As filed with the Securities and Exchange Commission on June 30, 2005

Registration No. 333 -             

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-1
REGISTRATION STATEMENT

Under
The Securities Act of 1933

TAL International Group, Inc.

(Exact name of registrant as specified in its charter)


Delaware 7359 20-1796526
(State of Incorporation) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer
Identification No.)

100 Manhattanville Road
Purchase, New York 10577-2135
(914) 251-9000

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

Brian M. Sondey
Chief Executive Officer
TAL International Group, Inc.
100 Manhattanville Road
Purchase, New York 10577-2135
(914) 251-9000

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to :


    Martin J. Collins
Philip O. Brandes
Mayer, Brown, Rowe & Maw LLP
1675 Broadway
New York, New York 10019
(212) 506-2500
William J. Whelan III, Esq.
Cravath, Swaine & Moore LLP
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019
(212) 474-1000

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.     [ ]

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434 under the Securities Act, check the following box.     [ ]

CALCULATION OF REGISTRATION FEE


Title of Each Class of
Securities to Be Registered
Proposed Maximum
Aggregate Offering Price
Amount of
Registration Fee (1)
Common Stock, par value $0.001 per share $ 201,250,000   $ 23,687.13  
(1) Calculated pursuant to Rule 457(o) under the Securities Act of 1933.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said section 8(a), may determine.




The information in this prospectus is not complete and may be changed. We and the selling stockholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED                         , 2005

Shares

TAL International Group, Inc.

Common Stock

Prior to this offering, there has been no public market for our common stock. The initial public offering price of our common stock is expected to be between $                     and $                     per share. We will apply to list our common stock on the New York Stock Exchange under the symbol "TAL."

The selling stockholders have granted the underwriters an option to purchase a maximum of          additional shares to cover over-allotments of shares.

Investing in our common stock involves risks. See "Risk Factors" on page 12.


  Price to
Public
Underwriting
Discounts and
Commissions
Proceeds to TAL
International
Group
Per Share $          $          $         
Total $   $   $  

Delivery of the shares of common stock will be made on or about                             , 2005.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Joint Book-Running Managers

Credit Suisse First Boston Deutsche Bank Securities Jefferies & Company, Inc.

Lead-Manager

UBS Investment Bank

The date of this prospectus is                                     , 2005.




TABLE OF CONTENTS


  Page
P ROSPECTUS S UMMARY 1
R ISK F ACTORS 12
F ORWARD- L OOKING S TATEMENTS 25
U SE OF P ROCEEDS 26
D IVIDEND P OLICY 26
C APITALIZATION 27
D ILUTION 28
U NAUDITED P RO  F ORMA  F INANCIAL S TATEMENTS 29
S ELECTED H ISTORICAL  F INANCIAL D ATA 36
M ANAGEMENT'S D ISCUSSION AND  A NALYSIS OF  F INANCIAL  C ONDITION AND  R ESULTS OF O PERATIONS 38
B USINESS 60
M ANAGEMENT 72
P RINCIPAL AND  S ELLING S TOCKHOLDERS 80
C ERTAIN R ELATIONSHIPS AND  R ELATED  P ARTY T RANSACTIONS 83
D ESCRIPTION OF  C APITAL  S TOCK 86
S HARES E LIGIBLE FOR  F UTURE S ALE 90
C ERTAIN  U NITED  S TATES F EDERAL  T AX  C ONSEQUENCES TO  N ON- U . S . H OLDERS 92
U NDERWRITING 95
N OTICE TO  C ANADIAN R ESIDENTS 98
L EGAL M ATTERS 99
E XPERTS 99
W HERE Y OU  C AN  F IND  M ORE I NFORMATION 99
I NDEX TO F INANCIAL S TATEMENTS F-1

You should rely only on the information contained in this document or to which we have referred you. We have not authorized anyone to provide you with information that is different. This document may only be used where it is legal to sell these securities. The information in this document may only be accurate on the date of this document.

Dealer Prospectus Delivery Obligation

Until                              , 2005 (25 days after the commencement of this offering), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer's obligation to deliver a prospectus when acting as an underwriter with respect to unsold allotments or subscriptions.

SERVICEMARK MATTERS

The following items referred to in this prospectus are registered or unregistered servicemarks in the United States and/or foreign jurisdictions pursuant to applicable intellectual property laws and are the property of us and our subsidiaries: TAL SM , Tradex ® , Trader ® and Greyslot ® .




PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed information and the financial statements and notes thereto appearing elsewhere in this prospectus. You should carefully read this entire prospectus and consider, among other things, the matters set forth under "Risk Factors" before deciding to invest in our common stock. In this prospectus, unless indicated otherwise, references to (i) "TAL International Group" refer to TAL International Group, Inc., the issuer of the common stock, (ii) "Trans Ocean" and "TAL International Corporation" refer to Trans Ocean Ltd. and TAL International Container Corporation, respectively, each of which is a wholly-owned direct subsidiary of TAL International Group, (iii) "the company," "we," "us" and "our" refer to TAL International Group and its subsidiaries, including Trans Ocean and TAL International Corporation and (iv) any "fiscal" year refers to the twelve months ending on December 31 of such year.

Our Company

We were formed in 1963 and are one of the world's largest and oldest lessors of intermodal freight containers. Intermodal freight containers are large, standardized steel boxes used to transport freight by ship, rail or truck. Because of the handling efficiencies they provide, intermodal freight containers are the primary means by which many goods and materials are shipped internationally. According to Drewry Shipping Consultants Limited (Drewry), the worldwide container shipping industry is a $148.7 billion industry, as measured by the gross revenues of shipping lines, in which volume has grown at a compound annual growth rate (CAGR) of 9.0% from 1980 to 2004.

Our operations include the acquisition, leasing, re-leasing and subsequent sale of multiple types of intermodal containers. According to Containerisation International, we are the world's third largest lessor of intermodal containers as measured by fleet size, with an approximately 11% market share of the world's leased container fleet. As of March 31, 2005, our fleet included approximately 613,324 containers (with approximately 82,031 containers under management for third parties), representing approximately one million twenty-foot equivalent units (TEU). We also believe that we are the world's largest seller of used containers. We have an extensive global presence, offering leasing services through 19 offices in 12 countries and approximately 190 third party container depot facilities in 39 countries as of May 31, 2005. Our customers are among the world's largest shipping lines and include, among others, APL-NOL, CMA-CGM, CP Ships, Hanjin Shipping, Maersk-Sealand, Mediterranean Shipping Company and NYK Line.

We generated total revenues, Adjusted EBITDA and net income of $           million, $           million and $           million, respectively, for fiscal 2004 on a pro forma basis, and $           million, $           million and $           million, respectively, for the three months ended March 31, 2005 on a pro forma basis. We had total assets of $1,320.9 million at December 31, 2004 and $1,347.0 million at March 31, 2005. For the definition of EBITDA and Adjusted EBITDA and a reconciliation of net income to EBITDA and EBITDA to Adjusted EBITDA, see "Summary Historical and Pro Forma Financial Data."

We lease three principal types of containers: (1) dry freight containers, which are used for general cargo such as manufactured component parts, consumer staples, electronics and apparel, (2) refrigerated containers, which are used for perishable items such as fresh and frozen foods, and (3) special containers, which are used for heavy and oversized cargo such as marble slabs, building products and machinery. As of March 31, 2005, dry, refrigerated and special containers represented 87%, 6% and 7% of our fleet on a unit basis, respectively. For the fiscal year 2004, dry, refrigerated and special containers represented 60%, 30% and 10% of our leasing revenues, respectively, and for the three months ended March 31, 2005, dry, refrigerated and special containers represented 59%, 30% and 11% of our leasing revenues, respectively.

We lease our containers on a per diem basis to our customers under three types of leases: long-term leases, service leases and finance leases. Long-term leases, typically with terms of three to eight years, provide us with predictable cash flow and low transaction costs by requiring customers to

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maintain specific containers on-hire for the duration of the lease. Service leases command a premium per diem rate in exchange for providing customers with a greater level of operational flexibility by allowing the pick-up and drop-off of containers during the lease term. Finance leases, which are typically structured as full payout leases, provide for a predictable recurring revenue stream with the lowest daily cost to the customer because customers are generally required to retain the container for the duration of its useful life. In each case, our leases require lessees to maintain the containers in good operating condition, defend and indemnify us from liabilities relating to the containers' contents and handling and return the containers to specified drop-off locations. As of March 31, 2005, 92% of our containers were on-hire to customers, with 62% of our containers on long-term leases, 28% on service leases or long-term leases, whose fixed terms have expired but for which the related units remain on-hire and for which we continue to receive rental payments, and 2% on finance leases. As of March 31, 2005, our long-term leases had an average remaining lease term of 34 months. In addition, less than 7% of our containers were available for lease and less than 2% were available for sale.

Our total revenues primarily consist of leasing revenues derived from the lease of our owned containers and, to a lesser extent, fees received for managing containers owned by third parties and equipment trading revenue. The most important driver of our profitability is the extent to which leasing revenues, which are driven primarily by our owned container fleet size, utilization (which represents the percentage of our operating fleet on-hire to customers) and average rental rates, exceed our operating costs, which primarily consist of depreciation and amortization, interest expense, direct operating expenses and administrative expenses. We seek to exceed a targeted return on our investment over the life cycle of each container by managing container utilization, per diem lease rates, drop-off restrictions and the used container sale process.

Industry Overview

According to Drewry, the container shipping industry is a $148.7 billion industry, as measured by the gross revenue of shipping lines. Containers provide a secure and cost-effective method of transporting raw materials, component parts and finished goods because they can be used in multiple modes of transport. By making it possible to move cargo from a point of origin to a final destination without repeated unpacking and repacking, containers reduce freight and labor costs. In addition, automated handling of containers permits faster loading and unloading of vessels, more efficient utilization of transportation equipment and reduced transit time. The protection provided by sealed containers also reduces cargo damage and the loss and theft of goods during shipment.

Over the last twenty-five years, containerized trade has grown at a rate greater than that of general worldwide economic growth. According to Drewry, worldwide containerized cargo volume grew in every year from 1980 through 2004, attaining a CAGR of 9.0% during that period. Furthermore, Clarkson Research Studies (Clarkson) projects that loaded container lifting, which is a measure of volume in the industry, will increase by 11.2% in 2005 and 10.3% in 2006. We believe that this projected growth is due to several factors, including the shift in global manufacturing capacity to lower labor cost areas such as China and India, the continued integration of developing high growth economies into global trade patterns, the continued conversion of cargo from bulk shipping into containers and the growing liberalization and integration of world trade.

Current trends in containerized shipbuilding also support expectations for increased container demand. According to Clarkson, the current orderbook for containerships set to be delivered between 2005 and 2008 represents approximately 4.4 million TEU of vessel capacity, or 53.4% of the existing containership fleet, with a significant portion of the orders concentrated on the larger (4,000 TEU or greater) ships. Given that most shipping lines utilize approximately two TEU of containers for each TEU of vessel capacity, we believe that near-term container demand should remain strong.

The percentage of owned versus leased containers utilized by shipping lines has been fairly stable over the last decade, with leased containers making up slightly less than one half of the total container fleet. According to Drewry, container lessors' ownership was approximately 8.9 million TEU or 45.8%

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of the total worldwide container fleet of 19.4 million TEU in 2004. In general, leasing containers helps shipping lines improve their overall container fleet efficiency and provides the shipping lines with an alternative source of equipment finance. Given the uncertainty and variability of export volumes, and the fact that shipping lines have difficulty in accurately forecasting their container requirements at a port-by-port level, the availability of containers for lease significantly reduces a shipping line's need to purchase and maintain larger container inventory buffers. In addition, the flexibility provided by operating leases also allows the shipping lines to adjust their container fleet sizes both seasonally and over time and helps to balance trade flows. Leasing containers also provides shipping lines with an additional source of funding to help them manage a high-growth, asset-intensive business.

Container leasing rates are typically a function of, among other things, new container prices (which are heavily influenced by steel prices), interest rates and the container supply and demand balance at a particular time and location. Beginning in 2003, global steel prices and container demand began to increase significantly, resulting in higher new and used container prices and significant increases in new and used container leasing rates. Average leasing rates on an entire portfolio of container leases respond more gradually to changes in new container prices, because lease agreements can only be re-priced upon the expiration of the lease. In addition, the value that lessors receive upon resale of containers is closely related to the cost of new containers.

While international containerized trade has grown rapidly and been consistently positive for the last twenty-five years, the shipping business has been characterized by cyclical swings due to lengthy periods of excess or scarce vessel capacity. We believe that these sustained periods of vessel supply/demand imbalances are mainly caused by the multi-year ordering and production cycle associated with the manufacture of new vessels, which requires shipping lines to estimate market growth many years into the future. Container leasing companies are partially insulated from the impacts of such shipping cycles by the relatively short production time associated with the manufacture of new containers. Lead-times for new container orders are typically only a few months (compared to the multi-year ordering and production cycle for new vessels), so the rate of new container ordering can be quickly adjusted to reflect unexpected market changes.

Competitive Strengths

We believe that our core competitive strengths include:

Leading market position .    As measured by TEU, we believe that we are the world's third largest lessor of containers and the largest seller of used containers. We believe that we enjoy a leading competitive position in the container leasing industry through our extensive global network, which comprises 19 offices in 12 countries and approximately 190 independent contracted container depots in 39 countries as of May 31, 2005. Our scale and worldwide operations provide us with cost and capability advantages relative to smaller leasing companies. In addition, our long-standing reputation for service reliability encourages many customers to rely on us to meet their unanticipated container needs worldwide.

Attractive long-term lease portfolio.     We concentrate on leasing our equipment on a long-term basis. Over the last five years we have adjusted the mix of our lease portfolio to focus on long-term leases, and have increased the percentage of our container fleet under long-term leases and finance leases from 48% at December 31, 2000 to 64% at March 31, 2005. The long-term nature of our lease portfolio provides us with a predictable source of revenue and operating cash flow, enabling us to manage and grow our business more effectively. For the twelve months ended December 31, 2004 and the three months ended March 31, 2005, our average utilization for containers was 93.0% and 92.8%, respectively. We have also structured the terms of our long-term and service leases to reduce the ability of customers to return containers to locations with weak export markets, thereby reducing our container repositioning expenses.

Strong, long-standing customer relationships.      We serve a large number of customers, including many of the world's largest shipping lines, whose businesses span many geographic regions and involve

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the transportation of a diverse range of products. Our forty-two years in the business have allowed us to develop broad and deep relationships with our key customers and to build a reputation for service reliability and quality. Our top ten customers, as measured by revenue, have leased containers from us for an average of over 20 years. As a result of these relationships with key customers, we believe that we have more leasing opportunities than our newer or smaller competitors and we typically experience lease renewal rates of approximately 70% for containers which are not scheduled to be sold.

Strong historical credit performance.     Over the last five years, our write offs of customer receivables have averaged less than 0.35% of our average total assets over such period. We believe that this strong credit performance is due not only to our comprehensive lease underwriting and monitoring, which is due, in part, to procedures which were developed during our twenty-five years of ownership by a major insurance and finance company, but also to several attributes of our container leasing business. These attributes include the size and credit quality of our customers, the high recovery rate of containers in default situations (which has exceeded 90% over the last five years) and high remarketability of containers.

Market leader in the sale of used containers .    We believe that we are the world's largest seller of used containers, having sold over 50,000 used containers in each of the last five years on behalf of ourselves and third parties. We manage our own container disposals, act as the disposal agent for a number of our shipping line customers and buy and sell used containers on an opportunistic basis. We believe that our ability to sell containers directly to end-users provides us with a higher and more reliable residual value for our containers than can be achieved by other leasing companies who rely primarily on third-party depots for container disposals.

Experienced management team .    Our senior management team has a diversified set of credentials and related leasing experiences, with our key officers having an average of approximately 20 years of industry experience and approximately 15 years of service with us. Furthermore, our customer service and sales representatives, who have an average of approximately 10 years of experience in the industry, have developed long-term customer relationships that afford us access to sales opportunities with leading shipping lines.

Business Strategy

We intend to leverage our leading market position in container leasing to profitably grow our business by pursuing the following strategies:

Increase revenues and operating cash flow by investing in our container fleet .    Our previous owner limited our ability to invest in growing our container fleet. From 2001 to 2004, our capital expenditures (excluding certain 2004 expenditures for the purchase of used container equipment which we had been leasing under an operating lease) averaged approximately $96.1 million annually for all equipment types. By contrast, for fiscal 2005, we anticipate capital expenditures for new containers to exceed $200 million. We plan to place the majority of these new containers on long-term leases at lease rates that meet or exceed our targeted investment returns. Going forward, we intend to selectively increase our investment in new containers. We believe that we can add a significant volume of new container leases and increase our container fleet without making significant incremental investments in our infrastructure, information systems or headcount.

Re-lease existing fleet at attractive rates.      We believe that our existing portfolio of leased containers will benefit from the current strong container leasing market environment as we will be able to re-lease these containers at higher rates upon expiration of the current leases. We estimate that the average daily rate of the dry containers in our lease portfolio was 34% below the current container market lease rate for new containers as of June 2005.

Maintain discipline on leasing terms.     We seek to exceed a targeted return on investment over the life cycle of each container. In order to achieve this return, we plan to maintain our focus on

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long-term leases and to continue to include tight drop-off restrictions in our lease agreements. We believe that our lease structuring discipline has been a major factor in allowing us to increase our utilization and reduce our operating expenses over the last five years, and we are committed to maintain pricing, structuring and credit discipline as we increase the size of our container fleet.

Expand customer product offerings.     We believe that we are well-positioned to explore new market opportunities related to our core container leasing business, including U.S. chassis leasing and direct finance leasing for containers. A chassis is a truck trailer built specifically for the purpose of transporting containers on land. We have recently hired key management personnel to oversee our entrance into the U.S. chassis leasing market and we anticipate receiving delivery of our initial orders of chassis in the third quarter of 2005. We believe that chassis are a natural extension of our container business because the chassis customer base overlaps with our container customer base. In addition, because we previously owned a chassis leasing business, we believe that we will be able to expand our recent entry into the market without significant additional headcount or systems cost. In addition, prior to our former parent's sale of a business unit, certain members of our senior management team focused on the origination and writing of finance leases, and we intend to pursue opportunities in the future to increase the proportion of finance leases in our portfolio. We believe that our previous experience in originating and structuring finance leases, coupled with our regular purchasing of containers, our close operating relationships with the world's largest shipping lines and our ability to recover and re-market containers in the event of customer defaults, will allow us to selectively grow our finance lease portfolio.

Pursue acquisitions on a financially disciplined basis .    We will seek to acquire container leasing companies, related businesses and container fleet portfolios as they become available. Due to the scalable nature of our fleet management systems and sales force, we believe that we can manage a larger container lease portfolio without substantially increasing our infrastructure costs. Since 1994, we have completed acquisitions of two container leasing businesses and various container portfolios and have successfully integrated these assets into our fleet.

TAL International Group, Inc. is a Delaware corporation. Our headquarters are located at 100 Manhattanville Road, Purchase, NY 10577-2135. Our telephone number is 914-251-9000 and our website is located at http://www.talinternational.com. Information contained on our website is not incorporated by reference into this prospectus, and you should not consider information contained on our website as part of this prospectus.

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The Offering

Common stock offered by TAL International Group, Inc.                  shares
Common stock to be outstanding after the offering                  shares
Use of proceeds We estimate that our net proceeds from this offering, after deducting underwriter discounts and estimated offering expenses, will be approximately $           million assuming the shares are offered at $           per share, which is the mid-point of the estimated offering price range set forth on the cover page of this prospectus.
We intend to use the estimated net proceeds of this offering to:
pay the entire outstanding principal and interest due on our existing senior unsecured credit agreement; and
fund working capital and general corporate purposes.
We will not receive any proceeds from the sale of our common stock, if any, by the selling stockholders upon the exercise of the underwriters' over-allotment option.
Dividend policy We do not anticipate paying any dividends on our common stock in the foreseeable future. See "Dividend Policy."
NYSE symbol We will apply to list our common stock on the New York Stock Exchange under the symbol "TAL"

The calculation of the number of shares of common stock to be outstanding after this offering is based on            shares of our common stock outstanding as of March 31, 2005, and assumes the       -to-       stock split of our common stock that will occur immediately prior to the consummation of this offering. The calculation of the number of shares of common stock to be outstanding after this offering excludes           shares of common stock available for issuance under our TAL International Group, Inc. 2004 Management Stock Plan, including           shares of common stock issuable upon the exercise of outstanding stock options as of March 31, 2005 at a weighted average exercise price of $       per share.

The Acquisition

On November 4, 2004, TAL International Group acquired all of the outstanding capital stock of Trans Ocean and TAL International Corporation from TA Leasing Holding Co., Inc. We refer to our acquisition of Trans Ocean and TAL International Corporation as the "Acquisition." The aggregate purchase price paid by us at the closing of the Acquisition was approximately $1.2 billion. To finance the Acquisition, Trans Ocean, TAL International Corporation and Trans Ocean Container Corporation, each of which is a direct or indirect wholly-owned subsidiary of ours, entered into our existing $875.0 million senior secured credit facility and made initial borrowings of $805.0 million thereunder, we entered into our existing $275.0 million senior unsecured credit agreement and made initial borrowings of $275.0 million thereunder and certain of our equity investors made preferred and common equity investments in us in an aggregate amount of $200.1 million.

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We refer to the Acquisition together with the equity contribution and our initial borrowings under our senior unsecured credit agreement and our senior secured credit facility as the "Acquisition and Related Transactions." Prior to the consummation of this offering, we intend to enter into a new asset securitization facility and a new senior secured credit facility, the proceeds of which we intend to use to repay the entire outstanding principal amount under our existing senior secured credit facility and a portion of the outstanding principal amount under our existing senior unsecured credit agreement. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources." We intend to use the net proceeds of this offering to repay the entire remaining outstanding principal amount under our existing senior unsecured credit agreement. We collectively refer to (i) our initial borrowings under our new asset securitization facility and our new senior secured credit facility and the use of the net proceeds therefrom and (ii) this offering and the use of the net proceeds therefrom, as the "Offering and Related Transactions." We refer to the Acquisition and Related Transactions, together with the Offering and Related Transactions, as the "Acquisition, Offering and Related Transactions."

Risk Factors

Investment in our common stock involves risks. You should carefully read and consider the information set forth in "Risk Factors" and all other information set forth in this prospectus before investing in our common stock.

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Summary Historical and Pro Forma Financial Data

The following table sets forth summary historical and pro forma financial, operating and other data of Trans Ocean and certain operations of TAL International Corporation on a combined basis (collectively, the "Predecessor") and TAL International Group (the "Successor"). The summary historical combined consolidated statement of operations data for the fiscal years ended December 31, 2002 and 2003 and for the fiscal quarter ended March 31, 2004 and the ten months ended October 31, 2004 were derived from the Predecessor's audited and unaudited combined consolidated financial statements and related notes appearing elsewhere in this prospectus. The summary historical consolidated statement of operations data for the two months ended December 31, 2004 and the fiscal quarter ended March 31, 2005, together with the summary historical consolidated balance sheet as of March 31, 2005, were derived from the Successor's audited and unaudited consolidated financial statements and related notes appearing elsewhere in this prospectus.

The summary unaudited pro forma consolidated balance sheet as of March 31, 2005 assumes that the Offering and Related Transactions took place on that date. The summary unaudited pro forma financial data for the three months ended March 31, 2005 assumes that the Offering and Related Transactions took place on January 1, 2005. The summary unaudited pro forma financial data for the twelve months ended December 31, 2004 assumes that the Acquisition, Offering and Related Transactions took place on January 1, 2004. The summary unaudited pro forma financial data do not purport to represent what our results of operations or financial position would have been if the Acquisition, Offering and Related Transactions had occurred on the date indicated and are not intended to project our results of operations or financial position for any future period or date. The unaudited pro forma adjustments are based on preliminary estimates, available information and certain assumptions that we believe are reasonable and may be revised as additional information becomes available. The pro forma adjustments and primary assumptions are described in "Unaudited Pro Forma Financial Statements" and the accompanying notes.

The summary historical and pro forma financial, operating and other data set forth below are not necessarily indicative of the results of future operations and should be read in conjunction with the discussion under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Unaudited Pro Forma Financial Statements" and the historical financial statements and related notes thereto included elsewhere in this prospectus.

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  Predecessor Successor   Predecessor Successor Pro Forma
Three Months
Ended
March 31,
2005
  Year Ended
December 31,
Ten Months
Ended
October 31,
2004
Two Months
Ended
December 31,
2004
Pro Forma
Twelve Months
Ended
December 31,
2004
Three Months
Ended
March 31,
  2002 2003
2004

2005
  (dollars in thousands other than per share data)
Statement of Operations Data:                                    
Leasing revenues $ 303,786   $ 301,352   $ 242,755   $ 48,180   $                $ 73,331   $ 71,991   $              
Management fee income   5,927     6,612     6,046     1,071           2,046     1,996  
Equipment trading revenue   15,893     15,235     9,641     1,713           2,155     2,508  
Other revenues   2,395     2,823     3,066     498           1,193     1,037        
Total revenues   328,001     326,022     261,508     51,462           78,725     77,532  
Equipment trading expenses   12,937     12,822     7,044     1,361           1,625     2,065  
Direct operating expenses   53,595     37,268     23,043     4,372           5,074     6,870  
Administrative expenses   33,383     38,404     29,014     6,419           8,481     9,709  
Depreciation and amortization   150,256     134,985     119,449     19,769           35,618     29,285  
Equipment rental expense   37,307     36,264     4,342     1,140           1,435     247  
Provision for doubtful accounts (reversal)   (322   (33   300     225           163     (225
Net loss (gain) on sale of leasing equipment   55,782     35,940     3,325     (126         5,098     (4,375
Interest and debt expense   25,063     23,756     22,181     13,185           6,887     21,114  
Unrealized (gain) on interest rate swaps               (2,432             (10,060
Other parent company charges and management fees   3,563         28,360               10,635     1,626  
Income tax (benefit) expense   (15,783   740     8,926     2,680           1,327     7,891        
Income (loss) before cumulative effect of accounting change   (27,780   5,876     15,524     4,869           2,382     13,385  
Cumulative effect of accounting change   (35,377                                
Net income (loss) $ (63,157 $ 5,876   $ 15,524     4,869         $ 2,382     13,385        
Preferred stock dividends and accretion to redemption value                     (8,410               (6,028      
Net income (loss) applicable to common stockholders                   $ (3,541 $         $ 7,357   $  
Earnings (Loss) Per Share Data:                                          
Basic and diluted income (loss) per share applicable to common stockholders $   $   $   $ (35.41 $   $   $ 73.57   $  
Weighted average common shares outstanding:                                          
Basic and diluted               100,000               100,000  
Other Financial Data:                                          
EBITDA (1) $ 131,756   $ 165,357   $ 166,080   $ 40,503   $   $ 46,214   $ 71,675   $  
Adjusted EBITDA (1)   169,315     199,353     197,600     38,703           57,797     63,241  
Capital expenditures   77,645     94,822     256,882     29,775           159,676     53,529  
Container sales proceeds   34,486     46,771     50,741     10,111           18,916     43,463  
Selected Fleet Data (2) :                                          
Total container units (3)   674,081     637,134     623,497     621,038     621,038     645,568     613,324     613,324  
Total containers in TEU (3)   1,053,183     1,001,368     995,335     994,891     994,891     1,015,028     981,900     981,900  
Percentage of containers on long-term leases, including finance leases (3)   59.0   61.0   66.3   66.2   66.2   60.9   64.1   64.1
Average utilization %   79.4   87.2   92.7   94.4   93.0   89.8   92.8   92.8

9





  As of March 31, 2005
  Actual Pro Forma
Balance Sheet Data:   (unaudited   (unaudited
Cash and cash equivalents $ 25,738   $                        
Net investment in direct finance leases   15,162        
Leasing equipment, net   1,088,720        
Total assets   1,347,036        
Total debt   1,027,000        
Preferred stock, Series A, subject to redemption   209,766        
Common stock, subject to redemption   3        
Total stockholders' equity   3,921        
(1)      EBITDA is defined as net income (loss) before the cumulative effect of accounting change, interest and debt expense, income tax expense (benefit) and depreciation and amortization. Adjusted EBITDA is defined as EBITDA as further adjusted for certain items described in more detail below, which management believes are not representative of our operating performance. Adjusted EBITDA excludes pretax loss related to an unrealized (gain) on interest rate swaps, other parent company charges and management fees and certain equipment rental expense for equipment previously on operating lease and subsequently acquired by us. EBITDA and Adjusted EBITDA are not presentations made in accordance with generally accepted accounting principles, or GAAP, are not measures of financial condition or profitability and should not be considered as alternatives to, or more meaningful than, amounts determined in accordance with GAAP, including net income (loss) as an indicator of operating performance or net cash from by operating activities as an indicator of liquidity. We present EBITDA and Adjusted EBITDA as additional information because they are among the bases upon which we assess our financial performance. We believe that EBITDA and Adjusted EBITDA are useful measures for users of our financial statements because they provide information that can be used to evaluate the performance of our business from an operations perspective, exclusive of costs to finance our activities, income taxes and depreciation and amortization, and other non-routine events which we do not expect to occur in the future. We further believe that EBITDA is frequently used by securities analysts, investors and other interested parties in their evaluation of companies, many of which present EBITDA, and a reconciliation thereto, when reporting their results.
  EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider either in isolation or as a substitute for analyzing our results as reported under GAAP. Some of these limitations are:
•  EBITDA and Adjusted EBITDA do not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments;
•  EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;
•  EBITDA and Adjusted EBITDA do not reflect our interest expense, or the cash requirements necessary to service interest or principal payments on our debt;
•  Although depreciation and amortization are noncash charges, the assets being depreciated will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements; and
•  EBITDA and Adjusted EBITDA are not calculated identically by all companies; therefore, our presentation of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

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The following is a reconciliation of EBITDA and Adjusted EBITDA to net income (loss):


  Predecessor Successor   Predecessor Successor
  Year Ended
December 31,
Ten Months
Ended
Two Months
Ended
Pro Forma
Twelve Months
Ended
Three Months
Ended
March 31,
Pro Forma
Three Months
Ended
March 31,
2005
  2002 2003 October 31,
2004
December 31,
2004
December 31,
2004
2004 2005
  (dollars in thousands)
Net income (loss) $ (63,157 $ 5,876   $ 15,524   $ 4,869   $                    $ 2,382   $ 13,385   $              
Add:                                          
Cumulative effect of accounting change   35,377                            
Interest and debt expense   25,063     23,756     22,181     13,185           6,887     21,114  
Income tax (benefit) expense   (15,783   740     8,926     2,680           1,327     7,891  
Depreciation and amortization   150,256     134,985     119,449     19,769           35,618     29,285        
EBITDA   131,756     165,357     166,080     40,503           46,214     71,675        
Add (subtract):
Unrealized (gain)
on interest rate swaps (a)
              (2,432             (10,060
Other parent company charges and management fees (b)   3,563         28,360               10,635     1,626  
Certain equipment rental expense (c)   33,996     33,996     3,160     632           948            
Adjusted EBITDA $ 169,315   $ 199,353   $ 197,600   $ 38,703   $   $ 57,797   $ 63,241   $  
(a)  Reflects the reversal of gain on mark-to-market accounting treatment of interest rate swap agreements that we entered into on December 14, 2004. The interest rate swaps are presented as if they received hedge accounting treatment. We anticipate that, as part of the Offering and Related Transactions, these swap agreements will receive hedge accounting treatment.
(b)  Reflects the reversal of other parent company charges of $3.6 million, $28.4 million and $10.6 million in fiscal years 2002 and 2004 and the three months ended March 31, 2004, respectively. These charges were related to a retention and incentive program established by our former parent and were paid to certain of our employees. Certain of these payments were triggered by the sale of other businesses owned by our former parent. It also reflects the reversal of management fees of $1.6 million in the three months ended March 31, 2005 payable to our affiliates pursuant to certain management agreements which are terminable upon the consummation of this offering. See "Certain Relationships and Related Party Transactions—Management Agreements."
(c)  Reflects the reversal of certain equipment rental expense related to containers that we purchased in 2004 and 2005. The ownership costs associated with these units are now be included in depreciation and amortization.
(2)  Includes our operating fleet (which is comprised of our owned and managed fleet) plus certain other units including finance leases.
(3)  Calculated as of the end of the relevant period.

