Document:

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                                                                Exhibit 4.1

                          SUPPLEMENTAL INDENTURE NO. 2

                                 BY AND BETWEEN

                         SENIOR HOUSING PROPERTIES TRUST

                                       AND

                       STATE STREET BANK AND TRUST COMPANY

                             AS OF DECEMBER 28, 2001

           SUPPLEMENTAL TO THE INDENTURE DATED AS OF DECEMBER 20, 2001

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

                         SENIOR HOUSING PROPERTIES TRUST

                     ADDITIONAL 8-5/8% SENIOR NOTES DUE 2012

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         This SUPPLEMENTAL INDENTURE NO. 2 (this "SUPPLEMENTAL INDENTURE") made
and entered into as of December 28, 2001 between SENIOR HOUSING PROPERTIES
TRUST, a Maryland real estate investment trust (the "Company"), and STATE STREET
BANK AND TRUST COMPANY, a Massachusetts trust company, as Trustee (the
"TRUSTEE"),

                                WITNESSETH THAT:

         WHEREAS, the Company and the Trustee have executed and delivered an
Indenture, dated as of December 20, 2001 (as amended, supplemented or otherwise
modified from time to time, the "BASE INDENTURE") to provide for the issuance of
the Company's senior debt securities (the "SECURITIES") to be issued from time
to time in one or more series;

         WHEREAS, the Company and the Trustee have also executed and delivered a
Supplemental Indenture No. 1, dated as of December 20, 2001 (as amended,
supplemented or otherwise modified from time to time, "SUPPLEMENTAL INDENTURE
NO. 1") supplementing the Base Indenture (as so supplemented, the "INDENTURE")
to provide for the establishment of a series of its Securities known as its
8-5/8% Senior Notes due 2012 (such series, the "NOTES DUE 2012") issued in an
initial aggregate principal amount of $200,000,000; and

         WHEREAS, the Company desires to reopen the such series of Securities
pursuant to Section 301 of the Base Indenture and Section 2.1(a) of Supplemental
Indenture No. 1 to authorize the issuance of an additional $45,000,000 in
aggregate principal amount of Notes due 2012 pursuant to the terms and
conditions established thereunder;

         NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:

         SECTION 1. ADDITIONAL NOTES DUE 2012. The Indenture, including Section
2.1(a) of Supplemental Indenture No. 1, is hereby supplemented to provide that
the Notes due 2012 will be limited to an aggregate principal amount of
$245,000,000, subject to the continued right of the Company to reopen such
series for issuances of additional Securities of such series and except (i) as
provided in Section 2.1 of Supplemental Indenture No. 1 and (ii) for Securities
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes due 2012 pursuant to Section 304, 305, 306, 906
or 1107 of the Base Indenture and except for any Notes due 2012 which, pursuant
to Section 303 of the Base Indenture, are deemed never to have been
authenticated and delivered thereunder.

         SECTION 2. EFFECTIVENESS. This Supplemental Indenture shall be
effective for all purposes as of the date and time this Supplemental Indenture
has been executed and delivered by the Company and the Trustee in accordance
with Article Nine of the Base Indenture. As supplemented hereby, the Indenture
is hereby confirmed as being in full force and effect.

         SECTION 3. MISCELLANEOUS. (a) In the event any provision of this
Supplemental Indenture shall be held invalid or unenforceable by any court of
competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof or any provision of the Indenture.

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                  (b) To the extent that any terms of this Supplemental
Indenture are inconsistent with the terms of the Indenture, the terms of this
Supplemental Indenture shall govern and supersede such inconsistent terms.

                  (c) This Supplemental Indenture shall be governed by and
construed in accordance with the laws of the State of New York.

                  (d) This Supplemental Indenture may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.

                            [Signature Page Follows]

                                      -2-

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         IN WITNESS WHEREOF, the Company and the Trustee have caused this
Supplemental Indenture to be executed as an instrument under seal as of the date
first above written.

                                        SENIOR HOUSING PROPERTIES TRUST

                                        By:
                                            -----------------------------------
                                            Name:
                                            Title:

                                        STATE STREET BANK AND TRUST
                                        COMPANY, as Trustee

                                        By:
                                            -----------------------------------
                                            Name:
                                            Title:

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                                  EXHIBIT 10.6

                                    AGREEMENT

         This Agreement (this "AGREEMENT") dated as of December 14, 2001 is
entered into by and between TRC Companies, Inc., a corporation organized under
the laws of Delaware (together with its successors, "TRC"), and Fletcher
International, Ltd., a company organized under the laws of Bermuda (together
with its successors, "FLETCHER").

         The parties hereto agree as follows:

     1. Purchase and Sale. In consideration of and upon the basis of the
representations, warranties and agreements and subject to the terms and
conditions set forth in this Agreement:

                  (A) Fletcher agrees to purchase from TRC, and TRC agrees to
         sell to Fletcher on the Initial Closing Date (as defined below), in
         accordance with Section 2 below, fifteen thousand (15,000) shares (the
         "INITIAL PREFERRED SHARES") of TRC's Series A-1 Cumulative Convertible
         Preferred Stock (the "SERIES A-1 PREFERRED STOCK"), having the terms
         and conditions set forth in the Certificate of Rights and Preferences
         attached hereto as Annex A (the "CERTIFICATE OF RIGHTS AND
         PREFERENCES"), at a price of one thousand dollars ($1,000) per share
         for an aggregate purchase price of fifteen million dollars
         ($15,000,000). Fletcher shall have the right to convert the outstanding
         Initial Preferred Shares into shares of Common Stock of TRC, par value
         ten cents ($0.10) per share ("COMMON STOCK"), in the manner, and
         subject to the terms, specified in this Agreement and in the
         Certificate of Rights and Preferences.

                  (B) The closing (the "INITIAL CLOSING") of the sale of the
         Initial Preferred Shares shall occur on the third (3rd) Business Day,
         after and excluding the date hereof, or at such other date and time as
         Fletcher and TRC shall mutually agree (such date, the "INITIAL CLOSING
         DATE").

                  (C) TRC grants Fletcher rights (the "FLETCHER RIGHTS") to
         require TRC, at any time between and including December 15, 2002 and
         December 14, 2003, to issue to it from time to time, provided that such
         rights shall be exercisable by Fletcher no more than three (3) times
         and for a minimum each time of at least one thousand (1,000) shares, in
         whole or in part, up to an aggregate of ten thousand (10,000) shares of
         additional series of TRC preferred stock (e.g., Series A-2 Cumulative
         Convertible Preferred Stock, Series A-3 Cumulative Convertible
         Preferred Stock, etc.), having, except as set forth below, identical
         terms, conditions, rights, preferences and privileges as the Series A-1
         Preferred Stock (such shares shall collectively be referred to as the
         "ADDITIONAL PREFERRED SHARES" and together with the Initial Preferred
         Shares, the "SERIES A PREFERRED SHARES") at a price of one thousand
         dollars ($1,000) per share for an aggregate purchase price for all
         Fletcher Rights of ten million dollars ($10,000,000). Fletcher shall
         have the right to convert the outstanding Additional Preferred Shares
         into shares of Common Stock in the manner, and subject to the terms,
         specified in this Agreement and in a certificate of rights and

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         preferences for each such series of Additional Preferred Shares (each,
         a " SUBSEQUENT CERTIFICATE OF RIGHTS AND PREFERENCES" and collectively,
         the "SUBSEQUENT CERTIFICATES OF RIGHTS AND PREFERENCES"). Each
         Subsequent Certificate of Rights and Preferences shall have the same
         terms and conditions as the Certificate of Rights and Preferences,
         except that (A) the Conversion Price (as defined therein) shall equal
         one hundred twenty percent (120%) of the Average Market Price (as
         defined therein) calculated as of the Business Day on which the
         corresponding Fletcher Notice (as defined below) is delivered but not
         less than the greater of (1) the volume-weighted average price of the
         Common Stock on the NYSE on the Business Day before and excluding the
         corresponding Subsequent Closing Date and (2) the lesser of (i)
         twenty-four dollars and fourteen cents ($24.14) and, (ii) fifty percent
         (50%) of the Average Market Price calculated on the date ninety (90)
         calendar days after and excluding the Restatement Date (as defined in
         the Certificate of Rights and Preferences); (B) the number of
         Additional Preferred Shares issued pursuant to each Subsequent
         Certificate of Rights and Preferences may differ from the number of
         shares of Series A-1 Preferred Stock; and (C) the number denoting which
         Series of Series A Shares (e.g., the "2" in A-2, the "3" in A-3) is
         being issued shall be inserted where the number "1" is located in the
         term "Series A-1" in each place where such term is located in the
         Certificate of Rights and Preferences. To exercise any Fletcher Rights,
         Fletcher shall deliver one or more written notices substantially in the
         form attached hereto as Annex B (each, a "FLETCHER NOTICE") to TRC from
         time to time commencing at any time between and including December 15,
         2002 and December 14, 2003 (the "Fletcher Rights Expiration Date" ). .
         The Fletcher Rights Expiration Date shall be extended by one calendar
         day for each Registration Statement Unavailability Day (as defined
         below). Upon satisfaction or, if applicable, waiver of the relevant
         conditions set forth in Sections 13 and 14 hereof, the closing of each
         exercise of Fletcher Rights (each, a "SUBSEQUENT CLOSING") shall take
         place on the date that is two (2) Business Days following and excluding
         delivery of the Fletcher Notice, or at such other date and time as
         Fletcher and TRC shall mutually agree (each such date and time being
         referred to herein as a "SUBSEQUENT CLOSING DATE" and, together with
         the Initial Closing Date, a "CLOSING DATE").

                  (D) TRC shall redeem all of the Series A Preferred Shares
         (including any accrued and unpaid dividends) pursuant to the terms and
         conditions set forth in the Certificate of Rights and Preferences or
         Subsequent Certificate of Rights and Preferences of each such series.
         As set forth in the Certificate of Rights and Preferences or Subsequent
         Certificate of Rights and Preferences of each such series, TRC may
         satisfy its redemption obligations under Section 6(B)(ii)and (iii) of
         the Certificate of Rights and Preferences and the Subsequent
         Certificates of Rights and Preferences by delivering shares of
         Registered Common Stock (the amount of which shall be determined
         pursuant to the terms and conditions set forth in the Certificate of
         Rights and Preferences and Subsequent Certificates of Rights and
         Preferences, as the case may be, of each such series) (collectively,
         the "REDEMPTION COMMON STOCK").

