Exhibit 10.4

EMPLOYMENT AGREEMENT

          THIS AGREEMENT, dated October 1, 2003 is made by and between
Interpool, Inc., a Delaware corporation (the "Company"), and Herbert Mertz (the
"Executive").

          WHEREAS, the Board desires that the Company continue to employ the
Executive and the Executive desires to continue to furnish services to the
Company on the terms and conditions hereinafter set forth; and

          WHEREAS, the Board recognizes that, as is the case with many publicly
held corporations, the possibility of a Change in Control exists and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of management personnel
to the detriment of the Company and its stockholders; and

          WHEREAS, the Board has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of
members of the Company's management, including the Executive, to their assigned
duties without distraction in the face of potentially unsettling circumstances
arising from the possibility of a Change in Control.

          NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and the Executive hereby agree as
follows:

           1.      Defined Terms. The definitions of capitalized terms used in
this Agreement are provided in the last Section hereof.

           2.      Employment. The Company hereby agrees to continue to employ
the Executive, and the Executive hereby agrees to continue such employment, on
the terms and conditions hereinafter set forth.

           3.      Term of Agreement. The Term of this Agreement shall commence
on January 1, 2004 and shall continue in effect through December 31, 2004. This
stipulated Term shall not effect the common stock purchase options to be granted
on the date above written pursuant to paragraph 6 (g) hereof. It is expressly
understood and agreed that on or before June 30 2004, the Company shall present
the Executive with either (i) an Employment Agreement for an additional one year
term which may be accepted or rejected by the Executive or (ii) notice not to
extend the Term; and provided further, however, that in the event that a Change
in Control occurs during the Term, the Term and the terms and conditions of this
Agreement without exception shall expire no earlier than thirty (30) months
following the date of such Change in Control.

           4.      Position and Duties. During the Term, the Executive shall
serve as Executive Vice President and Chief Administrative Officer of the
Company and shall have those powers and duties of a management nature consistent
with such positions as are assigned to him from time to time by the Chairman and
Chief Executive Officer of the Company and President of the Company. In the
performance of his duties hereunder, the Executive shall report to the Chairman
and Chief Executive Officer and President of the Company. During the Term, the
Executive shall devote substantially all of his full business time, attention
and energies to the business of the Company as shall be necessary for him to
carry out his obligations hereunder.

           5.      Place of Performance. During the Term, the Executive shall be
based at the Company's offices in Princeton, New Jersey, except for travel
reasonably required for the performance of the Executive's duties hereunder.

           6.      Compensation and Related Matters.

                (a)      Base Salary. During the Term, the Company shall pay the
Executive an annual base salary at a rate not less than $275,000.00 (the "Base
Salary") payable in accordance with the Company's regular payroll practice.

                (b)      Bonus. During the Term, the Executive shall be entitled
to receive an annual target bonus to be defined by the Compensation Committee at
the beginning of the term. Annual bonus shall be deemed earned and paid upon the
consummation of the yearly objectives unless the Executive and the Company shall
mutually agree to a deferred payment date.

                (c)      Employee Benefits/Expenses. During the Term, the
Executive shall be entitled to participate in any health insurance, life
insurance and other employee benefit plans and programs which may now be in
effect or which may hereafter be adopted by the Company, under the same terms of
participation as shall be offered to the employees of the Company generally. The
Company shall reimburse the Executive for all reasonable business expenses
incurred by the Executive in performing his duties hereunder upon the
presentation of itemized statements and receipts for such expenses.

                (d)      Automobile Allowance. During the Term and any renewals
thereof, the Company shall lease or purchase, or provide an adequate automobile
allowance for the Executive's leasing or purchase of, an automobile of make and
model as determined by the Company for the Executive's use. The Executive shall
cause the vehicle to be properly insured and maintained and the Company shall
reimburse the Executive for the expense of such insurance, routine maintenance
and service and repair of the vehicle upon the presentation of itemized
statements and receipts for such expenses.

                (e)      Vacation. The Executive shall be entitled to vacation
of five (5) weeks per year without reduction in compensation. Unused vacation
time may be carried forward into the following year subject to the limitation
that not more than eight weeks may be available for use in any one calendar
year. [Thereafter, all unused vacation time shall lapse at the end of the
relevant calendar year and the Executive shall not receive any form of
compensation in lieu thereof.]

