Note Purchase Agreement

Execution Copy

CONTAINER APPLICATIONS INTERNATIONAL, INC.

Note Purchase Agreement

Dated as of April 30, 1998

Subordinated Secured Note

TABLE OF CONTENTS

Page

ARTICLE I DEFINITIONS AND CONSTRUCTION	1
1.1 Definitions	1
1.2 Construction	11
1.3 Accounting Terms	11
ARTICLE II THE NOTE	12
2.1 Authorization and Issuance of the Note	12
2.2 Purchase and Sale of Note	12
2.3 Time and Place of Payments; Interest Rate; Payment of Principal and Interest under the Note	12
2.4 Overdue Rate	13
2.5 Computation of Interest	13
2.6 Prepayment	13
2.7 Holidays	14
2.8 Security	14
2.9 Tax Withholding	14
2.10 Calculation of Principal	14
ARTICLE III CONDITIONS TO THE PURCHASE OF THE NOTE	14
3.1 Conditions Precedent to be Satisfied at Closing Date	14
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF COMPANY	19
4.1 Due Organization	19
4.2 Organization, Standing, and Qualification	19
4.3 Requisite Power	19
4.4 Binding Agreements	20
4.5 Other Agreements	20
4.6 Litigation; Adverse Facts	20
4.7 Consents	21
4.8 Financial Condition	21
4.9 Title to Assets; Liens	21
4.10 Payment of Taxes	21
4.11 Governmental Regulation	22
4.12 Securities Activities	22
4.13 Bank Credit Agreement	22
4.14 Disclosure	22
4.15 Debt	22
4.16 Intellectual Property	23
4.17 Burdensome Agreements	23
4.18 Existing Defaults	23
4.19 Leases	23
4.20 Fire, Explosion, and Labor Disputes	24
4.21 No Partnerships	24
4.22 Employment Agreements and Relations	24
4.23 Insurance	24
4.24 Environmental Matters	24
4.25 Contracts	25
4.26 Commitments	25
4.27 No Default	25
4.28 Purchaser Documents	25
4.29 Solvency, Etc.	25
4.30 Due Diligence	26
4.31 Related Agreements	26
4.32 Third-Party Action	26
ARTICLE V AFFIRMATIVE COVENANTS OF COMPANY	26
5.1 Corporate Existence	26
5.2 Maintenance of Assets	26
5.3 Compliance with Laws	27
5.4 Senior Debt	27
5.5 Further Assurances	27
5.6 Use of Proceeds	27
5.7 Accounting Records and Inspection	27
5.8 Financial Statements and Other Information	27
ARTICLE VI NEGATIVE COVENANTS OF COMPANY	30
6.1 Financial Covenants	30
6.2 Restriction on Fundamental Changes	31
6.3 Investments	32
6.4 Conduct of Business	33
6.5 Partnerships	33
6.6 Margin Regulation	33
6.7 Shareholders' Agreement	33
ARTICLE VII EVENTS OF DEFAULT	33
7.1 Events of Default	33
7.2 Acceleration of Maturity; Rescission and Annulment	36
7.3 Suits for Enforcement	38
7.4 Modifications or Waivers Under Bank Credit Agreement	38
ARTICLE VIII SUBORDINATION	39
ARTICLE IX PURCHASER'S REPRESENTATIONS	39
9.1 Investment Representation	39
9.2 Participation in the Note	39
ARTICLE X EXPENSES AND INDEMNITIES	39
10.1 Expenses	39
10.2 Indemnity	40
ARTICLE XI MISCELLANEOUS	41
11.1 Waivers; Modifications in Writing	41
11.2 Changes in Accounting Principles	41
11.3 Confirmation	42
11.4 Notices	42
11.5 Transfers of Note	42
11.6 Headings, Date	43
11.7 Execution in Counterparts	43
11.8 Assignment and Participation	43
11.9 Governing Law	44
11.10 Severability of Provisions	44
11.11 Survival of Agreements, Representations, and Warranties	44
11.12 Setoff	44
11.13 Independence of Covenants	44
11.14 Complete Agreement	44
EXHIBITS
EXHIBIT A Form of Note	1
EXHIBIT B Form of PIK Note	1
EXHIBIT C Form of Officer's Compliance and Use of Proceeds Certificate	1
EXHIBIT D Legal Opinion of Company Counsel	1
SCHEDULES
Schedule 3.1(hh)	1
Schedule 4.28	1
Schedule 4.32	1

Container Applications International, Inc.
3 Embarcadero Center, Suite 1850
San Francisco, California 94111-3834

As of April 30, 1998

Note Purchase Agreement

Interpool, Inc.
633 Third Avenue
17th Floor
New York, New York 10017

Dear Sirs:

           Container Applications International, Inc., a Nevada corporation ("Company"), hereby agrees with you ("Purchaser") as follows:

ARTICLE I

DEFINITIONS AND CONSTRUCTION

            1.1   Definitions. For purposes of this Agreement, the following initially capitalized terms shall have the following meanings:

           “Accommodation Obligation” shall mean, as applied to any Person, any obligation of such Person guaranteeing or intended to guarantee (whether guaranteed, endorsed, co-made, discounted, or sold with recourse to such Person) any Debt, lease, dividend, letter of credit, or other obligation (“primary obligation”) of any other Person (“primary obligor”) in any manner whether directly or indirectly, including any obligation of such Person (irrespective of whether contingent), (a) to purchase any such primary obligation or any Asset constituting direct or indirect security therefor, (b) to advance or supply funds (whether in the form of a loan, advance, stock purchase, capital contribution, or otherwise) (i) for the purchase, repurchase, or payment of any such primary obligation or any Asset constituting direct or indirect security therefor, or (ii) to maintain working capital or equity capital of the primary obligor, or to otherwise maintain the net worth, solvency, or other financial condition of the primary obligor, (c) to purchase or make payment for any Asset, securities, services, or lease, regardless of the non-delivery or non-furnishing thereof, if primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation, or (d) to otherwise assure or hold harmless the owner of such primary obligation against loss in respect thereof.