                  (E) As used herein, the term "COMMON SHARES" means the
         Redemption Common Stock and shares issuable upon conversion of or as
         dividends under the Series A Preferred Shares (including Series A
         Preferred Shares not yet issued), and all other Common Stock issuable
         under the Certificate of Rights and Preferences, Subsequent
         Certificates of Rights and Preferences or this Agreement; the term
         "INVESTMENT

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         SECURITIES" means the Series A Preferred Shares issued or issuable
         hereunder, the Fletcher Rights and all Common Shares; the term
         "BUSINESS DAY" means any day on which the Common Stock may be traded on
         the NYSE or, if not admitted for trading on the NYSE, on any day other
         than a Saturday, Sunday or holiday on which banks in New York City are
         required or permitted to be closed; the term "NEW YORK STOCK EXCHANGE"
         means the New York Stock Exchange; and the term "NYSE" means the New
         York Stock Exchange, but if the New York Stock Exchange is not then the
         principal U.S. trading market for the Common Stock, or such other
         applicable common stock, then "NYSE" shall be deemed to mean the
         principal U.S. national securities exchange (as defined in the
         Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT")) on
         which the Common Stock, or such other applicable common stock, is then
         traded, or if such Common Stock, or such other applicable common stock,
         is not then listed or admitted to trading on any national securities
         exchange but is designated as a national market system security or a
         Nasdaq SmallCap Market Security by the National Association of
         Securities Dealers, Inc. ("NASD"), then such market system, or if
         such Common Stock, or such other applicable common stock, is not listed
         or quoted on any of the foregoing, then the OTC Bulletin Board.

         2. Initial Closing. The Initial Closing shall take place initially via
facsimile on the Initial Closing Date in the manner set forth below; provided
that original certificates representing shares of Series A-1 Preferred Stock
shall be delivered via Federal Express or another reputable overnight carrier
to:

                            Ms. Ele Stathatos
                            C/o Lehman Brothers Inc.
                            Three World Financial Center
                            New York, NY 10285
                            Telephone: (212) 526-6273.

         At the Initial Closing, the following deliveries shall be made:

         (A) SERIES A-1 PREFERRED STOCK. TRC shall deliver to Fletcher three (3)
     stock certificates, each representing five thousand (5,000) shares of
     Series A-1 Preferred Stock, duly executed by TRC in definitive form, and
     shall register such shares in the stockholder register of TRC.

         (B) PURCHASE PRICE. Fletcher shall cause to be wire transferred to TRC,
     in accordance with the instructions set forth in Section 19, the aggregate
     purchase price of fifteen million dollars ($15,000,000) in immediately
     available United States funds.

         (C) CLOSING DOCUMENTS. The closing documents required by Sections 13
     and 14 shall be delivered to Fletcher and TRC, respectively.

         (D) DELIVERY NOTICE. An executed copy of the delivery notice in the
     form attached hereto as Annex C shall be delivered to Fletcher.

The deliveries specified in this Section 2 shall be deemed to occur
simultaneously as part of a

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single transaction, and no delivery shall be deemed to have been made until all
such deliveries have been made.

         3. Subsequent Closing. Each Subsequent Closing shall take place
initially via facsimile on the Subsequent Closing Date in the manner set forth
below; provided that original certificates representing Additional Preferred
Shares shall be delivered via Federal Express or another reputable overnight
carrier to Fletcher as Fletcher instructs in writing. At each Subsequent
Closing, the following deliveries shall be made:

                  (A) ADDITIONAL PREFERRED SHARES. TRC shall issue and deliver
         to Fletcher stock certificates, each representing five thousand (5,000)
         Additional Preferred Shares (except that to the extent the number of
         Additional Preferred Shares to be delivered is not evenly divisible by
         five thousand (5,000), one (1) stock certificate shall represent the
         remaining shares), duly executed by TRC, and shall register such shares
         in the stockholder register of TRC.

                  (B) PURCHASE PRICE. Fletcher shall cause to be wire
         transferred to TRC, in accordance with the instructions set forth in
         Section 19, one thousand dollars ($1,000) per Additional Preferred
         Share, in the aggregate the "Additional Issuance Price" as specified in
         the applicable Fletcher Notice (the "ADDITIONAL ISSUANCE PRICE")
         payable on such Subsequent Closing Date, in immediately available
         United States dollars.

                  (C) CLOSING DOCUMENTS. The closing documents required by
         Sections 13 and 14 shall be delivered to Fletcher and TRC,
         respectively.

                  (D) DELIVERY NOTICE. An executed copy of the delivery notice
         in the form attached hereto as Annex C shall be delivered to Fletcher.

The deliveries specified in this Section 3 shall be deemed to occur
simultaneously as part of a single transaction, and no delivery shall be deemed
to have been made until all such deliveries have been made.

         4. Representations and Warranties of TRC. TRC hereby represents and
warrants to Fletcher on each Closing Date, except as set forth on any Schedule
hereto, as follows:

                  (A) TRC has been duly incorporated and is validly existing in
         good standing under the laws of Delaware or, after the Initial Closing
         Date, if another entity has succeeded TRC in accordance with the terms
         hereof, under the laws of one of the states of the United States.

                  (B) The execution, delivery and performance of this Agreement,
         the Certificate of Rights and Preferences and Subsequent Certificates
         of Rights and Preferences (including the authorization, sale, issuance
         and delivery of the Investment Securities) have been duly authorized by
         all requisite corporate action and no further consent or authorization
         of TRC, its Board of Directors or its stockholders is required, except
         as otherwise contemplated by this Agreement.

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                  (C) This Agreement has been duly executed and delivered by TRC
         and, when this Agreement is duly authorized, executed and delivered by
         Fletcher, will be a valid and binding agreement enforceable against TRC
         in accordance with its terms, subject to bankruptcy, insolvency,
         reorganization, moratorium and similar laws of general applicability
         relating to or affecting creditors' rights generally and to general
         principles of equity. The issuance of the Investment Securities is not
         and will not be subject to any preemptive right or rights of first
         refusal that have not been properly waived or complied with.

                  (D) TRC has full corporate power and authority necessary to
         (i) own and operate its properties and assets and execute and deliver
         this Agreement, (ii) perform its obligations hereunder and under the
         Certificate of Rights and Preferences or Subsequent Certificates of
         Rights and Preferences (including, but not limited to, the issuance of
         the Investment Securities) and (iii) carry on its business as presently
         conducted and as presently proposed to be conducted. TRC and its
         subsidiaries are duly qualified and are authorized to do business and
         are in good standing as foreign corporations in all jurisdictions in
         which the nature of their activities and of their properties (both
         owned and leased) makes such qualification necessary, except for those
         jurisdictions in which failure to do so would not, individually or in
         the aggregate, be reasonably expected to have a material adverse effect
         on (i) the business affairs, assets, results of operations or prospects
         of TRC or any of its subsidiaries, or (ii) the transactions
         contemplated by, or TRC's ability to perform under, this Agreement, the
         Certificate of Rights and Preferences or any Subsequent Certificate of
         Rights and Preferences.

                  (E) No consent, approval, authorization or order of any court,
         governmental agency or other body is required for execution and
         delivery by TRC of this Agreement or the performance by TRC of any of
         its obligations hereunder and under the Certificate of Rights and
         Preferences or Subsequent Certificates of Rights and Preferences.

                  (F) Neither the execution and delivery by TRC of this
         Agreement nor the performance by TRC of any of its obligations
         hereunder or under the Certificate of Rights and Preferences or any
         Subsequent Certificate of Rights and Preferences:

                           (i) violates, conflicts with, results in a breach of,
                  or constitutes a default (or an event which with the giving of
                  notice or the lapse of time or both would be reasonably likely
                  to constitute a default) or creates any rights in respect of
                  any person under (A) the certificates of incorporation or
                  by-laws of TRC or any of its subsidiaries, (B) any decree,
                  judgment, order, law, treaty, rule, regulation or
                  determination of which TRC has knowledge (or would have
                  knowledge after due inquiry) of any court, governmental agency
                  or body, or arbitrator having jurisdiction over TRC or any of
                  its subsidiaries or any of their respective properties, or (C)
                  the terms of any bond, debenture, indenture, credit agreement,
                  note or any other evidence of indebtedness, or any agreement,
                  stock option or other similar plan, lease, mortgage, deed of
                  trust or other instrument to which TRC or any of its
                  subsidiaries is a party, by which TRC or any of its
                  subsidiaries is bound, or to which any of the properties or
                  assets of TRC or any of its subsidiaries is subject, (D) the
                  terms of any "lock-up" or similar provision of any
                  underwriting or similar

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                  agreement to which TRC or any of its subsidiaries is a party,
                  or (E) any rule or regulation of the NASD or the New York
                  Stock Exchange or any rule or regulation of the markets where
                  TRC's securities are publicly traded or quoted applicable to
                  TRC or the transactions contemplated hereby; or

                           (ii) results in the creation or imposition of any
                  lien, charge or encumbrance upon any Investment Securities or
                  upon any of the properties or assets of TRC or any of its
                  subsidiaries.

                  (G) TRC has validly reserved for issuance to Fletcher the
         Series A-1 Preferred Shares and any Additional Preferred Shares under
         this Agreement and eight hundred thousand (800,000) shares of Common
         Stock. When issued to Fletcher against payment therefor, each
         Investment Security:

                           (i) will have been duly and validly authorized, duly
                  and validly issued, fully paid and non-assessable;

                           (ii) will be free and clear of any security
                  interests, liens, claims or other encumbrances; and

                           (iii) will not have been issued or sold in violation
                  of any preemptive or other similar rights of the holders of
                  any securities of TRC or any other person.

                  (H) TRC satisfies all maintenance criteria of the New York
         Stock Exchange or has a valid exemption from such criteria of which it
         has previously notified Fletcher in writing. No present set of facts or
         circumstances of which TRC has knowledge (or would have knowledge after
         due inquiry) will (with the passage of time or the giving of notice or
         both or neither) cause any of the Common Stock to be delisted from the
         New York Stock Exchange. All of the Common Shares will, when issued, be
         duly listed and admitted for trading on all of the markets where shares
         of Common Stock are traded, including the New York Stock Exchange.

                  (I) There is no pending or, to the best knowledge of TRC,
         threatened action, suit, proceeding or investigation before any court,
         governmental agency or body, or arbitrator having jurisdiction over TRC
         or any of its affiliates that would materially affect the execution by
         TRC of, or the performance by TRC of its obligations under, this
         Agreement, the Certificate of Rights and Preferences or Subsequent
         Certificates of Rights and Preferences.

