MEXICAN PLEDGE AGREEMENT

This PLEDGE AGREEMENT , dated effective as of May 4, 2005 (this “Agreement” ), is entered into by and between RAILCAR, LTD (hereinafter referred to as “Railcar” or as “Grantor” ), and General Electric Capital Corporation ( “GECC” ) acting in the capacity of U.S. collateral agent for the benefit of the Secured Parties (as such term is defined in the Credit Agreement, defined below) (in such capacity, the “Collateral Agent” ). Capitalized terms used in this Agreement and not defined herein shall have the meanings assigned to them in the Credit Agreement, as such term is defined below.

RECITALS:

WHEREAS , reference is made to that certain Credit Agreement, dated as of March 24, 2005 (as it may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement” ), by and among Progress Rail Services Holdings Corp. (the “Parent” ), each of the domestic subsidiaries of Parent parry thereto (such subsidiaries, together with the Parent, the “U.S. Borrowers” ), Progress Rail Canada Corporation, Progress Rail Transcanada Corporation (the “Canadian Borrowers” , and together with the U.S. Borrowers, the “Borrowers” ), the Issuing Banks, GECC as U.S. Administrative Agent, GE Canada Finance Holding Company, as Canadian Administrative Agent and the Lenders party thereto from time to time, and

WHEREAS , Railcar has concurrently hereof formalized its pledge of (a) its 65% shareholding interest in Progress Rail Services de México S.A. de C.V. (the “Pledged Shares” ) and (b) its 65% equity interest in Servicios Ferroviarios Progress S. de R.L. de C.V. (the “Pledged Membership Interests” ) as more fully described in Schedule A hereto, to fully guarantee the obligations of the Borrowers under the Credit Agreement (the “Pledge” ), and desires to enter into this Agreement with the Collateral Agent for the purposes of agreeing as to certain terms and conditions applying to the Pledge, and

NOW, THEREFORE , in consideration of the premises and the agreements, provisions and covenants herein contained, the Grantor and the Collateral Agent agree as follows:

SECTION 1                   DEFINITIONS.

1.1           General Definitions.  In this Agreement, the following terms shall have the following meanings:

“Agreement” shall have the meaning set forth in the preamble.

“Collateral Agent” shall have the meaning set forth in the preamble.

“Credit Agreement” shall have the meaning set forth in the recitals.

“Indemnitee” shall mean the Collateral Agent, and its Affiliates’ officers, partners, directors, trustees, employees and agents.

“Notarial Copy” shall mean a copy of any relevant document which is certified as conforming to original documents by a duly appointed Notary Public in the United Mexican States ( “Mexico” ).

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“Pledged Equity Interests” shall mean all Pledged Shares and Pledged Membership Interests listed in Schedule A hereto.

“Proceeds” shall mean (i) all payments or distributions made with respect to any Pledged Equity Interests, and (ii) whatever is receivable or received when any Pledged Equity Interests are sold, exchanged or otherwise disposed of, whether such disposition is voluntary or involuntary.

“Representation Date” shall mean each of (i) the date hereof, (ii) each date on which a Borrowing is made (on or after the date hereof) and (iii) each date on which any Letter of Credit is issued, amended, renewed or extended (on or after the date hereof).

1.2           Definitions; Interpretation.  All capitalized terms used herein (including the preamble and recitals hereto) and which are not otherwise defined herein shall have the meanings ascribed thereto in the Credit Agreement. Defined terms shall apply equally to the singular and plural forms of such terms. References to “Sections,” “Annexes” and “Schedules” shall be to Sections, Annexes and Schedules, as the case may be, of this Agreement unless otherwise specifically provided.  Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect.

SECTION 2                   CONCURRENT FORMALIZATION OF PLEDGE.

The Grantor has, through this Agreement and/or concurrently with the execution of this Agreement, granted and formalized the Pledge of its Pledged Equity Interests in favor of the Collateral Agent through (a) the physical and legal delivery of certificates representing the Pledged Shares (attaching the relevant endorsement legend in the terms required by this Agreement); (b) the physical and legal delivery of this Agreement through which the Pledge of the Pledged Membership Interests is formalized; (c) its causing that the issuer of the respective Pledged Shares and the Pledged Membership Interests to register the respective Pledges on the relevant books and records of each respective issuer, and (d) generally through the actions described in this Agreement and particularly in Section 3.1(c) hereof, as a guarantee for the prompt and complete payment in full when due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise, of all obligations of the Borrowers under the Credit Agreement.