           “Affiliate” shall mean, as applied to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purpose of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of that Person, whether through the ownership of voting securities, by contract, or otherwise.

           “Agreement” shall mean this Note Purchase Agreement between Company and Purchaser, together with all exhibits hereto.

           “Ancillary Documents” shall mean the Security Agreement and any and all other documents, agreements, or instruments other than this Agreement and the Note, which have been or are entered into on or before the Closing Date by Company and Purchaser in connection with the transactions contemplated by this Agreement, and any and all alterations, amendments, changes, extensions, modifications, revisions, restatements, or supplements to any of the foregoing.

           “Asset” shall mean any interest of a Person in any kind of property or asset, whether real, personal, or mixed real and personal, or whether tangible or intangible.

           “Bank Credit Agreement” shall mean the Fourth Restated Revolving Credit and Term Loan Agreement dated as of April 30, 1998 between Company, BankBoston, N.A., as agent, and the other banks named therein and as it may be further amended from time to time with such consent, if any, of the Noteholders as is required under the Subordination and Intercreditor Agreement.

           “Bankruptcy Code” shall mean The Bankruptcy Reform Act of 1978 (11 U.S.C. 101-1330), as amended or supplemented from time to time, and any successor statute, and any and all rules issued or promulgated in connection therewith.

           “Banks” shall mean the bank(s) or other financial institution(s) that are from time to time parties to the Bank Credit Agreement.

           “Business Day” means any day on which commercial banks are not authorized or required to close in New York, New York.

           “Capitalized Lease” shall mean any lease under which the Company or any of its Subsidiaries is the lessee or obligor, the discounted future rental payment obligations under which are required to be capitalized on the balance sheet of the lessee or obligor in accordance with GAAP.

           “CERCLA” shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended or supplemented from time to time (by SARA or otherwise), set forth at 42 U.S.C. §§ 9601-9657, and any and all tools and regulations issued or promulgated in connection therewith.

           “Closing Date” shall mean the date of the purchase of the Note, which date shall be a Business Day.

           “Code” shall mean the Internal Revenue Code of 1986, as amended or supplemented from time to time, or any successor or superseding tax laws of the United States of America, and any and all rules and regulations issued or promulgated in connection therewith.

           “Company” shall have the meaning set forth in the introduction to this Agreement.

           “Computation Date” shall have the meaning given said term in Section 6.1(c).

           “Consolidated Adjusted Tangible Net Worth” shall mean, at any time, the Consolidated Tangible Net Worth of Company and its Subsidiaries at such time plus the outstanding amount of Subordinated Debt of Company and its Subsidiaries (excluding the current portion thereof).

           “Consolidated Net Income (or Deficit)” shall mean, with respect to Company and its Subsidiaries, the consolidated net income (or deficit) of Company and its Subsidiaries after deduction of all expenses, taxes and other proper charges, determined in accordance with GAAP, after eliminating therefrom all extraordinary nonrecurring items.

           “Consolidated Operating Cash Flow” shall mean for any period, an amount equal to (i) Consolidated Net Income (or Deficit) for such period, plus (ii) depreciation, amortization and all other noncash charges for such period, plus (iii) the principal portion of payments received by the Company from Direct Finance Leases during such period, plus in the case of credits for and minus in the case of debits for (iv) deferred taxes for such period, plus (v) all consolidated rental expenses of Company for such period under operating leases.

           “Consolidated Senior Debt” shall mean, at any time, all obligations of Company and its Subsidiaries consisting of Debt for borrowed money, the deferred purchase price of assets and in respect of Capitalized Leases minus obligations of such Persons in respect of Subordinated Debt (other than the current portion thereof) plus all Debt of such Person in respect of Rental Obligations.

           “Consolidated Tangible Net Worth” shall mean the excess of Consolidated Total Assets over Consolidated Total Liabilities, and less the sum of:

                 (a)   the total book value of all assets of the Company and its Subsidiaries properly classified as intangible assets under GAAP, including such items as goodwill, the purchase price of acquired assets in excess of the fair market value thereof (for purposes of this definition, the purchase price of new containers acquired in arm’s-length purchases from third parties shall be deemed to equal the fair market value thereof), trademarks, trade names, service marks, brand names, copyrights, patents and licenses, and rights with respect to the foregoing; plus

                 (b)  all amounts representing any write-up in the book value of any assets of the Company or its Subsidiaries resulting from a revaluation thereof subsequent to June 30, 1991, excluding adjustments to translate foreign assets and liabilities for changes in foreign exchange rates made in accordance with Financial Accounting Standards Board Statement No. 52; plus

                 (c)  to the extent otherwise includable in the computation of Consolidated Tangible Net Worth, any subscriptions receivable.

           “Consolidated Total Assets” shall mean all assets of the Company and its Subsidiaries determined on a consolidated basis in accordance with GAAP.

           “Consolidated Total Debt Service” shall mean, as of any Computation Date, for the period specified in the applicable covenant ending on such Computation Date (the “Test Period”), the sum of (a) the principal portion of payments required to be made by the Company on Capitalized Leases during the Test Period, plus (b) without duplication, the principal portion of all payments of all Debt of the Company due and payable during the Test Period, plus (c) a fraction of the average daily outstanding amount of the Revolving Credit Loans during the Test Period, which fraction shall be, if the Computation Date is on or before December 31, 1998, one twelfth (1/12), and if the Computation Date is after December 31, 1998 one tenth (1/10), plus (d) without duplication, all required payments of the Term Loan (as defined in the Bank Credit Agreement) to be made pursuant to Section 4.3 of the Bank Credit Agreement during the period specified in the applicable covenant commencing on such Computation Date.