           7.      Company's Covenants Summarized. In order to induce the
Executive to remain in the employ of the Company and in consideration of the
Executive's covenants set forth in Section 8 hereof, the Company agrees, under
the conditions described herein, to pay the Executive the Severance Payments and
the other payments and benefits under the circumstances described herein.

           8.      The Executive's Covenants. The Executive agrees that, subject
to the terms and conditions of this Agreement, in the event of a Change in
Control during the Term, the Executive will remain in the employ of the Company
until the earliest of (a) the date which is six months following the date of an
agreement entered into by the Company, the consummation of which would result in
a Change in Control, or the public announcement by the Company or any Person of
an intent to take actions which, if consummated, would result in a Change in
Control, (b) the date of a Change in Control, (c) the date of termination by the
Executive of the Executive's employment for Good Reason or by reason of death,
or Disability, or (d) the termination by the Company of the Executive's
employment for any reason.

           9.      Termination of Employment. The Executive's employment
hereunder may be terminated under the following circumstances, in each case
subject to the provisions of this Agreement.

                (a)      The Executive's employment hereunder shall terminate
upon his death.

                (b)      The Company may terminate the Executive's employment
hereunder for Disability or for Cause.

                (c)      The Executive may terminate his employment hereunder
for Good Reason.

                (d)      The Company may terminate the Executive's employment
hereunder other than for Cause or Disability, and the Executive may terminate
his employment hereunder other than for Good Reason, in each case subject to the
provisions of this Agreement.

           10.      Compensation During Period of Incapacity. During any period
during the Term that the Executive fails to perform his full-time duties with
the Company as a result of incapacity due to physical or mental illness, the
Company shall pay the Executive's full Base Salary to the Executive at the rate
in effect at the commencement of any such period, together with all compensation
and benefits payable to the Executive under the terms of any compensation or
benefit plan, program or arrangement maintained by the Company during such
period (other than any disability plan), until the Executive's employment is
terminated by the Company for Disability.

           11.      Compensation Upon Termination of Employment.

                (a)      Death or Disability. If the Executive's employment is
terminated during the Term by reason of his death or Disability, the Company
shall pay to the Executive (or his legal representatives or estate or as may be
directed by the legal representatives of her estate, as the case may be) (i) on
the Date of Termination, the Executive's full Base Salary to the Executive
through the Date of Termination at the rate in effect immediately prior to the
Date of Termination, together with all compensation and benefits payable to the
Executive through the Date of Termination under the terms of the Company's
compensation and benefit plans, programs or arrangements as in effect
immediately prior to the Date of Termination, (ii) on the Date of Termination,
any accrued but unpaid earned bonus and accrued but unused vacation days as of
the Date of Termination and (iii) the Executive's normal post-termination
compensation and benefits as such payments become due. Such post-termination
compensation and benefits shall be determined under, and paid in accordance
with, the Company's retirement, insurance and other compensation or benefit
plans, programs and arrangements as in effect immediately prior to the Date of
Termination. The amounts described in clauses (i), (ii) and (iii) of this
Section 11(a) are hereinafter referred to herein as the "Accrued Obligations."

                (b)      Termination by the Company for Cause or By Executive
Other than for Good Reason. If the Executive's employment shall be terminated
during the Term by the Company for Cause or by the Executive other than for Good
Reason, the Company shall pay to the Executive the Accrued Obligations.

                (c)      Termination By the Company Other than for Cause or
Disability or By Executive for Good Reason. If the Executive's employment is
terminated during the Term by the Company other than for Cause or Disability or
by the Executive for Good Reason, the Company shall pay to the Executive the
Accrued Obligations and the Severance Payments and benefits described in Section
12 below.

           12.      Severance Payments and Benefits.

                (a)      Severance Entitlement. If the Executive's employment is
terminated during the Term under the circumstances described in Section 11(c)
hereof, in consideration of the Executive's covenants set forth in this
Agreement, including the covenant not to compete set forth in Section 15 hereof,
the Company shall pay the Executive the amounts, and provide the Executive the
benefits, described in this Section 12(a) (the "Severance Payments"), in
addition to the Accrued Obligations to which the Executive is entitled under
Section 11(c) hereof. The payments provided in subsections (i) and (iii) of this
Section 12(a) shall be paid not later than the fifth day following the Date of
Termination.