                  (J) (i) Since September 30, 1998, none of TRC's filings with
         the United States Securities and Exchange Commission (the "SEC") under
         the Securities Act of 1933, as amended (the "SECURITIES ACT") or under
         Section 13(a) or 15(d) of the Exchange Act (each an "SEC FILING")
         contains any untrue statement of a material fact or omits to state any
         material fact necessary in order to make the statements, in the light
         of the circumstances under which they were made, not misleading (except
         as set forth in amendments or supplements to such SEC Filings made
         before and excluding the date hereof). (ii) Since June 30, 1998, there
         has not been any pending or, to the best knowledge of TRC, threatened
         action, suit, proceeding or investigation before any court,

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         governmental agency or body, or arbitrator having jurisdiction over TRC
         or any of its subsidiaries or any of its affiliates that could cause a
         material adverse change in the condition, financial or otherwise, or in
         the business affairs, assets, results of operations or prospects of TRC
         and its subsidiaries, whether or not arising in the ordinary course of
         business, except as disclosed in TRC's SEC Filings on or before the
         date immediately before and excluding the date hereof. (iii) Since the
         date of TRC's most recent SEC Filing, there has not been, and TRC is
         not aware of, any development or condition that is reasonably likely to
         result in, any material change in the condition, financial or
         otherwise, or in the business affairs, assets, results of operations or
         prospects of TRC and its subsidiaries, whether or not arising in the
         ordinary course of business. (iv) TRC's SEC Filings made from and after
         September 30, 1998, fully disclose all material information concerning
         TRC and its subsidiaries (other than the existence and terms of this
         Agreement).

                  (K) The offer and sale of the Investment Securities to
         Fletcher pursuant to this Agreement will, subject to compliance by
         Fletcher with the applicable representations and warranties contained
         in Section 7 hereof and with the applicable covenants and agreements
         contained in Section 11 hereof, be made in accordance with an exemption
         from the registration requirements of the Securities Act and any
         applicable state law. Neither TRC nor any agent on its behalf has
         solicited or will solicit any offers to sell or has offered to sell or
         will offer to sell all or any part of the Series A Preferred Shares to
         any person or persons so as to bring the sale of such Series A
         Preferred Shares by TRC within the registration provisions of the
         Securities Act.

                  (L) Immediately before the Initial Closing Date and
         immediately after the filing of the Certificate of Rights and
         Preferences, the authorized capital stock of TRC consists of thirty
         million (30,000,000) shares of Common Stock, par value ten cents
         ($0.10) per share, and five hundred thousand (500,000) shares of
         preferred stock, par value ten cents ($0.10) per share ("PREFERRED
         STOCK") of which fifteen thousand (15,000) are designated Series A-1
         Preferred Stock. Immediately before the Initial Closing Date, (A) eight
         million one hundred ninety-six thousand nine hundred and three
         (8,196,903) shares of Common Stock and no shares of Preferred Stock
         were issued and outstanding, (B) one million nine hundred twelve
         thousand nine hundred and one (1.912,901) shares of Common Stock and no
         shares of Preferred Stock are currently reserved and subject to
         issuance upon the exercise of outstanding stock options, warrants or
         other convertible rights, (C) 628,653 shares of Common Stock are held
         in the treasury of TRC, and (D) up to two hundred and fifty-five
         thousand and seventy four (255,074) additional shares of Common Stock
         may be issued under the TRC Companies, Inc. Restated Stock Option Plan.
         All of the outstanding shares of Common Stock are, and all shares of
         capital stock which may be issued pursuant to stock options, warrants
         or other convertible rights will be, when issued and paid for in
         accordance with the respective terms thereof, duly authorized, validly
         issued, fully paid and non-assessable, free of any preemptive rights in
         respect thereof and issued in material compliance with all applicable
         state and federal laws concerning issuance of securities. As of the
         date hereof, except as set forth above and except as may be provided
         for in the agreements set forth on Schedule 4(l) attached hereto, and
         except for shares of Common Stock or other securities issued upon
         conversion, exchange, exercise or purchase associated with the
         securities, options,

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         warrants, rights and other instruments referenced above, no shares of
         capital stock or other voting securities of TRC were outstanding, no
         equity equivalents, interests in the ownership or earnings of TRC or
         other similar rights were outstanding, and there were no existing
         options, warrants, calls, subscriptions or other rights or agreements
         or commitments relating to the capital stock of TRC or any of its
         subsidiaries or obligating TRC or any of its subsidiaries to issue,
         transfer, sell or redeem any shares of capital stock, or other equity
         interest in, TRC or any of its subsidiaries or obligating TRC or any of
         its subsidiaries to grant, extend or enter into any such option,
         warrant, call, subscription or other right, agreement or commitment.
         Attached hereto as Schedule 4(l) is a true and correct list as of the
         date of this Agreement of all outstanding options, warrants, calls,
         subscriptions and other rights or agreements or commitments relating to
         the issuance of additional shares of capital stock of TRC and with
         respect to each a description of the number and class of securities and
         the exercise price thereof.

                  (M) SOLVENCY. The sum of the assets of TRC, both at a fair
         valuation and at present fair salable value, exceeds its liabilities,
         including contingent liabilities. TRC has sufficient capital with which
         to conduct its business as presently conducted and, following the
         Initial Closing, as proposed to be conducted. TRC has not incurred
         debt, and does not intend to incur debt, beyond its ability to pay such
         debt as it matures. For purposes of this paragraph, "DEBT" means any
         liability on a claim, and "CLAIM" means (x) a right to payment, whether
         or not such right is reduced to judgment, liquidated, unliquidated,
         fixed, contingent, matured, unmatured, disputed, undisputed, legal,
         equitable, secured, or unsecured, or (y) a right to an equitable remedy
         for breach of performance if such breach gives rise to a payment,
         whether or not such right to an equitable remedy is reduced to
         judgment, fixed, contingent, matured, unmatured, disputed, undisputed,
         secured, or unsecured. With respect to any such contingent liabilities,
         such liabilities are computed at the amount which, in light of all the
         facts and circumstances existing at the time, represents the amount
         which can reasonably be expected to become an actual or matured
         liability.

                  (N) AUDITED FINANCIALS. Attached hereto as Annex D is a true,
         correct and complete copy of (i) the report of PricewaterhouseCoopers
         LLP dated October 9, 2001, together with the accompanying consolidated
         financial statements and schedules of TRC at June 30, 2001 and the
         results of TRC's operations and cash flows for each of the three (3)
         years in the period ended June 30, 2001, as such report appears in the
         Annual Report on Form 10-K for the fiscal year ended June 30, 2001
         filed by TRC with the SEC (the "AUDITOR REPORT") and (ii) the written
         consent of PricewaterhouseCoopers LLP to the inclusion of its report
         described in clause (i) herein.

                  (O) EQUIVALENT VALUE. As of the Initial Closing Date, the
         consideration that TRC is receiving from Fletcher is equivalent in
         value to the consideration Fletcher is receiving from TRC pursuant to
         this Agreement. As of the Initial Closing Date, under the terms of this
         Agreement, TRC is receiving fair consideration from Fletcher for the
         agreements, covenants, representations and warranties made by TRC to
         Fletcher.

                                       8
<PAGE>

                  (P) NO NON-PUBLIC INFORMATION. Fletcher has not requested from
         TRC, and TRC has not furnished to Fletcher, any material non-public
         information concerning TRC or its subsidiaries.

                  (Q) RESTATEMENT NOTICES. As of each Subsequent Closing Date,
         TRC has provided Fletcher with all Restatement Notices (as defined in
         the Certificate of Rights and Preferences or Subsequent Certificates of
         Rights and Preferences) required to be delivered following a
         Restatement (as defined in the Certificate of Rights and Preferences or
         Subsequent Certificates of Rights and Preferences).

         5. Registration Provisions.

                  (A) TRC shall, as soon as practicable and at its own expense,
         file a Registration Statement (as defined below) under the Securities
         Act covering the resale of the Registrable Number (as defined below) of
         shares of Common Stock and shall use its best efforts to cause such
         Registration Statement to be declared effective on or before April 14,
         2002 (the "REQUIRED REGISTRATION DATE"). The obligations to have the
         Registration Statement declared effective and to maintain such
         effectiveness as provided in this Section 5 are referred to herein as
         the "REGISTRATION REQUIREMENT." Pursuant to the preceding sentence, TRC
         shall register pursuant to such Registration Statement a number of
         shares of Common Stock equal to one hundred and sixty-six point
         sixty-six percent (166.66%) of the number of Common Shares issuable
         upon conversion of the Initial Preferred Shares based upon the
         Conversion Price (as defined in the Certificate of Rights and
         Preferences) in effect on the effective date of the Registration
         Statement (the "REGISTRABLE NUMBER"). Prior to the exercise by Fletcher
         of any of the Fletcher Rights, TRC shall promptly amend such
         Registration Statement (or, if necessary, file a new Registration
         Statement) at any time and from time to time after the number of Common
         Shares issued and issuable upon conversion or redemption of the Initial
         Preferred Shares (including shares issuable as dividends under the
         Initial Preferred Shares, assuming all such dividends are paid in
         shares of Registered Common Stock) exceeds ninety percent (90%) of the
         number of shares then registered (such greater number, thereafter, the
         "Registrable Number") so that the Registrable Number of Common Shares
         shall at all times be registered and freely tradable. In addition, from
         and after the exercise by Fletcher of any of the Fletcher Rights, TRC
         shall promptly amend such Registration Statement (or, if necessary,
         file a new Registration Statement) at any time, and from time to time,
         when the total number of Common Shares issued or issuable under the
         Series A Preferred Shares, whether upon conversion or redemption,
         (including shares issuable as dividends under the Series A Preferred
         Shares, assuming all such dividends are paid in shares of Registered
         Common Stock) exceeds eighty percent (80%) of the number of shares then
         registered (such greater number, thereafter, the "Registrable Number"),
         so that the Registrable Number of Common Shares shall at all times be
         registered and freely tradable.

                  (B) The registration statement filed or required to be filed
         under the Securities Act in accordance with Section 5(a) hereof, along
         with any amendments and additional registration statements, is referred
         to as the "REGISTRATION STATEMENT." TRC shall provide

                                       9
<PAGE>

         prompt written notice to Fletcher when the Registration Statement has
         been declared effective by the SEC.

                  (C) TRC will: (A) keep the Registration Statement effective
         until the earlier of (x) the later of (i) the second anniversary of the
         issuance of the last Common Share that may be issued, or (ii) such time
         as all of the Common Shares issued or issuable hereunder can be sold by
         Fletcher or any of its affiliates immediately without compliance with
         the registration requirements of the Securities Act pursuant to
         paragraph (k) of Rule 144 under the Securities Act ("RULE 144") or (y)
         the date all of the Common Shares issued or issuable shall have been
         sold by Fletcher and its affiliates (such later period, the
         "REGISTRATION PERIOD"); (B) prepare and file with the SEC such
         amendments and supplements to the Registration Statement and the
         prospectus used in connection with the Registration Statement (as so
         amended and supplemented from time to time, the "PROSPECTUS") as may be
         necessary to comply with the provisions of the Securities Act with
         respect to the disposition of all Common Shares by Fletcher or any of
         its affiliates; (C) furnish such number of Prospectuses and other
         documents incident thereto, including any amendment of or supplement to
         the Prospectus, as Fletcher from time to time may reasonably request;
         (D) cause all Common Shares to be listed on each securities exchange
         and quoted on each quotation service on which similar securities issued
         by TRC are then listed or quoted; (E) provide a transfer agent and
         registrar for all Common Shares and a CUSIP number for all Common
         Shares; (F) otherwise comply with all applicable rules and regulations
         of the SEC, the New York Stock Exchange and any other exchange or
         quotation service on which the Common Shares are obligated to be listed
         or quoted under this Agreement; and (G) file the documents required of
         TRC and otherwise obtain and maintain requisite blue sky clearance in
         (x) New York and all other jurisdictions in which any of the shares of
         Common Stock were originally sold and (y) all other states specified in
         writing by Fletcher, provided, however, that as to this clause (y), TRC
         shall not be required to qualify to do business or consent to service
         of process in any state in which it is not now so qualified or has not
         so consented. Fletcher shall have the right to approve the description
         of the selling stockholder, plan of distribution and all other
         references to Fletcher and its affiliates contained in each
         Registration Statement and Prospectus.