SECTION 3                   REPRESENTATIONS, WARRANTIES AND COVENANTS

3.1           Generally.

(a)            Representations and Warranties .  Grantor hereby represents and warrants, on each Representation Date, that:

(i)     having performed such inquiry and verification actions as Grantor has deemed to be appropriate and sufficient for all legal purposes, the Pledged Shares and the Pledged Membership Interests listed in Schedule A hereto, have been duly authorized and issued by their respective issuers in accordance with Mexican law and the respective corporate bylaws of each of the issuer of the Pledged Shares and the issuer of the Pledged Membership Interests, and are fully paid and outstanding;

(ii)    it has full legal title and ownership of the Pledged Shares and the Pledged Membership Interests listed in Schedule A hereto, in each case free and clear of any and all Liens, rights or claims of all other Persons other than Liens permitted by Section 6.02 of the Credit Agreement, including, without limitation, liens arising as a

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result of Grantor becoming bound (as a result of merger or otherwise) as debtor under a security agreement entered into by another Person;

(iii)   the Grantor, and each of the issuers of the Pledged Shares and the Pledged Membership Interests listed in Schedule A hereto, has been duly organized as a corporation (sociedad anónima de capital variable), limited liability company (sociedad de responsabilidad limitada de capital variable) or limited partnership, as applicable, under the laws of its jurisdiction of incorporation or formation and remains duly existing as such;

(iv)   the execution and delivery of this Agreement by Grantor and the performance by the Grantor of its obligations under this Agreement are within its corporate, limited liability company or other powers and have been duly authorized by all necessary corporate or other action, and the individual representing the Grantor in the execution of this Agreement has all requisite corporate powers as are required under applicable law in order to duly bind the Grantor in the terms of this Agreement;

(v)    no authorization, approval or other action by the Grantor or, in each case, by the issuer of the Pledged Shares and the issuer of the Pledged Membership Interests, and no notice to or filing with, any governmental authority or regulatory body is required for either (x) the pledge or grant by the Grantor of the Pledge created or purported to be created in favor of the Collateral Agent hereunder or (y) the exercise by Collateral Agent of any rights or remedies in respect of the Pledged Equity Interests, except for those actions and deliveries listed in Section 3.1(c) hereof;

(vi)   all actions and consents, including all filings, notices, registrations and recordings necessary or desirable for the exercise by the Collateral Agent of the voting or other rights provided for in this Agreement or the exercise of remedies in respect of the Pledged Equity Interests have been made or obtained;

(vii) all information supplied by the Grantor with respect to its Pledged Equity Interests (in each case taken as a whole with respect to any particular Pledged Equity Interests) is accurate and complete in all material respects;

(viii)   the individual executing the certificate referred to in Section 3.1(c)(iv) is in fact the duly appointed and acting alternate secretary (not member of the board of directors) of the issuer of the Pledged Shares, and his or her appointment as alternate secretary has not been revoked as of the date hereof, and

(ix)    the individual executing the certificate referred to in Section 3.1(c)(v) is in fact the duly appointed and acting alternate secretary (not member of the board of managers) of the issuer of the Pledged Membership Interests, and his or her appointment as alternate secretary has not been revoked as of the date hereof.

(b)            Covenants and Agreements .  The Grantor hereby covenants and agrees that:

(i)     except for the Pledge, it shall not create or suffer to exist any Lien upon or with respect to any of the Pledged Equity Interests, except Liens

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permitted by Section 6.02 of the Credit Agreement, and Grantor shall defend the Pledged Equity Interests against all Persons at any time claiming any interest therein;

(ii)    it shall not change Grantor’s name, identity, corporate structure (e.g. by merger, consolidation, change in corporate form or otherwise), sole place of business, chief executive office, type of organization or jurisdiction of organization or establish any trade names unless it shall have (a) notified the Collateral Agent in writing at least thirty (30) days prior to any such change or establishment, identifying such new proposed name, identity, corporate structure, sole place of business, chief executive office, jurisdiction of organization or trade name and providing such other information in connection therewith as the Collateral Agent may reasonably request and (b) taken all actions necessary or advisable to maintain the continuous validity, perfection and the same or better priority of the Collateral Agent’s rights in the Pledged Equity Interests;

(iii)   upon the Grantor or its officers obtaining knowledge thereof, it shall promptly notify the Collateral Agent in writing of any event that may materially and adversely affect the value of the Pledged Equity Interests or any portion thereof, the ability of the Grantor or the Collateral Agent to dispose of the Pledged Equity Interests or any portion thereof, or the rights and remedies of the Collateral Agent in relation thereto, including, without limitation, the levy of any legal process against the Pledged Equity Interests or any portion thereof;

(iv)   it shall not take or permit any action which could impair the Collateral Agent’s rights in the Pledged Equity Interests;

(v)    it shall not sell, transfer, assign, abandon or permit to lapse (by operation of law or otherwise) any Pledged Equity Interests;

(vi)   as long as no Event of Default shall have occurred and be continuing, the Collateral Agent will cause for Grantor to retain all ordinary cash dividends and distributions paid in the normal course of the business of the issuer and consistent with the past practice of the issuer and in respect of each of the Pledged Equity Interest, in each case to the extent permitted by Section 6.06 of the Credit Agreement, and the Collateral Agent agrees to reasonably assist Grantor in its receipt of such ordinary cash dividends and distributions, and

(vii) Grantor shall take such additional actions, including without limitation, causing each relevant issuer of the Pledged Equity Interests to register the pledge on its books and records or making such filings or recordings, in each case as may be necessary or advisable, under the laws of Mexico to insure the validity, perfection and priority of the Collateral Agent’s rights to the Pledged Equity Interests.