                     (i)      In lieu of any further Base Salary payments to the
Executive for periods subsequent to the Date of Termination and in lieu of any
severance benefit otherwise payable to the Executive, the Company shall pay to
the Executive a lump sum severance payment, in cash, equal to two and one-half
(2.5) times the sum of (A) the Executive's then current Base Salary or, if
higher, the Base Salary in effect immediately prior to any reduction that would
constitute Good Reason, and (B) the Executive's most current bonus in effect as
of the Date of Termination or, if higher, the minimum annual bonus in effect
immediately prior to any reduction that would consititute Good Reason.

                     (ii)      For the thirty (30) month period immediately
following the Date of Termination, the Company shall arrange to provide the
Executive and his dependents health, life, disability and accident insurance
benefits under the then current plans in effect and offered to the officers and
employees of the Company.

                     (iii)      Notwithstanding any provision of any annual or
long-term incentive plan to the contrary, the Company shall pay to the Executive
a lump sum amount, in cash, equal any unpaid annual bonus which has been
allocated or awarded to the Executive for a completed fiscal year or other
measuring period preceding the Date of Termination under any such plan and
which, as of the Date of Termination, is contingent only upon the continued
employment of the Executive to a subsequent date.

                (b)      (i) Notwithstanding any other provisions of this
Agreement, in the event that any payment or benefit received or to be received
by the Executive in connection with a Change in Control or the termination of
the Executive's employment (whether pursuant to the terms of this Agreement or
any other plan, arrangement or agreement with the Company, any Person whose
actions result in a Change in Control or any Person affiliated with the Company
or such Person) (all such payments and benefits, including the Severance
Payments, being hereinafter referred to as the "Total Payments") would be
subject (in whole or part), to the Excise Tax, then, after taking into account
any reduction in the Total Payments provided by reason of section 280G of the
Code in such other plan, arrangement or agreement, the cash Severance Payments
shall first be reduced, and the noncash Severance Payments shall thereafter be
reduced, to the extent necessary so that no portion of the Total Payments is
subject to the Excise Tax but only if (A) the net amount of such Total Payments,
as so reduced (and after subtracting the net amount of federal, state and local
income taxes on such reduced Total Payments and after taking into account the
phase out of itemized deductions attributable to such reduced Total Payments) is
greater than or equal to (B) the net amount of such Total Payments without such
reduction (but after subtracting the net amount of federal, state and local
income taxes on such Total Payments and the amount of Excise Tax to which the
Executive would be subject in respect of such unreduced Total Payments).

                     (ii)      For purposes of determining whether and the
extent to which the Total Payments will be subject to the Excise Tax, (A) no
portion of the Total Payments the receipt or enjoyment of which the Executive
shall have waived at such time and in such manner as not to constitute a
"payment" within the meaning of section 280G(b) of the Code shall be taken into
account, (B) no portion of the Total Payments shall be taken into account which,
in the opinion of tax counsel ("Tax Counsel") reasonably acceptable to the
Executive and selected by the accounting firm (the "Auditor") which was,
immediately prior to the Change in Control, the Company's independent auditor,
does not constitute a "parachute payment" within the meaning of section
280G(b)(2) of the Code (including by reason of section 280G(b)(4)(A) of the
Code) and, in calculating the Excise Tax, no portion of such Total Payments
shall be taken into account which, in the opinion of Tax Counsel, constitutes
reasonable compensation for services actually rendered, within the meaning of
section 280G(b)(4)(B) of the Code, in excess of the Base Amount allocable to
such reasonable compensation, and (C) the value of any non-cash benefit or any
deferred payment or benefit included in the Total Payments shall be determined
by the Auditor in accordance with the principles of sections 280G(d)(3) and (4)
of the Code.

                     (iii)      At the time that payments are made under this
Agreement, the Company shall provide the Executive with a written statement
setting forth the manner in which such payments were calculated and the basis
for such calculations including, without limitation, any opinions or other
advice the Company has received from Tax Counsel, the Auditor or other advisors
or consultants (and any such opinions or advice which are in writing shall be
attached to the statement). If the Executive objects to the Company's
calculations, the Company shall pay to the Executive such portion of the
Severance Payments (up to 100% thereof) as the Executive determines is necessary
to result in the proper application of subsection (i) of this Section 12(b).