                  (D) TRC shall furnish to Fletcher upon request a reasonable
         number of copies of a supplement to or an amendment of any Prospectus
         as may be necessary in order to facilitate the public sale or other
         disposition of all or any of the Common Shares by Fletcher or any of
         its affiliates pursuant to the Registration Statement.

                  (E) With a view to making available to Fletcher and its
         affiliates the benefits of Rule 144 and Form S-3 under the Securities
         Act, TRC covenants and agrees to: (A) make and keep available adequate
         current public information (within the meaning of Rule 144(c))
         concerning TRC, until the earlier of (x) the second (2nd) anniversary
         of the issuance of the last Common Share to be issued or (y) such date
         as all of the Common Shares shall have been resold by Fletcher or any
         of its affiliates; and (B) furnish to Fletcher upon request, as long as
         Fletcher owns any Common Shares, (x) a written statement by TRC that it
         has complied with the reporting requirements of the Securities Act and
         the Exchange Act, (y) a copy of the most recent annual or quarterly
         report of

                                       10
<PAGE>

         TRC, and (z) such other information as may be reasonably requested in
         order to avail Fletcher and its affiliates of Rule 144 or Form S-3 with
         respect to such Common Shares.

                  (F) Notwithstanding anything else in this Section 5, if, at
         any time during which a Prospectus is required to be delivered in
         connection with the sale of any Common Shares, TRC determines in good
         faith and upon the advice of its outside legal counsel that a
         development has occurred or a condition exists as a result of which the
         Registration Statement or the Prospectus contains a material
         misstatement or omission, or that a material transaction in which TRC
         is engaged or proposes to engage would require an immediate amendment
         to the Registration Statement, a supplement to the Prospectus, or a
         filing under the Exchange Act or other public disclosure of material
         information and the disclosure of such transaction would be premature
         or injurious to the consummation of the transaction, TRC will
         immediately notify Fletcher thereof by telephone and in writing. Upon
         receipt of such notification, Fletcher and its affiliates will
         immediately suspend all offers and sales of Common Shares pursuant to
         the Registration Statement. In such event, TRC will amend or supplement
         the Registration Statement and the Prospectus or make such filings or
         public disclosures as promptly as practicable and will take such other
         steps as may be required to permit sales of the Common Shares
         thereunder by Fletcher and its affiliates in accordance with applicable
         federal and state securities laws. TRC will promptly notify Fletcher
         after it has determined in good faith that such sales have become
         permissible in such manner and will promptly deliver copies of the
         Registration Statement and the Prospectus (as so amended or
         supplemented, if applicable) to Fletcher in accordance with paragraphs
         (c) and (d) of this Section 5. Notwithstanding the foregoing, (A) under
         no circumstances shall TRC be entitled to exercise its right to suspend
         sales of any Common Shares as provided in this Section 5(f) and
         pursuant to the Registration Statement more than twice in any twelve
         (12)-month period, (B) the period during which such sales may be
         suspended (each a "BLACKOUT PERIOD") at any time shall not exceed
         thirty (30) calendar days, and (C) no Blackout Period may commence less
         than thirty (30) calendar days after the end of the preceding Blackout
         Period.

                  (G) Upon the commencement of a Blackout Period pursuant to
         this Section 5, Fletcher will notify TRC of any contract to sell,
         assign, deliver or otherwise transfer any Common Shares (each a "SALES
         CONTRACT") that Fletcher or any of its affiliates has entered into
         before the commencement of such Blackout Period and that would require
         delivery of such Common Shares during such Blackout Period, which
         notice will contain the aggregate sale price and quantity of Common
         Shares pursuant to such Sales Contract. If Fletcher or any of its
         affiliates are unable to consummate the sale of Common Shares pursuant
         to the Sales Contract, TRC will promptly indemnify each Fletcher
         Indemnified Party against any Proceeding that each Fletcher Indemnified
         Party may incur arising out of or in connection with Fletcher's breach
         or alleged breach of any such Sales Contract, and TRC shall reimburse
         each Fletcher Indemnified Party for any reasonable costs or expenses
         (including reasonable legal fees) incurred by such party in
         investigating or defending any such Proceeding.

                  (H) In addition to any other remedies available to Fletcher
         under this Agreement or at law or equity, if the Registration Statement
         has not been declared

                                       11
<PAGE>

         effective by the Required Registration Date or such Registration
         Statement is not available with respect to the Registrable Number at
         any time on or after the Required Registration Date (except during a
         Blackout Period permitted under Section 5(f))(each calendar day in
         which the Registration Statement is unavailable under any of the
         foregoing circumstances, a " REGISTRATION STATEMENT UNAVAILABILITY
         DAY"), then each of the Conversion Prices (as defined in the
         Certificate of Rights and Preferences and Subsequent Certificates of
         Rights and Preferences) shall be permanently decreased by two and
         one-half percent (2-1/2%) for each month or partial month, compounded
         monthly, that such Registration Statement is not available with respect
         to the Registrable Number.

                  (I) If the Registration Requirement is not satisfied at any
         time during the Registration Period then the Fletcher Rights Period
         shall be extended by one (1) day for each day (or portion thereof) that
         the Registration Requirement shall have not been satisfied.

         6. Conversion and Redemption of Preferred Shares.

                  (A) Initial Preferred Shares and Additional Preferred Shares
         are convertible and redeemable into Common Shares in accordance with
         the terms and conditions set forth in Section 6 of the Certificate of
         Rights and Preferences and Subsequent Certificates of Rights and
         Preferences. The form of the "PREFERRED STOCK CONVERSION NOTICE" to be
         executed and delivered by Fletcher to TRC as specified therein is
         attached hereto as Annex E, the form of the "PREFERRED STOCK CONVERSION
         DELIVERY NOTICE" to be executed and delivered by TRC to Fletcher as
         specified therein is attached hereto as Annex F, the form of the "CALL
         REDEMPTION NOTICE" to be executed and delivered by TRC to Fletcher as
         specified therein is attached hereto as Annex G, the form of the
         "INITIAL REDEMPTION NOTICE" to be executed and delivered by Fletcher to
         TRC as specified therein is attached hereto as Annex H and the form of
         the "FINAL REDEMPTION NOTICE" to be executed and delivered by TRC to
         Fletcher as specified therein is attached hereto as Annex I.

                  (B) If the number of Common Shares issued and issuable under
         this Agreement (including, but not limited to, all Common Shares issued
         or issuable upon conversion or redemption of or as dividends upon
         Series A Preferred Shares issued or that may become issuable under this
         Agreement) on the date of any Preferred Stock Conversion Notice or on
         any date on which Fletcher is entitled to deliver a Holder Redemption
         Notice (each a "FLETCHER NOTICE DATE") would result in Fletcher
         receiving more than seventeen and one-half percent (17.5%) of the
         shares of Common Stock outstanding as of the date of this Agreement
         (the "ORIGINAL NUMBER") and Fletcher's receipt of twenty percent (20%)
         or more of the Original Number would require the approval (the
         "REQUIRED CONSENT") of the holders of Common Stock pursuant to the
         listing requirements or rules of the NYSE, TRC (A) shall not issue
         Common Shares (the "ISSUANCE BLOCKAGE") to the extent that the total
         number of shares of Common Stock issued hereunder would exceed nineteen
         and ninety-nine one-hundredths percent (19.99%) of the Original Number,
         (B) shall notify TRC's stockholders of a stockholder meeting for the
         purpose of voting on the Required Consent within twenty (20) Business
         Days from and including the Fletcher Notice Date, which meeting shall
         be held on or before the seventieth (70th) calendar day after and
         including the Fletcher Notice Date, and

                                       12
<PAGE>

         (C) shall otherwise use its best efforts to obtain, on or before the
         seventieth (70th) calendar day after and including the Fletcher Notice
         Date, the Required Consent for the issuance of all Common Shares issued
         or issuable under this Agreement (including, but not limited to, all
         Common Shares issued or issuable upon conversion or redemption of
         Series A Preferred Shares issued or issuable under this Agreement)
         including, but not limited to, recommending to TRC's stockholders that
         such stockholders give the Required Consent and not withdrawing such
         recommendation.

                  (C) The aggregate number of Common Shares issuable upon
         conversion or redemption of, or as dividends upon, the Series A
         Preferred Shares, when combined with all shares of Common Stock then
         beneficially owned (as determined pursuant to Exchange Act Rule 13d-3)
         by Fletcher, shall not exceed the Maximum Number of shares of Common
         Stock. The "MAXIMUM NUMBER" equals the sum of eight hundred thousand
         (800,000) plus the Exercisable Number. The "EXERCISABLE NUMBER" is
         initially zero (0) and thereafter may be increased upon expiration of a
         sixty-five (65) day period (the "NOTICE PERIOD") after Fletcher
         delivers a notice (a "65 DAY NOTICE") to TRC designating an aggregate
         number of Common Shares in excess of the Maximum Number which shall be
         issuable upon conversion or redemption of the Series A Preferred
         Shares. A 65 Day Notice may be given at any time. From time to time
         following the Notice Period, Common Stock may be issued to Fletcher on
         any Business Day for any quantity of Common Stock, such that the
         aggregate number of shares of Common Stock issued hereunder is less
         than or equal to the Maximum Number.

         7. Representations and Warranties of Fletcher. Fletcher hereby
represents and warrants to TRC on each Closing Date:

                  (A) Fletcher has been duly incorporated and is validly
         existing under the laws of Bermuda.

                  (B) The execution, delivery and performance of this Agreement
         by Fletcher have been duly authorized by all requisite corporate action
         and no further consent or authorization of Fletcher, its Board of
         Directors or its stockholders is required. This Agreement has been duly
         executed and delivered by Fletcher and, when duly authorized, executed
         and delivered by TRC, will be a valid and binding agreement enforceable
         against Fletcher in accordance with its terms, subject to bankruptcy,
         insolvency, reorganization, moratorium and similar laws of general
         applicability relating to or affecting creditors' rights generally and
         to general principles of equity.