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RISK FACTORS

An investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors, together with the other information contained in this prospectus, including our financial statements and the related notes, before investing in our common stock. Any of the risk factors we describe below could adversely affect our business, results of operations and financial condition. The market price of our common stock could decline and you may lose some or all of your investment if one or more of these risks and uncertainties develop into actual events.

Risks Related to Our Business and Industry

Container leasing demand is affected by numerous market factors as well as external political and economic events and a decrease in the volume of world trade and other operating factors may adversely affect our container leasing business.

Demand for containers depends largely on the rate of world trade and economic growth. Cyclical recessions can negatively affect lessors' operating results because during economic downturns or periods of reduced trade, such as those that occurred in 2001 and 2002, shipping lines tend to lease fewer containers, or lease containers only at reduced rates, and tend to rely more on their own fleets to satisfy a greater percentage of their requirements. Thus, a decrease in the volume of world trade may adversely affect our container utilization and lease rates and lead to reduced revenue, increased operating expenses (such as storage and positioning) and reduced financial performance. We cannot predict whether, or when, such cyclical downturns will occur. In the late 1990's, the economic downturn in Asia, lower prices for new containers and the consolidation of shipping lines adversely affected the container leasing business. These events may reoccur.

Other general factors affecting demand for leased containers, container utilization and per diem rental rates include the available supply and prices of new and used containers, including the market acceptance of new container types and overbuying by competitors and customers, economic conditions and competitive pressures in the shipping industry, including fluctuations in ship charter and freight rates and expansion, containership fleet overcapacity or undercapacity, consolidation or withdrawal of individual customers in that industry, shifting trends and patterns of cargo traffic, the availability and terms of equipment financing, fluctuations in interest rates and foreign currency values, import/export tariffs and restrictions, customs procedures, foreign exchange controls and other governmental regulations and political or economic factors that are inherently unpredictable and may be beyond our control. Any of the aforementioned external "shocks" to the world political or economic environment may have a material adverse affect on our business.

We cannot assure you that equipment prices and lease rates will not decrease.

Lease rates depend on the type and length of the lease, the type and age of the equipment, competition (as more fully discussed herein), and other factors more fully discussed herein. Container lease rates also move with the fluctuations in prices for new containers. Because steel is the major component used in the construction of new containers, the price for new containers, as well as prevailing container lease rates, are both highly correlated with the price of raw steel. Container prices and leasing rates have increased since late 2003, partially due to an increase in worldwide steel prices, while in the late 1990's, new container prices and lease rates declined, because of, among other factors, a drop in worldwide steel prices and a shift in container manufacturing from Taiwan and Korea to areas with lower labor costs in mainland China. No assurance can be given that container prices and leasing rates will not fall again.

In addition, leasing rates can be negatively impacted by the entrance of new leasing companies, overproduction of new containers by factories and over-buying by shipping lines and leasing competitors. For example, during 2001 and again in the second quarter of 2005, overproduction of new containers, coupled with a build-up of container inventories in Asia by leasing companies and shipping lines, has led to decreasing utilization rates. In the event that the container shipping industry were to be characterized by over-capacity in the future, or if available supply of containers were to

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increase significantly as a result of, among other factors, new companies entering the business of leasing and selling containers, both utilization and lease rates can be expected to decrease, thereby adversely affecting the revenues generated by our container leasing business. No assurance can be given that such imbalances will not occur.

Sustained Asian economic instability could reduce demand for leasing.

A number of the shipping lines to which we lease containers are entities domiciled in Asian countries. In addition, many of our customers are substantially dependent upon shipments of goods exported from Asia. From time to time, there have been economic disruptions, financial turmoil and political instability in this region. If these events were to occur in the future, they would adversely affect these customers and lead to a reduced demand for leasing of our containers or otherwise adversely affect us.

Our customers may decide to lease fewer containers.

We, like other suppliers of leased containers, are dependent upon decisions by shipping lines to lease rather than buy their equipment. Should shipping lines decide to buy a larger percentage of the containers they operate, our utilization rate would decrease, resulting in decreased leasing revenue, increased storage costs and increased repositioning costs. Most of the factors affecting the decisions of our customers are outside our control.

We face extensive competition in the container leasing industry.

We may be unable to compete favorably in the highly competitive container leasing and sales business after completion of this offering. We compete with approximately 10 other major leasing companies, many smaller lessors, manufacturers of container equipment, companies offering finance leases as distinct from operating leases, promoters of container ownership and leasing as a tax shelter investment, shipping lines, which sometimes lease their excess container stocks, and suppliers of alternative types of equipment for freight transport. Some of these competitors may have greater financial resources and access to capital than we do. Additionally, some of these competitors may have large, underutilized inventories of containers, which could lead to significant downward pressure on lease rates and margins.

Competition among container leasing companies depends upon many factors, including, among others, lease rates, lease terms (including lease duration, drop-off restrictions and repair provisions), customer service, and the location, availability, quality and individual characteristics of equipment. New entrants into the leasing business have been attracted by the high rate of containerized trade growth in recent years, and new entrants have generally been less disciplined than we are in pricing and structuring leases. As a result, there can be no assurance that we can maintain a high level of container utilization or achieve our growth plans.

The age of our container fleet may become a competitive disadvantage.

As of March 31, 2005, the average age of the containers in our fleet was 8.7 years. We believe that the average age of our competitors' container fleets is lower than the average age of our fleet, and customers generally have a preference for younger containers. Historically, we have been successful marketing our older equipment by positioning older containers in areas where demand is very strong, offering incentives for customers to extend containers on lease, and providing greater drop-off location flexibility for containers approaching sale age. However, we cannot assure you that our marketing strategies for older containers will continue to be successful, particularly if demand for containers in general becomes weaker.

Lessee defaults may adversely affect our financial condition and results of operations and cash flow by decreasing revenues and increasing storage, repositioning, collection and recovery expenses.

Our containers are leased to numerous customers. Rent and other compensation, as well as indemnification for damage to or loss of containers, is payable under the leases and other

13




arrangements by the end users. Inherent in the nature of the leases and other arrangements for use of the containers is the risk that once the lease is consummated, we may not receive, or may experience delay in realizing, all of the compensation and other amounts to be paid in respect of the containers. A delay or diminution in amounts received under the leases and other arrangements could adversely affect our business and financial prospects and our ability to make payments on our debt.

The cash flow from the containers, principally lease rentals, management fees, proceeds from the sale of owned containers and commissions earned on container agency and brokerage activities, is affected significantly by the ability to collect payments under leases and other arrangements for the use of the containers and the ability to replace cash flows from terminating leases by re-leasing or selling containers on favorable terms. All of these factors are subject to external economic conditions and the performance by lessees and service providers that will not fully be within our control.

When lessees or sublessees of containers default, we may fail to recover all of our containers, and the containers we do recover may be returned in locations where we will not be able to efficiently re-lease or sell them. We may have to reposition these containers to other places where we can re-lease or sell them, which could be expensive depending on the locations and distances involved. As a result, we may lose lease or management revenues and incur additional operating expenses in repossessing and storing the equipment. We do not currently maintain insurance to cover such defaults. While in recent years defaults by lessees, as measured by our historical experience and reflected on our financial statements as an allowance for doubtful accounts, have not been material as a percentage of our assets, there is no assurance that any future defaults will not be material and any such future defaults could have a material adverse effect on our business condition and financial prospects.

We are dependent upon continued demand from our large customers.

Our largest customers account for a significant portion of our revenues. Our five largest customers represented approximately 44% of our revenues for our 2004 fiscal year, with our single largest customer representing approximately 16% during such period. The loss, default or significant reduction of orders from any of our five largest customers, and especially our single largest customer, could have a material adverse effect on our business, financial condition and future prospects.

Gains and losses associated with container sales may fluctuate and adversely affect our operating results.

Although our revenue primarily depends upon equipment leasing, our profitability is also affected by the residual values of our containers upon the expiration of their leases because, in the ordinary course of our business, we sell certain containers when such containers are returned to us. The volatility of the residual values of such containers may be significant. These values, which can vary substantially, depend upon, among other factors, worldwide steel prices, applicable maintenance standards, refurbishment needs, comparable new equipment costs, used equipment availability, inflation rates, market conditions, materials and labor costs and equipment obsolescence. Most of these factors are outside of our control. Operating leases, which represent the predominant form of lease in our portfolio, are subject to greater residual value risk than direct finance leases.

Containers are typically sold if it is in our best interest to do so after taking into consideration the book value, remaining useful life, repair condition, suitability for leasing or other uses and the prevailing local sales price for containers. As these considerations vary, gains or losses on sale of equipment will also fluctuate and may be significant if we sell large quantities of containers.

Changes in market price, availability or transportation costs of containers in China could adversely affect our ability to maintain our supply of containers.

China is currently the largest container producing nation in the world, and we currently purchase substantially all of our dry and special containers from two manufacturers based in China and substantially all of our refrigerated containers from three manufacturers based in China. In the event that it were to become more expensive for us to procure containers in China or to transport these

14




containers at a low cost from China to the locations where they are needed by our customers, because of further consolidation among container suppliers, increased tariffs imposed by the United States or other governments or for any other reason, we would have to seek alternative sources of supply. We may not be able to make alternative arrangements quickly enough to meet our equipment needs, and the alternative arrangements may increase our costs.

Our business strategies entail risk and we may not be able to realize our plans with regard to these strategies.

As discussed herein, in order to grow our business, we expect to employ various strategies, including consummating strategic acquisitions and investing in our container fleet. Unanticipated issues may arise in the implementation of these contemplated strategies, which could impair our ability to expand our business as expected. We may not be able to execute strategic acquisitions or to integrate such acquired assets successfully into our business. We may not be able to achieve a competitive cost of capital to rejuvenate our fleet through securitizations as we plan, either because of market forces or otherwise. If we are unable to consummate securitizations effectively, we may be at a competitive disadvantage. Furthermore, the execution of our plans could result in our having greater losses than we have historically experienced and could have a material adverse effect on our business.

If we are unable to meet future capital requirements, our business may be adversely affected.

We periodically make capital investments to, among other things, maintain and upgrade our container fleet. As we maintain and grow our business, we may have to incur significant capital expenditures. We believe that we will be able to fund these expenditures through cash flow from operations and borrowings under our existing senior secured credit facility, our anticipated new senior secured credit facility and our anticipated new asset securitization facility. However, we cannot assure you that future borrowings will be available under such facilities or that we will be able to refinance such facilities on commercially reasonable terms or at all. We cannot assure you that we will have, or be able to obtain, adequate funds to make all necessary capital expenditures when required, or that the amount of future capital expenditures will not be materially in excess of our anticipated or current expenditures. If we are unable to make necessary capital expenditures, our profitability could suffer.

We may incur costs associated with relocation of leased equipment.

When lessees return equipment to locations where supply exceeds demand, we routinely reposition containers to higher demand areas. Repositioning expenses vary depending on geographic location, distance, freight rates and other factors, and may not be fully covered by drop-off charges collected from the last lessees of the equipment or pick-up charges paid by the new lessees. In addition, demand may not be as great as anticipated after repositioning has occurred, which may result in equipment remaining idle. We seek to limit the number of containers that can be returned and impose surcharges on containers returned to areas where demand for such containers is not expected to be strong. We cannot assure you, however, that market conditions will enable us to continue such practices. In addition, we cannot assure you that we have accurately anticipated which port locations will be characterized by weak or strong demand in the future, and our current contracts will not provide much protection against repositioning costs if ports that we expect to be strong demand ports turn out to be surplus container ports at the time leases expire.

We rely on our information technology systems to conduct our business. If these systems fail to adequately perform these functions, or if we experience an interruption in their operation, our business and financial results could be adversely affected.

The efficient operation of our business is highly dependent on two of our information technology systems: our "Terms" tracking system and our "Tradex" customer interface system. For example, these systems allow customers to place pick-up and drop-off orders on the Internet, view current inventory and check contractual terms in effect with respect to any given container lease agreement. We correspondingly rely on such information systems to track transactions, such as repairs and changes to

15




book value, and movements associated with each of our owned or managed containers. We use the information provided by these systems in our day-to-day business decisions in order to effectively manage our lease portfolio and improve customer service. The failure of these systems to perform as we anticipate could disrupt our business and results of operation and cause our relationships with our customers to suffer. In addition, our information technology systems are vulnerable to damage or interruption from circumstances beyond our control, including fire, natural disasters, power loss and computer systems failures and viruses. Any such interruption could have a material adverse effect on our business.

A number of key personnel are critical to the success of our business.

Most of our senior executives and other management-level employees have been with us for over ten years and have significant industry experience. We rely on this knowledge and experience in our strategic planning and in our day-to-day business operations. Our success depends in large part upon our ability to retain our senior management, the loss of one or more of whom could have a material adverse effect on our business. Our success also depends on our ability to retain our experienced sales force and technical personnel as well as recruiting new skilled sales, marketing and technical personnel. Competition for these persons in our industry is intense and we may not be able to successfully recruit, train or retain qualified personnel. If we fail to retain and recruit the necessary personnel, our business and our ability to obtain new customers and provide acceptable levels of customers service could suffer.

The international nature of the container industry exposes us to numerous risks.

Our ability to enforce the end users' obligations under the leases and other arrangements for use of the containers will be subject to applicable law in the jurisdiction in which enforcement is sought. As the containers are predominantly located on international waterways, it is not possible to predict, with any degree of certainty, the jurisdictions in which enforcement proceedings may be commenced. For example, repossession from defaulting lessees may be difficult and more expensive in jurisdictions whose laws do not confer the same security interests and rights to creditors and lessors as those in the United States and in jurisdictions where recovery of equipment from the defaulting lessee is more cumbersome. As a result, the relative success and expedience of enforcement proceedings with respect to the containers in various jurisdictions also cannot be predicted.

We are also subject to risks inherent in conducting business across national boundaries, any one of which could adversely impact our business. These risks include:

•  regional or local economic downturns;
•  changes in governmental policy or regulation;
•  restrictions on the transfer of funds into or out of the country;
•  import and export duties and quotas;
•  domestic and foreign customs and tariffs;
•  international incidents;
•  military outbreaks;
•  government instability;
•  nationalization of foreign assets;
•  government protectionism;
•  compliance with export controls, including those of the U.S. Department of Commerce;
•  compliance with import procedures and controls, including those of the U.S. Department of Homeland Security;
•  potentially negative consequences from changes in tax laws;

16




•  higher interest rates;
•  requirements relating to withholding taxes on remittances and other payments by subsidiaries;
•  labor or other disruptions at key ports;
•  difficulty in staffing and managing widespread operations; and
•  restrictions on our ability to own or operate subsidiaries, make investments or acquire new businesses in these jurisdictions.

We cannot assure you that one or more of these factors will not impair our current or future international operations and, as a result, harm our overall business.

As a U.S. corporation, we are subject to the Foreign Corrupt Practices Act, and a determination that we violated this act may affect our business and operations adversely.

As a U.S. corporation, we are subject to the regulations imposed by the Foreign Corrupt Practices Act (FCPA), which generally prohibits U.S. companies and their intermediaries from making improper payments to foreign officials for the purpose of obtaining or keeping business. Any determination that we have violated the FCPA could have a material adverse effect on us.

The lack of an international title registry for containers increases the risk of ownership disputes.

Pursuant to the terms of the Acquisition, the seller represented and warranted to us that Trans Ocean and TAL International Corporation had good and marketable title to the containers they purported to own and valid leasehold interests in containers they purported to lease. However, there is no internationally recognized system of recordation or filing to evidence Trans Ocean's and TAL International Corporation's title to the containers. The lack of a title recordation system with respect to the containers could result in disputes with creditors of prior owners of Trans Ocean and TAL International Corporation or the containers owned or leased-in from time to time, or creditors of the end users.

We may incur costs associated with new security regulations.

We may be subject to regulations promulgated in various countries, including the United States, seeking to protect the integrity of international commerce and prevent the use of containers for international terrorism or other illicit activities. For example, the Container Safety Initiative, the Customs-Trade Partnership Against Terrorism and Operation Safe Commerce are among the programs administered by the U.S. Department of Homeland Security that are designed to enhance security for cargo moving throughout the international transportation system by identifying existing vulnerabilities in the supply chain and developing improved methods for ensuring the security of containerized cargo entering and leaving the United States. Moreover, the International Convention for Safe Containers, 1972 (CSC), as amended, adopted by the International Maritime Organization, applies to new and existing containers and seeks to maintain a high level of safety of human life in the transport and handling of containers by providing uniform international safety regulations. As these regulations develop and change, we may incur increased compliance costs due to the acquisition of new, compliant containers and/or the adaptation of existing containers to meet any new requirements imposed by such regulations. Additionally, certain companies are currently developing or may in the future develop products designed to enhance the security of containers transported in international commerce. Regardless of the existence of current or future government regulations mandating the safety standards of intermodal shipping containers, our competitors may adopt such products or our customers may require that we adopt such products in the conduct of our container leasing business. In responding to such market pressures, we may incur increased costs, which could have a material adverse effect on our financial condition and results of operations.

Terrorist attacks could negatively impact our operations and our profitability and may expose us to liability.

Terrorist attacks may negatively affect our operations and your investment. There can be no assurance that there will not be further terrorist attacks worldwide. Such attacks have contributed to

17




economic instability in the United States and elsewhere, and further acts of terrorism, violence or war could similarly affect world trade and the industries in which we and our customers operate. In addition, terrorist attacks or hostilities may directly impact ports our containers come in and out of, depots, our physical facilities or those of our suppliers or customers and could impact our sales and our supply chain. A severe disruption to the worldwide ports system and flow of goods could result in a reduction in the level of international trade and lower demand for our containers. The consequences of any terrorist attacks or hostilities are unpredictable, and we may not be able to foresee events that could have an adverse effect on our operations or your investment.

It is also possible that one of our containers could be involved in a terrorist attack. Our lease agreements require our lessees to indemnify us against all damages arising out of the use of our containers, and we carry insurance to potentially offset any costs in the event that our customer indemnifications prove to be insufficient, but there can be no assurance that we will be fully protected from liability arising from a terrorist attack which utilizes one of our containers.

Environmental liability may adversely affect our business and financial situation.

We are subject to federal, state, local and foreign laws and regulations relating to the protection of the environment, including those governing the discharge of pollutants to air and water, the management and disposal of hazardous substances and wastes and the cleanup of contaminated sites. We could incur substantial costs, including cleanup costs, fines and third-party claims for property damage and personal injury, as a result of violations of or liabilities under environmental laws and regulations in connection with our current or historical operations. Under some environmental laws in the United States and certain other countries, the owner of a leased container may be liable for environmental damage, cleanup or other costs in the event of a spill or discharge of material from a container without regard to the owner's fault. While we maintain certain insurance relating to both on-hire and off-hire containers and require lessees to obtain similar insurance and to provide us with indemnity against certain losses, such insurance and indemnities may not cover or be sufficient to protect us against losses arising from environmental damage. Under the terms of the stock purchase agreement in respect of the Acquisition, the seller is obligated to indemnify us for certain environmental liabilities relating to the operation of the business prior to our acquisition. This indemnification, however, may not be sufficient to reimburse us for all losses relating to environmental liabilities.

Many countries, including the United States, restrict, prohibit or otherwise regulate the use of chlorofluorocarbon compounds (CFCs) due to their ozone depleting and global warming effects. CFCs have historically been used in the manufacture and operation of older refrigerated containers, including some containers purchased in the past by Trans Ocean and TAL International Corporation, which we acquired in the Acquisition and which are currently used in approximately 3% of our refrigerated containers. Regulation of CFCs or other refrigerants may become stricter in the future. Market pressure or government regulation of refrigerants and synthetic insulation materials may require refrigerated containers using non-conforming substances to be retrofitted with non-CFC refrigerants at substantial cost to us. The replacement refrigerant used in our new refrigerated containers also may become subject to similar market pressures or governmental regulation. In addition, refrigerated containers that are not retrofitted may command lower prices in the market for used containers once we retire these containers from our fleet.

Certain liens may arise on our containers.

Depot operators, repairmen and transporters may come into possession of the containers from time to time and have sums due to them from the lessees or sublessees of the containers. In the event of nonpayment of those charges by the lessees or sublessees, we may be delayed in, or entirely barred from, repossessing the containers, or be required to make payments or incur expenses to discharge such liens on the containers.

Fluctuations in foreign exchange rates could reduce our profitability.

The majority of our revenues and costs are billed in U.S. dollars. Most of our non-U.S. transactions are individually of small amounts and in various denominations and thus are not suitable

18




for cost-effective hedging. In addition, almost all of our container purchases are paid for in U.S. dollars. There can be no assurance that exchange rate fluctuations will not adversely affect our results of operations and financial condition

We are a "controlled company" within the meaning established by the New York Stock Exchange and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements.

Under the shareholders agreement among the investors who acquired our company in November 2004, management and our other shareholders, The Resolute Fund, L.P. (our Sponsor) is permitted to designate eight of the nine members of our board of directors. While this shareholders agreement will be terminated upon the closing of this offering, investors affiliated with our Sponsor will continue to beneficially own a majority of our outstanding common stock, and, as a result, we will be considered a "controlled company" within the meaning of the corporate governance standards of the New York Stock Exchange. Under these rules, a "controlled company" is exempt from complying with certain corporate governance requirements, including (1) the requirement that a majority of the board of directors consist of independent directors, (2) the requirement that we have a nominating/corporate governance committee that is composed entirely of independent directors and (3) the requirement that we have a compensation committee that is composed entirely of independent directors. Following this offering, we intend to utilize these exemptions. As a result, our board of directors will not consist of a majority of independent directors nor will our board of directors have compensation and nominating/corporate governance committees consisting entirely of independent directors. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the New York Stock Exchange.

Our Sponsor may have significant influence on our company, including control over decisions that require the approval of shareholders, whether or not such decision is believed by the other equityholders to be in their own best interests.

After the consummation of this offering, our Sponsor will beneficially own approximately         % of our common stock, or approximately         % of our common stock if the underwriters exercise in full their option to purchase additional shares. As a result, our Sponsor will have the ability to control all matters requiring shareholder approval, including the nomination and election of directors, the determination of our corporate and management policies and the determination, without the consent of our other shareholders, of the outcome of any corporate transaction or other matter submitted to our shareholders for approval, including potential mergers or acquisitions, asset sales and other significant corporate transactions. So long as our Sponsor continues to own a majority of our outstanding common stock, it will continue to be able to strongly influence or effectively control our decisions.

Our strategy to selectively pursue complementary acquisitions may present unforeseen integration obstacles or costs.

We may selectively pursue complementary acquisitions and joint ventures. Acquisitions involve a number of risks and present financial, managerial and operational challenges, including:

•  potential disruption of our ongoing business and distraction of management;
•  difficulty with integration of personnel and financial and other systems;
•  hiring additional management and other critical personnel; and
•  increasing the scope, geographic diversity and complexity of our operations.

In addition, we may encounter unforeseen obstacles or costs in the integration of acquired businesses. Also, the presence of one or more material liabilities of an acquired company that are unknown to us at the time of acquisition may have a material adverse effect on our business. Our acquisition and joint venture strategy may not be successfully received by customers, and we may not realize any anticipated benefits from acquisitions or joint ventures.

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Other Risks Related to our Business

We will have a substantial amount of debt outstanding on a consolidated basis and will have significant debt service obligations which could adversely affect our financial condition or our ability to fulfill our obligations and make it more difficult for us to fund our operations.

After the closing of this offering, we will have a significant amount of debt outstanding on a consolidated basis. As of March 31, 2005, on a pro forma basis, we had outstanding total indebtedness of $           million. As of March 31, 2005, on a pro forma basis, our ratio of total debt to total assets was             .

Our substantial debt could have important consequences for you, including the following:

•  require us to dedicate a substantial portion of our cash flow from operations to make payments on our debt, thereby reducing funds available for operations, future business opportunities and other purposes;
•  limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
•  make it more difficult for us to satisfy our obligations with respect to our debt obligations, and any failure to comply with such obligations, including financial and other restrictive covenants, could result in an event of default under the agreements governing such indebtedness, which could lead to, among other things, an acceleration of our indebtedness or foreclosure on the assets securing our indebtedness and which could have a material adverse effect on our business or prospects;
•  limit our ability to borrow additional funds, or to sell assets to raise funds, if needed, for working capital, capital expenditures, acquisitions or other purposes;
•  make it more difficult for us to pay dividends on our common stock;
•  increase our vulnerability to general adverse economic and industry conditions, including changes in interest rates; and
•  place us at a competitive disadvantage compared to our competitors which have less debt.