                (c)      After a Change in Control, the Company also shall pay
to the Executive all legal fees and expenses incurred by the Executive in
disputing in good faith any issue hereunder relating to the termination of the
Executive's employment, in seeking in good faith to obtain or enforce any
benefit or right provided by this Agreement or in connection with any tax audit
or proceeding to the extent attributable to the application of section 4999 of
the Code to any payment or benefit provided hereunder. Such payments shall be
made within five (5) business days after delivery of the Executive's written
requests for payment accompanied with such evidence of fees and expenses
incurred as the Company reasonably may require.

                (d)      Upon the occurrence of a Change in Control, all
outstanding stock options granted to the Executive under the Company's 1993
Stock Option Plan for Executive Officers and Directors (or other Company stock
option plan or arrangement) which have not yet vested as of the date of the
Change in Control shall become fully vested and immediately exercisable as of
the date of the Change in Control.

           13.      Termination Procedures and Compensation During Dispute.

                (a)      Notice of Termination. During the Term and after a
Change in Control, any purported termination of the Executive's employment
(other than by reason of death) shall be communicated by written Notice of
Termination from one party hereto to the other party hereto in accordance with
Section 17 hereof. For purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated. Further, after a Change in Control,
a Notice of Termination for Cause is required to include a copy of a resolution
duly adopted by the affirmative vote of not less than a majority of the entire
membership of the Board at a meeting of the Board which was called and held for
the purpose of considering such termination (after reasonable notice to the
Executive and an opportunity for the Executive, together with the Executive's
counsel, to be heard before the Board) finding that, in the good faith opinion
of the Board, the Executive was guilty of conduct set forth in clause (i) or
(ii) of the definition of Cause herein, and specifying the particulars thereof
in detail.

                (b)      Date of Termination. "Date of Termination," with
respect to any purported termination of the Executive's employment during the
Term, shall mean (i) if the Executive's employment is terminated for Disability,
thirty (30) days after Notice of Termination is given (provided that the
Executive shall not have returned to the full-time performance of the
Executive's duties during such thirty (30) day period), and (ii) if the
Executive's employment is terminated for any other reason, the date specified in
the Notice of Termination (which, in the case of a termination by the Company,
shall not be less than thirty (30) days (except in the case of a termination for
Cause) and, in the case of a termination by the Executive, shall not be less
than fifteen (15) days nor more than sixty (60) days, respectively, from the
date such Notice of Termination is given).

                (c)      Dispute Concerning Termination. If within fifteen (15)
days after any Notice of Termination is given, or, if later, prior to the Date
of Termination (as determined without regard to this Section 13(c)), the party
receiving such Notice of Termination notifies the other party that a dispute
exists concerning the termination, the Date of Termination shall be extended
until the earlier of (i) the date on whichthe Term ends or (ii) the date on
which the dispute is finally resolved, either by mutual written agreement of the
parties or by a final judgment, order or decree of an arbitrator or a court of
competent jurisdiction (which is not appealable or with respect to which the
time for appeal therefrom has expired and no appeal has been perfected);
provided, however, that the Date of Termination shall be extended by a notice of
dispute given by the Executive only if such notice is given in good faith and
the Executive pursues the resolution of such dispute with reasonable diligence.

                (d)      Compensation During Dispute. If a purported termination
occurs following a Change in Control and during the Term and the Date of
Termination is extended in accordance with Section 13(c) hereof, the Company
shall continue to pay the Executive his Base Salary in effect when the notice
giving rise to the dispute was given and continue the Executive as a participant
in all compensation, benefit and insurance plans in which the Executive was
participating when the notice giving rise to the dispute was given, until the
Date of Termination, as determined in accordance with Section 13(c) hereof.
Amounts paid under this Section 13(d) are in addition to all other amounts due
under this Agreement (other than those due under Section 10 and 11 hereof) and
shall not be offset against or reduce any other amounts due under this
Agreement.