           “Consolidated Total Interest Expense” shall mean for any period, the aggregate amount of interest required to be paid or accrued by Company and its Subsidiaries during such period on all Debt of Company and its Subsidiaries outstanding during all or any part of such period, whether such interest was or is required to be reflected as an item of expense or capitalized, including payments consisting of interest in respect of Capitalized Leases and including commitment fees, agency fees, facility fees, balance deficiency fees and similar fees or expenses in connection with the borrowing of money.

           “Consolidated Total Liabilities” shall mean all of the liabilities of Company and its Subsidiaries determined on a consolidated basis in accordance with GAAP and, without duplication, all Debts of the Company and its Subsidiaries, whether or not so classified.

           “Contractual Obligation” shall mean, as applied to any Person, any provision of any security agreement entered into by that Person or of any material indenture, mortgage, deed of trust, contract, undertaking, agreement, or other instrument to which that Person is a party or by which it or any of its owned Assets is bound or to which it or any of its owned Assets is subject.

           “Debt” shall mean all obligations, contingent and otherwise, that in accordance with GAAP should be classified upon the obligor’s balance sheet as liabilities, or to which reference should be made by footnotes thereto, including in any event and whether or not so classified: (a) all debt and similar monetary obligations, whether direct or indirect; (b) all liabilities secured by any mortgage, pledge, security interest, lien, charge or other encumbrance existing on property owned or acquired subject thereto, whether or not the liability secured thereby shall have been assumed; (c) all Rental Obligations; and (d) all guarantees, endorsements and other contingent obligations whether direct or indirect in respect of indebtedness of others, including any obligation to supply funds to or in any manner to invest in, directly or indirectly, the debtor, to purchase Debt, or to assure the owner of Debt against loss, through an agreement to purchase goods, supplies or services for the purpose of enabling the debtor to make payment of the indebtedness held by such owner or otherwise, and the obligations to reimburse the issuer in respect of any letters of credit.

           “Debt Coverage Ratio” shall have the meaning given said term in Section 6.1(c).

           “Direct Finance Leases” shall mean leases pursuant to which Company leases containers to a lessee and (a) the terms of such lease provide that title to such containers will pass to such lessee at the end of the lease term automatically or at the option of the lessee for no additional consideration or for nominal additional consideration, or upon terms with substantially similar economic effect and (b) the interest component of the proceeds of such lease are booked on Company’s financial statements as “Income from Direct Finance Leases.”

           “Disclosure Statement” shall mean the disclosure statement dated the date hereof, executed and delivered by a Responsible Officer of Company, which sets forth information called for by, or exceptions to, the representations and warranties made by Company herein.

           “Dollars” or “$” shall mean United States of America dollars or such coin or currency of the United States of America as at the time of payment shall be legal lender for the payment of public and private debts in the United States of America.

           “Earnings Before Interest and Taxes” shall mean, for any period, an amount equal to (a) Consolidated Net Income (or Deficit) for such period, plus (b) Consolidated Total Interest Expense for such period, plus (c) income taxes for the Company and its Subsidiaries for such period.

           “Effective Date” shall have the meaning set forth in the Bank Credit Agreement.

           “Environment” shall have the meaning set forth in 42 U.S.C. § 9601(8).

           “Environmental Protection Statute” shall mean any federal or state law, statute, rule, order, determination, or regulation (including CERCLA, RCRA, and SARA) enacted in connection with or relating to the protection or regulation of the Environment, including those laws, statutes, rules, orders, determinations and regulations regulating the disposal, removal, production, storing, refining, handling, transferring, processing, or transporting of Hazardous Waste or Hazardous Substances (or similar substances), and any regulations issued or promulgated in connection with such statutes by any Governmental Agency.

           “EPA” shall mean the United States Environmental Protection Agency or any successor thereto.

           “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

           “Event of Default” shall have the meaning set forth in Article VII.

           “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended or supplemented from time to time, and any successor statute, and any and all rules and regulations issued or promulgated in connection therewith.

           “Exclusive Supply Agreement” shall mean the Exclusive Supply Agreement dated July 30, 1992 between the Company and Mitsui, as amended from time to time.

           “Federal Reserve Board” shall mean the Board of Governors of the Federal Reserve System of the United States of America or any successor thereto.

           “Funding Date” shall mean the date on which the Purchaser pays to the Company the purchase price for the Note, which date shall be on or before April 30, 1998.

           “GAAP” shall mean generally accepted accounting principles in the United States of America in effect on the date of this Agreement; provided, however, that all financial statements to be furnished to Purchaser after the Closing Date shall utilize such generally accepted accounting principles in effect at the time of preparation.

           “Governmental Agency” shall mean any agency, department, board, commission, district or other public organ, whether federal, state, local or foreign.

           “Hazardous Substance” shall have the meaning set forth in 42 U.S.C. § 9601(14).

           “Hazardous Waste” shall have the meaning set forth in 42 U.S.C. § 6903(5) and 40 C.F.R. § 261.3.

           “Indemnified Liabilities” shall have the meaning set forth in Section 10.2.

           “Indemnitee” shall have the meaning set forth in Section 10.2.

           “Installment Sales Contract Indemnity Clause” shall mean the indemnity clause from the Company in favor of Mitsui contained in any Installment Sales Contract, each as set forth in Schedule II of the Stock Purchase Agreement.

           “Intangible Assets” shall mean that portion of the book value of any Person’s Assets which would be treated as intangibles under GAAP, including, to the extent so treated, all items such as goodwill, trademarks, trade names, brands, trade secrets, customer lists, computer software, copyrights, patents, licenses, franchise conversion rights, and rights with respect to any of the foregoing, and all unamortized debt discount and expenses.

           “Interest Rate Protection Obligations” shall mean, with respect to any Person, any obligations of such Person under any interest rate swap agreements, interest rate cap agreements, interest rate collar agreements, or any other similar agreements with respect to interest payable on Debt.