We cannot assure you that we will generate sufficient revenues to service and repay our debt and have sufficient funds left over to achieve or sustain profitability in our operations, meet our working capital and capital expenditure needs or compete successfully in our markets.

Despite our substantial leverage, we and our subsidiaries will be able to incur additional indebtedness. This could further exacerbate the risks described above.

We and our subsidiaries may be able to incur substantial additional indebtedness in the future. Although our existing senior secured credit facility and our existing senior unsecured credit agreement currently contain, and we anticipate that our new senior secured credit facility and our new asset securitization facility will contain, restrictions on the incurrence of additional indebtedness, such restrictions are subject to a number of qualifications and exceptions, and, under certain circumstances, indebtedness incurred in compliance with such restrictions could be substantial. To the extent that new indebtedness is added to our and our subsidiaries' current debt levels, the risks described above would increase.

We will require a significant amount of cash to service and repay our outstanding indebtedness and our ability to generate cash depends on many factors beyond our control.

Our ability to make payments on and repay our indebtedness and to fund planned capital expenditures will depend on our ability to generate cash in the future. We cannot assure you that:

•  our business will generate sufficient cash flow from operations to service and repay our debt and to fund working capital and planned capital expenditures;

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•  future borrowings will be available under our current or future credit facilities in an amount sufficient to enable us to repay our debt; or
•  we will be able to refinance any of our debt on commercially reasonable terms or at all.

Financial, business, economic and other factors, many of which we cannot control, will affect our ability to generate cash in the future and to make these payments.

If we cannot generate sufficient cash from our operations to meet our debt service and repayment obligations, we may need to reduce or delay capital expenditures, the development of our business generally and any acquisitions. In addition, we may need to refinance our debt, obtain additional financing or sell assets, which we may not be able to do on commercially reasonable terms or at all.

Our existing senior secured credit facility and existing senior unsecured credit agreement currently impose, and we anticipate that our new senior secured credit facility and new asset securitization facility will impose, significant operating and financial restrictions, which may prevent us from pursuing certain business opportunities and taking certain actions.

Our existing senior secured credit facility and existing senior unsecured credit agreement currently impose, and we anticipate that our new senior secured credit facility and new asset securitization facility will impose, and the terms of any future indebtedness may impose, significant operating, financial and other restrictions on us and our subsidiaries. These restrictions will limit or prohibit, among other things, our ability to:

•  incur additional indebtedness;
•  pay dividends on or redeem or repurchase our stock;
•  issue capital stock of us and our subsidiaries;
•  make loans and investments;
•  create liens;
•  sell certain assets or merge with or into other companies;
•  enter into certain transactions with stockholders and affiliates;
•  restrict dividends, distributions or other payments from our subsidiaries; and
•  otherwise conduct necessary corporate activities.

These restrictions could adversely affect our ability to finance our future operations or capital needs and pursue available business opportunities. A breach of any of these restrictions could result in a default in respect of the related indebtedness. If a default occurs, the relevant lenders could elect to declare the indebtedness, together with accrued interest and fees, to be immediately due and payable and proceed against any collateral securing that indebtedness, which will constitute substantially all of our material container assets.

Risks Related to the Offering

An active market for our common stock may not develop which may inhibit the ability of our stockholders to sell common stock following this offering.

Prior to this offering, there has been no public market for our common shares. An active or liquid trading market in our common stock may not develop upon completion of this offering, or if it does develop, it may not continue. The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. The lack of an active market may also reduce the fair market value and increase the volatility of our common stock. An inactive market may also impair our ability to raise capital by selling shares and may impair our ability to acquire other companies or technologies by using our shares as consideration.

The price of our common stock may be highly volatile and may decline regardless of our operating performance.

The initial public offering price for the common shares sold in this offering will be determined by negotiation between the representatives of the underwriters and us. This price may not reflect the

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market price of our common shares following this offering and we cannot assure you that the market price will equal or exceed the initial public offering price of your shares. See "Underwriting" for a discussion of the factors that we and the underwriters will consider in determining the initial public offering price. The trading price of our common shares is likely to be subject to wide fluctuations. Factors affecting the trading price of our common shares may include:

•  variations in our financial results;
•  changes in financial estimates or investment recommendations by securities analysts following our business;
•  the public's response to our press releases, our other public announcements and our filings with the Securities and Exchange Commission;
•  changes in accounting standards, policies, guidance or interpretations or principles;
•  future sales of common stock by us and our directors, officers and significant stockholders;
•  announcements of technological innovations or enhanced or new products by us or our competitors;
•  our failure to achieve operating results consistent with securities analysts' projections;
•  the operating and stock price performance of other companies that investors may deem comparable to us;
•  recruitment or departure of key personnel;
•  our failure to timely address changing customer preferences;
•  broad market and industry factors; and
•  other events or factors, including those resulting from war, incidents of terrorism or responses to such events.

In addition, if the market for container leasing company stocks or the stock market in general experiences loss of investor confidence, the trading price of our common shares could decline for reasons unrelated to our business or financial results. The trading price of our common shares might also decline in reaction to events that affect other companies in our industry even if these events do not directly affect us. See "Underwriting" for a discussion of the factors that we and the underwriters will consider in determining the initial public offering price.

You will experience an immediate and substantial dilution in the net tangible book value of the common shares you purchase in this offering and you will experience dilution if we raise funds through the issuance of additional equity and/or convertible debt securities.

The initial public offering price is substantially higher than the pro forma net tangible book value per share of the outstanding common stock. As a result, investors purchasing common stock in this offering will incur immediate dilution of $         per share. The exercise of outstanding options and future equity issuances may result in further dilution to investors.

If we raise additional funds through the issuance of equity securities or convertible debt securities, you will experience dilution of your percentage ownership of our company. This dilution may be substantial. In addition, these securities may have powers, preferences and rights that are senior to the holders of our common stock and may further limit our ability to pay dividends on our common stock.

Future sales of our common stock, or the perception that such future sales may occur, may cause our stock price to decline and impair our ability to obtain capital through future stock offerings.

A substantial number of shares of our common stock held by our current stockholders could be sold into the public market after this offering. The occurrence of such sales, or the perception that

22




such sales could occur, could materially and adversely affect our stock price and could impair our ability to obtain capital through an offering of equity securities. The shares of common stock being sold in this offering will be freely tradable, except for any shares acquired by our "affiliates."

In connection with this offering, all members of our senior management and our directors and substantially all of our stockholders have either entered into or have agreed to enter into written "lock-up" agreements providing in general that, for a period of 180 days from the date of this prospectus, they will not, among other things, sell their shares without the prior written consent of Credit Suisse First Boston LLC, subject to specified exceptions. See "Shares Eligible for Future Sale—Lock-Up Agreements" for more information regarding these lock-up agreements. Upon the expiration of the lock-up period, an additional          shares of our common stock will be tradable in the public market subject, in most cases, to volume and other restrictions under federal securities laws. In addition, upon completion of this offering, options exercisable for an aggregate of approximately          shares of our common stock will be outstanding. We have entered into agreements with the holders of approximately          shares of our common stock under which, subject to the applicable lock-up agreements, we may be required to register future sales of these shares.

We will have broad discretion over the use of the proceeds to us from this offering and may not use those proceeds in ways that will enhance our market value, which would cause our stock price to decline.

We will have broad discretion to use the net proceeds to us from this offering, and you will be relying on the judgment of our board of directors and management regarding the application of these proceeds. Although we expect to use the net proceeds from this offering, other than approximately $         of which will be used to repay our outstanding indebtedness under our existing senior unsecured credit agreement, for general corporate purposes, including working capital and for potential strategic investments or acquisitions, we have not allocated these net proceeds for specific purposes and as part of your investment decision, you will not be able to direct how we apply the net proceeds. If we do not apply these funds effectively, we may lose significant business opportunities. Furthermore, the market price of our common stock could decline if the market does not view our use of the proceeds from this offering favorably.

We do not expect to pay any dividends in the foreseeable future.

We do not anticipate paying any cash dividends to holders of our common stock in the foreseeable future. In addition, our existing senior secured credit facility and existing senior unsecured credit agreement currently include and we anticipate that our new senior secured credit facility and new asset securitization facility will include, restrictions on our ability to pay cash dividends. Agreements governing future indebtedness will likely contain similar restrictions on our ability to pay cash dividends. Consequently, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment. Investors seeking cash dividends should not purchase our common stock.

We are uncertain of our ability to obtain additional financing for our future capital needs.

We believe that cash from operations and existing cash, together with available borrowings under our existing senior secured credit facility and our anticipated available borrowings under our new senior secured credit facility and our new asset securitization facility will be sufficient to meet our working capital, capital expenditure and expense requirements for at least the next twelve months. However, we may need to raise additional funds in order to fund our business, expand our sales activities, develop new or enhance existing products and/or respond to competitive pressures. Additional financing may not be available on terms favorable to us, or at all.

If securities analysts do not publish research or reports about our business or if they downgrade our stock, the price of our stock could decline.

The trading market for our common shares will rely in part on the research and reports that industry or financial analysts publish about us or our business. We do not control these analysts.

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Furthermore, if one or more of the analysts who do cover us downgrades our stock, the price of our stock could decline. If one or more of these analysts ceases coverage of our company, we could lose visibility in the market, which in turn could cause our stock price to decline.

Implementation of required public-company corporate governance and financial reporting practices and policies will increase our cost, and we may be unable to provide the required financial information in a timely and reliable manner.

As we have never been a publicly reporting company, our internal controls and procedures may not currently meet all the standards applicable to public companies, including those contained in Section 404 of the Sarbanes-Oxley Act of 2002, as well as rules and regulations enacted by the Securities and Exchange Commission and The New York Stock Exchange.

Our management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that will be applicable to us as a public company. If we are not able to implement the requirements of Section 404 in a timely manner or with adequate compliance, our independent auditors may not be able to certify as to the adequacy of our internal controls over financial reporting. This result may subject us to adverse regulatory consequences, and there could also be a negative reaction in the financial markets due to a loss of confidence in the reliability of our financial statements. We could also suffer a loss of confidence in the reliability of our financial statements if we disclose a material weakness in our internal controls. In addition, if we fail to develop and maintain effective controls and procedures, we may be unable to provide the required financial information in a timely and reliable manner or otherwise comply with the standards applicable to us as a public company. Any failure by us to timely provide the required financial information could materially and adversely impact our financial condition and the market value of our securities.

Possible non-compliance with the Sarbanes-Oxley Act of 2002 could materially adversely affect us.

The Securities and Exchange Commission, as directed by Section 404 of the Sarbanes-Oxley Act of 2002, adopted rules which will require us to include in our annual reports on Form 10-K, beginning with the Form 10-K for fiscal 2006, an assessment by management of the effectiveness of our internal controls over financial reporting. In addition, our independent auditors must attest to and report on management's assessment of the effectiveness of such internal controls over financial reporting. If our independent auditors are not satisfied with the adequacy of our internal controls over financial reporting, or if the independent auditors interpret the requirements, rules and/or regulations differently than we do, then they may decline to attest to management's assessment or may issue a report that is qualified. This could result in an adverse reaction in the financial marketplace due to a loss of investor confidence in the reliability of our financial statements, which could negatively impact the price of our common shares.

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FORWARD-LOOKING STATEMENTS

We make "forward-looking statements" throughout this prospectus. Whenever you read a statement that is not solely a statement of historical fact, such as when we state that we "believe," "expect," "anticipate" or "plan" that an event will occur, and other similar statements, you should understand that our expectations may not be correct, although we believe they are reasonable, and that our plans may change. We do not guarantee that the transactions and events described in this prospectus will happen as described or that any positive trends noted in the prospectus will continue. The forward-looking information contained in this prospectus is generally located under the headings "Prospectus Summary," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business," but may be found in other locations as well. These forward-looking statements generally relate to our strategies, plans and objectives for future operations and are based upon our current plans and beliefs or estimates of future results or trends.

Forward-looking statements regarding our present plans or expectations for capital expenditures, sales-building, cost-saving strategies, and growth involve risks and uncertainties relative to return expectations and related allocation of resources, and changing economic or competitive conditions, as well as the negotiation of agreements with third parties, which could cause actual results to differ from present plans or expectations, and such differences could be material. Similarly, forward-looking statements regarding our present expectations for operating results and cash flow involve risks and uncertainties relative to these and other factors, such as the ability to increase revenues and/or to achieve cost reductions (and other factors discussed under "Risk Factors" or elsewhere in this prospectus), which also would cause actual results to differ from present plans. Such differences could be material.

You should read this prospectus completely and with the understanding that actual future results may be materially different from what we expect. We will not update these forward-looking statements, even if our situation changes in the future.

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USE OF PROCEEDS

We estimate that we will receive net proceeds from this offering of approximately $       million, after deducting underwriting discounts and commissions and estimated offering expenses. We intend to use the net proceeds from this offering:

•  to pay the entire outstanding principal and interest due on our existing senior unsecured credit agreement; and
•  for working capital and general corporate purposes.

The amounts that we actually expend for working capital and other general corporate purposes will vary significantly depending on a number of factors, including future revenue growth, if any, and the amount of cash that we generate from operations. As a result, we will retain broad discretion over allocation of that portion of the net proceeds of this offering.

We will not receive any proceeds from the sale of our common stock, if any, by the selling stockholders upon the exercise of the underwriters' over-allotment option.

DIVIDEND POLICY

We have never paid cash dividends on our common stock, and we intend to retain our future earnings, if any, to fund the development and growth of our business. We therefore do not anticipate paying any cash dividends in the foreseeable future. Our future decisions concerning the payment of dividends on the common stock will depend upon the results of our operations, our financial condition and our capital expenditure plans, as well as any other factors that our board of directors, in its sole discretion, may consider relevant. In addition, our existing indebtedness restricts, and we anticipate that any of our future indebtedness may restrict, our ability to pay dividends.

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CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of March 31, 2005 on an actual basis and on a pro forma basis to give effect to the Offering and Related Transactions. For the purposes of the pro forma financial information set forth below, we have assumed the receipt of net proceeds from our sale of         shares of common stock in this offering at an assumed public offering price of $       , the mid-point of the estimated price range shown on the cover of this prospectus, after deducting estimated underwriting discounts and commission and estimated offering expenses.

You should read this table together with the discussion under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our financial statements and the related notes thereto included elsewhere in this prospectus.


  March 31, 2005
  Actual Pro Forma
  (in thousands, except shares and
per share amounts)
Cash and cash equivalents $ 25,738   $              
             
Debt:            
Existing senior secured credit facility $ 752,000   $  
Existing senior unsecured credit agreement   275,000        
New senior secured credit facility          
New asset securitization facility          
Total debt:   1,027,000        
Preferred Stock, Series A, subject to redemption 200,000 shares, actual;               shares pro forma   209,766        
Common stock, subject to redemption, 3,333.63 shares, actual;            shares pro forma   3        
             
Stockholders' equity:            
Preferred stock, $0.001 par value per share, 500,000 shares authorized, 200,000 shares issued and outstanding, actual;                      shares authorized,                      shares issued and outstanding, pro forma            
Common stock, par value $0.001 per share, 200,000 shares authorized, 100,000 shares issued and outstanding, actual;                shares authorized,                shares issued and outstanding, pro forma (a)            
Additional paid-in capital   97        
Accumulated deficit   3,816        
Accumulated other comprehensive income   8        
Total stockholders' equity:   3,921        
Total capitalization: $ 1,240,690   $  
(a) The share information above for our common stock excludes           shares of common stock available for issuance under our TAL International Group, Inc. 2004 Management Stock Plan, including           shares of common stock issuable upon the exercise of outstanding stock options as of March 31, 2005 at a weighted average exercise price of $         per share.

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DILUTION

If you invest in our common stock, your ownership interest will be diluted to the extent of the difference between the public offering price per share of our common stock and the pro forma net tangible book value per share of our common stock immediately after this offering. Pro forma net tangible book value per share represents the amount of our total tangible assets less our total liabilities divided by the pro forma number of shares of common stock outstanding after giving effect to the Offering and Related Transactions. For the purposes of the pro forma financial information set forth below, we have assumed the receipt of net proceeds from our sale of         shares of common stock in this offering at an assumed public offering price of $       , the mid-point of the estimated price range shown on the cover of this prospectus, after deducting estimated underwriting discounts and commission and estimated offering expenses.

After giving effect to the foregoing, our pro forma net tangible book value as of March 31, 2005 would have been $           million, or approximately $         per share. The net tangible book value of our common stock as of March 31, 2005 before giving effect to this offering was $    , or approximately $     per share. This represents an immediate increase in pro forma net tangible book value of $       per share to existing stockholders and an immediate dilution of $         per share to new investors. The following table illustrates this per share dilution:


Assumed initial public offering price       $                     
Net tangible book value as of March 31, 2005 $                           
Increase in pro forma net tangible book value attributable to new investors            
Pro forma net tangible book value after this offering            
Dilution to new investors       $  

The following table presents, on a pro forma basis, as of March 31, 2005, the differences between the number of shares of common stock purchased from us, the total consideration paid to us and the average price per share paid by existing stockholders and by new investors purchasing shares in this offering:


  Shares Purchased Total Consideration Average
Price Per
Share
  Number Percent Amount Percent
Existing stockholders                            $                          $              
New investors                              
Total         100.0 $     100.0 $  

The foregoing table and calculations assumes no exercise of any options and excludes           shares of common stock available for issuance under our TAL International Group, Inc. 2004 Management Stock Plan, including           shares of common stock issuable upon the exercise of outstanding stock options as of March 31, 2005 at a weighted average exercise price of $         per share.

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UNAUDITED PRO FORMA FINANCIAL STATEMENTS

The following unaudited pro forma financial statements have been derived from the application of pro forma adjustments to the historical financial statements of us and our Predecessor. The unaudited pro forma statements of operations for the year ended December 31, 2004 assumes that the Acquisition, Offering and Related Transactions took place on January 1, 2004. The unaudited pro forma statement of operations for the three months ended March 31, 2005 assumes that the Offering and Related Transactions took place on January 1, 2005. The unaudited pro forma consolidated balance sheet as of March 31, 2005 assumes that the Offering and Related Transactions took place on that date. The unaudited pro forma financial statements do not purport to represent what our results of operations or financial position would have been if the Acquisition, Offering and Related Transactions had occurred on the date indicated and are not intended to project our results of operations or financial position for any future period or date.

The unaudited pro forma adjustments are based on preliminary estimates, available information and certain assumptions that we believe are reasonable and may be revised as additional information becomes available. The pro forma adjustments and primary assumptions are described in the accompanying notes. Other information included under this heading has been presented to provide additional analysis. The Acquisition has been accounted for using the purchase method of accounting, which requires that we revalue or adjust our assets and liabilities to their fair values.

You should read our unaudited pro forma financial statements and the related notes hereto in conjunction with our historical financial statements and the related notes thereto and other information contained in "Capitalization," "Selected Historical Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus.

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TAL International Group, Inc.
Unaudited Pro Forma Statement of Operations
For the Year Ended December 31, 2004
(Dollar amounts in thousands)


  Year Ended December 31, 2004
  Combined (1) Adjustments
for Acquisition
and Related
Transactions
Pro forma
for Acquisition
and Related
Transactions
Adjustments
for Offering
and Related
Transactions
Pro forma
REVENUES                  
Leasing revenues $ 290,935   $ 2,894   (2)   $ 293,829   $   $  
Management fee income   7,117         7,117              
Equipment trading revenue   11,354         11,354              
Other revenues   3,564         3,564              
Total revenues   312,970     2,894     315,864              
             
EXPENSES            
Equipment trading expenses   8,405         8,405              
Direct operating expenses   27,415         27,415  
Administrative expenses   35,433         35,433  
Depreciation and amortization   139,218     (23,324 ) (3)     115,894  
Equipment rental expense   5,482         5,482  
Provision for doubtful accounts   525         525  
Net loss (gain) on sale of leasing equipment   3,199     (9,702 ) (4)     (6,503
Interest and debt expense   35,366     33,859   (5)     69,225  
Unrealized (gain) on interest rate swaps   (2,432       (2,432
Other parent company charges and management fees   28,360     (22,172 ) (6)     6,188              
Total expenses   280,971     (21,339   259,632              
             
Income before income taxes   31,999     24,233     56,232              
Income tax expense   11,606     8,966   (7)     20,572              
Net income   20,393     15,267     35,660                                      
Preferred stock dividends and accretion to redemption value   (8,410   (21,052 ) (8)     (29,462            
Net income applicable to common stockholders $ 11,983   $ (5,785 $ 6,198   $   $  
Basic and diluted earnings per share applicable to common stockholders $ 119.83         $ 61.98              

The accompanying notes are an integral part of the Unaudited Pro Forma Financial Statements.

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TAL International Group, Inc.
Notes to Unaudited Pro Forma Statement of Operations
For the Year Ended December 31, 2004
(Dollar amounts in thousands)

The unaudited pro forma statement of operations gives effect to the following adjustments.

(1) The results for the combined year ended December 31, 2004 combine the results of the Predecessor for the ten months ended October 31, 2004 with the results of the Successor for the two months ended December 31, 2004 by mathematical addition and do not comply with generally accepted accounting principles. Such data is being presented for analysis purposes only.
(2) Reversal of amortization of initial direct lease costs eliminated based on purchase accounting.
(3) Adjustment to depreciation and amortization as a result of the purchase price allocation from the Acquisition.

Depreciation and amortization based on purchase accounting $ 96,125  
Depreciation and amortization under the Predecessor's historical cost   (119,449
Pro forma adjustment to depreciation and amortization $ (23,324
(4) Increase net loss (gain) on sale of leasing equipment based on the difference between the purchase accounting value and the actual sale price.

Net loss on sale of leasing equipment under historical value $ 3,325  
Net (gain) on sale of leasing equipment based on purchase accounting value   (6,377
Pro forma adjustment to net (gain) on sale of leasing equipment $ (9,702
(5) Interest expense attributable to new borrowings related to the Acquisition and the elimination of intercompany debt and interest thereon.

Interest, including amortization of deferred finance costs on new debt $ 56,040  
Historical interest expense   (22,181
Pro forma adjustments to interest expense $ 33,859  
(6) Elimination of non-recurring expenses paid by our former parent and to record management fees resulting from the Acquisition.

Elimination of non-recurring expenses paid by our former parent $ (28,360
Record management fees resulting from the Acquisition   6,188  
Pro forma adjustment to other parent company charges and management fees $ (22,172
(7) The related income tax effect of the above items based upon a pro forma effective
income tax rate of 37.0%.

(8)   Adjustments for the accrued dividends related to the preferred stock $ (21,052

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TAL International Group, Inc.
Unaudited Pro Forma Statement of Operations
For the Three Months Ended March 31, 2005
(Dollar amounts in thousands)


  Three Months Ended March 31, 2005
  Actual Adjustments
for Offering and
Related Transactions
Pro forma
REVENUES      
Leasing revenues $ 71,991   $   $  
Management fee income   1,996              
Equipment trading revenue   2,508              
Other revenues   1,037              
Total revenues   77,532              
             
EXPENSES            
Equipment trading expenses   2,065        
Direct operating expenses   6,870              
Administrative expenses   9,709              
Depreciation and amortization   29,285              
Equipment rental expense   247              
Provision for doubtful accounts   (225            
Net loss (gain) on sale of leasing equipment   (4,375            
Interest and debt expense   21,114              
Unrealized (gain) on interest rate swaps   (10,060            
Other parent company charges and management fees   1,626              
Total expenses   56,256              
                   
Income before income taxes   21,276              
Income tax expense   7,891              
Net income   13,385                                      
Preferred stock dividends and accretion to redemption value   (6,028            
Net income applicable to common stockholders $ 7,357   $   $  
Basic and diluted earnings per share applicable to common stockholders $ 73.57   $   $  

The accompanying notes are an integral part of the Unaudited Pro Forma Financial Statements.

32




TAL International Group, Inc.
Notes to Unaudited Pro Forma Statement of Operations
For the Three Months Ended March 31, 2005
(Dollar amounts in thousands)

The unaudited pro forma statement of operations gives effect to the following adjustments.

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TAL International Group, Inc.
Unaudited Pro Forma Consolidated Balance Sheet
As of March 31, 2005
(Dollar amounts in thousands, except per share amounts)


  As of March 31, 2005
  Historical Adjustments
for Offering and
Related Transactions
Pro forma
ASSETS            
Cash and cash equivalents $ 25,738   $   $  
Accounts receivable, net of allowances of $5,540   39,862        
Net investment in direct finance leases   15,162        
Leasing equipment, net of accumulated depreciation and allowances of $46,425   1,088,720        
Leasehold improvements and other fixed assets, net of accumulated depreciation of $793   4,028        
Equipment held for sale   34,780        
Goodwill   73,570        
Deferred financing cost   45,820        
Other assets   19,356              
TOTAL ASSETS $ 1,347,036   $   $  
                   
LIABILITIES AND STOCKHOLDERS' EQUITY            
Liabilities:            
Accounts payable $ 11,821   $   $  
Accrued expenses   83,702        
Income taxes payable   598        
Deferred tax liability   10,225        
Debt            
Existing senior secured credit facility   752,000        
Existing senior unsecured credit agreement   275,000        
New senior secured credit facility          
New asset securitization facility                
Total liabilities   1,133,346              
             
Preferred stock, Series A subject to redemption, 200,000 shares issued and outstanding   209,766        
Common stock, subject to redemption, 3,333.63 shares issued and outstanding   3        
             
Stockholders' equity            
Preferred stock, $.001 par value, 500,000 shares authorized and 200,000 shares issued and outstanding    
Common stock, $.001 par value, 200,000 shares authorized and 100,000 shares issued and outstanding          
Additional paid-in capital   97              
Retained earnings   3,816        
Accumulated other comprehensive income   8              
Total stockholders' equity   3,921              
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,347,036   $                    $                   

The accompanying notes are an integral part of the Unaudited Pro Forma Consolidated Balance Sheet.

34




TAL International Group, Inc.
Notes to Unaudited Pro Forma Consolidated Balance Sheet
As of March 31, 2005
(Dollar amounts in thousands, except per share amounts)

The unaudited balance sheet gives effect to the following adjustments.

35




SELECTED HISTORICAL FINANCIAL DATA

The following table sets forth certain selected historical financial, operating and other data of the Predecessor and the Successor. The selected historical consolidated combined financial, operating and other data as of and for the fiscal years ended December 31, 2002 and 2003, for the ten months ended October 31, 2004 and as of and for the fiscal quarter ended March 31, 2004 were derived from the Predecessor's audited and unaudited combined consolidated financial statements and related notes appearing elsewhere in this prospectus. The selected historical consolidated combined financial, operating and other data as of and for the fiscal years ended December 31, 2000 and 2001 were derived from the audited and unaudited combined consolidated financial statements of the Predecessor that are not included in this prospectus. The selected historical consolidated financial, operating and other data as of and for the two months ended December 31, 2004, and as of and for the fiscal quarter ended March 31, 2005 were derived from the Successor's audited and unaudited consolidated financial statements and related notes appearing elsewhere in this prospectus.

You should read the following selected historical financial and operating data together with "Use of Proceeds," "Capitalization," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the financial statements and related notes thereto included elsewhere in this prospectus.