           14.      No Mitigation. The Company agrees that, if the Executive's
employment with the Company terminates during the Term, the Executive is not
required to seek other employment or to attempt in any way to reduce any amounts
payable to the Executive by the Company pursuant to Section 12 hereof or Section
13(d) hereof. Further, the amount of any payment or benefit provided for in this
Agreement (other than Section 12(a)(ii) hereof) shall not be reduced by any
compensation earned by the Executive as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by the Executive to the Company, or otherwise.

           15.      Confidentiality; Nonsolicitation, Noncompetition.

                (a)      The Executive covenants and agrees:

                     (i)      That he will not knowingly divulge any material or
confidential proprietary matters of the Company which are not otherwise in the
public domain, including, without limitation, financial records, trade secrets,
business plans, pricing policies, and customer lists, except as required in the
course of performing duties hereunder or as required by law, regulation or
judicial or other legal process, either during or after the termination of
employment by the Company; That he will deliver to the Company on termination of
his employment by the Company, at the Company's expense all memoranda, notes,
records, reports and other documents, and all copies thereof, relating to the
business of the Company which he obtained while employed by, or otherwise
serving or acting on behalf of, the Company, and which he may then possess or
have under his control.

                     (ii)      That during the Term the Executive, alone or
together with any other person, firm, partnership, corporation or other entity
whatsoever, except any subsidiaries or affiliates of the Company, directly or
indirectly, whether as an officer, director, stockholder, partner, proprietor,
associate, employee, representative, landlord, sublandlord, public relations or
advertising representative, management consultant or otherwise, will not engage
in, or become or be interested in or associated with, any other person,
corporation, firm, partnership or other entity whatsoever engaged in a business
in which the Company shall then be engaged in or in which the Company within the
preceding twelve (12) months engaged in or at any time during such period was
the subject of a formal business proposal which the Company was actively
considering.

                (b)      With respect to employment after termination of the
Executive's employment with the Company:

                     (i)      Throughout his employment and for a period of two
(2) years after termination of his employment, he will not directly or
indirectly, induce or attempt to influence any employee of the Company to leave
its employ; aid or agree to aid any competitor, customer or supplier of the
Company in any attempt to hire any person who shall have been employed by the
Company within the 365 day period next preceding such requested aid; induce or
attempt to influence any person or business entity who was a customer or
supplier of the Company during any portion of said period to transact business
with a competitor of the Company; or participate in planning for or accept any
employment or any other association with any company which then employs more
than two former employees of Company within the 365 day period next preceding
his termination of employment with the Company without the prior written consent
of the Company.

                     (ii)      Throughout his employment and for a period of two
(2) years after termination of his employment he will not, directly or
indirectly, become interested in, or otherwise become employed by or act as a
consultant or lender to, or render any services to, or become a director,
officer, employee, principal, agent, stockholder, manager, member, owner or
partner of, or employer of any other business or organization (a "Competing
Business") which engages in the business of transmodal chassis and transmodal
dry freight container leasing; provided, however, that, notwithstanding the
foregoing, it shall not be a violation of this Section 15(b)(ii) for the
Executive to become the registered or beneficial owner of up to two percent (2%)
of any class of the capital stock of a Competing Business registered under the
Securities Exchange Act of 1934, as amended, provided that the Executive does
not otherwise participate in the business of such corporation.

                (c)      Remedies for Breach. The Executive agrees that the
remedy at law for any breach or threatened breach of any covenant contained in
this Section 15 will be inadequate and that the Company, in addition to such
other remedies as may be available to it in law or in equity, shall be entitled
to institute proceedings in any court or courts of competent jurisdiction to
obtain damages for breach of this Agreement and permanent injunctive relief
without bond or other security. The parties further agree that the Company shall
be entitled to apply to any court having jurisdiction for temporary injunctive
relief pending permanent injunctive relief in arbitration.

           16.      Successors; Binding Agreement.

                (a)      In addition to any obligations imposed by law upon any
successor to the Company, the Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain such assumption and agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Executive to compensation from the Company in
the same amount and on the same terms as the Executive would be entitled to
hereunder if the Executive were to terminate the Executive's employment for Good
Reason after a Change in Control, except that, for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination.

                (b)      This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive shall die while any amount would still be payable to the Executive
hereunder (other than amounts which, by their terms, terminate upon the death of
the Executive) if the Executive had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the executors, personal representatives or administrators of the
Executive's estate.