           “Investment” shall mean, all expenditures made and all liabilities incurred (contingently or otherwise) for the acquisition of stock or Debt of, or for loans, advances, capital contributions or transfers of property to, or in respect of any guaranties (or other commitments as described under Debt), or obligations of, any Person. In determining the aggregate amount of Investments outstanding at any particular time: (a) the amount of any Investment represented by a guaranty shall be taken at not less than the principal amount of the obligations guaranteed and still outstanding; (b) there shall be included as an Investment all interest accrued with respect to Debt constituting an Investment unless and until such interest is paid; (c) there shall be deducted in respect of each such Investment any amount received as a return of capital (but only by repurchase, redemption, retirement, repayment, liquidating dividend or liquidating distribution); (d) there shall not be deducted in respect of any Investment any amounts received as earnings on such Investment, whether as dividends, interest or otherwise, except that accrued interest included as provided in the foregoing clause (b) may be deducted when paid; and (e) there shall not be deducted from the aggregate amount of Investments any decrease in the value thereof.

           “Leverage Ratio” shall mean, at any time, the ratio of: (a) Consolidated Senior Debt to (b) Consolidated Adjusted Tangible Net Worth.

           “Lien” shall mean any lien, mortgage, pledge, assignment (including any assignment of rights to receive payments of money), security interest, charge, or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof, any Capitalized Lease, and any agreement to give any security interest).

           “Maturity Date” shall mean the tenth anniversary of the Funding Date.

           “Mitsui” shall mean Mitsui Ltd. and Mitsui USA.

           “Mitsui Ltd.” shall mean Mitsui & Co., Ltd., a Japanese corporation.

           “Mitsui USA” shall mean Mitsui & Co. (U.S.A.), Inc. a New York corporation.

           “Nonrecourse Loans” shall have the meaning set forth in the Bank Credit Agreement.

           “Note” shall mean the subordinated secured promissory note issued hereunder, substantially in the form of Exhibit A attached hereto, with appropriate insertions, executed by Company.

           “Noteholder(s)” shall mean the Purchaser and/or any permitted assignees or transferees of the Note.

           “Officer’s Compliance Certificate” shall mean a certificate of the chief financial officer of Company, substantially in the form of Exhibit B attached hereto.

           “Operating Lease” shall mean, as applied to any Person, any lease of any Asset which is not a Capitalized Lease, other than any such lease under which such Person is the lessor.

           “Permitted Liens” shall mean: (i) liens in favor of the Company on all or part of the assets of Subsidiaries of the Company securing indebtedness owing by Subsidiaries of the Company to the Company; (ii) liens to secure taxes, assessments and other government charges in respect of obligations not overdue or liens on properties to secure claims for labor, material or supplies in respect of obligations not overdue; (iii) deposits or pledges made in connection with, or to secure payment of, workmen’s compensation, unemployment insurance, old age pensions or other social security obligations; (iv) liens on properties in respect of judgments or awards, the Debt with respect to which is permitted by Section 9.1(d) of the Bank Credit Agreement; (v) liens of carriers, warehousemen, mechanics and materialmen, and other like liens on properties in existence less than 120 days from the date of creation thereof in respect of obligations not overdue; (vi) encumbrances on real estate consisting of easements, rights of way, zoning restrictions, restrictions on the use of real property and defects and irregularities in the title thereto, landlord’s or lessor’s liens under leases to which the Company or a Subsidiary of the Company is a party, and other minor liens or encumbrances none of which interferes materially with the use of the property affected in the ordinary conduct of the business of the Company and its Subsidiaries, which defects do not individually or in the aggregate have a materially adverse effect on the business of the Company individually or of the Company and its Subsidiaries on a consolidated basis; (vii) liens listed on Schedule 9.2 to the Bank Credit Agreement; (viii) security interests in or mortgages on real or personal property acquired or leased after the Effective Date to secure Debt of the type and amount permitted by Section 9.1(g) or Section 9.1(h) of the Bank Credit Agreement, and proceeds thereof (including without limitation leases, accounts receivable, instruments and documents) which security interests or mortgages cover only the real or personal property to acquired or leased; (ix) liens on assets and property of the Company in favor of Purchaser; (x) liens in favor of the Banks and the agent therefor under the Loan Documents (as defined in the Bank Credit Agreement); (xi) liens consisting of the interest of lessees under leases of containers where the Company is lessor; (xii) liens on the property listed on Schedule 9.2 to the Bank Credit Agreement which are granted to secure any refinancing or renewal of Debt permitted under Section 9.1 of the Bank Credit Agreement which refinancing or renewal is permitted under Section 9.1(k) of the Bank Credit Agreement (subject to all the provisos contained therein) provided, that (i) such liens encumber the same property (and no additional assets or property of the company) as secured the Debt that was so refinanced or renewed and (ii) the aggregate amount of Debt secured by such property has not increased as a result of such refinancing or renewal; and (xiii) the interests of lessors in property leased to the Company or a Subsidiary of the Company under Section 9.1(g) or 9.1(h) of the Bank Credit Agreement.

           “Person” shall mean and include natural persons, corporations, limited partnerships, general partnerships, joint stock companies, joint ventures, associations, companies’ trusts, banks, trust companies, land trusts, business trusts, or other organizations, irrespective of whether they are legal entities, and governments and agencies and political subdivisions thereof.

           “Purchaser” shall have the meaning set forth in the introduction to this Agreement.

           “Quarterly Payment Date” shall mean the date which numerically corresponds to the Funding Date in every third month after the Funding Date or, if such day is not a Business Day, the next Business Day.

           “Rate” shall mean a rate per annum equal to 10-1/2%, computed on the basis of a three hundred sixty (360) day year and actual days elapsed.

           “RCRA” shall mean the Resource Conservation and Recovery Act of 1976, as amended or supplemented from time to time, set forth at 42 U.S.C. § 9601 et seq., and any and all rules and regulations issued or promulgated in connection therewith.