36





  Predecessor Successor Predecessor Successor
  Year Ended December 31, Ten Months
Ended
October 31,
2004
Two Months
Ended
December 31,
2004
Three Months
Ended
March 31,
  2000 2001 2002 2003 2004 2005
  (dollars in thousands other than per share data)
Statement of Operations Data:                                                
Leasing revenues $ 350,188   $ 326,421   $ 303,786   $ 301,352   $ 242,755   $ 48,180   $ 73,331   $ 71,991  
Management fee income   8,854     7,228     5,927     6,612     6,046     1,071     2,046     1,996  
Equipment trading revenue   36,351     33,356     15,893     15,235     9,641     1,713     2,155     2,508  
Other revenues   4,007     3,176     2,395     2,823     3,066     498     1,193     1,037  
Total revenues   399,400     370,181     328,001     326,022     261,508     51,462     78,725     77,532  
Equipment trading expenses   30,818     27,459     12,937     12,822     7,044     1,361     1,625     2,065  
Direct operating expenses   69,606     77,065     53,595     37,268     23,043     4,372     5,074     6,870  
Administrative expenses   44,097     41,040     33,383     38,404     29,014     6,419     8,481     9,709  
Depreciation and amortization   163,168     160,014     150,256     134,985     119,449     19,769     35,618     29,285  
Equipment rental expense   37,170     36,849     37,307     36,264     4,342     1,140     1,435     247  
Provision for doubtful accounts (reversal)   2,190     (1,785   (322   (33   300     225     163     (225
Net loss (gain) on sale of leasing equipment   17,085     18,443     55,782     35,940     3,325     (126   5,098     (4,375
Interest and debt expense   44,921     40,178     25,063     23,756     22,181     13,185     6,887     21,114  
Unrealized (gain) on interest rate swaps                       (2,432       (10,060
Other parent company charges and management fees           3,563         28,360         10,635     1,626  
Income tax (benefit) expense   (5,596   (10,135   (15,783   740     8,926     2,680     1,327     7,891  
Income(loss) before cumulative effect of accounting change   (4,059   (18,947   (27,780   5,876     15,524     4,869     2,382     13,385  
Cumulative effect of accounting change           (35,377                    
Net income(loss) $ (4,059 $ (18,947 $ (63,157 $ 5,876   $ 15,524     4,869   $ 2,382     13,385  
Preferred stock dividends and accretion to redemption value                                 (8,410         (6,028
Net income (loss) applicable to common stockholders                               $ (3,541       $ 7,357  
Earnings (Loss) Per Share Data:                                                
Basic and diluted income (loss) per share applicable to common stockholders $   $   $   $   $   $ (35.41 $   $ 73.57  
Weighted average common shares outstanding:                                                
Basic and diluted                       100,000         100,000  
Balance Sheet Data (end of period):                                                
Cash and cash equivalents $ (887 $ 1,939   $ 1,420   $ 3,161         $ 17,668   $ 6,105   $ 25,738  
Accounts receivable, net   82,230     63,365     44,955     37,593           35,014     45,466     39,862  
Leasing equipment, net   1,408,380     1,274,168     1,093,233     977,022           1,103,423     1,076,063     1,088,720  
Total assets   1,569,157     1,399,609     1,179,283     1,053,990           1,320,883     1,171,505     1,347,036  
Total debt   890,908     752,725     667,574     614,242           1,072,000     691,329     1,027,000  
Redeemable preferred stock                                 203,738           209,766  
Redeemable common stock                                 3           3  
Owners' net investment/stockholders' equity (deficit)   195,106     173,829     111,522     100,998           (3,427   106,664     3,921  
Other Financial Data:                                                
Capital expenditures       $ 76,023   $ 77,645   $ 94,822   $ 256,882   $ 29,775   $ 159,676   $ 53,529  
Container sales proceeds         33,148     34,486     46,771     50,741     10,111     18,916     43,463  
                                                 
Selected Fleet Data (1) :                                                
Dry container units (2)   621,307     605,309     581,885     548,401     540,428     538,390     555,837     532,029  
Refrigerated container units (2)   38,770     37,346     35,840     35,830     35,706     35,851     38,524     35,623  
Special container units (2)   61,388     58,677     56,356     52,903     47,363     46,797     51,207     45,672  
Total container units (2)   721,465     701,332     674,081     637,134     623,497     621,038     645,568     613,324  
Total containers in TEU (2)   1,100,744     1,082,100     1,053,183     1,001,368     995,335     994,891     1,015,028     981,900  
Average utilization %   77.5   74.2   79.4   87.2   92.7   94.4   89.8   92.8
(1) Includes our operating fleet (which is comprised of our owned and managed fleet) plus certain other units including finance leases.
(2) Calculated as of the end of the relevant period.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the consolidated and combined financial condition and results of operations of TAL International Group, Inc. and its subsidiaries should be read in conjunction with related consolidated and combined financial data and our annual audited consolidated and combined financial statements and related notes thereto included elsewhere in this prospectus. The statements in this discussion regarding industry outlook, our expectations regarding our future performance, liquidity and capital resources and other non-historical statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described under "Risk Factors" and "Forward-Looking Statements." Our actual results may differ materially from those contained in or implied by any forward-looking statements .

Our Company

We were formed in 1963 and are one of the world's largest and oldest lessors of intermodal freight containers. Intermodal freight containers are large, standardized steel boxes used to transport freight by ship, rail or truck. Because of the handling efficiencies they provide, intermodal freight containers are the primary means by which many goods and materials are shipped internationally. According to Drewry, the worldwide container shipping industry is a $148.7 billion industry, as measured by the gross revenues of shipping lines, in which volume has grown at a CAGR of 9.0% from 1980 to 2004.

Our operations include the acquisition, leasing, re-leasing and subsequent sale of multiple types of intermodal containers. According to Containerisation International, we are the world's third largest lessor of intermodal containers as measured by fleet size, with an approximately 11% market share of the world's leased container fleet. As of March 31, 2005, our fleet included approximately 613,324 containers (with approximately 82,031 containers under management for third parties), representing approximately one million twenty-foot equivalent units (TEU). We also believe that we are the world's largest seller of used containers. We have an extensive global presence, offering leasing services through 19 offices in 12 countries and approximately 190 third party container depot facilities in 39 countries as of May 31, 2005. Our customers are among the world's largest shipping lines and include, among others, APL-NOL, CMA-CGM, CP Ships, Hanjin Shipping, Maersk-Sealand, Mediterranean Shipping Company and NYK Line.

We generated total revenues, Adjusted EBITDA and net income of $         million, $         million and $         million, respectively, for fiscal 2004 on a pro forma basis, and $         million, $         million and $         million, respectively, for the three months ended March 31, 2005 on a pro forma basis. We had total assets of $1,320.9 million at December 31, 2004 and $1,347.0 million at March 31, 2005.

We lease three principal types of containers: (1) dry freight containers, which are used for general cargo such as manufactured component parts, consumer staples, electronics and apparel, (2) refrigerated containers, which are used for perishable items such as fresh and frozen foods, and (3) special containers, which are used for heavy and oversized cargo such as marble slabs, building products and machinery. As of March 31, 2005, dry, refrigerated and special containers represented 87%, 6% and 7% of our fleet on a unit basis, respectively. For the fiscal year 2004, dry, refrigerated and special containers represented 60%, 30% and 10% of our leasing revenues, respectively, and for the three months ended March 31, 2005, dry, refrigerated and special containers represented 59%, 30% and 11% of our leasing revenues, respectively.

We lease our containers on a per diem basis to our customers under three types of leases: long-term leases, service leases and finance leases. Long-term leases, typically with terms of three to eight years, provide us with predictable cash flow and low transaction costs by requiring customers to maintain specific containers on-hire for the duration of the lease. Service leases command a premium per diem rate in exchange for providing customers with a greater level of operational flexibility by allowing the pick-up and drop-off of containers during the lease term. Finance leases, which are typically structured as full payout leases, provide for a predictable recurring revenue stream with the lowest daily cost to the customer because customers are generally required to retain the container for

38




the duration of its useful life. In each case, our leases require lessees to maintain the containers in good operating condition, defend and indemnify us from liabilities relating to the containers' contents and handling and return the containers to specified drop-off locations. As of March 31, 2005, 92% of our containers were on-hire to customers, with 62% of our containers on long-term leases, 28% on service leases or long-term leases, whose fixed terms have expired but for which the related units remain on-hire and for which we continue to receive rental payments, and 2% on finance leases. As of March 31, 2005, our long-term leases had an average remaining lease term of 34 months. In addition, less than 7% of our containers were available for lease and less than 2% were available for sale.

Our profitability is primarily determined by the extent to which our leasing and other revenues exceed our ownership, operating, administrative and other expenses. Our profitability has improved significantly in recent years after several difficult years for our industry following the Asia crisis in the late 1990's. Our recent improvements in profitability are attributable mainly to the successful restructuring of our lease portfolio and the significant improvements in our market.

Our total revenues primarily consist of leasing revenues derived from the lease of our owned containers and, to a lesser extent, fees received for managing containers owned by third parties and equipment trading revenue.

Our leasing revenues are primarily driven by our owned container fleet size, utilization and average rental rates, and fees associated with returned containers. Our owned container fleet size is mainly a function of the size of our historical container investments and the rate and age at which we sell our used containers. From 2002 to 2004, the size of our total container fleet decreased by 7.9% mainly due to restrictions on capital investments placed upon us by our previous parent.

Our container utilization is made up of two components: (a) the portion of our containers on long-term lease and finance lease, and (b) the utilization of our containers not on long-term lease or finance lease. Containers on long-term lease are generally only returned at lease expiration, and containers on finance lease are generally not returned at all, so these containers usually remain on-hire regardless of the level of container demand in the market. Utilization of our units not on long-term lease or finance lease is primarily driven by the level of container demand, the location of our available containers and the quality of our customer relationships. Location of available containers is important since containers available in strong demand locations are more readily leased than containers available in locations where demand is weak. Customer relationships are important to ensure we are aware of our customers' container requirements and to secure bookings when containers are available from multiple sources. From 2002 to 2004, our container utilization increased from 79.4% to 93.0%, which increase was primarily due to the increase in the portion of our units covered by long-term leases, improved contractual drop-off restrictions that reduced the level of container returns in weak markets, and an increase in overall demand for leased containers due to the rapid growth of world containerized trade.

Container leasing rates are typically a function of, among other things, new container prices (which are heavily influenced by steel prices), interest rates, and the container supply and demand balance at a particular time and location. Beginning in 2003, global steel prices and container demand began to increase significantly, resulting in higher new and used container prices and significant increases in new and used container leasing rates. Average leasing rates on an entire portfolio of container leases respond more gradually to changes in new container prices, because lease agreements can only be re-priced upon the expiration of the lease, In addition, the value that lessors receive upon resale of containers is closely related to the cost of new containers.

Fees associated with container returns include drop-off fees and repair and handling re-bills. Drop-off fees are primarily associated with our service leases and are usually charged to customers when units are returned in locations with relatively weak container demand. Service lease drop-off fees have been slightly decreasing over the last few years due to a decrease in the volume of units returned in low demand areas partially offset by an increase in the average drop-off fee charged for such returns. Repair and handling fees primarily represent a pass through of damage and handling expenses incurred by us when containers are returned off lease.

39




The fees we receive for managing containers for third-party investors are a function of our managed container fleet size, the level of commissions we charge for managing containers and the operating performance of our managed fleet of containers. Equipment trading revenue is driven by the number of third-party containers we purchase and sell and the size of our average resale margin.

Our major expenses can be categorized in terms of ownership expenses, direct operating expenses and administrative expenses.

Ownership expenses are comprised of depreciation and amortization, interest expense and equipment rental expense. Our ownership expenses are primarily driven by the size of our container fleet, the price we pay for our containers, our depreciation policies and the cost of our debt. Our ownership expenses decreased by 8% from 2002 to 2004 due to a reduction in our owned container fleet size and the purchase of 67,251 units we previously leased-in under an operating lease. However, our ownership expense has increased since November 2004 due to the higher debt amount and higher interest rates we have experienced after the Acquisition.

Direct operating expenses primarily include container storage, repair, repositioning and handling costs, and is driven mainly by the portion of our containers that are not on-hire to customers and the rate at which containers are dropped-off and picked-up by our customers. Our direct operating expense has decreased significantly in recent years as our utilization has increased and as the rate of container drop-offs and pick-ups has slowed due to the increased percentage of our units on long-term lease and tighter return restrictions imposed by our leases.

Our provision for doubtful accounts is driven by the financial health of our customer base, and our collections and repossession success. Bad debt expense has been low for a number of years due to a low default rate and generally successful repossession and remarketing of containers in default situations.

Losses (gains) on the sale of used containers are driven by the number of used containers we sell, the price we receive for our used containers, and the age and net book value of the containers that are sold. From 2000 to 2003, we incurred large losses on container disposals as we elected to sell containers at low prices that had become stranded in the aftermath of the Asia crisis in areas with weak demand and high positioning cost, such as the East Coast and interior of the United States. Since late 2003, our disposal results have improved significantly due to much higher sale prices for our used containers. These higher sale prices have been supported by the successful clearing of our stranded inventory and a significant increase in the price of new containers.

Our administrative expenses reflect the cost of our sales, operations, management and technology infrastructures. Since our systems could handle significantly more units than they do today and since we do not expect our customer or container depot networks to require significant expansion if we increase our fleet size, we believe that we could increase our container fleet and revenues without significantly increasing administrative expenses.

Our profitability is primarily determined by the extent to which our leasing and other revenues exceed our ownership, operating, administrative and other expenses. Our profitability has improved significantly in recent years after a difficult period for our industry following the Asia crisis in the late 1990's. Between 1999 and 2002, our profitability was negatively impacted by falling average rental rates, low utilization and high direct operating costs caused by low new container prices and the development of a persistent East/West trade imbalance. New container prices fell during the late 1990's due to falling steel prices and the shift of container production from South Korea and Taiwan to lower labor cost areas in mainland China. The drop in new container prices caused our average lease rates to decline from the mid 1990's to 2003 as containers were added to our fleet at lower price and lease rate levels and as existing leases expired and were renegotiated downward.

A large East/West trade imbalance emerged in the aftermath of the Asia crisis due to Asian currency devaluations, shrinking domestic demand in many Asian countries and other economic factors. As a result of the trade imbalance, shipping lines sought to reduce their empty container positioning costs by returning leased containers to North America and Europe. As a result, large idle container inventories built up for most leasing companies because, at the time, lease contracts were

40




generally not structured to prevent containers from being returned in large quantities outside of Asia. Such large idle inventories in locations with weak export markets led to low utilization, large losses on container disposals and high storage and empty container repositioning costs for the container leasing industry.

Over the last few years, our profitability has improved significantly due to successful lease restructuring, stronger demand for containers, increasing new container prices and leasing rates, and increasing sale prices for used containers. In the aftermath of the Asia crisis, we embarked on a program to reduce logistical and utilization risk by increasing the percentage of our containers on long-term lease and restricting the ability of our customers to return containers outside of high demand locations. The success of this lease restructuring program is illustrated by our operating statistics. From December 31, 2000 to December 31, 2004, the portion of our containers on long-term lease or finance lease increased from 48% to 66%, the annual number of dry containers returned to North America and Europe from service leases fell by 63%, the number of idle dry containers available for lease fell by 81% and our empty container positioning cost fell by 79%. During the last few years, we have also benefited from strong trade growth and strong leased container demand. Clarkson estimates that container liftings increased at an average annual rate of 11.9% from 2002 to 2004. Due to strong underlying container demand and our successful lease restructuring, our average container utilization increased from 79.4% in 2002 to 92.8% for the quarter ending March 31, 2005.

Since late 2003, we have also benefited from increasing new container prices, market lease rates and sale prices for our used containers. From 2003 to 2004, the price of new dry containers increased by over 50% and market lease rates for new containers increased by a corresponding level. The average lease rate in our portfolio has begun to increase gradually as new containers are added to our fleet and as existing leases expire and are renegotiated. In addition, our average used dry container sale prices increased by 54% from 2002 to 2004 due to higher prices for new containers and strong container demand.

Our successful lease restructuring initiatives and improved utilization, coupled with increasing new container prices and increasing used container sale prices, have transformed our financial performance over the last three years. Our average daily container yield (average utilization times average daily rate) increased by 7% from 2002 to 2004, while container operating expenses as a percentage of our total revenues dropped from 16.3% of total revenues in 2002 to 8.8% of total revenues in 2004 and net loss (gain) on sale of leasing equipment improved from a loss equal to 17% of our total revenues in 2002 to a gain equal to 1% of our total revenues in 2004.

Our performance in the first quarter of 2005 continues to reflect the benefits of our lease restructuring and improvements in our market. New and used dry container prices remain high and our operating costs remain low. However, utilization, particularly for dry containers, is operating slightly below our average level for 2004 due to our increased buying of new containers and a build-up of container inventories in Asia by leasing companies and shipping lines.

Basis of Presentation

TAL International Group was formed on October 26, 2004 in connection with the Acquisition, which is described under the heading "Prospectus Summary—The Acquisition" elsewhere in this prospectus, and had no prior independent operations. Consequently, the combined consolidated statement of operations data for the fiscal years ended December 31, 2002 and 2003, for the ten months ended October 31, 2004 and for the fiscal quarter ended March 31, 2004 were derived from the Predecessor's audited and unaudited combined consolidated financial statements and related notes thereto appearing elsewhere in this prospectus. The consolidated statement of operations data for the two months ended December 31, 2004 and for the quarter ended March 31, 2005 were derived from our audited and unaudited consolidated financial statements and related notes thereto appearing elsewhere in this prospectus. The combined statement of operations data for the year ended December 31, 2004 were derived from our and the Predecessor's audited financial statements and related notes thereto appearing elsewhere in this prospectus. The results for the combined year ended December 31, 2004 combine the results of the Predecessor for the ten months ended October 31, 2004

41




with the results of the Successor for the two months ended December 31, 2004 by mathematical addition and do not comply with generally accepted accounting principles. Such data is being presented for analysis purposes only.

The Predecessor's combined consolidated financial statements include the financial data of Trans Ocean and certain operations of TAL International Corporation on a combined basis.

The financial statements for periods prior to November 1, 2004 have been prepared using Trans Ocean's and TAL International Corporation's historical basis in the assets and liabilities presented as of the dates specified therein and the historical results of operations for such periods. The financial statements for periods subsequent to November 1, 2004 have been prepared using our basis in the assets and liabilities, as adjusted pursuant to the terms of the Acquisition. Our basis in our assets and liabilities was determined by applying the purchase method of accounting to the Acquisition, and the asset and liabilities were adjusted, or "stepped up," to their estimated fair market value. The consolidated financial statement data included in this prospectus may not necessarily reflect our consolidated and combined financial position, operating results, changes in stockholders' equity and cash flows in the future or what would have been had we been a separate stand-alone entity during the periods preceding November 1, 2004.

Results of Operations

The following table summarizes our results of operations for the year ended December 31, 2002, the year ended December 31, 2003, the ten months ended October 31, 2004, the two months ended December 31, 2004, the combined year ended December 31, 2004, the three months ended March 31, 2004 and the three months ended March 31, 2005 in dollars and as a percentage of total revenues for the periods presented.

42





  Predecessor   Predecessor Successor
  Year Ended December 31, Combined Year Ended
December 31,
2004 (a)
Three Months Ended March 31,
  2002 2003 2004 2005
  Dollars Percent Dollars Percent Dollars Percent Dollars Percent Dollars Percent
  (dollars in thousands)
Leasing revenues $ 303,786     92.6 $ 301,352     92.4 $ 290,935     93.0 $ 73,331     93.2 $ 71,991     92.9
Management fee income   5,927     1.8     6,612     2.0     7,117     2.3     2,046     2.6     1,996     2.6  
Equipment trading revenue   15,893     4.9     15,235     4.7     11,354     3.6     2,155     2.7     2,508     3.2  
Other revenues   2,395     0.7     2,823     0.9     3,564     1.1     1,193     1.5     1,037     1.3  
Total revenues   328,001     100.0     326,022     100.0     312,970     100.0     78,725     100.0     77,532     100.0  
Equipment trading expenses   12,937     3.9     12,822     3.9     8,405     2.7     1,625     2.1     2,065     2.7  
Direct operating expenses   53,595     16.3     37,268     11.4     27,415     8.8     5,074     6.4     6,870     8.9  
Administrative expenses   33,383     10.2     38,404     11.8     35,433     11.3     8,481     10.8     9,709     12.5  
Depreciation and amortization   150,256     45.8     134,985     41.4     139,218     44.5     35,618     45.2     29,285     37.8  
Equipment rental expense   37,307     11.4     36,264     11.1     5,482     1.8     1,435     1.8     247     0.3  
Provision for doubtful accounts (reversal)   (322   (0.1   (33   0.0     525     0.2     163     0.2     (225   (0.3
Net loss (gain) on sale of leasing equipment   55,782     17.0     35,940     11.0     3,199     1.0     5,098     6.5     (4,375   (5.6
Interest and debt expense   25,063     7.6     23,756     7.3     35,366     11.3     6,887     8.7     21,114     27.2  
Unrealized (gain) on interest rate swaps       0.0         0.0     (2,432   (0.8       0.0     (10,060   (13.0
Other parent company charges and management fees   3,563     1.1         0.0     28,360     9.1     10,635     13.5     1,626     2.1  
Income tax (benefit) expense   (15,783   (4.8   740     0.2     11,606     3.7     1,327     1.7     7,891     10.2  
Income (loss) before cumulative effect of accounting change   (27,780   (8.5   5,876     1.8     20,393     6.5     2,382     3.0     13,385     17.3  
Cumulative effect of accounting change   (35,377   (10.8       0.0         0.0         0.0         0.0  
Net income (loss) $ (63,157   (19.3 )%  $ 5,876     1.8 $ 20,393     6.5 $ 2,382     3.0 $ 13,385     17.3
(a) The results for the combined year ended December 31, 2004 combine the results of the Predecessor for the ten months ended October 31, 2004 with the results of the Successor for the two months ended December 31, 2004 by mathematical addition and do not comply with generally accepted accounting principles. Such data is being presented for analysis purposes only.

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The following table shows information related to our fleet as of the end of the periods presented.


  Year Ended
December 31, 2002
Year Ended
December 31, 2003
Year Ended
December 31, 2004
Three Months
Ended
March 31, 2004
Three Months
Ended
March 31, 2005
Dry container units   581,885     548,401     529,202     541,815     516,438  
Refrigerated container units   35,840     35,830     34,738     35,181     34,382  
Special container units   56,356     52,903     46,797     51,205     45,113  
Finance lease and other leasing units           10,301     17,367     17,391  
Total fleet units   674,081     637,134     621,038     645,568     613,324  
Total owned units (1)   580,337     550,219     541,470     560,429     531,293  
Total managed units   93,744     86,915     79,568     85,139     82,031  
Total containers in TEU   1,053,183     1,001,368     994,891     1,015,028     981,900  
Average utilization % (2)   79.4   87.2   93.0   89.8   92.8
(1) In 2002 and 2003, total owned units includes certain leased-in units, which are currently owned by us.
(2) For the relevant period.

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Comparison of Three Months Ended March 31, 2005 to Three Months Ended March 31, 2004.

Revenues.     Total revenues were $77.5 million for the three months ended March 31, 2005 compared to $78.7 million for the three months ended March 31, 2004, a decrease of $1.2 million or 1.5%. The decrease was primarily due to a 5% decline in fleet size and a decline in the per diem rates in our special and refrigerated containers, which was partially offset by improving per diem rates in dry containers.

Equipment trading expenses.     Equipment trading expenses were $2.1 million for the three months ended March 31, 2005 compared to $1.6 million for the three months ended March 31, 2004, an increase of $0.5 million or 31.3%, resulting from more units sold and an increase in the carrying value of certain units due to purchase accounting associated with the Acquisition.

Direct operating expenses.     Direct operating expenses were $6.9 million for the three months ended March 31, 2005 compared to $5.1 million for the three months ended March 31, 2004 an increase of $1.8 million or 35.3%. During the first three months ended March 31, 2004, we recovered units on lease from a non-performing customer, previously provided for under our allowance policy. This recovery resulted in a reversal of the provision of $1.8 million in the first quarter of 2004.

Administrative expenses.     Administrative expenses were $9.7 million for the three months ended March 31, 2005 compared to $8.5 million for the three months ended March 31, 2004, an increase of $1.2 million or 14.1%. The increase was primarily due to higher compensation costs.

Depreciation and amortization.     Depreciation and amortization was $29.3 million for the three months ended March 31, 2005 compared to $35.6 million for the three months ended March 31, 2004, a decrease of $6.3 million or 17.7%. The decrease was primarily due to purchase accounting. Under purchase accounting each unit was assigned a fair value at the date of the Acquisition. The net book value assigned to the fleet under purchase accounting was $1,101.2 million, as compared to the net book value of acquired fleet of $1,057.8 million, an increase of $43.4 million or 4.1%. However, the allocation of values to the specific units had the effect of increasing values of the younger containers, while decreasing values of the older containers. Since the younger containers have a longer remaining depreciable life, this shift in value resulted in lower overall depreciation.

Equipment rental expense.     Equipment rental expense was $0.2 million for the three months ended March 31, 2005 compared to $1.4 million for the three months ended March 31, 2004, a decrease of $1.2 million or 85.7%. The decrease was primarily due to the purchase of equipment in the first quarter of 2005 that was previously leased-in under operating leases.

Provision for doubtful accounts (reversal).     Provision for doubtful accounts was a reversal of $0.2 million for the three months ended March 31, 2005 compared to expense of $0.2 million for the three months ended March 31, 2004.

Net loss (gain) on sale of leasing equipment.     Gain on sale of leasing equipment was $4.4 million for the three months ended March 31, 2005 compared to a loss of $5.1 million for the three months ended March 31, 2004, an increase of $9.5 million. The increase was primarily due to increased selling prices for our used containers.

Interest and debt expense.     Interest and debt expense was $21.1 million for the three months ended March 31, 2005 compared to $6.9 million for the three months ended March 31, 2004, an increase of $14.2 million or 205.8%. The increase was primarily due to a different capital structure resulting from the Acquisition, which resulted in increased levels of debt and a higher effective interest rate.

Unrealized (gain) on interest rate swaps.     Unrealized (gain) on interest rate swaps was $10.1 million for the three months ended March 31, 2005 compared to zero for the three months ended March 31, 2004. We entered into interest rate swap agreements on December 14, 2004 to fix the floating interest rate on our senior secured credit facility. The interest rate swaps were accounted for on a mark-to- market basis and their fair value was approximately $12.5 million at March 31, 2005 due to an increase in interest rates.

Other parent company charges and management fees.     Other parent company charges and management fees were $1.6 million for the three months ended March 31, 2005 compared to $10.6

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million for the three months ended March 31, 2004. During the first three months of 2004, our former parent paid $9.0 million of incentive and other management compensation to certain of our employees and allocated $1.6 million of certain overhead costs for services such as legal, human resources, finance and certain information technology functions. The payment for incentive and management compensation was the result of a retention and incentive program established by our former parent and was triggered in January 2004 by the sale of other businesses by our former parent. In the first three months of 2005, we recorded an expense of $1.6 million of management fees payable under certain management agreements. See "Certain Relationships and Related Party Transactions— Management Agreements."

Income tax (benefit) expense.     Income tax expense was $7.9 million for the three months ended March 31, 2005 compared to $1.3 million for the three months ended March 31, 2004, and the effective tax rates for the periods were 37.1% and 35.8%, respectively. In conjunction with the Acquisition, both the seller and the purchaser elected to have the provisions of Internal Revenue Code Section 338(h)(10) apply to the sale, resulting in the transaction being treated as a taxable asset sale for U.S. federal income tax purposes. As a result of this election, the tax basis of the Company's assets was adjusted to fair market value for U.S. federal income tax purposes, resulting in the elimination of the net deferred U.S. federal income tax liability balance that existed immediately prior to the sale. As a result, we do not expect to pay U.S. federal income taxes for the foreseeable future although we will be recording income for tax expense.

Net income.     Net income was $13.4 million for the three months ended March 31, 2005 compared to $2.4 million for the three months ended March 31, 2004, an increase of $11.0 million or 458.3%. The increase in net income was due to all of the factors discussed above.

Comparison of Year Ended December 31, 2004 (Combined) to Year Ended December 31, 2003

Revenues.     Total revenues were $313.0 million for 2004 compared to $326.0 million for 2003, a decrease of $13.0 million or 4.0%. The decrease was primarily due to a smaller fleet size and a decline in the per diem rates in our special and refrigerated containers, and was partially offset by improving utilization in dry and special containers. In addition, equipment trading revenue declined by $3.9 million due to fewer third party units sold.

Equipment trading expenses.     Equipment trading expenses were $8.4 million for 2004 compared to $12.8 million for 2003, a decrease of $4.4 million or 34.4%. The decrease was due to our having sold fewer units.

Direct operating expenses.     Direct operating expenses were $27.4 million for 2004 compared to $37.3 million for 2003, a decrease of $9.9 million or 26.5%. This decrease resulted mainly from lower storage, positioning and repair expenses primarily related to increased utilization of our containers.

Administrative expenses.     Administrative expenses were $35.4 million for 2004 compared to $38.4 million for 2003, a decrease of $3.0 million or 7.8%. The decrease was primarily due to a decrease in allocated costs in 2004 from our former parent.

