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:
| | -------------------------------------------------------------------