           “Rental Obligations” shall mean all present or future obligations of Company or any of its Subsidiaries under any rental agreements or leases of real or personal property, other than (a) obligations that can be terminated by the giving of notice without liability to Company or such Subsidiary in excess of the liability for rent due as of the date on which such notice is given and under which no penalty or premium is paid as a result of any such termination, (b) rental agreements relating to equipment other than Containers (as defined in the Bank Credit Agreement) having an aggregate value of less than $1,000,000 for all such agreements, and (c) obligations in respect of Capitalized Leases. For purposes of this Agreement, the aggregate amount of Rental Obligations of any Person shall be, as at any date of determination, at an amount equal to the net present value, calculated at a discount rate of nine percent (9%) per annum, of the future Rental Obligations of such Person.

           “Representative” shall mean any trustee, fiduciary, agent, or representative of any issue of Debt.

           “Required Noteholders” shall mean Noteholders holding an aggregate principal amount at least equal to 66-2/3% of the aggregate principal amount of Notes then outstanding.

           “Responsible Officer” shall mean the president, the treasurer, or any vice president of a Person, or such other officer of such Person designated by a Responsible Officer of such Person in a writing delivered to Purchaser.

           “Revolving Credit Loans” shall have the meaning given said term in the Bank Credit Agreement.

           “SARA” shall mean the Superfund Amendment and Reauthorization Act of 1986, as amended or supplemented from time to time, set forth in Public Law 99-499 et seq., and any and all rules and regulations issued or promulgated in connection therewith.

           “Securities Act” shall mean the Securities Act of 1933, as amended from time to time, and any successor statute, and any and all rules and regulations promulgated thereunder.

           “Security Agreement” shall mean the security agreement dated as of April 30, 1998, as it may be amended from time to time, between Company and Purchaser.

           “Senior Debt” shall mean the principal of and premium, if any, and interest (including interest accruing after the filing of a petition initiating any proceeding under any state or federal bankruptcy laws) on all obligations of every nature of Company from time to time owed to Banks under the Bank Credit Agreement, including principal of and interest on, and all fees related to, any revolving loans, term loans and all reimbursement obligations and fees in respect of letters of credit (or any combination thereof made pursuant to the Bank Credit Agreement), all costs and expenses reimbursable thereunder, and all reimbursement and other obligations owed by Company with respect to Interest Rate Protection Obligations incurred to satisfy the requirements of the Bank Credit Agreement or otherwise, whether outstanding on the date hereof or hereafter created, incurred, or assumed.

           “Staff Loan Program” shall mean a program administered by the Company pursuant to which the Company makes loans to employees, provided that the aggregate amount of loans outstanding at any time under such program shall not exceed $2,000,000 plus the amount of interest on any such loans added to principal and shall be used solely for the purpose of enabling employees to purchase preferred stock.

           “Stock Purchase Agreement” shall mean that certain stock purchase agreement between Mitsui, Company, Hiromitsu Ogawa and Purchaser dated January 31, 1998.

           “Subordinated Debt” shall have the meaning given said term in the Bank Credit Agreement.

           “Subordination and Intercreditor Agreement” shall have the meaning given to it in the Bank Credit Agreement.

           “Subsidiary” shall mean, with respect to any Person: (a) any corporation in which such Person, directly or indirectly through its Subsidiaries, owns more than fifty percent (50%) of the stock of any class or classes having by the terms thereof the ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency); and (b) any partnership, association, joint venture, or other entity in which such Person directly or indirectly through its Subsidiaries, has more than a fifty percent (50%) equity interest at the time.

           “Taxes” shall mean any tax based upon or measured by net or gross income, gross receipts, sales, use, ad valorem, transfer, franchise, withholding, payroll, employment. excise, occupation, premium or property taxes, or conduct of business, together with any interest and penalties, additions to tax and additional amounts imposed by any federal, state, local, or foreign taxing authority upon any Person.

           “Third-Party Action” shall mean any consent, waiver, release, approval, license or other authorization of, or notice to, or filing with, any other Person, whether or not a Governmental Agency, and the expiration of any associated mandatory waiting period.

           “Unmatured Event of Default” shall mean an event, act, or occurrence which, with the giving of notice or passage of time, would become an Event of Default.

           1.2  Construction. Unless the context of this Agreement clearly requires otherwise, references to the plural include the singular, to the singular include the plural, and to the part include the whole, the term “including” is not limiting, and the term “or” has the inclusive meaning represented by the phrase “and/or.” References in this Agreement to “determination” by Purchaser include good faith estimates (in case of quantitative determinations) by Purchaser and good faith beliefs (in the case of qualitative determinations), as applicable. The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. Article, section, subsection, clause, exhibit, and schedule references are to this Agreement unless otherwise specified. Any reference in this Agreement, the Note or any Ancillary Document to the Agreement, the Note or any Ancillary Document includes any and all alterations, amendments, changes, extensions, modifications, renewals, or supplements thereto or thereof. Neither this Agreement, nor the Note, nor the Ancillary Documents, nor any uncertainty or ambiguity contained herein or therein, shall be construed or resolved against Company or Purchaser, whether under any rule of construction or otherwise. On the contrary, this Agreement, the Note, and the Ancillary Documents have been reviewed by Company, Purchaser, and their respective counsel and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes of Company and Purchaser.

           1.3  Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with GAAP, including (subject to the definition of GAAP contained herein) applicable statements, bulletins, and interpretations issued by the Financial Accounting Standards Board and bulletins, opinions, interpretations, and statements issued by the American Institute of Certified Public Accountants or its committees. When used herein, the term “financial statements” shall include the notes and schedules thereto.

ARTICLE II

THE NOTE

           2.1  Authorization and Issuance of the Note. Company has authorized the issuance of the Note in the aggregate principal amount of Thirty Three Million Six Hundred Fifty Thousand Dollars ($33,650,000).