Depreciation and amortization.     Depreciation and amortization was $139.2 million for 2004 compared to $135.0 million for 2003, an increase of $4.2 million or 3.1%. Depreciation increased by $14.9 million due to the purchase of 67,251 containers for a purchase price of $150.7 million that we had formerly leased-in on an operating lease. This increase was partially offset by a decrease in the overall size of our fleet.

Equipment rental expense.     Equipment rental expense was $5.5 million for 2004 compared to $36.3 million for 2003, a decrease of $30.8 million or 84.8%. On January 2, 2004, we elected to exercise a purchase option for 67,251 containers leased-in on an operating lease for an aggregate purchase price of $150.7 million. The purchase of these leased-in containers reduced equipment rental expense by $30.2 million.

Provision for doubtful accounts.     Provision for doubtful accounts was $0.5 million for 2004 compared to zero for 2003.

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Net loss (gain) on sale of leasing equipment.     Loss on sale of leasing equipment was $3.2 million for 2004 compared to a loss of $35.9 million for 2003, a decrease of $32.7 million or 91.1%. The improvement was primarily the result of higher sale prices achieved in 2004. Sale prices have improved steadily since the middle of 2003 due to strong container demand and an increase in new container prices.

Interest and debt expense.     Interest and debt expense was $35.4 million for 2004 compared to $23.8 million for 2003, an increase of $11.6 million or 48.7%. This increase was primarily attributable to the increase in debt and interest rates associated with the Acquisition on November 4, 2004. The purchase for $150.7 million of the 67,251 units of containers, previously leased-in on an operating lease, also contributed to the increase in interest and debt expense due to higher debt incurred to fund the purchase.

Unrealized (gain) on interest rate swaps.     Unrealized gain on interest rate swaps was $2.4 million for 2004 compared to zero for 2003. We entered into interest rate swap agreements on December 14, 2004 to fix the floating interest rate on our senior secured credit facility. The interest rate swaps were accounted for on a mark-to-market basis and their fair value was approximately $2.4 million at December 31, 2004.

Other parent company charges and management fees.     Other parent company charges and management fees were $28.4 million for 2004 compared to zero for 2003. During 2004 our former parent paid $27.0 million of incentive, termination and other management compensation to certain of our employees. These payments were the result of retention and incentive program established by our former parent. Additional payments were also triggered by the sale of other businesses owned by our former parent in January 2004 and by the Acquisition.

Income tax (benefit) expense.     Income tax expense was $11.6 million for 2004 compared to $0.7 million in 2003. Our effective tax rate was 36.3% for 2004 compared to 11.2% for 2003. The increase was principally due to a one-time cumulative state tax benefit of $1.6 million realized in the first quarter of 2003 resulting from a reduction in state tax rate. In conjunction with the Acquisition, both the seller and the purchaser elected to have the provisions of Internal Revenue Code Section 338(h)(10) apply to the sale, resulting in the transaction being treated as a taxable asset sale for U.S. federal income tax purposes. As a result of this election, the tax basis of the Company's assets were adjusted to fair market value for U.S. federal income tax purposes, resulting in the elimination of the net deferred U.S. federal income tax liability balance that existed immediately prior to the sale. As a result, we do not expect to pay U.S. federal income taxes for the foreseeable future although we will be recording income tax expense.

Net income.     Net income was $20.4 million for 2004 compared to $5.9 million for 2003, an increase of $14.5 million or 245.8%. The increase in net income was due to all of the factors discussed above.

Comparison of Year Ended December 31, 2003 to Year Ended December 31, 2002

Revenues.     Total revenues were $326.0 million for 2003 compared to $328.0 for 2002, a decrease of $2.0 million or 0.6%. The decrease was primarily due to a smaller fleet size and a decline in the per diem rates, partially offset by increased utilization for all equipment types.

Equipment trading expenses.     Equipment trading expenses were $12.8 million for 2003 compared to $12.9 million for 2002, a decrease of $0.1 million.

Direct operating expenses.     Direct operating expenses were $37.3 million for 2003 compared to $53.6 million for 2002, a decrease of $16.3 million or 30.4%. This decrease resulted mainly from lower storage, repositioning and repair expenses primarily related to increased utilization of our containers.

Administrative expenses.     Administrative expenses were $38.4 million for 2003 compared to $33.4 million for 2002, an increase of $5.0 million or 15.0%. This was primarily due to an increase in management incentive payments of $2.5 million, an increase in pension costs of $1.0 million and an increase in salary expenses and related taxes of $1.5 million.

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Depreciation and amortization.     Depreciation and amortization was $135.0 million for 2003 compared to $150.3 million for 2002, a decrease of $15.3 million or 10.2%. This decrease was primarily due to a reduced fleet size in 2003 compared to 2002.

Equipment rental expense.     Equipment rental expense was $36.3 million for 2003 compared to $37.3 million for 2002, a decrease of $1.0 million or 2.7%. This decrease primarily resulted from a reduction in the number of units leased-in on operating leases.

Provision for doubtful accounts (reversal).     Provision for doubtful accounts was zero for 2003 compared to income of $0.3 million for 2002.

Net loss (gain) on sale of leasing equipment.     Loss on sale of leasing equipment was $35.9 million for 2003 compared to a loss of $55.8 million for 2002, a decrease of $19.9 million. During 2002 and 2003 a significant effort was made to dispose of units trapped in non-demand locations. During 2002 we experienced a larger per unit loss due to lower average selling prices and high per unit net book values.

Interest and debt expense.     Interest and debt expense was $23.8 million for 2003 compared to $25.1 million for 2002, a decrease of $1.3 million or 5.2%. This decrease was primarily attributable to the decrease in debt associated with a smaller fleet size.

Other parent company charges and management fees.     Other parent company charges and management fees were zero for 2003 compared to $3.6 million in 2002. Our former parent paid $3.6 million of incentive and other management compensation to certain of our employees. The payment was the result of a retention and incentive program established by our former parent.

Income tax (benefit) expense.     Income tax expense was $0.7 million for 2003 resulting in an effective tax rate of 11.2%, compared to an income tax benefit of $15.8 million and an effective tax rate of 36.2% for 2002. The increase in income tax expense was principally due to an increase of income before income taxes of $50.2 million in 2003, partially offset by a one-time cumulative state tax benefit of $1.6 million realized in the first quarter of 2003 resulting from a reduction in state tax rates.

Cumulative effect of accounting change.     A cumulative effect of accounting change was recorded in 2002 of $35.4 million compared to zero in 2003. This was due to the write down of goodwill upon the required adoption of a new accounting standard.

Net income (loss).      Net income was $5.9 million for 2003 compared to a net loss of $63.2 million in 2002, an increase of $69.1 million. The increase in net income was due primarily to all of the factors discussed above.

Liquidity and Capital Resources

Our principal sources of liquidity have been cash flows generated from operations and borrowings under our senior secured credit facility. Our cash will be used to finance capital expenditures, provide working capital and meet debt service requirements. We believe that cash from operations and existing cash, together with available borrowings under our existing senior secured credit facility and our anticipated available borrowings under our new senior secured credit facility and our new asset securitization facility will be sufficient to meet our liquidity requirements for at least the next twelve months. Our future operating performance and ability to extend or refinance our indebtedness will be dependent on future economic conditions and financial, business and other factors that are beyond our control. See "Risk Factors."

Historically, our primary funding source has been cash provided by operations and cash from the sale of our owned used containers. Prior to the Acquisition, we had the ability to borrow from our former parent. As a result of the Acquisition and Related Transactions, however, our capital structure changed, and we are now dependent on third parties for financing. Our current capital structure includes an $875 million senior secured credit facility, which we refer to as our existing senior secured credit facility, and a $275 million senior unsecured credit agreement with an affiliate of our former parent, which we refer to as our existing senior unsecured credit agreement. We anticipate that our

48




existing senior secured credit facility and our existing senior unsecured credit agreement will be refinanced prior to or in connection with this offering. See "New Credit Facilities."

Existing Credit Facilities

Existing Senior Secured Credit Facility

In connection with the Acquisition, Trans Ocean, TAL International Corporation and Trans Ocean Container Corporation, collectively, the borrowers, entered into a senior secured credit facility. Under this facility, the borrowers are permitted to obtain loans of up to an aggregate maximum principal amount of $875.0 million on a revolving basis, subject to a borrowing capacity limitation, until November 3, 2006, after which date the aggregate principal amount of revolving loans then outstanding will be converted into term loans and all borrowing availability under this facility will cease. This facility is secured by a first priority lien on substantially all of the borrowers' assets, other than real property interests and certain other specified assets. The final maturity date of this facility is January 18, 2012.

The borrowing capacity under this facility is based upon a decreasing advance rate percentage of the net book values of certain eligible containers. With respect to the eligible containers owned by the borrowers at the time of the Acquisition, the applicable decreasing advance rate percentage was initially 76.5%, which advance rate percentage decreases by 1% for each full calendar quarter that shall have elapsed since the date of the Acquisition. With respect to eligible containers acquired by the borrowers since the Acquisition, the applicable decreasing advance rate percentage is 80% until November 3, 2006, at which time the advance rate percentage decreases by 1% for each full calendar quarter that shall have elapsed since such date. The portion of the outstanding principal amount of the loans, if any, payable on any payment date is equal to the amount by which the principal amount of the loans then outstanding exceeds the borrowers' then effective borrowing capacity, after taking into account any decrease to the borrowers' borrowing capacity resulting from a reduction in the applicable decreasing advance rate percentages as discussed above.

The loans under this facility bear interest at either the LIBOR rate plus 2.75% per annum or, in a limited set of circumstances, the higher of Citibank N.A.'s prime rate plus 1.5% or the federal funds rate plus 2%. The applicable interest rate will increase by 0.5% in the event that we do not refinance this facility in full by April 30, 2006. As of March 31, 2005, the applicable interest rate under this facility was 5.28%. Principal, interest and fees payable under the facility are due on the eighteenth business day of each calendar quarter.

The facility includes a financial covenant to maintain, commencing with the fiscal quarter ending December 31, 2005, a Consolidated EBIT to Consolidated Cash Interest Expense Ratio, as defined in the credit agreement governing this facility, of at least 1.00 to 1.00, as well as restrictions on incurring indebtedness or liens, paying dividends and other restricted payments, the making of certain investments and certain other matters.

Existing Senior Unsecured Credit Agreement

In connection with the Acquisition, we entered into a senior unsecured credit agreement with an affiliate of our former parent which provided for a $275.0 million term loan facility with a final maturity of November 2, 2014. This credit facility bears interest at an interest rate which increases by 0.25% per annum each 90-day period following the Acquisition, up to a maximum interest rate of 11.5% per annum. As of March 31, 2005, the interest rate under this facility was 9.0%. Accrued interest on this facility is payable in arrears on each April 15 and October 15 of each year. In addition to customary events of default, this facility contains covenants including restrictions on incurring indebtedness or liens, paying dividends and other restricted payments, the making of certain investments and certain other matters.

In the event that we do not prepay the entire outstanding principal amount of the loans under this facility on or prior to November 3, 2005, we may be required to enter into a new indenture and

49




issue a new class of notes in exchange for all of the outstanding loans under this facility. The new indenture and the new notes will have substantially the same terms as the facility, but will additionally provide the holders of such new notes certain registration rights requiring us to file, and cause to become effective, a registration statement under the Securities Act of 1933 which provides for an offer to the holders of the new notes to exchange such new notes for a like principal amount of debt securities which will be identical in all material respects to the new notes but which shall have been registered pursuant to an effective registration statement under the Securities Act of 1933.

In connection with the Acquisition and our entry into this facility, we entered into an agreement with our former parent pursuant to which we deposited $6.0 million into an escrow account. Pursuant to this agreement, this amount is to be distributed to our former parent and/or us, depending on when certain amounts outstanding under the facility are repaid by us or transferred by the lender. As of June 20, 2005, $3.0 million dollars of the escrowed amount has already been disbursed to our former parent. In the event that no portion of the outstanding loans under this facility is repaid by us or transferred by the lender on or prior to the last day of the months of June, July and August of 2005, the remaining $3.0 million will be disbursed to our former parent in monthly installments of $1.0 million. In the event that all or a portion of the outstanding loans under this facility is repaid by us or transferred by the lender on or prior to the last day of such months, a portion of the remaining funds in escrow will be disbursed to us, which portion will be determined by reference to the portion of the original principal amount of the loans under this facility that is so repaid or transferred.

New Credit Facilities

Prior to the closing of this offering, we intend to enter into a new asset securitization facility and a new senior secured credit facility, the proceeds of which we intend to use to repay the entire outstanding principal amount under our existing senior secured credit facility and a portion of the outstanding principal amount under our existing senior unsecured credit agreement.

New Asset Securitization Facility

Prior to the closing of this offering, we intend to enter into a new asset securitization facility pursuant to which one or more of our operating subsidiaries will sell certain eligible containers, together with the related leases, to a newly created special purpose entity (the SPE) whose sole business activity is to issue asset backed notes under our new asset securitization facility. We anticipate that the SPE will initially issue two series of asset backed notes, the Series 2005-1 Notes and the Series 2005-2 Notes. Our new asset securitization facility will be secured by a first priority lien on substantially all of the SPE's assets. We anticipate that the initial sales proceeds to our subsidiaries from the sale of the eligible containers to the SPE will be approximately $       million. The leasing business related to the eligible containers transferred to the SPE will be managed by TAL International Corporation and, in connection with its role as manager, TAL International Corporation will receive management fees equal to 12% of the net cash receipts (after direct operating expenses) of the SPE together with disposition fees equal to 5% of the sales and casualty proceeds in respect of any of the SPE's containers.

Series 2005-1 Notes .    The SPE will initially issue the Series 2005-1 Notes with an initial maximum aggregate principal amount of $775.0 million, which maximum aggregate amount will increase to $875.0 million upon the consummation of this offering. The Series 2005-1 Notes will initially have a three year revolving period and the SPE's borrowing capacity thereunder will be determined by reference to a variable advance rate percentage of the net book values of the SPE's eligible containers, subject to certain adjustments. We anticipate that such variable advance rate percentage will initially equal 80% for the period prior to the consummation of this offering. We further anticipate that, upon the consummation of this offering, such variable advance rate percentage will increase to 82%. Upon the issuance of the Series 2005-2 Notes, the proceeds of which will be used to refinance a portion of the outstanding Series 2005-1 Notes, the maximum aggregate principal amount of the Series 2005-1 Notes will be reduced to $300.0 million and the revolving period for the Series 2005-1 Notes will be decreased to a 364-day period.

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We anticipate that the Series 2005-1 Notes will initially bear interest at the LIBOR rate plus     % per annum during the period prior to the consummation of this offering. We further anticipate that, upon the consummation of this offering, the interest rate on the Series 2005-1 Notes will initially decrease to     % per annum for the first two year period following this offering, and shall then increase to     % per annum thereafter. Upon the occurrence of certain early amortization events, the applicable interest rate will increase by     %. Additionally, prior to the issuance of the Series 2005-1 Notes, we anticipate that the SPE will be obligated to pay a commitment fee equal to     % per annum on any unused portion of the maximum Series 2005-1 Note commitment amount, which commitment fee will, upon the issuance of the Series 2005-2 Notes, decrease to between     % to     %, depending upon whether an insurer is engaged to insure the indebtedness. We anticipate that, prior to the issuance of the Series 2005-2 Notes, accrued interest and fees and a portion of the outstanding principal amount of the Series 2005-1 Notes, together with certain other amounts, will be payable on a quarterly basis, with the portion of the outstanding principal amount of the Series 2005-1 Notes, if any, payable on any such payment date to be equal to the amount by which the principal amount of the Series 2005-1 Notes then outstanding exceeds the SPE's then effective borrowing capacity. Following the issuance of the Series 2005-2 Notes, we anticipate that such amounts will be payable monthly.

Series 2005-2 Notes .    After the issuance of the Series 2005-1 Notes, we anticipate that the SPE will issue Series 2005-2 Notes pursuant to a rated public securitization, the proceeds of which will be used to refinance a portion of the outstanding Series 2005-1 Notes. We anticipate that the SPE will initially issue Series 2005-2 Notes with an initial maximum aggregate principal amount of $875.0 million. The Series 2005-2 Notes will have a one year revolving period, followed by a nine year term loan amortization period, and the SPE's borrowing capacity thereunder will be determined by reference to a advance rate percentage of the net book values of the SPE's eligible containers. We anticipate that such variable advance rate percentage will initially equal 82%. We anticipate that the Series 2005-2 Notes will bear interest at approximately the LIBOR rate plus     % per annum. We anticipate that accrued interest and fees and a portion of the outstanding principal amount of the Series 2005-2 Notes, together with certain other amounts, will be payable on a monthly basis, with the portion of the outstanding principal amount of the Series 2005-2 Notes, if any, payable on any such payment date to be equal to the amount by which the principal amount of the Series 2005-2 Notes then outstanding exceeds the SPE's then effective borrowing capacity.

In addition to customary events of default and early amortization events, we anticipate that the Series 2005-1 and the Series 2005-2 Notes will contain financial covenants such as requirements that (i) the SPE maintain a consolidated EBIT to consolidated cash interest expense ratio of at least 1.10 to 1.00, (ii) we maintain a consolidated leverage ratio of 4.75 to 1.00 or less following the consummation of this offering, (iii) we maintain a consolidated EBIT to consolidated cash interest expense ratio of at least 1.00 to 1.00 prior to the consummation of this offering and at least 1.10 to 1.00 following the consummation of this offering, and (iv) we maintain a consolidated tangible net worth of at least $     million plus 50% of our cumulative net income following the issuance of the Series 2005-1 Notes plus 100% of the net proceeds of this offering, as well as containing restrictions on incurring indebtedness or liens, paying dividends and other restricted payments, the making of certain investments and certain other matters.

New Senior Secured Credit Facility

Prior to the closing of this offering, one or more of our operating subsidiaries, collectively, the borrowers, intend to enter into a new senior secured credit facility providing for a maximum of $175.0 million in revolving loans. This new facility will be secured by a first priority lien on substantially all of the borrowers' assets, other than real property interests and certain other specified assets.

The borrowers' borrowing capacity under this new facility will be based upon a variable advance rate percentage of the net book values of the borrowers' eligible containers, subject to certain adjustments. We anticipate that such variable advance rate percentage will initially equal 70% for the period prior to the consummation of this offering. We further anticipate that, upon the consummation of this offering, such variable advance rate percentage will increase to 85% and thereafter decrease by 1% for each full calendar year that shall have elapsed since the consummation of this Offering.

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We anticipate that the loans under this new facility will bear interest at the LIBOR rate plus     % per annum during the period prior to the consummation of this offering. Following the consummation of this offering, we anticipate that this interest rate will decrease to the LIBOR rate plus     % per annum until such time as the variable advance rate percentage decreases to 82%, at which time the interest rate will be further decreased to the LIBOR rate plus     % per annum. Additionally, we anticipate that the borrowers will be obligated to pay the lenders under this new facility a commitment fee equal to     % per annum on any unused portion of the maximum commitment amount. We anticipate that accrued interest and fees and a portion of the outstanding principal amount of the loans, together with certain other amounts, will be payable on a quarterly basis, with the portion of the outstanding principal amount of the loans, if any, payable on any such payment date to be equal to the amount by which the principal amount of the loans then outstanding exceeds the borrowers' then effective borrowing capacity, after taking into account any adjustment to the borrowers' borrowing capacity as discussed above.

We anticipate that, in addition to customary events of default, this new facility will contain financial covenants such as requirements that (i) we maintain a consolidated leverage ratio of 4.75 to 1.00 or less following the consummation of this offering, (iii) we maintain a consolidated EBIT to consolidated cash interest expense ratio of at least 1.00 to 1.00 prior to the consummation of this offering and at least 1.10 to 1.00 following the consummation of this offering, as well as containing restrictions on incurring indebtedness or liens, paying dividends and other restricted payments, the making of certain investments and certain other matters.

Cash Flow

The following table sets forth certain historical cash flow information for the three years ended December 31, 2004 and the three months ended March 31, 2005.


  Predecessor Combined
Year Ended
December 31,
2004 (a)
Successor
      
Year Ended December 31,
Three Months
Ended
March 31,
2004
Three Months
Ended
March 31,
2005
  2002 2003
  (dollars in millions)
Net cash provided by operating activities $ 123.1   $ 123.7   $ 133.3   $ 67.6   $ 65.0  
Proceeds from disposition of equipment   34.5     46.8     60.9     18.9     43.5  
Acquisition of leasing equipment   (77.6   (94.8   (286.7   (159.7   (53.5
Net cash (used in) investing activities   (44.9   (52.0   (1,441.9   (145.0   (12.0
Net cash provided by/(used in) financing activities   (78.7   (69.9   1,334.4     80.3     (45.0
(a) The results for the combined year ended December 31, 2004 combine the results of the Predecessor for the ten months ended October 31, 2004 with the results of the Successor for the two months ended December 31, 2004 by mathematical addition and do not comply with generally accepted accounting principles. Such data is being presented for analysis purposes only.

Operating Activities

Net cash provided by operating activities decreased $2.6 million to $65.0 million in the three months ended March 31, 2005 compared to $67.6 million in the three months ended March 31, 2004. This decrease was primarily due to additional equipment purchased for resale in the three months ended March 31, 2005 compared to the comparable period of 2004.

Net cash provided by operating activities increased $9.6 million to $133.3 million for the twelve months ended December 31, 2004 compared to $123.7 million for the twelve months ended December 31, 2003. The increase in net cash provided by operating activities was primarily the result of increased net income in fiscal 2004 over fiscal 2003 as previously discussed.

Net cash provided by operating activities increased $0.6 million to $123.7 million for the twelve months ended December 31, 2003 compared to $123.1 million for the twelve months ended December 31, 2002.

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Investing Activities

Net cash used in investing activities decreased $133.0 million to $12.0 million in the three months ended March 31, 2005 compared to $145.0 million in the three months ended March 31, 2004. Capital expenditures were $53.5 million for the three months ended March 31, 2005 compared to $159.7 million in the three months ended March 31, 2004. On January 2, 2004, we elected to exercise a purchase option for 67,251 units for $150.7 million that we had formerly leased-in on an operating lease. Excluding this purchase, capital expenditures increased primarily due to an increase in the level of procurement and an increase in new container prices. Sales proceeds from the disposal of equipment increased $24.6 million to $43.5 million in the three months ended March 31, 2005 compared to $18.9 million in the three months ended March 31, 2004. The increase was due to an increase in container sales prices due to market demand and an increase in units sold. Net cash used to originate finance receivables decreased by $2.2 million to $2.0 million for the three months ended March 31, 2004 compared to $4.3 million for the three months ended March 31, 2004.

Net cash used in investing activities increased by $1,389.9 million to $1,441.9 million for the twelve months ended December 31, 2004 compared to $52.0 million for the twelve months ended December 31, 2003. Cash paid to consummate the Acquisition, net of cash acquired was $1,209.2 million for the twelve months ended December 31, 2004. Capital expenditures were $286.7 million for the twelve months ended December 31, 2004 compared to $94.8 million for the twelve months ended December 31, 2003. This increase was the result of an increase in the level of procurement as well as an increase in new container prices. In addition, on January 2, 2004, we elected to exercise our purchase option contained in an operating lease and purchased 67,251 containers for $150.7 million. Sales proceeds from the disposal of equipment were $60.9 million for the twelve months ended December 31, 2004 compared to $46.8 million for the twelve months ended December 31, 2003. This increase was a result of increased container prices as a result of increased market demands. Other cash used in investing activities was $2.9 million in 2004 related to the funding of finance leases.

Net cash used in investing activities increased by $7.1 million to $52.0 million for the twelve months ended December 31, 2003 compared to $44.9 million for the twelve months ended December 31, 2002. Capital expenditures were $94.8 million for the twelve months ended December 31, 2003 compared to $77.6 million for the twelve months ended December 31, 2002. This increase in capital expenditures was due to an increase in the level of procurement. Sales proceeds from the disposal of equipment were $46.8 million for the twelve months ended December 31, 2003 compared to $34.5 million for the twelve months ended December 31, 2002. This increase was the result of an increase in container sale prices and units sold. Other cash used in investing activities was $2.2 million in 2003 related to the funding of finance leases.

Financing Activities

Prior to the Acquisition, our primary source of financing was our former parent. We maintained a fixed debt-to-capital ratio which resulted in borrowings or repayments and capital transactions with our former parent.

Since the Acquisition, our principal source of financing has been borrowings under our existing senior secured credit facility.

Net cash used in financing activities was $45.0 million for the three months ended March 31, 2005 compared to net cash provided by financing activities of $80.3 million for the three months ended March 31, 2004. Prior to the Acquisition, we maintained a fixed debt-to-capital ratio which resulted in borrowings or repayments and capital transactions with our former parent. In the three months ended March 31, 2005, net cash used in financing activities was primarily used to pay down borrowings under our existing senior secured credit facility.

Net cash provided by financing activities was $1,334.4 million for the twelve months ended December 31, 2004 compared to net cash used in financing activities of $69.9 million for the twelve months ended December 31, 2003. During 2004, net cash provided by our former parent prior to the Acquisition for the ten month period ended October 31, 2004 was $115.4 million. In order to finance

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the Acquisition, Trans Ocean, TAL International Corporation and Trans Ocean Container Corporation, each of which is a direct or indirect wholly-owned subsidiary of ours, entered into our existing $875.0 million senior secured credit facility and made initial borrowings of $805.0 million thereunder, we entered into our existing $275.0 million senior unsecured credit agreement and made initial borrowings of $275.0 million thereunder and certain of our equity investors made preferred and common equity investments in us in an aggregate amount of $200.1 million. Following the Acquisition, we used $8.0 million to pay down our borrowings under our existing senior secured credit facility. During 2003, we maintained a fixed debt-to-capital ratio which resulted in borrowings or repayments and capital transactions with our former parent.

Net cash used in financing activities was $69.9 million for the twelve month period ended December 31, 2003 compared to $78.7 million for the twelve month period ended December 31, 2002. We maintained a fixed debt-to-capital ratio which resulted in borrowings or repayments and capital transactions with our former parent.

Financial Covenants

Under our existing senior secured credit facility, commencing with the fiscal quarter ending December 31, 2005, we must maintain a minimum Consolidated EBIT to Consolidated Cash Interest Expense Ratio. As of March 31, 2005, we were in compliance with this financial covenant.

Contractual Obligations

We are parties to various operating leases and are obligated to make payment related to our long term borrowings. We are also obligated under various commercial commitments, including obligations to our equipment manufacturers. Our equipment manufacturer obligations are in the form of conventional accounts payable, and are satisfied from cash flow from operating and long term financing. The following table summarizes our contractual obligations and commercial commitments as of December 31, 2004.


  Payments Due by Period
  (dollars in thousands)
Contractual Obligations Total Less
than
1 year
1-3
years
3-5
years
More
than
5 years
Total debt obligations:                              
Senior secured credit facility (a) $ 797.0   $ 0.0   $ 328.9   $ 455.4   $ 12.7  
Senior unsecured credit agreement   275.0     0.0     0.0     0.0     275.0  
Capital lease obligations                    
Operating leases   10.7     3.4     2.2     2.7     2.4  
Purchase obligations   35.2     35.2     0.0     0.0     0.0  
Other long-term obligations   0.0     0.0     0.0     0.0     0.0  
Total contractual obligations $ 1,117.90   $ 38.6   $ 331.1   $ 458.1   $ 290.1  
(a) On November 3, 2006, the principal on this revolving facility will be converted into a term loan. The amortization of the term loan is assumed to be ratable over the remaining 87 months. However, prior to the closing of this offering, we intend to enter into a new securitization facility and a new senior secured credit facility, the proceeds of which we intend to use to repay the entire outstanding principal amount of this facility.

Off-Balance Sheet Arrangements

We are party to an interest rate swap agreement with a notional amount of $500 million. This interest rate swap was entered into on December 14, 2004, with a 7 year term and fixed rate of 3.8225% and requires us to settle the difference in interest obligations on a quarterly basis.

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At March 31, 2005, with the exception of the interest rate swap mentioned above, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. We are, therefore, not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.

Effect of Inflation

Inflation generally affects us by increasing our costs for equipment, repositioning and labor. We do not believe that inflation has had any material effect on our results of operations during 2002, 2003, 2004 or through March 31, 2005.