(c)            Deliveries .  Concurrently with the execution of this Agreement, Grantor shall:

(i)     have formalized the Pledge through (A) the physical and legal delivery to the Collateral Agent of the original certificates evidencing the Pledged Shares, duly endorsed as transferred in pledge to the Collateral Agent, including the legend substantially in the forms set forth in Exhibit A hereto, in the terms of paragraph II of article 334 of the General Law of Negotiable Instruments and Credit Transactions

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(Ley General de Títulos y Operaciones de Crédito); (B) the physical and legal delivery of this Agreement and the certificate referred to in paragraph (v) below, through which the Pledge of the Pledged Membership Interests is formalized, in the terms of paragraph III of article 334 of the General Law of Negotiable Instruments and Credit Transactions (Ley General de Titulos y Operaciones de Crédito), and (C) its causing that the issuer of the respective Pledged Shares and the Pledged Membership Interests to register the respective Pledges on the relevant books and records of each respective issuer, including without limitation the share register of the issuer of the Pledged Shares and the special members’ register of the issuer of the Pledged Membership Interests, substantially in the record forms set forth in Exhibit B hereto, and the Collateral Agent has delivered to Grantor a document evidencing its receipt of the Pledged Shares and the Pledged Membership Interests in the terms hereof and as Grantor may have reasonably requested from the Collateral Agent;

(ii)    shall have caused for the Pledge of the Pledged Shares to have been duly approved by the unanimous shareholders’ meeting of the issuer of the Pledged Shares, in form and substance acceptable to the Collateral Agent (the “Pledged Shares Resolution” );

(iii)   shall have caused for the Pledge of the Pledged Membership Interests and any potential ownership transfer thereof derived from the pledge rights to have been duly approved by the unanimous members’ meeting of the issuer of the Pledged Membership Interests, in form and substance acceptable to the Collateral Agent (the “Pledged Membership Interests Resolution” );

(iv)   shall deliver to the Collateral Agent a certificate, issued by the alternate secretary (not member of the board of directors) of the issuer of the Pledged Shares, certifying as to the completeness and duly formalization of the registration of the Pledge of the Pledged Shares on the relevant books and records of such issuer, in the terms required under Section  3.1(c)(i)(A)  above, and attaching (A) a Notarial Copy of all such relevant records; (B) a Notarial Copy of the incorporation deed of the issuer of the Pledged Shares;(C) a Notarial Copy of each bylaws amendment which has been adopted by the issuer of the Pledged Shares as of the date hereof, and (D) a Notarial Copy of the relevant public deed through which the Pledged Shares Resolution adopted under Section  3.l(c)(ii)  above has been protocolized in Mexico, including evidence of its registration in the Public Registry of Commerce in Monterrey, Nuevo Leon, Mexico, and

(v)    shall deliver to the Collateral Agent a certificate, issued by the alternate secretary (not member of the board of managers) of the issuer of the Pledged Membership Interests, certifying as to the completeness and duly formalization of the registration of the Pledge of the Pledged Membership Interests on the relevant books and records of such issuer, in the terms required under Section 3.1(c)(i)(B) above, and attaching (A) a Notarial Copy of all such relevant records; (B) a Notarial Copy of the incorporation deed of the issuer of the Pledged Membership Interests, and (C) a Notarial Copy of each bylaws amendment which has been adopted by the issuer of the Pledged Membership Interests as of the date hereof, and (D) a Notarial Copy of the relevant public deed through which the Pledged Membership Interests Resolution required under Section 3.1(c)(iii)  above has been protocolized in Mexico, including evidence of its registration in the Public Registry of Commerce in Monterrey, Nuevo Leon, Mexico, and

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(vi)   deliver to the Collateral Agent a legal opinion issued by the Grantor’s Mexican counsel regarding, among others, that (A) each of the issuer of the Pledged Shares and the issuer of the Pledged Membership Interests has been duly organized as a corporation (sociedad anónima de capital variable) and a limited liability company (sociedad de responsabilidad limitada de capital variable), respectively, under the laws of Mexico; (B) in a