            2.2  Purchase and Sale of Note.

           (a)  Subject to the terms and conditions of this Agreement, Company shall sell to Purchaser and Purchaser shall purchase from Company a Note in the aggregate principal amount of Thirty Three Million Six Hundred Fifty Thousand Dollars ($33,650,000). The purchase price for the Note shall be equal to one hundred percent (100%) of the principal amount thereof. The Note shall be purchased on the Funding Date.

           (b)  Delivery of the Note will be made on the Closing Date at the offices of Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, New York against payment of the purchase price therefor by transfer of immediately available Dollars, or as may otherwise be agreed to between Company and Purchaser.

            2.3  Time and Place of Payments; Interest Rate; Payment of Principal and Interest under the Note.

                 (a)  Any payment to be made hereunder or under the Note shall be made not later than 2:00 p.m., New York time, on the date of payment to the bank accounts designated after the signature of Purchaser hereto and shall be made by wire transfer of immediately available Dollars to such designated bank accounts, marked for attention as indicated, or in any other manner or any other place within or the continental limits of the United States of America as may be directed, in writing, by Purchaser. Payments and prepayments of principal or interest with respect to the Note may be evidenced by notations made by the Purchaser on the schedule annexed to the Note; provided, however, that any failure by Purchaser to make any such notation (whether with respect to payments or prepayments of principal or interest) on such schedule shall not in any way affect, impair, or enlarge Company’s obligations under this Agreement or the Note.

                 (b)  The unpaid principal balance of the Note shall bear interest from the Funding Date at the Rate. Interest due shall be due and payable in arrears, commencing on the first Quarterly Payment Date immediately following the Funding Date, and continuing on each Quarterly Payment Date thereafter up to and including the Quarterly Payment Date immediately preceding the Maturity Date, and on the Maturity Date. Interest shall be payable in cash subject to paragraph (c) of this Section 2.3.

                (c)  If the Company is prohibited, pursuant to Section 2(b)(i) of the Subordination and Intercreditor Agreement, from making any cash payments of interest due under the terms of the Note on any Quarterly Payment Date, then (subject to the next sentence) the Company shall satisfy its obligation to pay such interest by issuing a new note (each, a “PIK Note”), in the form of Exhibit B attached hereto, in the principal amount equal to the amount of the interest then due. Notwithstanding the foregoing, if, in the opinion of Purchaser or Purchaser’s independent auditors, the receipt of a PIK Note on such Quarterly Payment Date would create a significant risk that the Company would become a consolidated subsidiary of the Purchaser under GAAP, then in lieu of the issuance of an additional PIK Note on such Quarterly Payment Date, the interest due under the terms of the Note shall accrue from the preceding Quarterly Payment Date at the Rate. Accrual of interest which the Company would be entitled to pay by the delivery of a PIK Note, but for the provisions of the preceding sentence, shall not constitute a payment default for purposes of Section 7.1(a) of this Agreement.

                 (d)  Principal shall be due and payable in accordance with Section 2.6(b).

           2.4  Overdue Rate. Any payments of principal or (to the extent permitted by law and both before and after judgment) interest with respect to the Note, the fees payable under this Agreement, or any other amounts not paid when due hereunder or declared due, whether at maturity, by acceleration, by lapse of time, or otherwise, shall bear interest thereafter and without affecting any of the other rights and remedies provided for herein or in the Note, at a rate from and including the due date to but excluding the date on which such amount is paid in full equal to the Overdue Rate. The “Overdue Rate” shall mean a rate equal to two (2) percentage points per annum above the Rate applicable to the Note from time to time pursuant to the terms hereof.

           2.5  Computation of Interest. All computations of interest with respect to the Note and all computations of interest due under Section 2.4 for any period shall be calculated on the basis of a year of three hundred sixty (360) days for the actual number of days elapsed. Interest shall accrue from and including the Funding Date to and excluding the date of the repayment of all amounts outstanding under the Note.

           2.6  Prepayment.

                 (a)  Voluntary Prepayments. Company shall have the right, at any time and from time to time, upon thirty (30) Business Days’ prior written notice to the Purchaser, to prepay, in whole or in part, the principal balance outstanding under the Note. Upon giving such notice, the amount specified in the notice shall become due and payable in full on the specified date. Each partial prepayment under the Note shall be in a minimum aggregate amount of One Million Dollars ($1,000,000) and, thereafter, in integral multiples of One Million Dollars ($1,000,000).

                 (b)  Mandatory Prepayments. Unless prepaid in accordance with the terms hereof, Company shall pay consecutive quarterly installments of principal with respect to the Note, without demand, beginning on the twenty-first Quarterly Payment Date after the Funding Date and on each Quarterly Payment Date thereafter through, and including, the Maturity Date. The amount of each such installment shall be equal to the remaining principal balance of the Note divided by the number of remaining scheduled mandatory principal prepayments (including the prepayment then to be made).

                 (c)  Form of Prepayment. Each voluntary or mandatory prepayment made pursuant to this Section 2.6 shall be by a wire transfer of immediately available Dollars.

                 (d)  Application of Voluntary Prepayments. Any voluntary prepayment made pursuant to this Section 2.6 shall be applied, first, to accrued and unpaid interest on the amount prepaid and, then, to principal.

           2.7  Holidays. Any payments which would otherwise become due on a day other than a Business Day shall instead become due on the next succeeding Business Day and such extension shall be reflected in the computation of any payments due hereunder on such adjusted date.

           2.8  Security. Company’s obligations under this Agreement and the Note shall be secured by the Security Agreement, which shall create a security interest in and lien on all Containers of Company now owned or hereafter acquired (other than the Containers described as Excluded Assets on Schedule A of the Security Agreement), subject only to the security interest and lien under the Bank Credit Agreement in favor of the Agent and the Banks (as defined in the Bank Credit Agreement) to the extent provided therein.