Critical Accounting Policies

Our consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States, which require us to make estimates and assumptions that affect the amounts and disclosures reported in the consolidated financial statements and accompanying notes. Our estimates are based on historical experience and currently available information. Actual results could differ from such estimates. The following paragraphs summarize our critical accounting estimates. Additional accounting policies are discussed in the notes to our historical financial statements contained elsewhere in this prospectus.

Revenue Recognition

Operating Leases with Customers

We enter into long-term leases and service leases with ocean carriers, principally as lessor in operating leases, for marine cargo containers. Long-term leases provide the ocean carriers with specified container equipment for a specified term. The rentals are based upon the number of containers leased, the applicable per diem rate and the length of the lease. Long-term leases typically range for a period of three to eight years. Revenues are recognized on a straight-line basis over the life of the respective lease. Advanced billings are deferred and recognized in the period earned. Service leases do not specify the exact number of containers to be leased or the term that each container will remain on-hire but allow the ocean carrier to pick up and drop off containers at various locations specified in the lease agreement. Under a service lease, rental revenue is based on the number of containers utilized at contracted per diem rates. Revenue for customers where collection is not assured is deferred and recognized when the amounts are received. Also, in accordance with EITF No. 99-19, Reporting Revenue Gross as a Principal versus Net as an Agent, we recognize billings to customers for damages incurred and certain other pass through costs as leasing revenue as it is earned based on the terms of the contractual agreements with the customer.

Direct Finance Leases with Customers

We enter into direct finance leases as lessor for container equipment that we own. The net investment in direct finance leases represents the receivables due from lessees, net of unearned income. Unearned income is recognized on a level yield basis over the lease term and is recorded as other revenue. Direct finance leases are usually long-term in nature, typically ranging for a period of five to ten years and may include a bargain purchase option to purchase the equipment at the end of the lease term.

Management Fee Income

We manage equipment, which is owned by third parties and we earn management fees based on the income earned by the leasing of such equipment. Amounts we collect as agent on behalf of third parties that own such equipment are not included in revenue and costs paid for managed equipment are not included in expense.

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Equipment Trading Revenue

Equipment trading revenue represents the proceeds on the sale of equipment purchased for resale. The related expenses are recognized as incurred and are disclosed as equipment trading expense in the consolidated statements of operations.

Other Revenues

Other revenues include fee income for third party positioning of equipment and income earned on direct finance leases.

Direct Operating Expenses

Direct operating expenses are directly related to our equipment under and available for lease. These expenses primarily consist of our costs to repair and maintain the equipment, to store the equipment when it is not on lease, to re-position the equipment and a provision for equipment lost or not expected to be returned. These costs are recognized when incurred. In limited situations, certain re-positioning costs may be capitalized.

Leasing Equipment

Leasing equipment is recorded at cost and depreciated to an estimated residual value on a straight-line basis over the estimated useful life. We will continue to review our depreciation policies on a regular basis to determine whether changes have taken place that would suggest that a change in our depreciation policies, useful lives of our equipment or the assigned residual values is warranted. In addition, periodically a determination is made, if indicators of impairment are present, as to whether the carrying value of our fleet exceeds its estimated future undiscounted cash flows. The estimated useful lives for our leasing equipment ranges from 10 to 15 years from the date of manufacture, for both the Successor and Predecessor companies. Estimated useful lives have been based on independent appraisals and will be adjusted if necessary based on actual experience. Costs incurred to place new equipment into service, including costs to transport the equipment to its initial on-hire location, are capitalized. We charge repair and maintenance costs, that do not extend the lives of the assets, as incurred and is included in direct operating expenses.

An allowance is provided through direct operating expenses based on the net book value of a percentage of the units on lease to certain customers that are considered to be non-performing which we believe we will not ultimately recover. The percentage is developed based on historical experience.

Equipment Held for Sale

In accordance with the Financial Accounting Standards Board ("FASB") Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets ("SFAS No. 144"), container equipment held for sale is carried at the lower of its fair value, based on current transactions, less costs to sell or carrying value, depreciation on such assets is halted and disposals generally occur within ninety days. Subsequent changes to the asset's fair value, either increases or decreases, are recorded as adjustments to the carrying value of the equipment held for sale; however, any such adjustments would not exceed the equipment's carrying value at the time it was initially classified as held for sale. Initial write-downs of assets held for sale are recorded as an impairment charge and are included in net loss (gain) on sale of leasing equipment. Realized gains and losses resulting from the sale of equipment held for sale are recorded as a net loss (gain) on sale of leasing equipment.

Allowance for Doubtful Accounts

Our allowance for doubtful accounts is updated on a regular basis and is based upon a review of the collectibility of our receivables. This review considers the risk profile of the customer, credit quality indicators such as the level of past-due amounts and economic conditions. An account is considered past due when a payment has not been received in accordance with the contractual terms.

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Accounts are generally charged off after an analysis is completed which indicates that collection of the full principal balance is in doubt. Changes in economic conditions or other events may necessitate additions or deductions to the allowance for doubtful accounts. The allowance for doubtful accounts is intended to provide for losses inherent in the accounts receivable, and requires the application of estimates and judgments as to the outcome of collection efforts and the realization of collateral, among other things. We believe its allowance for doubtful accounts is adequate to provide for credit losses inherent in its accounts receivable. However, actual losses could exceed the amounts provided for in certain periods.

Income Taxes

We account for income taxes in accordance with Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes , ("SFAS No. 109"). Under SFAS No. 109, deferred tax assets and liabilities are determined based on the difference between our financial statements and the tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

In conjunction with the Acquisition, we and the seller elected to have the provisions of Internal Revenue Code Section 338(h)(10) apply to the sale, resulting in the transaction being treated as a taxable asset sale for U.S. income tax purposes. As a result of this election, the tax basis of the Company's assets and liabilities have been adjusted to fair market value, resulting in the elimination of the U.S. net deferred tax liability balance that existed immediately prior to the sale.

Goodwill

In accordance with SFAS No. 142, "Goodwill and Other Intangibles" we will evaluate our goodwill balance for possible impairment at least annually, in the fourth quarter of each year. A review of goodwill may also be initiated if events or circumstances indicate the carrying value may be impaired. In the future, in performing this evaluation management will consider many factors including projected future operating results and cash flows, economic trends and other market place data.

Recently Issued Accounting Pronouncements

In December 2004, the FASB issued SFAS No. 123R, Share-Based Payment, (revised 2004), ("SFAS No. 123R"). This Statement is a revision of SFAS No. 123. SFAS No. 123R supercedes APB No. 25, and its related implementation guidance. SFAS No. 123R requires companies to recognize in the statement of operations the fair value of all employee share-based payments, including grants of employee stock options, as well as compensatory employee stock purchase plans. We are evaluating the requirements under SFAS 123R including the valuation methods and support for the assumptions that underlie the valuation of the awards, as well as the transition methods (modified prospective transition method or modified retrospective transition method). We are required to adopt SFAS No. 123R on January 1, 2006. Based on the number of options currently outstanding, management does not expect the adoption of SFAS No. 123R to have a significant impact on our financial position, results of operations or cash flows. However, all future grants of shared-based compensation will result in the recognition of compensation expense.

In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets – an amendment of APB Opinion No. 29 ("SFAS No. 153"). This statement amends Accounting Practices Board Opinion No. 29, Accounting for Nonmonetary Transaction, to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. We do not expect the introduction of SFAS 153 to have any impact on its consolidated financial statements.

In December 2004, the FASB issued FASB Staff Position ("FSP") 109-1 and 109-2. FSP 109-1 provides guidance on the application of SFAS No. 109, Accounting for Income Taxes, with regard to

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the tax deduction on qualified production activities provision with H.R. 4520 The American Jobs Creation Act of 2004 (the "Act") that was enacted on October 22, 2004. FSP 109-2 provides guidance on a special one-time dividends received deductions on the repatriation of certain foreign earnings of qualifying U.S. taxpayers. In FSP 109-2, the FASB acknowledged that, due to the proximity of the Act's enactment date to many companies' year ends and the fact that numerous provisions within the Act are complex and pending further regulatory guidance, many companies may not be in a position to assess the impacts of the Act on their plans for repatriation of reinvestment of foreign earnings. Therefore, the FSP provided companies with a practical exception to the permanent reinvestment standards of SFAS No. 109 and APB No. 23 by providing additional time to determine the amount of earnings, if any, that they intend to repatriate under the Act's provisions. We are not yet in a position to decide whether, and to what extent, we might repatriate foreign earnings to the U.S. Therefore, under the guidance provided in FSP 109-2, no deferred income tax liability has been recorded in connection with the repatriation provisions of the Act. We are currently analyzing the impact of the temporary dividends received deduction provisions contained in the Act.

Quantitative and Qualitative Disclosures About Market Risk

Market risk represents the risk of changes in value of a financial instrument, derivative or non-derivative, caused by fluctuations in interest rates, foreign exchange rates and equity prices. Changes in these factors could cause fluctuations in results of our operations and cash flows. In the ordinary course of business, we are exposed to foreign currency and interest rate risks.

Foreign Currency Exchange Rate Risk

Although we have significant foreign-based operations, the U.S. dollar is the operating currency for the majority of our leases (both customers obligations and company obligations). Thus, substantially all of our net sales and our expenses in fiscal years 2002, 2003 and 2004 were denominated in U.S. dollars. Foreign currency fluctuations did not materially impact our financial results in those periods.

Interest Rate Risk

We enter into interest rate swaps for purposes other than trading as part of our overall market risk management practices. We assess and manage the external and internal risk associated with these derivative instruments in accordance with the overall operating goals. External risk is defined as those risks outside of our direct control, including counterparty credit risk, liquidity risk, systemic risk and legal risk. Internal risk relates to those operational risks within the management oversight structure and includes actions taken in contravention of our policy.

The primary external risk of our interest rate swap agreements instruments is counterparty credit exposure, which is defined as the ability of a counterparty to perform its financial obligations under a derivative contract. All derivative agreements are with major money center financial institutions rated investment grade by nationally recognized rating agencies, with the majority of our counterparties rated "AA" or better. Credit exposures are measured based on the market value of outstanding derivatives instruments. Both current exposures and potential exposures are calculated for each derivative contract to monitor counterparty credit exposure. As of March 31, 2005, the notional principal amount underlying our interest rate swap agreement was $500 million.

As a result of our variable rate indebtedness, our earnings are affected by changes in interest rates. However, we utilize interest rate swap agreements to manage the market risk associated with fluctuations in interest rates. If market interest rates for our variable rate indebtedness averaged 50 basis points more than the weighted average interest rate actually paid during 2004, our interest expense, after considering the effects of our interest rate swap agreements, would have increased, and income before incomes taxes would have decreased, by $1.5 million. These amounts are determined by considering the impact of the hypothetical interest rates on our borrowings and interest rate swap agreements. This analysis does not consider the effects of the reduced level of overall economic activity that could exist in such an environment.

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Credit Risk

We maintain detailed credit records regarding our customers and set maximum exposure limits for our significant customers based on our review of these records. Credit criteria include, but are not limited to, customer payment history, customer financial position and performance (e.g., net worth leverage, profitability, trade routes, country of domicile, social and political climate, and the type of, and location of, containers that are to be supplied.) We diligently monitor our customers' performance and our lease exposures on an ongoing basis, and our credit management processes are aided by the long payment experience we have with most of our customers and our broad network of long-standing relationships in the shipping industry that provide current information about our customers.

Industry factors that provide incremental credit protection include the strong growth in the container industry, effective collection tools, our high recovery rate for containers in default situations and the re-marketability of our container fleet. The strong growth in the container industry helps minimize the risk of customer defaults since the core assets of a poorly performing shipping line, its ships and containers, are generally needed to meet world containerized trade demand. As a result, poorly performing shipping lines are often acquired by others. In addition, the law in certain major port locations is highly favorable to creditors and many of our large customers call on ports that will allow us to arrest, or seize, the customer's ships or bunkers, or repossess our containers if the customer is in default under our container leases. We have historically recovered approximately 90% of our containers that were subject of defaulted contracts and we are able to successfully re-market these repossessed containers through our worldwide sales infrastructure. However, we typically incur operating expenses such as repairs and repositioning when containers are recovered after a customer default.

In 2004, our five largest customers accounted for approximately 44% of our leasing revenues, with our largest customer accounting for approximately 16% of our leasing revenues. Approximately 75% of our containers are currently on-hire to our 20 largest customers.

The allowance for doubtful accounts includes an estimate of allowances necessary for receivables on both our operating and direct financing lease receivables.

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BUSINESS

Our Company

We were formed in 1963 and are one of the world's largest and oldest lessors of intermodal freight containers. Intermodal freight containers are large, standardized steel boxes used to transport freight by ship, rail or truck. Because of the handling efficiencies they provide, intermodal freight containers are the primary means by which many goods and materials are shipped internationally. According to Drewry, the worldwide container shipping industry is a $148.7 billion industry, as measured by the gross revenues of shipping lines, in which volume has grown at a CAGR of 9.0% from 1980 to 2004.

Our operations include the acquisition, leasing, re-leasing and subsequent sale of multiple types of intermodal containers. According to Containerisation International, we are the world's third largest lessor of intermodal containers as measured by fleet size, with an approximately 11% market share of the world's leased container fleet. As of March 31, 2005, our fleet included approximately 613,324 containers (with approximately 82,031 containers under management for third parties), representing approximately one million twenty-foot equivalent units (TEU). We also believe that we are the world's largest seller of used containers. We have an extensive global presence, offering leasing services through 19 offices in 12 countries and approximately 190 third party container depot facilities in 39 countries as of May 31, 2005. Our customers are among the world's largest shipping lines and include, among others, APL-NOL, CMA-CGM, CP Ships, Hanjin Shipping, Maersk-Sealand, Mediterranean Shipping Company and NYK Line.

We generated total revenues, Adjusted EBITDA and net income of $         million, $         million and $         million, respectively, for fiscal 2004 on a pro forma basis, and $        million, $        million and $        million, respectively, for the three months ended March 31, 2005 on a pro forma basis. We had total assets of $1,320.9 million at December 31, 2004 and $1,347.0 million at March 31, 2005.

We lease three principal types of containers: (1) dry freight containers, which are used for general cargo such as manufactured component parts, consumer staples, electronics and apparel, (2) refrigerated containers, which are used for perishable items such as fresh and frozen foods, and (3) special containers, which are used for heavy and oversized cargo such as marble slabs, building products and machinery. As of March 31, 2005, dry, refrigerated and special containers represented 87%, 6% and 7% of our fleet on a unit basis, respectively. For the fiscal year 2004, dry, refrigerated and special containers represented 60%, 30% and 10% of our leasing revenues, respectively, and for the three months ended March 31, 2005, dry, refrigerated and special containers represented 59%, 30% and 11% of our leasing revenues, respectively.

We lease our containers on a per diem basis to our customers under three types of leases: long-term leases, service leases and finance leases. Long-term leases, typically with terms of three to eight years, provide us with predictable cash flow and low transaction costs by requiring customers to maintain specific containers on-hire for the duration of the lease. Service leases command a premium per diem rate in exchange for providing customers with a greater level of operational flexibility by allowing the pick-up and drop-off of containers during the lease term. Finance leases, which are typically structured as full payout leases, provide for a predictable recurring revenue stream with the lowest daily cost to the customer because customers are generally required to retain the container for the duration of its useful life. In each case, our leases require lessees to maintain the containers in good operating condition, defend and indemnify us from liabilities relating to the containers' contents and handling and return the containers to specified drop-off locations. As of March 31, 2005, 92% of our containers were on-hire to customers, with 62% of our containers on long-term leases, 28% on service leases or long-term leases whose fixed terms have expired but for which the related units remain on-hire and for which we continue to receive rental payments and 2% on finance leases. As of March 31, 2005, our long-term leases had an average remaining lease term of 34 months. In addition, less than 7% of our containers were available for lease and less than 2% were available for sale.

Our total revenues primarily consist of leasing revenues derived from the lease of our owned containers and, to a lesser extent, fees received for managing containers owned by third parties and

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equipment trading revenue. The most important driver of our profitability is the extent to which leasing revenues, which are driven primarily by our owned container fleet size, utilization and average rental rates, exceed our operating costs, which primarily consist of depreciation and amortization, interest expense, direct operating expenses and administrative expenses. We seek to exceed a targeted return on our investment over the life cycle of each container by managing container utilization, per diem lease rates, drop-off restrictions and the used container sale process.

Industry Overview

According to Drewry, the container shipping industry is a $148.7 billion industry, as measured by the gross revenues of shipping lines. Containers provide a secure and cost-effective method of transporting raw materials, component parts and finished goods because they can be used in multiple modes of transport. By making it possible to move cargo from a point of origin to a final destination without repeated unpacking and repacking, containers reduce freight and labor costs. In addition, automated handling of containers permits faster loading and unloading of vessels, more efficient utilization of transportation equipment and reduced transit time. The protection provided by sealed containers also reduces cargo damage and the loss and theft of goods during shipment.

Over the last twenty-five years, containerized trade has grown at a rate greater than that of general worldwide economic growth. According to Drewry, worldwide containerized cargo volume grew in every year from 1980 through 2004, attaining a CAGR of 9.0% during that period. Furthermore, Clarkson projects that loaded container lifting, which is a measure of volume in the industry, will increase by 11.2% in 2005 and 10.3% in 2006. We believe that this projected growth is due to several factors, including the shift in global manufacturing capacity to lower labor cost areas such as China and India, the continued integration of developing high growth economies into global trade patterns, the continued conversion of cargo from bulk shipping into containers and the growing liberalization and integration of world trade.

Current trends in containerized shipbuilding also support expectations for increased container demand. According to Clarkson, the current orderbook for containerships set to be delivered between 2005 and 2008 represents approximately 4.4 million TEU of vessel capacity, or 53.4% of the existing containership fleet, with a significant portion of the orders concentrated on the larger (4,000 TEU or greater) ships. Given that most shipping lines utilize approximately two TEU of containers for each TEU of vessel capacity, we believe that near-term container demand should remain strong.

The percentage of owned versus leased containers utilized by shipping lines has been fairly stable over the last decade, with leased containers making up slightly less than one half of the total container fleet. According to Drewry, container lessors' ownership was approximately 8.9 million TEU or 45.8% of the total worldwide container fleet of 19.4 million TEU in 2004. In general, leasing containers helps shipping lines improve their overall container fleet efficiency and provides the shipping lines with an alternative source of equipment finance. Given the uncertainty and variability of export volumes, and the fact that shipping lines have difficulty in accurately forecasting their container requirements at a port-by-port level, the availability of containers for lease significantly reduces a shipping line's need to purchase and maintain larger container inventory buffers. In addition, the flexibility provided by operating leases also allows the shipping lines to adjust their container fleet sizes both seasonally and over time and helps to balance trade flows. Leasing containers also provides shipping lines with an additional source of funding to help them manage a high-growth, asset-intensive business.

Container leasing rates are typically a function of, among other things, new container prices (which are heavily influenced by steel prices), interest rates and the container supply and demand balance at a particular time and location. Beginning in 2003, global steel prices and container demand began to increase significantly, resulting in higher new and used container prices and significant increases in new and used container leasing rates. Average leasing rates on an entire portfolio of container leases respond more gradually to changes in new container prices, because lease agreements can only be re-priced upon the expiration of the lease. In addition, the value that lessors receive upon resale of containers is closely related to the cost of new containers.

While international containerized trade has grown rapidly and been consistently positive for the last twenty-five years, the shipping business has been characterized by cyclical swings due to lengthy

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periods of excess or scarce vessel capacity. We believe that these sustained periods of vessel supply/demand imbalances are mainly caused by the multi-year ordering and production cycle associated with the manufacture of new vessels, which requires shipping lines to estimate market growth many years into the future. Container leasing companies are partially insulated from the impacts of such shipping cycles by the relatively short production time associated with the manufacture of new containers. Lead-times for new container orders are typically only a few months (compared to the multi-year ordering and production cycle for new vessels), so the rate of new container ordering can be quickly adjusted to reflect unexpected market changes.

Competitive Strengths

We believe that our core competitive strengths include:

Leading market position .    As measured by TEU, we believe that we are the world's third largest lessor of containers and the largest seller of used containers. We believe that we enjoy a leading competitive position in the container leasing industry through our extensive global network, which comprises 19 offices in 12 countries and approximately 190 independent contracted container depots in 39 countries as of May 31, 2005. Our scale and worldwide operations provide us with cost and capability advantages relative to smaller leasing companies. In addition, our long-standing reputation for service reliability encourages many customers to rely on us to meet their unanticipated container needs worldwide.

Attractive long-term lease portfolio.     We concentrate on leasing our equipment on a long-term basis. Over the last five years we have adjusted the mix of our lease portfolio to focus on long-term leases, and have increased the percentage of our container fleet under long-term leases and finance leases from 48% at December 31, 2000 to 64% at March 31, 2005. The long-term nature of our lease portfolio provides us with a predictable source of revenue and operating cash flow, enabling us to manage and grow our business more effectively. For the twelve months ended December 31, 2004, and the three months ended March 31, 2005, our average utilization for containers was 93.0% and 92.8%, respectively. We have also structured the terms of our long-term and service leases to reduce the ability of customers to return containers to locations with weak export markets, thereby reducing our container repositioning expenses.

Strong, long-standing customer relationships.     We serve a large number of customers, including many of the world's largest shipping lines, whose businesses span many geographic regions and involve the transportation of a diverse range of products. Our forty-two years in the business have allowed us to develop broad and deep relationships with our key customers and to build a reputation for service reliability and quality. Our top ten customers, as measured by revenue, have leased containers from us for an average of over 20 years. As result of these relationships with key customers, we believe that we have more leasing opportunities than our newer or smaller competitors and we typically experience lease renewal rates of approximately 70% for containers which are not scheduled to be sold.

Strong historical credit performance.     Over the last five years, our write offs of customer receivables have averaged less than 0.35% of our average total assets over such period. We believe that this strong credit performance is due not only to our comprehensive lease underwriting and monitoring, which is due, in part, to procedures which were developed during our twenty-five years of ownership by a major insurance and finance company, but also to several attributes of our container leasing business. These attributes include the size and credit quality of our customers, the high recovery rate of containers in default situations (which has exceeded 90% over the last five years) and high remarketability of containers.

Market leader in the sale of used containers .    We believe that we are the world's largest seller of used containers, having sold over 50,000 used containers in each of the last five years on behalf of ourselves and third parties. We manage our own container disposals, act as the disposal agent for a number of our shipping line customers and buy and sell used containers on an opportunistic basis. We believe that our ability to sell containers directly to end-users provides us with a higher and more reliable residual value for our containers than can be achieved by other leasing companies who rely primarily on third-party depots for container disposals.

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Experienced management team .    Our senior management team has a diversified set of credentials and related leasing experiences, with our key officers having an average of approximately 20 years of industry experience and approximately 15 years of service with us. Furthermore, our customer service and sales representatives, who have an average of approximately 10 years of experience in the industry, have developed long-term customer relationships that afford us access to sales opportunities with leading shipping lines.

Business Strategy

We intend to leverage our leading market position in container leasing to profitably grow our business by pursuing the following strategies:

Increase revenues and operating cash flow by investing in our container fleet .    Our previous owner limited our ability to invest in growing our container fleet. From 2001 to 2004, our capital expenditures (excluding certain 2004 expenditures for the purchase of used container equipment which we had been leasing under an operating lease) averaged approximately $96.1 million annually for all equipment types. By contrast, for fiscal 2005, we anticipate capital expenditures for new containers to exceed $200 million. We plan to place the majority of these new containers on long-term leases at lease rates that meet or exceed our targeted investment returns. Going forward, we intend to selectively increase our investment in new containers. We believe that we can add a significant volume of new container leases and increase our container fleet without making significant incremental investments in our infrastructure, information systems or headcount.

Re-lease existing fleet at attractive rates.     We believe that our existing portfolio of leased containers will benefit from the current strong container leasing market environment as we will be able to re-lease these containers at higher rates upon expiration of the current leases. We estimate that the average daily rate of the dry containers in our lease portfolio was 34% below the current container market lease rate for new containers as of June 2005.

Maintain discipline on leasing terms.     We seek to exceed a targeted return on investment over the life cycle of each container. In order to achieve this return, we plan to maintain our focus on long-term leases and to continue to include tight drop-off restrictions in our lease agreements. We believe that our lease structuring discipline has been a major factor in allowing us to increase our utilization and reduce our operating expenses over the last five years, and we are committed to maintain pricing, structuring and credit discipline as we increase the size of our container fleet.

Expand customer product offerings.     We believe that we are well-positioned to explore new market opportunities related to our core container leasing business, including U.S. chassis leasing and direct finance leasing for containers. A chassis is a truck trailer built specifically for the purpose of transporting containers on land. We have recently hired key management personnel to oversee our entrance into the U.S. chassis leasing market and we anticipate receiving delivery of our initial orders of chassis in the third quarter of 2005. We believe that chassis are a natural extension of our container business because the chassis customer base overlaps with our container customer base. In addition, because we previously owned a chassis leasing business, we believe that we will be able to expand our recent entry into the market without significant additional headcount or systems cost. In addition, prior to our former parent's sale of a business unit, certain members of our senior management team focused on the origination and writing of finance leases, and we intend to pursue opportunities in the future to increase the proportion of finance leases in our portfolio. We believe that our previous experience in originating and structuring finance leases, coupled with our regular purchasing of containers, our close operating relationships with the world's largest shipping lines and our ability to recover and re-market containers in the event of customer defaults, will allow us to selectively grow our finance lease portfolio.

Pursue acquisitions on a financially disciplined basis .    We will seek to acquire container leasing companies, related businesses and container fleet portfolios as they become available. Due to the scalable nature of our fleet management systems and sales force, we believe that we can manage a larger container lease portfolio without substantially increasing our infrastructure costs. Since 1994, we have completed acquisitions of two container leasing businesses and various container portfolios and have successfully integrated these assets into our fleet.

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Operations

Container Fleet Overview

As of March 31, 2005, we operated approximately one million TEU. Our container fleet consists of three types of containers: dry containers, refrigerated containers and special containers. The containers that we lease are either owned outright by us, leased-in from third-parties, or owned by third-parties and managed by us. The table below summarizes the composition of our fleet by the type of unit:


  Fleet as of March 31, 2005
  Drys Specials Refrigerated Total
Owned   453,308     27,906     32,688     513,902  
Finance leases and other leasing units (1)   15,591     559     1,241     17,391  
Total owned   468,899     28,465     33,929     531,293  
                         
Managed   63,130     17,207     1,694     82,031  
Total fleet   532,029     45,672     35,623     613,324  
% of Fleet owned   88.1   62.3   95.2   86.6
(1) Not included in utilization.

We operate our business through 19 worldwide offices located in 12 different countries as of May 31, 2005. Our operations include a global sales force, a global container operations group, a container resale group, and a logistics services group. Our headquarters are located in Purchase, New York.

Our Containers

Intermodal containers are designed to meet a number of criteria outlined by the International Standards Organization (ISO). The standard criteria include the size of the container and the gross weight rating of the container. This standardization ensures that containers can be used by the widest possible number of transporters and it facilitates container and vessel sharing by the shipping lines. The standardization of the container is also an important element of the container leasing business since we can operate one fleet of containers that can be used by all of our major customers.

Our container fleet consists of three types of containers:

•  Dry Containers .    A dry container is essentially a steel-constructed box with a set of doors on one end. Dry containers come in lengths of 20', 40' or 45'. They are 8' wide, and either 8'6" or 9'6" tall. Dry containers are the least-expensive type of intermodal container and are used to carry most types of freight. As of March 31, 2005, our fleet included approximately 532,029 dry containers, which accounted for 87% of our container fleet.
•  Refrigerated Containers .    Refrigerated containers include an integrated cooling machine and an insulated container, and these containers are typically used to carry perishable cargo such as fresh and frozen produce. As of March 31, 2005, our fleet included approximately 35,623 refrigerated containers, which accounted for 6% of our container fleet.
•  Special Containers .    Most of our special containers are open top and flat rack containers. Open top and flat rack containers are generally used to move heavy or bulky cargos, such as marble slabs, steel coils or factory components, that cannot be easily loaded on a fork lift into a standard container. As of March 31, 2005, our fleet included approximately 45,672 special containers, which accounted for 7% of our container fleet.

Our Leases

Most of our revenues are derived from leasing our fleet of containers to our core shipping line customers. The vast majority of our container leases are structured as operating leases, though we also

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provide customers with finance leases. Regardless of lease type, we seek to exceed our targeted return on our container investments over the life cycle of each container by managing container utilization, lease rates, drop-off restrictions and the used container sale process.