           17.      Notices. For the purpose of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed, if to the
Executive, to the address inserted below the Executive's signature on the final
page hereof and, if to the Company, to the address set forth below, or to such
other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon actual receipt:

To the Company:
Interpool, Inc.
211 College Road East
Princeton, New Jersey 08540
Attention: Chief Executive Officer

           18.      Miscellaneous. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and such officer as may be
specifically designated by the Board. No waiver by either party hereto at any
time of any breach by the other party hereto of, or of any lack of compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. This Agreement supersedes any
other agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof which have been made by either party. The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of New Jersey. All references to sections
of the Exchange Act or the Code shall be deemed also to refer to any successor
provisions to such sections. Any payments provided for hereunder shall be paid
net of any applicable withholding required under federal, state or local law and
any additional withholding to which the Executive has agreed. The obligations of
the Company and the Executive under this Agreement which by their nature may
require either partial or total performance after the expiration of the Term
(including, without limitation, those under Sections 12 and 13 hereof) shall
survive such expiration.

           19.      Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.

           20.      Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

           21.      Settlement of Disputes; Arbitration. Any dispute or
controversy arising under or in connection with this Agreement shall be settled
exclusively by arbitration in New York, New York in accordance with the rules of
the American Arbitration Association then in effect; provided, however, that the
evidentiary standards set forth in this Agreement shall apply. Judgment may be
entered on the arbitrator's award in any court having jurisdiction.
Notwithstanding any provision of this Agreement to the contrary, the Executive
shall be entitled to seek specific performance of the Executive's right to be
paid until the Date of Termination during the pendency of any dispute or
controversy arising under or in connection with this Agreement.

           22.      Definitions. For purposes of this Agreement, the following
terms shall have the meanings indicated below:

                (a)      "Accrued Obligations" shall have the meaning set forth
in Section 11(a) hereof.

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

                (c)      "Auditor" shall have the meaning set forth in Section
12(b) hereof.

                (d)      "Base Amount" shall have the meaning set forth in
section 280G(b)(3) of the Code.

                (e)      "Base Salary" shall have the meaning set forth in
Section 6(a) hereof.

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

                (g)      "Board" shall mean the Board of Directors of the
Company.

                (h)      "Cause" for termination by the Company of the
Executive's employment shall mean: (i) the Executive's conviction of a felony or
(ii) the willful and substantial failure by the Executive to perform the
Executive's services as provided herein for a period continuing for more than
ten (10) days after the issuance of a Notice of Termination by the Company to
the Executive, which notice shall specify in reasonable detail the details of
such failure to perform. For purposes of clause (ii) of this definition, (x) no
act, or failure to act, on the Executive's part shall be deemed "willful" unless
done, or omitted to be done, by the Executive not in good faith and without
reasonable belief that the Executive's act, or failure to act, was in the best
interest of the Company and (y) after a Change in Control and during the Term,
in the event of a dispute concerning the application of this provision, no claim
by the Company that Cause exists shall be given effect unless the Company
establishes to the Board by clear and convincing evidence that Cause exists.

                (i)      A "Change in Control" shall be deemed to have occurred
if the event set forth in any one of the following paragraphs shall have
occurred:

                     (i)      any Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company (not including in the
securities beneficially owned by such Person any securities acquired directly
from the Company or its affiliates) representing 50% or more of the combined
voting power of the Company's then outstanding securities, excluding any Person
who becomes such a Beneficial Owner in connection with a transaction described
in clause (A) of paragraph (iii) below; or

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

                     (iii)      there is consummated a merger or consolidation
of the Company or any direct or indirect subsidiary of the Company with any
other corporation, other than (A) a merger or consolidation immediately
following which the individuals who comprise the Board immediately prior thereto
constitute at least a majority of the board of directors of the Company, the
entity surviving such merger or consolidation or any parent thereof (or a
majority plus one member where such board comprises an odd number of members),
or (B) a merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person is or becomes the Beneficial
Owner, directly or indirectly, of securities of the Company (not including in
the securities Beneficially Owned by such Person any securities acquired
directly from the Company or its Affiliates) representing 50% or more of the
combined voting power of the Company's then outstanding securities; or

                     (iv)      there is consummated an agreement for the sale or
disposition by the Company of all or substantially all of the Company's assets,
other than a sale or disposition by the Company of all or substantially all of
the Company's assets to an entity, at least 51% of the combined voting power of
the voting securities of which are owned by stockholders of the Company in
substantially the same proportions as their ownership of the Company immediately
prior to such sale, or the stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company.