           2.9  Tax Withholding. Each Noteholder that is not incorporated under the laws of the United States of America or a state thereof agrees that it will certify to the Company that it is entitled to receive payments under this Agreement without deduction or withholding of any United States federal income taxes or authorize Company, and Company hereby agrees, to withhold taxes and make tax payments on such Noteholder’s behalf as required by applicable law and promptly provide to such Noteholder a certificate of payment of such withholding taxes.

           2.10  Calculation of Principal. Noteholder shall have the right to annotate a principal schedule annexed to the Note to reflect all increases in principal under the Note (including without limitation, any increases in principal resulting from additions of unpaid interest pursuant to Section 2.3(b)), and any payment of principal. Such principal schedule is to be conclusive evidence of principal owed, absent manifest error.

ARTICLE III

CONDITIONS TO THE PURCHASE OF THE NOTE

           3.1  Conditions Precedent to be Satisfied at Closing Date. The obligation of Purchaser to purchase the Note hereunder is subject to the fulfillment, to the satisfaction of Purchaser, or waiver by Purchaser in its sole discretion of each of the following conditions on or before the Closing Date:

                 (a)  Purchaser shall have received the Note dated the Funding Date, duly executed by Company to the order of Purchaser;

                 (b)  Purchaser shall have received a duly executed Officer’s Compliance Certificate substantially in the form of Exhibit C, dated as of the Closing Date, detailing the calculations made by Company based upon the balance sheet referred to in Section 3.1(n), by which Company has determined that it is in compliance with the financial covenants contained herein which are applicable as of the Closing Date;

                 (c)  Company shall have delivered a certificate of a Responsible Officer of Company substantially in the form of Exhibit C attached hereto setting forth the amount of proceeds from the sale of the Note which will be used (i) to finance the acquisition of new marine containers, (ii) to refinance containers already owned by the Company or leased by the Company on a direct finance lease basis, (iii) to redeem the issued and outstanding shares of Preferred Stock held by Mitsui and (iv) to repay all outstanding Debt owed to Mitsui;

                 (d)  the representations and warranties set forth in Article IV of this Agreement shall be true and correct on and as of the Closing Date, as though made on and as of the Closing Date;

                 (e)  the affirmative covenants set forth in Article V of this Agreement which require performance prior to the Closing Date shall have been performed as of the Closing Date;

                 (f)  both before and after giving effect to the purchase of the Note, Company and its Subsidiaries shall be in compliance with all of the requirements of each of the covenants contained in this Agreement;

                 (g)  the Closing Date shall occur on or before April 30, 1998;

                 (h)  Purchaser shall have received one or more written opinions, dated the Closing Date, of counsel to Company, substantially in the form and substance of Exhibit D attached hereto, or otherwise in form and substance satisfactory to Purchaser;

                 (i)  Purchaser shall have received certificates of corporate status with respect to Company and each of its Subsidiaries, dated within 30 calendar days of the Closing Date, or confirmed by telex, if telex confirmation is available, such certificates to be issued by the Secretary of State (or similar officer) of the jurisdiction of incorporation of Company and each of such Subsidiaries, which certificates shall indicate that Company and each of such Subsidiaries are in good standing in such jurisdiction;

                 (j)  Purchaser shall have received certificates of corporate status indicating that Company and each of its Subsidiaries are in good standing as foreign corporations, dated within 30 calendar days of the Closing Date, or confirmed by telex, if telex confirmation is available, such certificates to be issued by the Secretary of State (or similar official) of the jurisdiction in which its or their failure to be duly qualified or licensed would have a material adverse effect on its or their business;

                 (k)   Purchaser shall have received a copy of Company’s Articles of Incorporation, certified by the Secretary of Company;

                 (l)   Purchaser shall have received a copy of the bylaws of Company, certified by the Secretary of Company;

                 (m)   Purchaser shall have received a signature and incumbency certificate of the Responsible Officer of Company executing this Agreement, the Note, and the Ancillary Documents to which Company is a party, certified by the Secretary of Company;

                 (n)   Purchaser shall have received a consolidated pro forma balance sheet of Company, dated as of the latest practicable date, and certified by the President or Chief Financial Officer of Company, which gives effect to the transactions contemplated under this Agreement, the Note, and the Ancillary Documents;

                 (o)   Purchaser shall have received each of the Ancillary Documents, if any, not previously delivered, all duly executed by the parties thereto;

                 (p)   Purchaser shall have received a certificate from the Secretary of Company attesting to the resolutions of Company’s board of directors authorizing its execution, delivery and performance of this Agreement, the Note, and the Ancillary Documents to which Company is a party, and authorizing specific Responsible Officers to execute same;

                 (q)   Purchaser shall have received a payment of no more than $30,000,000 to be applied to legal fees, costs, and expenses incurred in connection with the preparation, negotiation, execution, and delivery of this Agreement, the Note, the Ancillary Documents and the other documents related hereto and thereto;

                 (r)   the representations and warranties set forth in the Ancillary Documents shall be true and correct;

                 (s)   each of the Ancillary Documents shall be in full force and effect and all filings and other notifications necessary to create and perfect Purchaser’s security interest under the Security Agreement shall have been made;

                 (t)   no material adverse change shall have occurred since January 1, 1998 in the proposed business, operations, Assets, prospects, or consolidated financial condition of Company;

                 (u)   no litigation, inquiry, other action or proceeding (governmental or otherwise), or injunction or other restraining order shall be pending or threatened which, in the reasonable opinion of Purchaser, (i) could be reasonably likely to have a material adverse effect on Company’s ability to repay the Note or perform its obligations under this Agreement or the Ancillary Documents, or (ii) could be reasonably likely to have a material adverse effect on the business, operations, Assets, prospects, liabilities, earnings, or condition (financial or other) of Company;