Our lease products provide numerous operational and financial benefits to our shipping line customers. These benefits include:

•  Operating Flexibility .    The timing, location and daily volume of cargo movements for a shipping line are often unpredictable. Leasing containers helps the shipping lines manage this uncertainty and minimize the requirement for large inventory buffers by allowing them to pick-up leased containers on short notice.
•  Fleet Size Flexibility .    Container leases allow shipping lines to adjust the size of their fleets as their trade volumes change due to seasonality, market changes or changes in company strategies.
•  Alternative Source of Financing .    Container leases provide an additional source of equipment financing to help shipping lines manage the high level of investment required to maintain pace with the rapid growth of the asset-intensive container shipping industry.

Operating Leases .    Operating leases are structured to allow customers flexibility to pick-up containers on short notice and to drop-off containers prior to the end of their useful life. Because of this flexibility, most containers will go through several pick-up and drop-off cycles. Our operating lease contracts specify a per diem rate for each container on-hire, where and when such containers can be returned, how the customer will be charged for damage and the charge for lost or destroyed containers, among other things.

We categorize our operating leases as either long-term leases or service leases. Long-term lease terms typically range from three to eight years with an average term of approximately five years at lease inception. Our long-term leases require our customers to maintain all units on-hire for the duration of the lease term, and they provide us with predictable recurring cash flow. As of March 31, 2005, 62% of our containers were on-hire under long-term leases. As of March 31, 2005, our long-term leases had an average remaining duration of 34 months, assuming no leases are renewed. However, we believe that many of our customers will renew leases for containers that are less than sale age at the expiration of the lease. We estimate that over the last three years, our lease renewal rate has been over approximately 70% in such cases. In addition, our containers typically remain on-hire at the contractual per diem rate for an additional six to eight months beyond the end of the contractual lease term due to the logistical requirements of our customers having to return containers to specific drop-off locations.

The following are the minimum future rentals at December 31, 2004 due to us under long-term leases (in thousands):


2005 $ 165,778  
2006   134,789  
2007   101,738  
2008   62,411  
2009 and thereafter   66,357  
  $ 531,073  

Some of our long-term leases give our customers Early Termination Options (ETOs). If exercised, ETOs allow customers to return containers prior to the expiration of the long-term lease. However, if an ETO is exercised, the customer is required to pay a penalty per diem rate that is applied retroactively to the beginning of the lease. As a result of this retroactive penalty, ETOs have historically rarely been exercised.

Service leases allow our customers to pick-up and drop-off containers during the term of the lease, subject to contractual limitations. Service leases provide the customer with a higher level of

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flexibility than term leases and, as a result, typically carry a higher per diem rate. As of March 31, 2005, 28% of our containers were on-hire under service leases and these containers have been on-hire for an average of 44 months.

Finance Leases.     Finance leases provide our customers with an alternative method to finance their container acquisitions. Finance leases typically have lease terms ranging from five to ten years. Finance leases are generally structured for specific quantities of containers (usually new containers) and generally require the customer to keep the containers on-hire for their remaining useful life, and provide the customer with a purchase option at the end of the lease term. Shipping lines generally consider finance leases a financing product for their owned containers, and the daily cost of a finance lease is typically less than the daily cost of an operating lease. Finance leases are reflected as "Net investment in direct finance leases" on our balance sheet. As of March 31, 2005, 2% of our containers were on-hire under finance leases.

Lease Documentation.     In general, our lease agreements consist of two basic elements, a master lease agreement and a lease addendum. Lease addenda contain the business terms (including daily rate, term duration and drop-off schedule, among other things) for specific leasing transactions, while master lease agreements outline the general rights and obligations of the lessor and lessee under all of the lease addenda covered by the master lease agreement (lease addenda will specify the master lease agreement that governs the lease addenda). For most customers, we have a small number of master lease agreements (often one) and a large number of lease addenda.

We have a standard master lease agreement form for our customers. Some lessees request that we use their agreement form or negotiate modifications to our standard form. The master lease agreements require the lessees to pay rentals, depot charges, taxes and other charges when due, to maintain the containers in good condition and repair, to return the containers in good condition in accordance with the return condition set forth in the master lease agreement, to use the containers in compliance with all laws, and to pay us for the value of the container as determined by us if the container is lost or destroyed. The default clause gives us certain legal remedies in the event that the lessee is in breach of the lease.

The master lease agreements contain an exclusion of warranties clause and require lessees to defend and indemnify us in most instances from third-party claims arising out of the lessee's use, operation, possession or lease of the containers. Lessees are required to maintain all risks physical damage insurance, comprehensive general liability insurance and to indemnify us against loss. We also maintain our own off-hire physical damage insurance to cover our containers when they are not on-hire to lessees and third-party liability insurance for both on-hire and off-hire containers.

Re-leasing, Logistics Management, Depot Management and Used Container Sales

We believe that managing the period after our containers' first lease is the most import aspect of our business. Successful management of this period requires disciplined logistics management, extensive re-lease capability, careful cost control and effective sales of used containers.

Re-Leasing .    Since our operating leases allow customers to return containers, we typically are required to place containers on several leases during their useful lives. Initial lease transactions for new containers can usually be generated with a limited sales and customer service infrastructure because initial leases for new containers typically cover large volumes of units and are fairly standardized transactions. Used containers, on the other hand, are typically leased out in small transactions and are structured to accommodate pick-ups and returns in a variety of locations. As a result, to maintain high utilization of older equipment, leasing companies benefit from having a large number of customers and maintaining a high level of operating contact with these customers. We believe that our extensive global presence and long-standing customer relationships provide us an advantage in leasing out our older equipment relative to many of our competitors.

Logistics Management .    Since the Asia crisis in the late 1990's, the shipping industry has been characterized by large regional trade imbalances, with loaded containers generally flowing from export-oriented economies in Asia to North America and Western Europe. Because of these trade

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imbalances, shipping lines have an incentive to return leased containers in North America and Europe to reduce the cost of empty container backhaul. For several years after the Asia crisis, the return of large numbers of containers to North America and Europe reduced utilization for the leasing industry and increased container repositioning costs as leasing companies were forced to ship empty containers back to high container demand areas in Asia.

In the aftermath of the Asia crisis, we embarked on a program to reduce logistical and utilization risk by increasing the percentage of our containers on long-term lease or finance lease and restricting the ability of our customers to return containers outside of Asian demand locations. Specifically, we have restructured our lease contracts and developed industry-leading container positioning capabilities. From December 31, 2000 to December 31, 2004, the portion of our containers on long-term lease and finance leases increased from 48% to 66%, the annual number of dry containers returned in North America and Europe from service leases fell by 63%, the number of idle dry containers available for lease fell by 81% and our empty container repositioning cost fell by 79%.

In addition to restructuring our leases, we increased our operational focus on moving empty containers as cheaply as possible. To accomplish this, we developed an in-house group of experts, which we call Greyslot, to manage our empty container repositioning program. As part of their mandate to reposition our empty containers, Greyslot maintains frequent contact with various shipping lines and vessel owners to identify available vessel space, and our success with managing our own repositioning program has led to additional revenue opportunities. For the last several years Greyslot has acted as a broker of empty vessel space for moving additional empty containers for third parties. Our third-party customers include leasing companies and shipping lines, and such third-party business currently represents a majority of the containers moved by Greyslot. The fee revenues generated by the third-party business has more than covered the total cost of the Greyslot infrastructure for the last two years, and the extra volume of container movements generated by our third-party business often gives us an opportunity, on an earlier basis than our competitors, to observe available ship space.

Depot Management .    As of May 31, 2005, we manage our container fleet through approximately 190 third-party owned and operated depot facilities located in 39 countries. Depot facilities are generally responsible for repairing containers when they are returned by lessees and for storing the containers while they are off-hire. We have a worldwide operations group that is responsible for managing our depot contracts and they also periodically visit the depot facilities to conduct inventory and repair audits. We also supplement our internal operations group with the use of independent inspection agents. We believe that our long history of operating with our depot network and the extensive experience we have with respect to the relative performance of alternative depots provide an operating advantage relative to many of our competitors.

We are in constant communication with our depot partners through the use of electronic data interchange, or EDI. The electronic exchange of container activity information for each depot is conducted via the Internet. Depots gather, prepare and send files with each day's activities to a specialized mailbox, several times a day if necessary. We then collect the activities received from all depots and update our "Terms" tracking system.

Most of the depot agency agreements follow a standard form and generally provide that the depot will be liable for loss or damage of equipment and, in the event of loss or damage, will pay us the previously agreed loss value of the applicable containers. The agreements require the depots to maintain insurance against container loss or damage and we carry insurance to cover the risk that the depot's insurance proves insufficient.

Our container repair standards and processes are generally managed in accordance with standards and procedures specified by the Institute of International Container Lessors, or the IICL. The IICL establishes and documents the acceptable interchange condition for containers and the repair procedures required to return damaged containers to the acceptable interchange condition. At the time that containers are returned by lessees, the depot arranges an inspection of the containers to assess the repairs required to return the containers to acceptable IICL condition. This inspection process also splits the damage into two components, customer damage and normal wear and tear.

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Items typically designated as customer damage include dents in the container and debris left in the container, while items such as rust are typically designated as normal wear and tear.

Our leases are structured so that the lessee is responsible for the customer damage portion of the repair costs, and customers are billed for damages at the time the containers are returned. We sometimes offer our customers a container repair service program whereby we, for an additional payment by the lessee (in the form of a higher per-diem rate or a flat fee at off-hire), assume financial responsibility for all or a portion of the cost of repairs upon return of the containers (but not of total loss of containers), up to a pre-negotiated amount.

Used Container Sales .    Our in-house used container sales group, Trader, has a worldwide team of over thirty-five container sales specialists that manage the sale process for our used containers. Trader also manages the used container sale process for a number of our customers and buys and sells used containers opportunistically. Trader has sold over 50,000 used containers in each of the last five years on behalf of us and third parties, and we believe that we are the world's largest seller of used containers. Trader generally sells to domestic storage companies, freight forwarders (who often use the containers for one-way trips into less developed countries) and other purchasers of used containers. We believe that our ability to sell containers directly to end users provides us with a higher and more reliable source of residual value for our containers than would be available if we, like many of our competitors, relied primarily on our container depots for container disposals. Due to the current worldwide container shortage and increasing container prices, the container disposal market is currently very strong.

Management Services

A portion of our container fleet is managed for third-party owners. Our management agreements fall into two general categories, (1) stand-alone pools, for which our systems track revenues and operating expenses attributable to specific containers and the container owners receive payments based on the net revenues of their own containers, and (2) co-mingled pools, in which the container owners receive payments based upon the average net revenues of similar containers in our fleet. In both structures, we receive management fees that currently range from 10% to 25% of net revenues. If operating expenses were to exceed revenues, the owners are obligated to pay the excess or we may deduct the excess, including our management fee, from future net revenues. We typically receive a commission for selling or disposing containers, though in some cases, we are compensated for sales through a percentage sharing of sale proceeds over an agreed floor amount. We will typically indemnify the owner for liabilities or losses arising out of the use, operation or possession of the containers, or for the manager's breach of its obligations. The owner will indemnify us as the manager against the owner's breaches, sales taxes on commencement of the arrangement, withholding taxes on payments to the owner under the arrangement and any other taxes (other than net income taxes of the manager) incurred with respect to the containers that are not otherwise included as operating expenses deductible from revenues. Typically the terms of the management agreements are 10 to 12 years from the acceptance dates of containers under the agreement.

Credit Controls

We have benefited from strong credit performance over the last several years. Over the last five years, our write offs of customer receivables have averaged less than 0.35% of our average total assets over such period, and we believe that our receivables and days outstanding are low for the container leasing industry. We attribute this credit performance to several factors—some of which are specific to our company, and some of which are attributable to the industry generally.

Until recently, we were owned by a large finance company, and we have established credit processes and a credit culture that reflect this history. We diligently monitor our customers' performance and our lease exposures on an ongoing basis, and our credit management processes are aided by the long payment experience we have with most of our customers, our broad network of relationships in the shipping industry that provide current information about our customers' market reputations, our focus on collections and a sales compensation structure that does not provide

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incentives based on container volumes. Credit criteria may include, but are not limited to, customer payment history, customer financial position and performance (e.g., net worth, leverage, profitability), trade routes, country of domicile, social and political climate, and the type of, and location of, containers that are to be supplied.

Factors providing credit protection include the strong growth in the container industry, effective collection tools, our high recovery rate for containers in default situations and the re-marketability of our container fleet. The strong growth in the container industry helps minimize the risk of customer defaults since the core assets of a poorly performing shipping line, its ships and containers, are generally needed to meet the demand for world containerized trade. As a result, poorly performing shipping lines are often acquired by others. In addition, the law in several major port locations is highly favorable to creditors and many of our large customers call on ports that will allow us to arrest, or seize, the customers' ships or bunkers, or repossess our containers if the customer is in default under our container leases. We have historically recovered approximately 90% of our containers that were the subject of defaulted contracts and we are able to re-market these repossessed containers through our worldwide sales infrastructure. However, we typically incur operating expenses such as repairs and repositioning when containers are recovered after a customer default.

Marketing and Customer Service

Our global sales and customer service force is responsible for developing and maintaining relationships with senior operations staff at our shipping line customers, negotiating lease contracts and maintaining day-to-day coordination with junior level staff at our customers. This close customer communication allows us to negotiate lease contracts that satisfy both our financial return requirements and our customers' operating needs and ensures that we are aware of our customers' potential equipment shortages and that they are aware of our available container inventories.

Many of our sales people have been with us for twenty years and we believe that the quality of our customer relationships and the level of communication with our customers represent an important advantage for us. As of March 31, 2005, our global sales and customer service group consisted of approximately 52 people, with 10 in North and South America, 22 in Asia, 16 in Europe and 4 in Australia. Our pricing and credit decisions are controlled by our senior headquarters staff located in Purchase, NY. In addition, we have 36 and 6 staff members dedicated to our Trader and our Greyslot groups, respectively.

Customers

We believe that we have strong, long standing relationships with our largest customers, most of whom we have had a relationship with for over 20 years. We currently have containers on-hire to more than 300 customers, although approximately 75% of our containers are on-hire to our 20 largest customers. Our customers are mainly international shipping lines, but we also lease containers to freight forwarding companies and manufacturers. Our five largest customers accounted for approximately 44% of our 2004 leasing revenues, with our largest customer, APL-NOL, accounting for approximately 16% of our 2004 leasing revenues. A default by any of these major customers could have a material adverse impact on our business, financial condition and future prospects.

Systems and Information Technology

We have a fully integrated container fleet management system. The system tracks all of our containers individually by container number, provides design specifications for the equipment, tracks on-hire and off-hire transactions, matches each on-hire container to a lease contract and each off-hire container to a depot contract, maintains the major terms for each lease contract, tracks accumulated depreciation, calculates the monthly bill for each customer and tracks and bills for container repairs. Our system is EDI capable, which means it can receive and process container activity transactions electronically.

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In addition, our system allows our business partners to conduct business with us through the Internet. It allows customers to check our container inventories, review design specifications, request clearances for returning containers (the system will issue the clearance electronically if the return to the specified location is currently allowed by the contract covering the container), request bookings for container pick-ups and review and approve repair bills. Approximately fifty percent of our interactions with our customers takes place online.

Our Suppliers

We purchase most of our containers in China. There are two large manufacturers of dry and special containers and three large manufacturers of refrigerated containers. Three companies are active in manufacturing the refrigeration units for refrigerated containers. Our engineering operations staff review the designs for our containers and periodically audit the production facilities of our suppliers. In addition, we use our Asian operations group and third-party inspectors to visit factories when our containers are being produced to provide an extra layer of quality control. We have long relationships with all of our major container suppliers.

Competition

We compete with approximately 10 other major container leasing companies, many smaller lessors, manufacturers of container equipment, companies offering finance leases as distinct from operating leases, promoters of container ownership and leasing as a tax shelter investment, shipping lines, which sometimes lease their excess container stock, and suppliers of alternative types of equipment for freight transport. It is also common for the shipping lines that are our customers to utilize several leasing companies to meet their container needs.

Our competitors compete with us in many ways, including pricing, lease flexibility, supply reliability and customer service. While we are forced to compete aggressively on price, we emphasize our supply reliability and high level of customer service to our customers. We invest heavily on ensuring adequate container availability in high demand locations, dedicate large portions of our organization to building customer relationships, maintain close day-to-day coordination with customers' operating staffs and have developed powerful and user-friendly systems that allow our customers to transact with us through the Internet. We believe that our close customer relationships, experienced staff, reputation for market leadership, scale efficiencies and proprietary systems provide important competitive advantages.

Properties and Facilities

Office Locations .    As of May 31, 2005, our employees are located in 19 offices in 12 different countries. We have seven offices in the U.S. including our headquarters in Purchase, New York. We have 12 offices outside the U.S. We lease all of our office space. In addition, we have agents dedicated to our business in South Korea.

The following table summarizes the facilities we leased as of May 31, 2005:

                                Office Location—U.S. Properties                                

Purchase, NY (Headquarters)
Cranford, NJ
Houston, TX
Danville, CA
San Francisco, CA
Miami, FL
Kansas City, MO

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                        Office Location—International Properties                        

Barking, United Kingdom
Antwerp, Belgium
Kowloon, Hong Kong
Sydney, Australia
Singapore, Singapore
Milan, Italy
Tokyo, Japan
Hamburg, Germany
Shanghai, China
Vienna, Austria
Mumbai, India
Taipei, Taiwan

Employees

As of May 31, 2005, we employed approximately 191 people, in 19 offices, in 12 countries. We believe that our relations with our employees are good and we are not a party to any collective bargaining agreements.

Legal Proceedings

From time to time we are a party to litigation matters arising in connection with the normal course of our business. While we cannot predict the outcome of these matters, in the opinion of our management, any liability arising from these matters will not have a material adverse effect on our business. Nevertheless, unexpected adverse future events, such as an unforeseen development in our existing proceedings, a significant increase in the number of new cases or changes in our current insurance arrangements could result in liabilities that have a material adverse impact on our business.

Environmental

We may be subject to environmental liability in connection with our current or historical operations that could adversely affect our business and financial prospects despite insurance coverage and terms of the leases and other arrangements for use of the containers that purport to place the responsibility for environmental liability on the end user. In certain countries like the United States, the owner of a leased container may be liable for the costs of environmental damage from the discharge of the contents of the container even though the owner is not at fault. We have and will seek to maintain off-hire physical damage insurance to cover our containers when they are not on-hire to lessees and third-party liability insurance for both on-hire and off-hire containers. We also have and will continue to require lessees to obtain all risks physical damage insurance, comprehensive general liability insurance and to provide us with indemnity against loss. However, we cannot assure you that insurance or indemnities can fully protect us against damages arising from environmental damage.

Countries that are signatories to the Montreal Protocol on the environment agreed in November 1992 to restrict the use of environmentally destructive refrigerants, banning production (but not use) of chlorofluorocarbon compounds (CFCs) beginning in January 1996. Since then, the environmental impact of CFCs has become increasingly prominent. On January 1, 2001, it became illegal for environmentally destructive refrigerants to be handled, other than for disposal, in most of the countries that are members of the European Union. CFCs are used in the operation, insulation and manufacture of refrigerated containers. All of our refrigerated containers purchased since June 1993 use non-CFC refrigerant gas in the operation and insulation of the containers, although a reduced quantity of CFCs are still used in the container manufacturing process. The replacement refrigerant used in our new refrigerated containers may also become subject to similar governmental regulations. In the past, we have retrofitted certain refrigerated containers with non-CFC refrigerants. Less than 3% of our refrigerated containers still use CFC refrigerants.

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MANAGEMENT

The following table sets forth certain information regarding our current board of directors of and key personnel who are responsible for overseeing the management of our business as of March 31, 2005:


Name Age Position
Brian M. Sondey   37   Chief Executive Officer, President, Director
Chand Khan   53   Vice President, Chief Financial Officer
John Burns   44   Vice President, Business Development
Marc Pearlin   49   Vice President, General Counsel, Secretary
Frederico Baptista   58   Vice President, Asia Pacific
Adrian Dunner   40   Vice President, Fleet Operations, North and South America and Australia, TRADER
A. Gary Klesch   58   Director, Chairman of the Board
Bruce Berkowitz   46   Director
A. Richard Caputo, Jr.   39   Director
John W. Jordan II   57   Director
Brian J. Higgins   29   Director
Ed Horne   49   Director
David W. Zalaznick   50   Director
Douglas J. Zych   33   Director

Brian M. Sondey is our Chief Executive Officer and President and has served as a director of our company since November, 2004. Mr. Sondey joined our former parent, Transamerica Corporation, in April 1996 as Director of Corporate Development. He then joined TAL International Corporation in November 1998 as Senior Vice President of Business Development. In September 1999, Mr. Sondey became President of TAL International Corporation. Prior to his work with Transamerica Corporation and TAL International Corporation, Mr. Sondey worked as a Management Consultant at the Boston Consulting Group and as a Mergers & Acquisitions Associate at J.P. Morgan. Mr. Sondey holds an MBA from The Stanford Graduate School of Business and a BA degree in Economics from Amherst College.

Chand Khan is our Vice President and Chief Financial Officer. Mr. Khan joined TAL International Corporation in 1984. He is responsible for overseeing our accounting, compliance, reporting and administrative departments. Prior to joining TAL International Corporation, Mr. Khan was employed for 8 years at Container Transport International. Mr. Khan holds an MBA from St. John's University and a BA from Bernard Baruch College.

John Burns is our Vice President of Business Development. Mr. Burns joined our former parent, Transamerica Corporation, in April 1996 as Director of Internal Audit and subsequently transferred to TAL International Corporation in April 1998 as Controller and later Vice President and Chief Financial Officer. Prior to joining Transamerica Corporation, Mr. Burns spent 10 years with Ernst & Young LLP in their financial audit practice. Mr. Burns holds a BA in Finance from the University of St. Thomas, St. Paul, Minnesota and is a certified public accountant.

Marc Pearlin is our Vice President, General Counsel and Secretary. Mr. Pearlin is responsible for overseeing all legal matters. Mr. Pearlin joined TAL International Corporation in October 1986 as an Associate General Counsel, and has held positions as our Secretary and Assistant General Counsel. Mr. Pearlin holds a Juris Doctor degree from the University of Connecticut School of Law and a BA in Economics and Spanish from Trinity College, Hartford, Connecticut.

Frederico Baptista is our Vice President, Asia Pacific. Mr. Baptista is responsible for managing operations and marketing for the Asia and Pacific area. Mr. Baptista joined TAL International Corporation in 1973 as a clerk in our Hong Kong office. While at TAL International Corporation, Mr. Baptista has held positions as General Manager, Far East (based in Hong Kong), Director, Singapore (based in Singapore) and Director, Procurement (based in Purchase, New York). Mr. Baptista

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graduated from St. Francis Xavier's College and later received a Diploma in Executive Finance from the Institute of Cost and Executive Accountants.

Adrian Dunner is our Vice President, Fleet Operations, North and South America and Australia and TRADER Division. Mr. Dunner is responsible for managing our fleet operations, our North and South America and Australia regions and for the worldwide sales efforts in the container aftermarket. Mr. Dunner joined TAL International Corporation in 1988 as Manager, Marketing, and has held positions as General Manager, US East Coast, and Marketing Manager located at various times in Cranford, NJ; Savannah, GA; and Jacksonville, FL. Prior to his employment with TAL International Corporation, Mr. Dunner worked as a Sales Representative for CTI and as a Trade Specialist at the Center for International Trade. Mr. Dunner received a BS degree in Finance/Economics from Spring Hill University, and an MBA in Business from Jacksonville University.

A. Gary Klesch has served as the Chairman of the Board of Directors of our company since November 2004. In 1990, Mr. Klesch formed Klesch & Company, an affiliate of Seacon Holdings Limited, and has been Chairman since that time. Mr. Klesch began his financial career in 1969 with McDonald & Company, a regional investment banking firm based in Cleveland, Ohio. In January 1975, Mr. Klesch was appointed Director of Capital Markets Policy of the U.S. Treasury Department during the Ford Administration.

Bruce Berkowitz has served as a director of our company since November 2004. Mr. Berkowitz is the Founder and Managing Member of Fairholme Capital Management, L.L.C., a registered investment adviser, and the President and a Director of Fairholme Funds, Inc., a registered investment company that is parent to The Fairholme Fund, a public mutual fund. Prior to founding Fairholme Capital in 1997, Mr. Berkowitz was a portfolio manager and a Managing Director at Smith Barney, Inc. and a portfolio manager at Lehman Brothers Holdings, Inc. Mr. Berkowitz currently serves as Deputy Chairman and a Director of Olympus Re Holdings, Ltd., a private Bermuda-based reinsurance company, a member of the Board of Trustees of First Union Real Estate and Mortgage Investments, a NYSE-listed REIT, and as a Director of White Mountains Insurance Group, Ltd, a NYSE-listed insurance company.

A. Richard Caputo, Jr . has served as a director of our company since November 2004. Mr. Caputo is a Partner and Senior Principal of The Jordan Company, L.P., a private merchant banking firm, and has been an employee of The Jordan Company, L.P. and its predecessors since 1990. The Jordan Company, L.P. manages, and is an affiliate of, The Resolute Fund, L.P. Since 2002, Mr. Caputo has been a Member of Resolute Fund Partners, LLC, the general partner of The Resolute Fund, L.P. Mr. Caputo is also a director of Universal Technical Institute, Inc. and Safety Insurance Group, Inc., as well as a number of privately held companies. Mr. Caputo received a BA in Mathematical and Business Economics from Brown University.

John W. Jordan II has served as a director of our company since November 2004. Since 1982, Mr. Jordan has been a Partner and Managing Principal of The Jordan Company, L.P., a private merchant banking firm and its predecessors. The Jordan Company, L.P. manages, and is an affiliate of, The Resolute Fund, L.P. Since 2002, Mr. Jordan has been a Managing Member of Resolute Fund Partners, LLC, the general partner of The Resolute Fund, L.P. Mr. Jordan is also a director of Jordan Industries, Inc., Kinetek, Inc. and Sensus Metering Systems, Inc., as well as a number of privately held companies. Mr. Jordan received a BA in Business Administration from the University of Notre Dame.

Brian J. Higgins has served as a director of our company since November 2004. Mr. Higgins joined The Jordan Company, L.P. in 1999 and has been a Vice President of The Jordan Company, L.P. since 2003. The Jordan Company, L.P. manages, and is an affiliate of, The Resolute Fund, L.P. Mr. Higgins received a BA in Economics from Williams College.

Ed Horne has served as a director of our company since November 2004. Mr. Horne has been a director of Klesch & Company, an affiliate of Seacon Holdings Limited, since its inception in 1990. Mr. Horne's duties include sourcing potential investments and analyzing and valuing corporate assets. Mr. Horne is a Chartered Accountant and graduated from Jesus College, Oxford in 1978 with a degree in Classics.

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David W. Zalaznick has served as a director of our company since November 2004. Since 1982, Mr. Zalaznick has been a Partner and Managing Principal of the Jordan Company, L.P., a private merchant banking firm and its predecessors. The Jordan Company, L.P. manages, and is an affiliate of, The Resolute Fund, L.P. Since 2002, Mr. Zalaznick has been a Managing Member of Resolute Fund Partners, LLC, the general partner of The Resolute Fund, L.P. Mr. Zalaznick is also a director of Jordan Industries, Inc., Kinetek, Inc., Sensus Metering Systems, Inc. and Marisa Christina, Inc., as well as a number of privately held companies.

Douglas J. Zych has served as a director of our company since November 2004. Mr. Zych joined The Jordan Company, L.P. in 1995 and has been a Principal of The Jordan Company, L.P. since 2002. The Jordan Company, L.P. manages, and is an affiliate of, The Resolute Fund, L.P. Mr. Zych received a BA in Business Administration from the University of Notre Dame.

Board of Directors

Our board of directors currently consists of nine directors. We will add two independent directors to our board of directors effective upon the consummation of this offering and a third independent member within one year of the consummation of this offering.

Messrs. Sondey, Klesch, Berkowitz, Caputo, Higgins, Horne, Jordan, Zalaznick and Zych are currently serving as directors pursuant to rights granted to certain of our stockholders under a shareholders agreement. These provisions of the shareholders agreement will terminate upon completion of the offering. See "Certain Relationships and Related Party Transactions—Shareholders Agreement."