                  (C) Fletcher understands that no United States federal or
         state agency has passed on, reviewed or made any recommendation or
         endorsement of the Investment Securities.

                  (D) Fletcher is an "accredited investor" as such term is
         defined in Regulation D promulgated under the Securities Act.

                  (E) Fletcher is purchasing the Investment Securities for its
         own account for investment only and not with a view to, or for resale
         in connection with, the public sale or

                                       13
<PAGE>

         distribution thereof in the United States, except pursuant to sales
         registered under the Securities Act or exempt from such registration.

                  (F) Fletcher understands that the Investment Securities are
         being or will be offered and sold to it in reliance on specific
         exemptions from the registration requirements of United States federal
         securities laws and that TRC is relying on the truth and accuracy of,
         and Fletcher's compliance with, the representations, warranties,
         agreements, acknowledgments and understandings of Fletcher set forth
         herein in order to determine the availability of such exemptions and
         the eligibility of Fletcher to acquire the Investment Securities.

                  (G) Fletcher is able to bear the economic risk of an
         investment in the Investment Securities and, at the present time, is
         able to afford a complete loss of such investment.

         8. Right of First Offer. Subject to the terms and conditions specified
in this Section 8, TRC hereby grants to (i) Fletcher, (ii) any affiliate or
wholly-owned subsidiary of Fletcher, or (iii) any of Fletcher's designees which,
other than in the case of an assignment of Investment Securities or this
Agreement in accordance with Section 20(b) hereof, have been approved by TRC
(collectively, the "FIRST OFFER STOCKHOLDERS"), a right of first offer with
respect to future sales by TRC of its Offered Shares (as hereinafter defined).
The term "OFFERED SHARES" means any shares of, or securities convertible into,
exercisable or exchangeable for, or whose value is derived in whole or in part
from, any shares of any class of its capital stock. At any time within the
thirty (30) Business Days after and excluding any Closing Date that TRC has a
bona fide intention to offer to sell to a third party any Offered Shares, TRC
shall first negotiate with the First Offer Stockholders (and, for the sake of
clarity, in the case of a Fletcher Notice delivered at such time as TRC shall be
in the process of offering, negotiating to sell or seeking indications of
interest to purchase Offered Shares, TRC shall then immediately cease such
activities and shall negotiate with the First Offer Stockholders) to sell such
Offered Shares in accordance with the following provisions:

                  (A) TRC shall deliver a notice in accordance with Section 19
         of this Agreement (an "OFFER NOTICE") to Fletcher stating (i) its bona
         fide intention to offer such Offered Shares, (ii) the number of such
         Offered Shares proposed to be offered, (iii) the price and terms upon
         which it proposes to offer such Offered Shares, and (iv) to the extent
         available, the identity of the proposed purchasers of such Offered
         Shares and such purchasers' affiliates and associates.

                  (B) For ten (10) Business Days after delivery of the Offer
         Notice, TRC shall negotiate exclusively and in good faith with the
         First Offer Stockholders with respect to the proposed sale of Offered
         Shares and TRC shall not enter into or continue negotiations with,
         respond to, furnish information to, or consummate any transaction with
         any person or entity concerning any transaction regarding the proposed
         sale of Offered Shares.

                  (C) Within ten (10) Business Days after delivery of the Offer
         Notice, the First Offer Stockholders may elect by delivering a written
         notice to TRC, to purchase or obtain, at the price and on the terms
         specified in the Offer Notice (or on terms that are

                                       14
<PAGE>

         substantially similar to, or more favorable to TRC than, the terms
         contained in the Offer Notice)(the "Specified Terms"), any or all of
         the Offered Shares. If the Offer Notice specifies consideration other
         than cash is to be paid for the Offered Shares, the First Offer
         Stockholders may, at their sole option, (if they choose to purchase
         such Offered Shares) deliver either of (i) such consideration or (ii)
         cash equal to the fair market value of such consideration on the date
         and at the time such offer is accepted. The closing of any such
         transaction shall occur not later than twenty (20) Business Days after
         TRC receives written notice of such election. If (i) the First Offer
         Stockholders do not so elect within ten (10) Business Days after
         delivery of the Offer Notice or, (ii) having elected to so purchase or
         obtain any or all of the Offered Shares at the Specified Terms,
         nonetheless do not, in the reasonable good faith judgment of TRC,
         present to TRC the same benefit, from a non-financial point of view, as
         that presented by an alternative investor identified in the Offer
         Notice to whom TRC proposes to sell and to whom TRC in fact sells the
         Offered Shares at the Specified Terms (viz., in terms of the benefit to
         TRC of being associated with such investor either as a result of such
         investor's identity or such investor's possible strategic value to
         TRC), then, in the case of clause (i), TRC may sell the Offered Shares
         to any person at the price and on terms that are no less favorable to
         TRC than the Specified Terms and, in the case of clause (ii) above, TRC
         may sell the Offered Shares only to the investor identified in the
         Offer Notice at the price and on terms that are no less favorable to
         TRC than the Specified Terms, in each case within sixty (60) calendar
         days after the date of the Offer Notice.

                  (D) The right of first offer in this Section 8 shall not
         apply, (for the sake of clarity, subject to the terms of the
         Certificate of Rights and Preferences and any Subsequent Certificates
         of Rights and Preferences), to any issuance or sale of the following
         securities:

                           (i) Such Offered Shares as are issued (x) as
                  consideration for the acquisition of at least fifty percent
                  (50%) of the voting capital stock or assets of a bona fide
                  operating company in a similar or complementary line of
                  business to that of TRC, as determined reasonably and in good
                  faith by TRC's Board of Directors whether through purchase,
                  merger, consolidation, tender offer or otherwise, provided
                  that the purpose of TRC entering into any such transaction
                  shall not be to raise capital, directly or indirectly, or
                  otherwise to avoid the requirements of this Section 8 or (y)
                  in connection with any bona fide lease financing, in
                  connection with any joint venture where none of the parties to
                  such joint venture is a financial investor, or in
                  consideration of license rights or similar rights to
                  proprietary technology;

                           (ii) Common Stock issued pursuant to any stock split,
                  dividend or distribution payable in additional shares of
                  Common Stock or other securities or rights convertible into,
                  or entitling the holder thereof to receive directly or
                  indirectly, additional shares of Common Stock without payment
                  of any consideration by such holder;

                           (iii) Common Stock issuable or issued to employees,
                  consultants or directors of TRC directly or pursuant to a
                  stock option plan, employee stock

                                       15
<PAGE>

                  purchase plan or restricted stock plan, or other similar
                  arrangements related to compensation for services in effect on
                  the date of this Agreement or approved by TRC's stockholders,
                  in each case in the ordinary course of business consistent
                  with TRC's past practice;

                           (iv) Common Stock issued upon conversion of warrants
                  and options in existence on the date hereof; or

                           (v) Common Stock issued as dividends on, or upon
                  conversion or redemption of Series A Preferred Shares.

                           (vi) Common Stock issued in a bona fide firm
                  commitment underwritten offering to the public with net
                  proceeds of at least twenty-five million dollars ($25,000,000)
                  to TRC, after underwriter's discounts or commissions and other
                  fees or expenses.

9. Covenants of TRC. TRC covenants and agrees with Fletcher as follows:

                  (A) For so long as Fletcher owns or has the right to purchase
         any Investment Securities, and for a period of one (1) year thereafter,
         TRC will (i) maintain the eligibility of the Common Stock for listing
         on the New York Stock Exchange and (ii) regain the eligibility of the
         Common Stock for listing or quotation on all markets and exchanges
         including the New York Stock Exchange, in the event that the Common
         Stock is delisted by the New York Stock Exchange or any other
         applicable market or exchange; and (iii) cause the representations and
         warranties contained in Section 4 to be and remain true and correct,
         except those representations and warranties that speak as of a
         particular date, which shall be true and correct as of such date.

                  (B) TRC will provide Fletcher with a reasonable opportunity,
         which shall not be less than two (2) full Business Days, to review and
         comment on any public disclosure by TRC of information regarding this
         Agreement and the transactions contemplated hereby, before such public
         disclosure. Beginning on the date hereof and for so long as Fletcher
         owns or has the right to purchase any Investment Securities and for a
         period of ninety (90) calendar days thereafter, TRC will promptly
         notify Fletcher immediately following any press release or other
         information disseminated to any stockholder, analyst, or member of the
         media.

                  (C) As soon as such information is available (but in no event
         later than two (2) weeks after the Closing Date), TRC shall deliver to
         Fletcher a written notice stating the Original Number.

                  (D) TRC will make all filings required by law with respect to
         the transactions contemplated hereby.

                  (E) TRC will comply with the terms and conditions of the
         Series A Preferred Shares as set forth in the Certificate of Rights and
         Preferences and Subsequent Certificates of Rights and Preferences, and
         will not amend the Certificate of Rights and

                                       16
<PAGE>

         Preferences or Subsequent Certificates of Rights and Preferences
         without the required consent of the holders of Series A Preferred
         Shares.

                  (F) For so long as Fletcher holds any Investment Securities,
         on or promptly following the date of filing of each of its quarterly
         reports on Form 10-Q with the SEC, TRC shall deliver to Fletcher a copy
         of the review report delivered to TRC relating to the final
         consolidated unaudited financial statements contained therein, prepared
         by PricewaterhouseCoopers LLP, or another nationally recognized
         accounting firm, in accordance with Statements of Auditing Standard No.
         71; from and after such time as Fletcher shall have converted 7,500 or
         more shares of Series A Preferred Shares, Fletcher shall pay 50% of
         TRC's cost of obtaining such reports, up to a maximum of $5,000 per
         year.

                  (G) TRC shall use commercially reasonable efforts to cause the
         Common Shares to be eligible for book-entry transfer through The
         Depository Trust Company (or any successor thereto) as soon as
         practicable after the date of this Agreement and thereafter to use
         commercially reasonable efforts to maintain such eligibility.

                  (H) TRC shall at all times reserve for issuance such number of
         its shares of Common Stock as shall from time to time be sufficient to
         effect the conversion of all Series A Preferred Shares and to satisfy
         its delivery obligation upon such conversion and to effect the
         redemption of the Series A Preferred Shares.

                  (I) TRC shall deliver a notice (an "INCREASE NOTICE") stating
         the increase, if any, in the aggregate number of shares of Common Stock
         outstanding as of the last day of the preceding month over the number
         outstanding as of the last day of the second preceding month, or in the
         case of the last day of the month immediately following the Initial
         Closing Date, the number of shares outstanding specified in Section
         4(l), provided that in any month in which there is an increase of less
         than 10,000 shares (as such number may be adjusted to reflect any
         stock-splits, etc) TRC need not deliver any such notice and shall
         instead carry-over the amount of such increase into succeeding months
         until such amount is reflected in a notice delivered hereunder. Unless
         expressly waived by Fletcher, TRC shall deliver an Increase Notice to
         Fletcher on or before the tenth (10th) day of every calendar month from
         and including the Initial Closing Date.