                           Notwithstanding the foregoing, a "Change in Control"
shall not be deemed to have occurred by virtue of the consummation of any
transaction or series of integrated transactions immediately following which the
record holders of the common stock of the Company immediately prior to such
transaction or series of transactions continue to have substantially the same
proportionate ownership in an entity which owns all or substantially all of the
assets of the Company immediately following such transaction or series of
transactions.

                (j)      "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.

                (k)      "Company" shall mean Interpool, Inc. and, except in
determining under Section 21(i) hereof whether or not any Change in Control of
the Company has occurred, shall include any successor to its business and/or
assets which assumes and agrees to perform this Agreement by operation of law,
or otherwise.

                (l)      "Date of Termination" shall have the meaning set forth
in Section 13(b) hereof.

                (m)      "Disability" shall be deemed the reason for the
termination by the Company of the Executive's employment, if, as a result of the
Executive's incapacity due to physical or mental illness, the Executive shall
have been absent from the full-time performance of the Executive's duties with
the Company for a period of six (6) consecutive months, the Company shall have
given the Executive a Notice of Termination for Disability, and, within thirty
(30) days after such Notice of Termination is given, the Executive shall not
have returned to the full-time performance of the Executive's duties.

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

                (o)      "Excise Tax" shall mean any excise tax imposed under
Section 4999 of the Code.

                (p)      "Executive" shall mean the individual named in the
first paragraph of this Agreement.

                (q)      "Good Reason" for termination by the Executive of the
Executive's employment shall mean the occurrence, following a Change in Control,
(without the Executive's express written consent) of any one of the following
acts by the Company, or failures by the Company to act:

                     (i)      the assignment to the Executive of any duties
inconsistent with the Executive's status as Executive Vice President and Chief
Administrative Officer of the Company as compared to the Executive's duties and
status on the date hereof (and as such duties and status may be increased
hereafter), or a substantial adverse alteration or change in the scope, nature
or status of any of the Executive's responsibilities from the scope, nature or
status on the date hereof (and as the scope, nature and status of such
responsibilities may be increased hereafter);

                     (ii)      a reduction by the Company in the Executive's
Base Salary and/or minimum annual bonus in effect immediately prior the Change
in Control;

                     (iii)      the relocation of the Executive's principal
place of employment to a location which is more than 30 miles outside of
Princeton, New Jersey or the Company's requiring the Executive to be based
anywhere other than the Executive's principal place of employment (or permitted
relocation thereof) as set forth in Section 5 of this Agreement, except for
required travel on the Company's business to an extent substantially consistent
with the Executive's present business travel obligations;

                     (iv)      the failure by the Company to continue to provide
the Executive with employee benefits substantially similar to those enjoyed by
the Executive under any of the Company's retirement, savings, life insurance,
medical, health and accident, or disability plans in which the Executive was
participating immediately prior to the Change in Control;

                     (v)      any purported termination of the Executive's
employment which is not effected pursuant to a Notice of Termination satisfying
the requirements of Section 13(a) hereof; for purposes of this Agreement, no
such purported termination shall be effective. The Executive's continued
employment shall not constitute consent to, or a waiver of rights with respect
to, any act or failure to act constituting Good Reason hereunder.

                           For purposes of any determination regarding the
existence of Good Reason, any claim by the Executive that Good Reason exists
shall be presumed to be correct unless the Company establishes to the Board by
clear and convincing evidence that Good Reason does not exist.

                     (r)      "Notice of Termination" shall have the meaning set
forth in Section 13(a) hereof.

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

                     (t)      "Severance Payments" shall have the meaning set
forth in Section 12(a) hereof.

                     (u)      "Tax Counsel" shall have the meaning set forth in
Section 12(b) hereof.

                     (v)      "Term" shall mean the period of time described in
Section 3 hereof (including any extension, continuation or termination described
therein).

                     (w)      "Total Payments" shall mean those payments so
described in Section 12(b) hereof.

                IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first above written.

INTERPOOL, INC.

By:                                                         
      Name:
      Title:

                                                         
Herbert Mertz

Address: