATION
CORPORATION