                  (J) TRC shall, within one (1) Business Day after and excluding
         each Closing Date publicly distribute a press release disclosing the
         material terms of such Initial Closing or Subsequent Closing and shall,
         within three (3) Business Days after and excluding each Closing Date
         file a report with the SEC on Form 8-K with respect to the same.

         10. Consolidation, Merger, Etc. In case TRC shall be a party to any
transaction which results in a Change in Control (as defined in the Certificate
of Rights and Preferences or Subsequent Certificates of Rights and Preferences),
Fletcher and its assigns shall have the rights set forth in the Certificate of
Rights and Preferences and Subsequent Certificates of Rights and Preferences
regarding Changes in Control in addition to the rights contained in this
Agreement. "ACQUIRER" means, in connection with any Change in Control, the
continuing or surviving

                                       17
<PAGE>

corporation of a consolidation or merger with TRC (if other than TRC), the
transferee of all or substantially all of the properties or assets of the
Company, the corporation consolidating with or merging into TRC in a
consolidation or merger in connection with which the Common Stock is changed
into or exchanged for stock or other securities of any other person or cash or
any other property, the entity or group acting in concert acquiring or
possessing the power to cast the majority of the eligible votes at a meeting of
the Company's stockholders at which directors are elected or, in the case of a
capital reorganization or reclassification, TRC. TRC agrees that it will not
enter into an agreement with an Acquirer resulting in a Change in Control unless
such agreement expressly obligates the Acquirer to assume all of TRC's
obligations under this Agreement, the Certificate of Rights and Preferences and
the Subsequent Certificates of Rights and Preferences including, but not limited
to, the dividend, liquidation, conversion, exercise, redemption, voting and
other provisions regarding the Series A Preferred Shares and the Fletcher Rights
contained herein and therein. Without limiting the foregoing, all unexercised
and unexpired Fletcher Rights shall automatically be converted into equivalent
rights with respect to the Acquirer including, but not limited to, the right to
receive the equivalent of the Additional Preferred Shares issuable upon the
exercise of such rights and to receive the consideration for such Additional
Preferred Shares set forth in Section 6(F) of the Subsequent Certificate of
Rights and Preferences governing such series of Additional Preferred Shares. On
or before the date an agreement is entered into with an Acquirer resulting in a
Change in Control, the Company shall deliver to Fletcher written notice that the
Acquirer has assumed such obligations. TRC shall provide Fletcher with written
notice of any proposed transaction resulting in a Change in Control as soon as
the existence of such proposed transaction is made public by any person. TRC
shall notify Fletcher promptly of any material developments with respect to such
transaction, including advance notice at least ten (10) Business Days before the
date such transaction is expected to become effective (provided, however, in the
case of such information which TRC reasonably believes, after consultation with
outside counsel, would be required to be publicly disseminated if disclosed to
Fletcher absent a confidentiality agreement, that TRC shall so notify Fletcher
only after Fletcher's delivery of a notice indicating its agreement to keep such
information confidential).

         11. Covenants of Fletcher. Fletcher hereby covenants and agrees with
         TRC that:

                  (A) Neither Fletcher, nor any of its affiliates, will at any
         time offer or sell any Investment Securities other than pursuant to
         registration under the Securities Act or pursuant to an available
         exemption therefrom.

                  (B) Neither Fletcher, nor any of its affiliates, shall engage
         in short sales of TRC's securities.

         12. Legend. Subject to Section 5, Fletcher understands that the
         certificates or other instruments representing the Investment
         Securities shall bear a restrictive legend composed of exactly the
         following words (and a stop transfer order may be placed against
         transfer of such certificates or other instruments):

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
         APPLICABLE STATE SECURITIES LAWS. THE

                                       18
<PAGE>

         SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR
         SALE, SOLD, TRANSFERRED OR ASSIGNED UNLESS (1) THERE IS AN EFFECTIVE
         REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, OR (2)
         THE SALE IS MADE IN ACCORDANCE WITH RULE 144 OR ANOTHER APPLICABLE
         EXEMPTION UNDER THE SECURITIES ACT.

         The legend set forth above shall be removed and TRC shall issue a
certificate without such legend to any holder of Investment Securities if,
unless otherwise required by state securities laws, such shares are sold
pursuant to an effective Registration Statement under the Securities Act, Rule
144 or another applicable exemption from registration.

         13. Conditions Precedent to Fletcher's Obligations. The obligations of
Fletcher hereunder are subject to the performance by TRC of its obligations
hereunder and to the satisfaction of the following additional conditions
precedent, unless expressly waived in writing by Fletcher:

                  (A) On each Closing Date, (i) the representations and
         warranties made by TRC in this Agreement shall be true and correct;
         (ii) TRC shall have complied fully with all of the covenants and
         agreements (other than those referred to in clause (iii) of this
         subsection (a)) in this Agreement, (iii) TRC shall have complied fully
         in all material respects with all of the covenants and agreements in
         Sections 9(b), 9(f), 9(g) and 9(i) of this Agreement; and (iv) Fletcher
         shall have received a certificate of the Chief Executive Officer and
         the Chief Financial Officer of TRC dated such date and to such effect.

                  (B) On each Closing Date, TRC shall have delivered to Fletcher
         opinions of (1) Paul, Hastings, Janofsky & Walker LLP (or other counsel
         reasonably satisfactory to Fletcher), dated the date of delivery,
         confirming in substance the matters covered in paragraphs (a), (b),
         (c), (d)(i) and (ii), (e), (f)(but not, other than as agreed to by the
         parties, (f)(i)(C)), (g) and (k) of Section 4 hereof and to the effect
         that the offer and sale of the Investment Securities to Fletcher
         hereunder do not require registration under the Securities Act and (2)
         the Company's general counsel, dated the date of delivery, confirming
         in substance the matters covered in paragraphs (d)(iii), and (f)(i)(C)
         and (l) of Section 4 hereof.

                  (C) On the Initial Closing Date, Fletcher shall have received
         a copy of a letter from PricewaterhouseCoopers LLP to TRC to the effect
         that, as of such date, it consents to the inclusion in this Agreement
         of the Auditor Report. On each Subsequent Closing Date, Fletcher shall
         receive a copy of a report of PricewaterhouseCoopers LLP, together with
         the accompanying consolidated financial statement and schedules of TRC
         and results of TRC's operations and cash flows, as such report appears
         in the most recent Form 10-K filed by TRC with the SEC and a letter
         from PricewaterhouseCoopers LLP to TRC to the effect that, as of such
         date, it consents to the inclusion in this Agreement of such report.

                  (D) On the Initial Closing Date, TRC shall have submitted to
         the New York Stock Exchange a complete listing application in respect
         of the Registrable Number and

                                       19
<PAGE>

         within 60 days thereafter the Registrable Number shall be duly listed
         and admitted for trading on the New York Stock Exchange.

                  (E) On each Subsequent Closing Date all of the Common Shares
         shall be registered and freely tradable.

                  (F) On or before each Subsequent Closing Date, TRC shall have
         filed with the Delaware Secretary of State a Subsequent Certificate of
         Rights and Preferences, with terms and conditions of the applicable
         series of Additional Preferred Shares as required by this Agreement.

         14. Conditions Precedent to TRC's Obligations. The obligations of TRC
hereunder are subject to the performance by Fletcher of its obligations
hereunder and to the satisfaction (unless expressly waived in writing by TRC) of
the additional conditions precedent that, on each Closing Date: (i) the
representations and warranties made by Fletcher in this Agreement shall be true
and correct; (ii) Fletcher shall have complied fully with all the covenants and
agreements in this Agreement; (iii) in respect of the foregoing clauses (i) and
(ii) only, TRC shall have received on each such date a certificate of an
appropriate officer of Fletcher dated such date and to such effect, (iv) no (x)
statute, rule, regulation or executive order or (y) decree, ruling or injunction
which by its terms expressly binds TRC shall have been promulgated by any court
or governmental authority of competent jurisdiction that prohibits the
consummation of the transactions contemplated by this Agreement, and (v) solely
in respect of the obligations under any particular Certificate of Rights and
Preferences or Subsequent Certificates of Rights and Preferences, no decree,
ruling or injunction which by its terms expressly binds TRC shall have been
promulgated by any court or governmental authority of competent jurisdiction
that prohibits the consummation of the transactions contemplated by such
Certificate of Rights and Preferences or Subsequent Certificates of Rights and
Preferences.

         15. Fees and Expenses. Each of Fletcher and TRC agrees to pay its own
expenses incident to the performance of its obligations hereunder, including,
but not limited to the fees, expenses and disbursements of such party's counsel,
except as is otherwise expressly provided in this Agreement.

         16. Non-Performance.

                  (A) If TRC, at any time, shall fail to deliver the Investment
         Securities to Fletcher required to be delivered pursuant to this
         Agreement, in accordance with the terms and conditions of this
         Agreement, for any reason other than the failure of any condition
         precedent to TRC's obligations hereunder or the failure by Fletcher to
         comply with its obligations hereunder, then TRC shall (without
         limitation to Fletcher's other remedies at law or in equity):

                           (i) indemnify and hold Fletcher harmless against any
                  loss, claim or damage to which it is entitled under law or in
                  equity arising from or as a result of such failure by TRC; and

                           (ii) reimburse Fletcher for all of its reasonable
                  out-of-pocket expenses, including fees and disbursements of
                  its counsel, incurred by Fletcher in

                                       20
<PAGE>

         connection with this Agreement and the transactions contemplated herein
         and therein.

         17. Indemnification.

                  (A) INDEMNIFICATION OF FLETCHER. TRC hereby agrees to
         indemnify Fletcher and each of its officers, directors, employees,
         consultants, agents, attorneys, accountants, and affiliates and each
         person that controls (within the meaning of Section 20 of the Exchange
         Act) any of the foregoing persons (each a "FLETCHER INDEMNIFIED PARTY")
         against any claim, demand, action, liability, damages, loss, cost or
         expense (including, without limitation, reasonable legal fees and
         expenses incurred by such Fletcher Indemnified Party in investigating
         or defending any such Proceeding) (a "PROCEEDING"), that it may incur
         in connection with any of the transactions contemplated hereby arising
         out of or based upon:

                           (i) any untrue or alleged untrue statement of a
                  material fact in a SEC Filing from and after September 30,
                  1998, by TRC or any of its affiliates or any person acting on
                  its or their behalf or omission or alleged omission to state
                  therein any material fact necessary in order to make the
                  statements, in the light of the circumstances under which they
                  were made, not misleading by TRC or any of its affiliates or
                  any person acting on its or their behalf; provided that with
                  respect to the items disclosed in any Schedule to Section 4
                  (other than Schedule 4(l)), the items disclosed therein shall
                  not, to the extent that the consequences thereof have been so
                  disclosed, constitute untrue or alleged untrue statements of a
                  material fact;

                           (ii) any of the representations or warranties made by
                  TRC herein being untrue or incorrect at the time such
                  representation or warranty was made; and

                           (iii) any breach or non-performance by TRC of any of
                  its covenants, agreements or obligations under this Agreement,
                  the Certificate of Rights and Preferences and Subsequent
                  Certificates of Rights and Preferences;

provided, however, that the foregoing indemnity shall not apply to any
Proceeding to the extent that it arises out of, or is based upon, the gross
negligence or willful misconduct of Fletcher in connection therewith.