                 (v)   Purchaser shall have received satisfactory evidence of Company’s having obtained all orders, consents, approvals, and other authorizations, and having made all filings and other notifications (governmental or otherwise) and all other Third Party Actions having been taken required in connection with the transactions contemplated by this Agreement;

                 (w)   Purchaser shall have completed or received all audits, inspections, appraisals, and examinations as deemed necessary in Purchaser’s opinion with respect to the Assets, books and records, and business, financial condition, and operations of Company and its Subsidiaries;

                 (x)   Purchaser shall have received from Company consolidated cash flow projections for Company and its Subsidiaries for a period of not less than two (2) years from and after the Closing Date;

                 (y)   no Event of Default or Unmatured Event of Default shall have occurred and be continuing, nor shall either result from the sale of the Note and the application of the proceeds as provided hereunder;

                 (z)   the Bank Credit Agreement shall be in full force and effect, subject only to the consummation of the Interpool Transactions (as defined in the Bank Credit Agreement), pursuant to which Company shall be entitled to borrow up to One Hundred and Sixty-Five Million Dollars ($165,000,000) with at least One Hundred and Fifty-One Million, Two Hundred and Eighteen Thousand, Six Hundred and Seventeen Dollars ($151,218,617) available for borrowing by Company immediately prior to Closing;

                 (aa)   all other documents and legal matters in connection with the transactions contemplated by this Agreement shall have been delivered or executed and shall be in form and substance reasonably satisfactory to Purchaser;

                 (bb)   Mitsui shall have performed and complied in all material respects with all covenants required in the Stock Purchase Agreement to be performed or complied with by Mitsui at or before the Closing Date including, without limitation, those to be performed on the Closing Date pursuant to Section 1 of the Stock Purchase Agreement;

                 (cc)   All directors of the Company elected by Mitsui shall have delivered their written resignation as directors and officers, effective on the Closing Date;

                 (dd)   All corporate and other proceedings on the part of Mitsui in connection with the transaction to be consummated or the Closing Date, and all documents and instruments incident to such transactions, shall be reasonably satisfactory in substance and form to the Purchaser;

                 (ee)   The waiting period under Hart-Scott shall have expired or been terminated, and all other Third-Party Action (as defined in the Stock Purchase Agreement) required in order to consummate the transactions contemplated by the Stock Purchase Agreement without thereby causing any breach, acceleration or imposition of a Lien under any contract to which the Company is a party or by which the Company or its property is bound, other than any the absence of which in the aggregate would not have a material effect on the transactions contemplated hereby, shall have been taken;

                 (ff)   No claims arising under the indemnification provision of the Stock Purchase Agreement have been threatened or asserted and Company is aware of no facts which may give rise to such a claim;

                 (gg)   The Company and/or Mr. Ogawa on one side, and Mitsui on the other side, shall have entered into the Termination Agreement contemplated by Section 1.7 of the Stock Purchase Agreement, which will be in form and substance satisfactory to the Purchaser in its sole discretion;

                 (hh)   The Company and Mitsui shall have entered into mutual releases of all obligations and claims, other than those arising under the Stock Purchase Agreement and except as otherwise specified in Section 3.1(hh), and all Liens held by Mitsui on any property of the Company shall have been released, all such releases to have been in form and substance acceptable to Purchaser;

                 (ii)   Purchaser shall have received a copy of a payoff letter from Mitsui in connection with the transactions contemplated by the Stock Purchase Agreement;

                 (jj)   The Company shall not have made any payment to obtain any third party consent or induce any Third-Party Action (as defined in this Agreement) without obtaining Purchaser’s prior written approval; and

                 (kk)   The Company and Mitsui shall not have entered into any new agreements since the execution of the Stock Purchase Agreement other than the agreements executed on the Closing Date and referred to in Schedule 4.28.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF COMPANY

           In order to induce Purchaser to enter into this Agreement, Company represents and warrants as of the date hereof that, except as set forth in the Disclosure Statement with a specific reference to the Section of this Article IV affected thereby:

           4.1  Due Organization. Company is a duly organized and validly existing corporation in good standing under the laws of the State of Nevada and is duly qualified to conduct business as a foreign corporation in all jurisdictions where its failure to do so would have a material adverse effect on its business, operations, Assets, prospects, or condition (financial or other). Each of Company’s Subsidiaries is a duly organized and validly existing corporation in good standing under the laws of the state of its incorporation and is duly qualified to conduct business as a foreign corporation in all jurisdictions where its failure to do so would have a material adverse effect on the business, operations, Assets, prospects, or condition (financial or otherwise) of Company and its Subsidiaries, taken as a whole.

           4.2  Organization, Standing, and Qualification. Set forth in the Disclosure Statement is a complete and accurate list for Company and its Subsidiaries, showing: (a) the jurisdiction of their incorporation; (b) the number of shares of each class of common and preferred stock authorized for each; and (c) the number outstanding and the percentage of the outstanding shares of each such class owned (directly or indirectly) by one or more Persons. All of the outstanding capital stock of each of Company’s Subsidiaries has been duly authorized and validly issued and is fully paid and nonassessable.

           4.3  Requisite Power. Company has all requisite corporate power to execute and deliver this Agreement, the Note, and the Ancillary Documents to which it is a party and to sell the Note as provided for in this Agreement. Company has full power and authority to own, lease and operate its Assets and to carry on the business in which it is engaged. Company and each of its Subsidiaries have all governmental licenses, authorizations, consents, and approvals necessary to own and operate their respective Assets and to carry on their respective businesses as now conducted and as proposed to be conducted, other than licenses, authorizations, consents, and approvals which are not currently required or the failure to obtain which would not have a material adverse effect on the business, operations, Assets, prospects, or condition (financial or other) of Company and its Subsidiaries, taken as a whole. The execution, delivery, and performance of this Agreement, the Note and the Ancillary Documents to which Co