                  (B) INDEMNIFICATION OF TRC. Fletcher hereby agrees to
         indemnify TRC and each of its officers, directors, employees,
         consultants, agents, attorneys, accountants, and affiliates and each
         person that controls (within the meaning of Section 20 of the Exchange
         Act) any of the foregoing persons against any Proceeding, that it may
         incur in connection with any of the transactions contemplated hereby
         arising out of or based upon:

                           (i) any untrue or alleged untrue statement of a
                  material fact included in an SEC filing by TRC with the
                  express written consent of Fletcher

                                       21
<PAGE>

                  therefor by Fletcher or any of its affiliates or any person
                  acting on its or their behalf or omission or alleged omission
                  to state any such material fact necessary in order to make the
                  statements, in the light of the circumstances under which they
                  were made, not misleading by Fletcher or any of its affiliates
                  or any person acting on its or their behalf;

                           (ii) any of the representations or warranties made by
                  Fletcher herein being untrue or incorrect at the time such
                  representation or warranty was made; and

                           (iii) any breach or non-performance by Fletcher of
                  any of its covenants, agreements or obligations under this
                  Agreement;

provided, however, that the foregoing indemnity shall not apply to any
Proceeding to the extent that it arises out of, or is based upon, the gross
negligence or willful misconduct of TRC in connection therewith.

         (C) CONDUCT OF CLAIMS.

                  (i) Whenever a claim for indemnification shall arise under
         this Section 17, the party seeking indemnification (the "INDEMNIFIED
         PARTY"), shall notify the party from whom such indemnification is
         sought (the "INDEMNIFYING PARTY") in writing of the Proceeding and the
         facts constituting the basis for such claim in reasonable detail;

                  (ii) Such Indemnifying Party shall have the right to retain
         the counsel of its choice in connection with such Proceeding and to
         participate at its own expense in the defense of any such Proceeding;
         provided, however, that counsel to the Indemnifying Party shall not
         (except with the consent of the relevant Indemnified Party) also be
         counsel to such Indemnified Party. In no event shall the Indemnifying
         Party be liable for fees and expenses of more than one counsel (in
         addition to any local counsel) separate from its own counsel for all
         Indemnified Parties in connection with any one action or separate but
         similar or related actions in the same jurisdiction arising out of the
         same general allegations or circumstances; and

                  (iii) No Indemnifying Party shall, without the prior written
         consent of the Indemnified Parties (which consent shall not be
         unreasonably withheld), settle or compromise or consent to the entry of
         any judgment with respect to any litigation, or any investigation or
         proceeding by any governmental agency or body, commenced or threatened,
         or any claim whatsoever in respect of which indemnification could be
         sought under this Section 17 unless such settlement, compromise or
         consent (A) includes an unconditional release of each Indemnified Party
         from all liability arising out of such litigation, investigation,
         proceeding or claim and (B) does not include a statement as to or an
         admission of fault, culpability or a failure to act by or on behalf of
         any Indemnified Party.

                                       22
<PAGE>

         18. Survival of the Representations, Warranties, etc. The respective
representations, warranties, and agreements made herein by or on behalf of the
parties hereto shall remain in full force and effect, regardless of any
investigation made by or on behalf of the other party to this Agreement or any
officer, director or employee of, or person controlling or under common control
with, such party and will survive delivery of and payment for any Investment
Securities issuable hereunder, until the seventh anniversary of the Initial
Closing Date.

         19. Notices. All communications hereunder shall be in writing and
delivered as set forth below.

                  (A) If sent to Fletcher, all communications shall be deemed
         delivered: if delivered by hand, on the day received by Fletcher; if
         sent by reputable overnight courier, on the next Business Day; and if
         transmitted by facsimile to Fletcher, on the date transmitted (provided
         such facsimile is later confirmed), in each case to the following
         address (unless otherwise notified in writing of a substitute address):

                     Fletcher International, Ltd.
                     c/o A. S. & K. Services Ltd.
                     Cedar House, 41 Cedar Avenue
                     Hamilton HM EX
                     Bermuda
                     Attention: Felicity Holmes, Corporate Administrator
                     Telephone: 441-295-2244
                     Facsimile: 441-292-8666

                     with a copy to:

                     Fletcher Asset Management, Inc.
                     22 East 67th Street
                     New York, NY 10021
                     Attention: Peter Zayfert
                     Telephone: (212) 284-4800
                     Facsimile: (212) 284-4801

                     with a copy (which copy shall not constitute notice) to:

                     Skadden, Arps, Slate, Meagher & Flom LLP
                     1440 New York Avenue, N.W.
                     Washington, D.C. 20005
                     Attention: Stephen W. Hamilton, Esq.
                     Telephone: (202) 371-7000
                     Facsimile: (202) 393-5760

                  (B) If sent to TRC, all communications shall be deemed
         delivered: if delivered by hand, on the day received by Fletcher; if
         sent by reputable overnight courier, on the next Business Day; and if
         or transmitted by facsimile to TRC, on the date transmitted

                                       23
<PAGE>

         (provided such facsimile is later confirmed), in each case to the
         following address (unless otherwise notified in writing of a substitute
         address):

                      TRC Companies, Inc.
                      5 Waterside Crossing
                      Windsor, Connecticut 06095
                      Attention: General Counsel and Chief Financial Officer
                      Telephone: (860) 298-9692
                      Facsimile: (860) 298-6291

                      with a copy (which copy shall not constitute notice) to:

                      Paul, Hastings, Janofsky & Walker LLP
                      1055 Washington Blvd.
                      Stamford, CT 06901

                      Attention: E. Donald Elliott, Esq.
                      Telephone: (203) 961-7400
                      Facsimile: (203) 359-3031

To the extent that any funds shall be delivered to TRC by wire transfer, unless
otherwise instructed by TRC, such funds should be delivered in accordance with
the following wire instructions:

                      TRC Companies, Inc.
                      Account Number: 005313-2695
                      ABA Number: 011000390
                      Bank: Fleet Bank
                      100 Federal Street
                      Boston, MA 02106
                      Account Name: TRC Companies, Inc. -- Concentration Account

         20. Miscellaneous.

                  (A) The parties may execute and deliver this Agreement as a
         single document or in any number of counterparts, manually, by
         facsimile or by other electronic means, including contemporaneous
         xerographic or electronic reproduction by each party's respective
         attorneys. Each counterpart shall be an original, but a single document
         or all counterparts together shall constitute one instrument that shall
         be the agreement. This Agreement shall become effective when each party
         executes and delivers this Agreement to the other party.

                  (B) This Agreement shall inure to the benefit of and be
         binding upon the parties hereto, their respective successors and
         assigns and, with respect to Section 17 hereof, shall inure to the
         benefit of their respective officers, directors, employees, agents,
         affiliates and controlling persons, and no other person shall have any
         right or obligation

                                       24
<PAGE>

         hereunder. TRC may not assign this Agreement. Notwithstanding anything
         to the contrary in this Agreement, Fletcher may assign, pledge,
         hypothecate or transfer any of the rights and associated obligations
         contemplated by this Agreement (including, but not limited to, the
         Series A Preferred Shares and the Common Shares), in whole or in part,
         at its sole discretion (including, but not limited to, assignments,
         pledges, hypothecations and transfers in connection with financing or
         hedging transactions with respect to this Agreement, the Series A
         Preferred Shares and the Common Shares), provided that any such
         assignment, pledge, hypothecation or transfer must comply with
         applicable federal and state securities laws and provided, further,
         that Fletcher may not knowingly make any assignment or transfer of this
         Agreement, the Series A Preferred Shares or the Common Shares to any of
         the entities set forth on Schedule 20(b) without the consent of TRC. No
         person acquiring Common Stock from Fletcher pursuant to a public market
         purchase shall thereby obtain any of the rights contained in this
         Agreement. This Agreement constitutes the entire agreement and
         supersedes all prior agreements and understandings, both written and
         oral, between the parties hereto with respect to the subject matter of
         this Agreement. Except as provided in this Section 20(b), this
         Agreement is not intended to confer upon any person other than the
         parties hereto any rights or remedies hereunder.

                  (C) This Agreement shall be governed by, and construed in
         accordance with, the internal laws of the State of New York, and each
         of the parties hereto hereby submits to the non-exclusive jurisdiction
         of any state or federal court in the Southern District of New York and
         any court hearing any appeal therefrom, over any suit, action or
         proceeding against it arising out of or based upon this Agreement (a
         "RELATED PROCEEDING"). Each of the parties hereto hereby waives any
         objection to any Related Proceeding in such courts whether on the
         grounds of venue, residence or domicile or on the ground that the
         Related Proceeding has been brought in an inconvenient forum.

                  (D) Each party represents and acknowledges that, in the
         negotiation and drafting of this Agreement and the other instruments
         and documents required or contemplated hereby, it has been represented
         by and relied upon the advice of counsel of its choice. Each party
         hereby affirms that its counsel has had a substantial role in the
         drafting and negotiation of this Agreement and such other instruments
         and documents. Therefore, each party agrees that no rule of
         construction to the effect that any ambiguities are to be resolved
         against the drafter shall be employed in the interpretation of this
         Agreement and such other instruments and documents.

                  (E) Without prejudice to other rights or remedies hereunder
         (including any specified interest rate), and except as otherwise
         expressly set forth herein, interest shall be due on any amount that is
         due pursuant to this Agreement and has not been paid when due,
         calculated for the period from and including the due date to but
         excluding the date on which such amount is paid at the prime rate of
         U.S. money center banks as published in The Wall Street Journal (or if
         The Wall Street Journal does not exist or publish such information,
         then the average of the prime rates of three U.S. money center banks
         agreed to by the parties) plus two percent (2%).

                                       25
<PAGE>

                  (F) Fletcher and TRC stipulate that the remedies at law of the
         parties hereto in the event of any default or threatened default by
         either party in the performance of or compliance with any of the terms
         of this Agreement, the Certificate of Rights and Preferences and the
         Subsequent Certificates of Rights and Preferences are not and will not
         be adequate and that, to the fullest extent permitted by law, such
         terms may be specifically enforced by a decree for the specific
         performance of any agreement contained herein or by an injunction
         against a violation of any of the terms hereof or otherwise.

                  (G) Any and all remedies set forth in this Agreement, the
         Certificate of Rights and Preferences and Subsequent Certificates of
         Rights and Preferences: (i) shall be in addition to any and all other
         remedies Fletcher or TRC may have at law or in equity, (ii) shall be
         cumulative, and (iii) may be pursued successively or concurrently as
         each of Fletcher and TRC may elect. The exercise of any remedy by
         Fletcher or TRC shall not be deemed an election of remedies or preclude
         Fletcher or TRC, respectively, from exercising any other remedies in
         the future.

                  (H) TRC agrees that the parties have negotiated in good faith
         and at arms' length concerning the transactions contemplated herein,
         and that Fletcher would not have agreed to the terms of this Agreement
         without each and every of the terms, conditions, protections and
         remedies provided herein and the Certificate of Rights and Preferences.
         Except as specifically provided otherwise in this Agreement, the
         Certificate of Rights and Preferences and the Subsequent Certificates
         of Rights and Preferences, TRC's obligations to indemnify and hold
         Fletcher harmless in accordance with Section 17 of this Agreement are
         obligations of TRC that TRC promises to pay to Fletcher when and if
         they become due. TRC shall record any such obligations on its books and
         records in accordance with U.S. generally accepted accounting
         principles.

                  (I) This Agreement may be amended, modified or supplemented in
         any and all respects, but only by a written instrument signed by
         Fletcher and TRC expressly stating that such instrument is intended to
         amend, modify or supplement this Agreement.

                  (J) Each of the parties will cooperate with the others and use
         its best efforts to prepare all necessary documentation, to effect all
         necessary filings, to obtain all necessary permits, consents, approvals
         and authorizations of all governmental bodies and other third parties,
         and to do all other things necessary to consummate the transactions
         contemplated by this Agreement.

                  (K) For purposes of this Agreement, except as otherwise
         expressly provided or unless the context otherwise requires: (i) the
         terms defined in this Agreement have the meanings assigned to them in
         this Agreement and include the plural as well as the singular, and the
         use of any gender herein shall be deemed to include the other gender
         and neuter gender of such term; (ii) accounting terms not otherwise
         defined herein have the meanings assigned to them in accordance with
         U.S. generally accepted accounting principles; (iii) references herein
         to "Articles," "Sections," "Subsections," "Paragraphs" and other
         subdivisions without reference to a document are to designated
         Articles, Sections, Subsections, Paragraphs and other subdivisions of
         this Agreement, unless the

                                       26
<PAGE>

         context shall otherwise require; (iv) a reference to a Subsection
         without further reference to a Section is a reference to such
         Subsection as contained in the same Section in which the reference
         appears, and this rule shall also apply to Paragraphs and other
         subdivisions; (v) the words "herein," "hereof," "hereunder" and other
         words of similar import refer to this Agreement as a whole and not to
         any particular provision; (vi) the term "include" or "including" shall
         mean without limitation; (vii) the table of contents to this Agreement
         and all section titles or captions contained in this Agreement or in
         any Schedule or Exhibit annexed hereto or referred to herein are for
         convenience only and shall not be deemed a part of this Agreement and
         shall not affect the meaning or interpretation of this Agreement;
         (viii) any agreement, instrument or statute defined or referred to
         herein means such agreement, instrument or statute as from time to time
         amended, modified or supplemented, including (in the case of agreements
         or instruments) by waiver or consent and (in the case of statutes) by
         succession of comparable successor statues and references to all
         attachments thereto and instruments incorporated therein; and (ix)
         references to a person are also to its permitted successors and assigns
         and, in the case of an individual, to his or her heirs and estate, as
         applicable.

                  (L) If any term or other provision of this Agreement is
         invalid, illegal or incapable of being enforced by any rule of law or
         public policy all other conditions and provisions of this Agreement
         shall nevertheless remain in full force and effect. If the final
         judgment of a court of competent jurisdiction or other authority
         declares that any term or provision hereof is invalid, void or
         unenforceable, the parties agree that the court making such
         determination shall have the power to reduce the scope, duration, area
         or applicability of the term or provision, to delete specific words or
         phrases, or to replace any invalid, void or unenforceable term or
         provision with a term or provision that is valid and enforceable and
         that comes closest to expressing the intention of the invalid or
         unenforceable term or provision. Upon such determination that any term
         or other provision is invalid, illegal or incapable of being enforced,
         the parties hereto shall negotiate in good faith to modify this
         Agreement so as to effect the original intent of the parties as closely
         as possible in a mutually acceptable manner in order that the
         transactions contemplated hereby be consummated as originally
         contemplated to the fullest extent possible.

                  (M) Time shall be of the essence in this Agreement.

                  (N) All dollar ($) amounts set forth herein, in the
         Certificate of Rights and Preferences and in each Subsequent
         Certificate of Rights and Preferences refer to United States dollars.
         All payments hereunder and thereunder shall be made in lawful currency
         of the United States of America.

                  (O) Notwithstanding anything herein to the contrary, all
         measurements and references related to share prices and share numbers
         herein shall be, in each instance, appropriately adjusted for stock
         splits, recombinations, stock dividends and the like.

                            [SIGNATURE PAGE FOLLOWS]

                                       27
<PAGE>

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

                                   TRC COMPANIES, INC.

                                   By: /s/ Martin H. Dodd
                                       ----------------------------------------
                                   Name: Martin H. Dodd
                                   Title: Vice President

                                   FLETCHER INTERNATIONAL, LTD., by its duly
                                   authorized investment advisor,
                                   FLETCHER ASSET MANAGEMENT, INC.

                                   By: /s/ Denis J. Kiely
                                       ----------------------------------------
                                       Name: Denis J. Kieley
                                       Title: Deputy Chief Executive Officer

                                   By: /s/ Peter Zayfort
                                       ----------------------------------------
                                   Name: Peter Zayfort
                                   Title: Executive Vice President

                                       28
<PAGE>

                                TABLE OF CONTENTS
<TABLE>
<S>   <C>                                                                                                      <C>
1.    Purchase and Sale...........................................................................................1

2.    Initial Closing.............................................................................................3

3.    Subsequent Closing..........................................................................................4

4.    Representations and Warranties of TRC.......................................................................4

5.    Registration Provisions.....................................................................................9

6.    Conversion and Redemption of Preferred Shares..............................................................12

7.    Representations and Warranties of Fletcher.................................................................13

8.    Right of First Offer.......................................................................................14

9.    Covenants of TRC...........................................................................................16

10.   Consolidation, Merger, Etc.................................................................................17

11.   Covenants of Fletcher......................................................................................18

12.   Legend.....................................................................................................18

13.   Conditions Precedent to Fletcher's Obligations.............................................................19

14.   Conditions Precedent to TRC's Obligations..................................................................20

15.   Fees and Expenses..........................................................................................20

16.   Non-Performance............................................................................................20

17.   Indemnification............................................................................................21

18.   Survival of the Representations, Warranties, etc...........................................................23

19.   Notices....................................................................................................23

20.   Miscellaneous..............................................................................................24

ANNEXES

FORM OF CERTIFICATE OF RIGHTS AND
PREFERENCES OF CLASS B-1 CUMULATIVE CONVERTIBLE
PREFERRED STOCK OF TRC COMPANIES, INC...........................................................................A-1
FORM OF FLETCHER NOTICE.........................................................................................B-1
FORM OF DELIVERY NOTICE.........................................................................................C-1
AUDITOR REPORT..................................................................................................D-1
FORM OF PREFERRED STOCK CONVERSION NOTICE.......................................................................E-1
FORM OF PREFERRED STOCK CONVERSION DELIVERY NOTICE..............................................................F-1
FORM OF CALL REDEMPTION NOTICE..................................................................................G-1
FORM OF HOLDER REDEMPTION NOTICE................................................................................H-1
FORM OF FINAL REDEMPTION NOTICE.................................................................................I-1
AUDITOR REPORT............................................................................................EXHIBIT 1
</TABLE>

                                       i

<PAGE>

                             INDEX OF DEFINED TERMS
<TABLE>
<S>                                                                                                           <C>
"hereunder"......................................................................................................27
65 Day Notice....................................................................................................13
accredited investor..............................................................................................13
Additional Issuance Price.........................................................................................4
Additional Preferred Shares.......................................................................................1
Agreement.........................................................................................................1
Auditor Report....................................................................................................8
Blackout Period..................................................................................................11
Business Day......................................................................................................3
Certificate of Rights and Preferences.............................................................................1
claim.............................................................................................................8
Common Shares.....................................................................................................2
Common Stock......................................................................................................1
debt..............................................................................................................8
Exchange Act......................................................................................................3
Exercisable Number...............................................................................................13
First Offer Stockholders.........................................................................................14
Fletcher..........................................................................................................1
Fletcher Indemnified Party.......................................................................................21
Fletcher Notice...................................................................................................2
Fletcher Notice Date.............................................................................................12
Fletcher Rights...................................................................................................1
herein...........................................................................................................27
hereof...........................................................................................................27
hereunder........................................................................................................27
Increase Notice..................................................................................................17
Indemnified Party................................................................................................22
Indemnifying Party...............................................................................................22
Initial Closing...................................................................................................1
Initial Closing Date..............................................................................................1
Initial Preferred Shares..........................................................................................1
Investment Securities.............................................................................................2
Issuance Blockage................................................................................................12
lock-up...........................................................................................................5
Maximum Number...................................................................................................13
NASD..............................................................................................................3
Notice Period....................................................................................................13
NYSE..............................................................................................................3
Offer Notice.....................................................................................................14
Offered Shares...................................................................................................14
Original Number..................................................................................................12
Paragraphs.......................................................................................................26

                                       i

<PAGE>

<S>                                                                                                             <C>
Preferred Stock...................................................................................................7
Preferred Stock Conversion Delivery Notice.......................................................................12
Preferred Stock Conversion Notice................................................................................12
Proceeding.......................................................................................................21
Prospectus.......................................................................................................10
Redemption Common Stock...........................................................................................2
Registrable Number................................................................................................9
Registration Period..............................................................................................10
Registration Requirement..........................................................................................9
Registration Statement............................................................................................9
Related Proceeding...............................................................................................25
Required Consent.................................................................................................12
Required Registration Date........................................................................................9
Rule 144.........................................................................................................10
Sales Contract...................................................................................................11
SEC...............................................................................................................6
Sec Filing........................................................................................................6
Sections.........................................................................................................26
SECURITIES ACT....................................................................................................6
SECURITIES ACT...................................................................................................18
Series A Preferred Shares.........................................................................................1
Series A-1 Preferred Stock........................................................................................1
Subsections......................................................................................................26
Subsequent Certificate of Rights and Preferences..................................................................1
Subsequent Certificates of Rights and Preferences.................................................................2
Subsequent Closing................................................................................................2
Subsequent Closing Date...........................................................................................2
TRC...............................................................................................................1
</TABLE>

                                       ii

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