Following the consummation of this offering, we will be deemed to be a "controlled company" under the rules of the New York Stock Exchange, and we will qualify for, and intend to rely upon, the "controlled company" exception to the board of directors and committee composition requirements under the rules of the New York Stock Exchange. Pursuant to this exception, we will be exempt from the rules that would otherwise require that our board of directors be comprised of a majority of "independent directors" and that our compensation and corporate governance and nominating committees be comprised solely of "independent directors," as defined under the rules of the New York Stock Exchange. The "controlled company" exception does not modify the independence requirements for the audit committee, and we intend to comply with the requirements of the Sarbanes-Oxley Act of 2002 and the New York Stock Exchange rules, which require that our audit committee be exclusively comprised of independent directors.

Board Committees

Prior to the completion of this offering, our board of directors will establish and appoint an audit committee, a compensation committee and a corporate governance and nominating committee. The duties and responsibilities of these committees are set forth below.

Audit Committee.      The audit committee will be responsible for (1) selecting the independent auditor, (2) approving the overall scope of the audit, (3) discussing the annual audited financial statements and quarterly financial statements, including matters required to be reviewed under applicable legal, regulatory or New York Stock Exchange requirements, with management and the independent auditor, (4) discussing earnings press releases, guidance provided to analysts and other financial information provided to the public, with management and the independent auditor, as appropriate, (5) discussing with management and the independent auditor, as appropriate, any audit problems or difficulties and management's response, (6) discussing our risk assessment and risk management policies, (7) reviewing our financial reporting and accounting standards and principles, significant changes in such standards or principles and the key accounting decisions affecting our financial statements, (8) reviewing and approving the internal corporate audit staff functions, (9) reviewing our internal system of audit, financial and disclosure controls and the results of internal audits, (10) annually reviewing our independent auditor's written report describing the auditing firm's internal quality-control procedures and any material issues raised by the auditing firm's internal

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quality-control review or peer review of the auditing firm, (11) setting hiring policies for employees or former employees of the independent auditors, (12) reviewing and investigating matters pertaining to the integrity of management, (13) establishing procedures concerning the treatment of complaints and concerns regarding accounting, internal accounting controls or audit matters, (14) meeting separately with management, the corporate audit staff and the independent auditor, (15) handling such other matters that are specifically delegated to the audit committee by the board of directors from time to time and (16) reporting regularly to the full board of directors.

Compensation Committee.      The compensation committee will be responsible for (1) reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer and annually evaluating the chief executive officer's performance in light of these goals, (2) reviewing and approving the compensation and incentive opportunities of our executive officers, (3) reviewing and approving employment contracts, severance arrangements, incentive arrangements, change-in-control arrangements and other similar arrangements between us and our executive officers, (4) receiving periodic reports on our compensation programs as they affect all employees, (5) reviewing executive succession plans for business and staff organizations and (6) such other matters that are specifically delegated to the compensation committee by the board of directors from time to time.

Corporate Governance and Nominating Committee.      Our corporate governance and nominating committee's purpose will be to assist our board in identifying individuals qualified to become members of our board of directors, assess the effectiveness of the board and develop our corporate governance principles. This committee will be responsible for (1) identifying and recommending for election individuals who meet the criteria the board has established for board membership, (2) recommending nominees to be presented at the annual meeting of stockholders, (3) reviewing the board's committee structure and recommending to the board the composition of each committee, (4) annually reviewing director compensation and benefits, (5) establishing a policy for considering stockholder nominees for election to our board, (6) developing and recommending a set of corporate governance guidelines and reviewing them on an annual basis and (7) developing and recommending an annual self-evaluation process of the board and its committees and overseeing such self-evaluations.

Other Committees.     Our board of directors may establish other committees as it deems necessary or appropriate from time to time.

Director Compensation

Our bylaws provide that, at the discretion of a majority of our board of directors, our directors may be paid such compensation for their services and such reimbursement for expenses of attendance at meetings of our board of directors or any committee thereof. Currently, our non-executive directors receive director fees of $100,000 per year.

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Executive Compensation

The following table sets forth information concerning the compensation received for services rendered to us by our current Chief Executive Officer and each of our four most highly-compensated executive officers for the year ended December 31, 2004:


  Annual Compensation Long-Term Compensation
        Awards Payouts
Name and Principal Position Salary ($) Bonus ($) Other Annual
Compensation ($)
Restricted
Stock
Awards ($)
Shares of
Common
Stock
Underlying
Options (#)
Long-Term
Incentive
Payouts ($)
All Other
Compensation ($)
Brian M. Sondey $ 321,154   $ 600,000   $ 12,116     0     2,000   $ 12,044,843   $ 0  
Chief Executive Officer, President
John Burns   186,250     270,000     44,150     0     400     1,560,769     0  
Vice President, Business Development
Adrian Dunner   195,115     285,000     43,781     0     400     1,616,923     0  
Vice President, Fleet Operations, North and South America and Australia, TRADER
Frederico Baptista   209,651     314,476     82,173     0     400     1,737,253     0  
Vice President, Asia Pacific
Chand Khan   191,154     277,500     47,748     0     250     1,313,846     0  
Vice President, Chief Financial Officer

Employee Agreements

Employment Agreement with Brian M. Sondey .    At the closing of the Acquisition, we entered into an employment agreement with Brian M. Sondey, whereby he agreed to serve as our Chief Executive Officer. The agreement provides for an initial term ending November 3, 2007 and automatically renewing successive one-year terms thereafter, subject to at least 90 days' advance notice by either party of a decision not to renew the employment agreement. Under the employment agreement, Mr. Sondey is entitled to receive a minimum annual base salary of $400,000, as increased on an annual basis starting in 2006 to reflect increases in the consumer price index specified therein. Mr. Sondey's annual base salary may also be increased by mutual agreement with our board of directors following a performance evaluation performed by our board of directors. Mr. Sondey is also entitled to an annual bonus award that is determined and paid in accordance with our bonus plan. Mr. Sondey is also entitled to certain perquisites, including reimbursement of expenses, health and disability insurance and paid vacations. Mr. Sondey is entitled to severance pay if his employment is terminated by us without cause (as defined by the employment agreement), he dies or becomes disabled or if he terminates his employment for good reason (as defined by the employment agreement). Upon termination of Mr. Sondey's employment for any reason or no reason, subject to our election to continue to pay to Mr. Sondey his base salary for a one year period following such termination, unless such termination is for cause, Mr. Sondey will be restricted from competing with us for a period of one year following such termination. Mr. Sondey is also prohibited from disclosing any of our confidential information.

2004 Management Stock Plan .    We established our 2004 Management Stock Plan so that we and our subsidiaries could attract and retain certain employees, motivate eligible participants to achieve long-range goals and to provide incentive compensation opportunities to eligible participants that are competitive with those of similar companies. Upon the consummation of this offering, the stock plan will be administered by a committee of our board of directors. The committee will have the power to determine the ability of an eligible individual to receive awards, the types and number of shares of

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stock subject to the awards, the price and timing of awards and to establish the terms, conditions, performance criteria and restrictions on the awards.

Participants .    Any of our employees, consultants, directors or any other person providing services to us or our subsidiaries, as determined by the committee, may be selected to participate in the incentive plan. We may award these individuals with one or more of the following:

•  Stock options
•  Stock appreciation rights
•  Restricted stock awards
•  Performance shares
•  Bonus stock
•  Stock units
•  Restricted stock units

Stock options .    Stock options may be granted under our 2004 Management Stock Plan, including incentive stock options, as defined under Section 422 of the Internal Revenue Code, as amended (the "Code"), and nonqualified stock options. The exercise price of all stock options granted under the incentive plan will be determined by the committee, except that for nonqualified options, the exercise price cannot be less than 85% of the fair market value of the stock on the date of the grant. For incentive stock options, the exercise price cannot be less than 100% of the fair market value on the date of the grant.

Upon the exercise of a stock option, the purchase price must be paid in full in either cash or its equivalent by tendering previously acquired shares of our common stock with a fair market value at the time of exercise equal to the exercise price, provided such shares have been held for at least six months prior to tender. The committee may also allow a broker-assisted cashless exercise, exercise by the delivery of a promissory note containing terms established by the committee or exercise by any other means that it determines to be consistent with the purpose of the stock plan and as permitted under applicable law.

Stock Appreciation Rights (SAR) .    A SAR entitles a participant to receive a payment equal in value to the difference between the fair market value of a share of stock on the date of exercise of the SAR over the exercise price of the SAR. The committee may pay that amount in cash, in shares of our common stock, by delivery of a replacement award or a combination of the foregoing. The exercise price of a SAR cannot be less than 85% of the fair market value of the stock on the date of the grant and in any event shall not be less than the par value of the stock. The terms, methods of exercise, methods of settlement, form of consideration payable in settlement, and any other terms and conditions of any SAR will be determined by the committee at the time of the grant of award and will be reflected in the award agreement.

Restricted stock .    A restricted stock award is the grant of shares of our common stock at a price determined by the committee, and is subject to substantial risk of forfeiture until specific conditions or goals are met. Restricted stock awards are subject to such conditions, restrictions and contingencies as the committee shall determine.

Performance shares .    A performance share award is a contingent right to receive pre-determined shares of our common stock if certain performance goals are met. The value of performance shares will depend on the degree to which the specified performance goals are achieved but are generally based on the value of our common stock. The committee may, in its discretion, pay earned performance shares in cash, or stock, or a combination of both.

Bonus stock .    A bonus stock award is a grant of shares of our common stock in return for services previously rendered to us by a participant or for the surrender of previously earned compensation or in return for amounts paid by a participant.

Stock units .    A stock unit award is the grant of a right to receive shares of our common stock in the future.

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Restricted stock units .    A restricted stock unit is the right to receive a share of our common stock in the future, with such share or right to receive future delivery of such share subject to a risk of forfeiture or other restrictions that will lapse upon the achievement of one or more goals relating to the completion of service by the participant or the achievement of performance or other objectives, as determined by the committee.

Shares reserved for issuance .    Subject to certain adjustments, we may issue a maximum of 5,265 shares of stock pursuant to options intended to be incentive stock options. The maximum number of shares that may be delivered to participants in the stock option plan is 5,265 shares.

As of March 31, 2005, 3,950 shares of our common stock are issuable pursuant to options granted under the incentive plan, at a weighted average exercise price of $1.00, and 1,315 shares remain available for future option grants under the stock plan.

Change of control bonus .    Pursuant to the stock option agreements with each of the current participants in our 2004 Management Stock Plan, upon the occurrence of a change of control in which all of the holders of our Series A 12.0% cumulative senior preferred stock receive cash proceeds in an amount equal to at least the then effective liquidation preference in respect of such Series A 12.0% cumulative senior preferred stock plus accrued but unpaid dividends thereon, each of the current participants in our stock plan will be entitled to receive a change of control bonus in an amount equal to the difference between (i) the quotient of (a) all accrued but unpaid dividends on our shares of Series A 12.0% cumulative senior preferred stock immediately prior to such change of control, divided by (b) one minus the fully-diluted percentage ownership of our common stock represented by the shares of our common stock issuable upon exercise of such participant's options, and (ii) all accrued but unpaid dividends on our shares of Series A 12.0% cumulative senior preferred stock immediately prior to such change of control. The term "change of control" under such stock option agreements is generally defined to include (1) the sale by our stockholders of at least 50% of our voting securities to any person in which our stockholders do not hold over 50% of the ordinary voting securities, (2) a transfer of all or substantially all of our assets to a person in which our stockholders do not hold over 50% of the ordinary voting securities, (3) a merger or consolidation in which our stockholders own less than 50% of the voting securities of the surviving entity and (4) the consummation of a registered public offering of our stock for gross proceeds of at least $50 million, in each case, in which the holders of all of the outstanding shares of Series A 12.0% cumulative senior preferred stock receive cash equal to the liquidation preference plus accrued but unpaid dividends on each such outstanding share. The change of control bonuses are payable in cash; provided that in the event that the change of control event consists of a registered public offering of our stock for gross proceeds of at least $50 million, we may elect to pay such bonus amounts in shares of our stock based upon the price per share of the securities sold in such registered public offering.

Vesting upon change of control .    Under the stock option agreements with each of the current participants in our stock plan, all existing options granted under the stock plan will become fully exercisable upon the occurrence of a change of control.

Lockup period .    Under the stock option agreements with each of the current participants in our stock plan, in connection with a registered public offering of our securities, we or the underwriters of such offering may require the existing participants in our stock plan to hold their shares for a specified period of time following the effective date of the registration statement.

Amendment and termination .    The board of directors may terminate, amend or modify the stock option plan at any time; however, the approval of any affected participant must be obtained to amend or terminate the stock option plan to the extent the proposed amendment or termination would adversely affect the rights of any participant or any beneficiary of any award granted under the plan.

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Stock Option Grants in Last Fiscal Year

The following table sets forth information as to options granted to the named executive officers during the year ended December 31, 2004. These options were granted on November 3, 2004, have a term of ten years and will vest in four equal annual installments beginning on the first anniversary of the date of grant. We have not granted any stock appreciation rights.


  Individual Grants Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Option Term(1)
Name Number of
Securities
Underlying
Options
Granted (#)
Percent of
Total Options
Granted to
Employees in
Fiscal Year(2)
Exercise
Price Per
Share ($/Sh)
Expiration Date 5% ($) 10% ($) Grant
Date
Present
Value ($)
Brian M. Sondey   2,000     50.63 $ 1.00   November 3, 2014                  
Chand Khan   250     6.33 $ 1.00   November 3, 2014                  
Frederico Baptista   400     10.13 $ 1.00   November 3, 2014                  
Adrian Dunner   400     10.13 $ 1.00   November 3, 2014                  
John C. Burns   400     10.13 $ 1.00   November 3, 2014                  
Bernd Schackier   250     6.33 $ 1.00   November 3, 2014                  
John Pearson   250     6.33 $ 1.00   November 3, 2014                  
(1) Potential realizable values are net of exercise price, but before the payment of taxes associated with exercise. Amounts represent hypothetical gains that could be achieved for the respective options if exercised at the end of the option term. The 5% and 10% assumed annual rates of compounded stock price appreciation are mandated by rules of the Securities and Exchange Commission and do not represent our estimate or projection of our future common stock prices. These amounts represent certain assumed rates of appreciation in the value of the common stock from the fair market value on the date of grant. Actual gains, if any, on stock option exercises are dependent on the future performance of the common stock and overall stock market conditions. The amounts reflected in the table may not necessarily be achieved.
(2) Based on options to purchase an aggregate of 3,950 shares of common stock granted by us during the year ended December 31, 2004.

Fiscal Year End Option Values

The following table sets forth information with respect to unexercised options held by the named executive officers as of December 31, 2004.


  Number of Securities Underlying
Unexercised Options at December 31, 2004
Value of Unexercised In-the-Money Options
at December 31, 2004(1)
Name Exercisable (#) Unexercisable (#) Exercisable ($) Unexercisable ($)
Brian M. Sondey   0   2,000 $ 0        
Chand Khan   0   250 $ 0        
Frederico Baptista   0   400 $ 0        
Adrian Dunner   0   400 $ 0        
John C. Burns   0   400 $ 0        
Bernd Schackier   0   250 $ 0        
John Pearson   0   250 $ 0        
(1) There was no public trading market for the common stock as of December 31, 2004. Accordingly, these values have been calculated on the basis of an assumed initial offering price of $       per share, the mid-point of the estimated price range shown on the cover page of this prospectus, less the applicable exercise price per share, multiplied by the number of shares underlying such options.

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PRINCIPAL AND SELLING STOCKHOLDERS

The following table shows the beneficial ownership of our common stock on March 31, 2005:

•  each person who we know beneficially owns more than 5% of our common stock;
•  our directors and named executive officers;
•  all of our directors and executive officers as a group; and
•  each selling stockholder.

Beneficial ownership, which is determined in accordance with the rules and regulations of the Securities and Exchange Commission, means the sole or shared power to vote or direct the voting or to dispose or direct the disposition of our common stock. The number of shares of our common stock beneficially owned by a person includes shares of common stock issuable with respect to options and convertible securities held by the person which are exercisable or convertible within 60 days. The percentage of our common stock beneficially owned by a person assumes that the person has exercised all options, and converted all convertible securities, the person holds which are exercisable or convertible within 60 days, and that no other persons exercised any of their options or converted any of their convertible securities. Except as otherwise indicated, the business address for each of the following persons is 100 Manhattanville Road, Purchase, New York 10577-2135. Except as otherwise indicated in the footnotes to the table or in cases where community property laws apply, we believe that each person identified in the table possesses sole voting and investment power over all shares of common stock shown as beneficially owned by the person. Percentage of beneficial ownership is based on 100,000 shares of common stock outstanding as of March 31, 2005 and                      shares of common stock outstanding after the completion of the offering.

The selling stockholders have granted the underwriters an option to purchase up to              shares of common stock to cover over-allotments, if any. If the underwriters do not exercise their over-allotment option, the selling stockholders will not sell any shares in the offering.


Name and Address of Beneficial Owner (1) Shares Beneficially
Owned
Prior to this Offering
Shares Beneficially
Owned
After this Offering (a)
Shares Offered
if Over-Allotment
is Exercised in
Full
Number Percent Number Percent
Five Percent and Greater Stockholders
The Resolute Fund, L.P. (2)   59,231.25     58.9      
Fairholme Partners, L.P. (3)   12,745.69     12.7      
Seacon Holdings Limited (4)   11,943.75     11.9      
Edgewater Private Equity Fund IV, L.P. (5)   6,372.84     6.3      
JZ Equity Partners plc (6)   6,372.84     6.3      
Directors and Named Executive Officers
Brian M. Sondey   2,938.75     2.9
Frederico Baptista   76.78    
Bruce Berkowitz (7)   12,745.69     12.7
John Burns   76.78    
A. Richard Caputo, Jr. (8)    
Adrian Dunner   76.78    
Brian J. Higgins (9)    
Ed Horne (10)    
John W. Jordan II (11)    
Chand Khan   54.84    
A. Gary Klesch (12)   11,943.75     11.9
David W. Zalaznick (13)    
Douglas J. Zych (14)    
All directors and named executive officers as a group   27,913.37     27.9
* Less than 1%.
(a) The numbers in these columns assume no exercise by the underwriters of their over-allotment option.

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(1) "Beneficial ownership" is a term broadly defined by the Securities and Exchange Commission in Rule 13d3 under the Securities Exchange Act of 1934, and includes more than the typical forms of stock ownership, that is, stock held in the person's name. The term also includes what is referred to as "indirect ownership," meaning ownership of shares as to which a person has or shares investment or voting power. For purposes of this table, a person or group of persons is deemed to have "beneficial ownership" of any shares as of a given date that such person or group has the right to acquire within 60 days after such date.
(2) Represents an aggregate of 59,231.25 shares of common stock owned by The Resolute Fund, L.P. and certain of its affiliated funds (collectively, "The Resolute Funds"). The respective ownership of the shares of common stock owned each of The Resolute Funds are: (a) The Resolute Fund, L.P. - 52,555.85 shares of common stock; (b) The Resolute Fund Singapore PV, L.P. - 2,066.69 shares of common stock; (c) The Resolute Fund Netherlands PV I, L.P. - 2,480.02 shares of common stock; (d) The Resolute Fund Netherlands PV II, L.P. - 2,066.69 shares of common stock; and (e) The Resolute Fund NQP, L.P. - 62.00 shares of common stock. The Resolute Funds are managed by The Jordan Company, L.P. Resolute Fund Partners, LLC, the General Partner of The Resolute Funds, exercises investment discretion and control over the shares held by The Resolute Funds. The address for this beneficial owner is 767 Fifth Avenue, 48 th Floor, New York, New York 10153. Each of Messrs. Caputo, Higgins, Jordan, Zalaznick and Zych may be deemed to share voting and investment power over the shares owned by The Resolute Funds as a result of their position or affiliation with Resolute Fund Partners, LLC and/or The Jordan Company, L.P. Each such individual disclaims beneficial ownership of the shares owned by The Resolute Funds.
(3) Represents an aggregate of 12,745.69 shares of common stock owned by Fairholme Partners, L.P. and certain of its affiliated funds (collectively, the "Fairholme Funds"). The respective ownership of the shares of common stock owned by each of the Fairholme Funds are: (a) Fairholme Partners, L.P. - 4,248.56 shares of common stock; (b) Fairholme Ventures II, LLC - 4,248.56 shares of common stock; and (c) Fairholme Holdings, Ltd. - 4,248.57 shares of common stock. The Fairholme Funds are managed by Fairholme Capital Management L.L.C. Fairholme Capital Management, L.L.C. exercises investment discretion and control over the shares held by the Fairholme Funds. The address for this beneficial owner is 51 JFK Parkway, Short Hills, New Jersey 07078.
(4) The address for this beneficial owner is PO Box 771, Thorp House, 2 nd Floor, Rouge Bouillon, St Helier, Jersey JE4 ORX, Channel Islands. Mr. Klesch and Mr. Horne are directors of Klesch & Company, the entity that controls Seacon Holdings Limited.
(5) Represents an aggregate of 6,372.84 shares of common stock owned by Edgewater Private Equity Fund III, L.P. and Edgewater Private Equity Fund IV, L.P. The respective ownership of the shares of common stock owned by Edgewater Private Equity Fund III, L.P. and Edgewater Private Equity Fund IV, L.P. are (a) Edgewater Private Equity Fund III, L.P. - 877.50 shares of common stock; and (b) Edgewater Private Equity Fund IV, L.P. - 5,495.34 shares of common stock. The address for these beneficial owners is 900 N. Michigan Ave., Suite 1800, Chicago, Illinois 60616.
(6) JZ Equity Partners plc is an investment trust listed on the London Stock Exchange. Its business is to invest, primarily in the United States, in debt and equity securities recommended by Jordan/ Zalaznick Advisers, Inc., a Delaware corporation based in New York, that is its sole investment advisor. JZ Equity Partners plc is governed by a board of independent directors who have sole voting and investment power over the shares held by JZ Equity Partners plc. The address for this beneficial owner is 17(a) Curzon Street, London, W1J 5HS England.
(7) Mr. Berkowitz is the Managing Member of Fairholme Capital Management, L.L.C., which is the managing partner of Fairholme Partners, L.P., the managing member of Fairholme Ventures II, LLC, and the investment manager to Fairholme Holdings, Ltd., and as such Mr. Berkowitz has investment and voting power with respect to the shares owned by the

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aforementioned entities and may be deemed a beneficial owner of the shares owned by the aforementioned entities. Mr. Berkowitz's address is Fairholme Capital Management, 51 JFK Parkway, Short Hills, New Jersey 07078.
(8) Mr. Caputo is a Partner and Senior Principal of The Jordan Company, L.P., which manages The Resolute Funds. Mr. Caputo may be deemed to share voting and investment power over the shares owned by The Resolute Funds and therefore to beneficially own such shares. Mr. Caputo disclaims beneficial ownership of the shares owned by The Resolute Funds. Mr. Caputo's address is 767 Fifth Avenue, 48 th Floor, New York, New York 10153.
(9) Mr. Higgins is a Vice President of The Jordan Company, L.P., which manages The Resolute Funds. Mr. Higgins may be deemed to share voting and investment power over the shares owned by The Resolute Funds and therefore to beneficially own such shares. Mr. Higgins disclaims beneficial ownership of the shares owned by The Resolute Funds. Mr. Higgins's address is 767 Fifth Avenue, 48 th Floor, New York, New York 10153.
(10) Mr. Horne's address is 105 Wigmore Street, London WIU IQY, United Kingdom.
(11) Mr. Jordan is a Partner and Managing Principal of The Jordan Company, L.P., which manages The Resolute Funds. Mr. Jordan may be deemed to share voting and investment power over the shares owned by The Resolute Funds and therefore to beneficially own such shares. Mr. Jordan disclaims beneficial ownership of the shares owned by The Resolute Funds. Mr. Jordan's address is 767 Fifth Avenue, 48 th Floor, New York, New York 10153.
(12) Mr. Klesch is the beneficial owner of Seacon Holdings Limited, and as such Mr. Klesch has voting power with respect to the shares owned by Seacon Holdings Limited and may be deemed a beneficial owner of the shares owned by Seacon Holdings Limited. Mr. Klesch's address is 105 Wigmore Street, London WIU IQY, United Kingdom.
(13) Mr. Zalaznick is a Partner and Managing Principal of The Jordan Company, L.P., which manages The Resolute Funds. Mr. Zalaznick may be deemed to share voting and investment power over the shares owned by The Resolute Funds and therefore to beneficially own such shares. Mr. Zalaznick disclaims beneficial ownership of the shares owned by The Resolute Funds. Mr. Zalaznick's address is 767 Fifth Avenue, 48 th Floor, New York, New York 10153.
(14) Mr. Zych is a Principal of The Jordan Company, L.P., which manages The Resolute Funds. Mr. Zych may be deemed to share voting and investment power over the shares owned by The Resolute Funds and therefore to beneficially own such shares. Mr. Zych disclaims beneficial ownership of the shares owned by The Resolute Funds. Mr. Zych's address is 767 Fifth Avenue, 48 th Floor, New York, New York 10153.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

The following discussion is only a summary and is qualified in its entirety by reference to the actual terms and provisions of each applicable agreement, which agreements will be filed as exhibits to the registration statement of which this prospectus forms a part.

Management Subscription Agreement

We entered into a subscription agreement with certain members of our management team. Under the subscription agreement, certain members of our management team purchased an aggregate of 3,333.63 shares of our common stock, representing 3.33% of our outstanding common stock as of the closing of the Acquisition, and an aggregate of 1,900 shares of our Series A 12.0% cumulative senior preferred stock, representing 0.95% of our outstanding Series A 12.0% cumulative senior preferred stock as of the closing of the Acquisition. The aggregate cash consideration for the shares purchased was $1,903,333.63.

The subscription agreement provides that if the employment by us of a member of our management team is terminated we may repurchase from the terminated manager, or the terminated manager may cause us to repurchase, depending upon the reason for such manager's termination, such manager's shares of our common stock and our Series A 12.0% cumulative senior preferred stock. The repurchase price with respect to our common stock ranges from $1.00 per share to a per share price calculated with reference to a measure of our operating cash flow, depending upon when, and for what reason, such termination occurs. The repurchase price with respect to our Series A 12.0% cumulative senior preferred stock ranges from $1,000 per share to the aggregate liquidation preference per share of our Series A 12.0% cumulative senior preferred stock, including accrued but unpaid dividends thereon, depending upon when, and for what reason, such termination occurs. As of the date of this prospectus, we have not repurchased any shares of our common stock or Series A 12.0% cumulative senior preferred stock. These repurchase provisions will terminate upon the closing of this offering.

Investor Subscription Agreement

We also entered into a subscription agreement with our other stockholders in connection with the Acquisition. These stockholders included, among others, The Resolute Fund, L.P. and certain of its affiliated funds, JZ Equity Partners, plc, which is advised by an affiliate of The Jordan Company, L.P., and Seacon Holdings Limited. Under the subscription agreement, the investor parties thereto purchased an aggregate of 96,666.37 shares of our common stock, representing 96.67% of our outstanding common stock as of the closing of the Acquisition, and an aggregate of 198,100 shares of our Series A 12.0% cumulative senior preferred stock, representing 99.05% of our outstanding Series A 12.0% cumulative senior preferred stock as of the closing of the Acquisition. The aggregate cash consideration for the shares purchased was $198,196,666.37. Pursuant to the subscription agreement, Seacon Holdings Limited has agreed that upon the occurrence of an exit event, if the return on invested capital realized by each of the other investor parties to the subscription agreement is less than certain minimum threshold amounts specified in the subscription agreement, then each of the investor parties other than Seacon Holdings Limited shall have the right to purchase from Seacon Holdings Limited such number of shares of our common stock at a per share price of $0.01, up to a maximum amount of 4,875 shares, as is equal to the minimum number of shares that would enable such investors to realize the applicable minimum return on invested capital thresholds set forth in the subscription agreement. For the purpose of the foregoing, an "exit event" generally includes (i) a sale by each of the investors other than Seacon Holdings Limited of all of their respective shares of our equity securities, (ii) the sale by us of all or substantially all of our assets or (iii) the expiration of any lock-up period or other transfer restrictions in connection with the consummation of an initial public offering by us in which all outstanding shares of our Series A 12.0% cumulative senior preferred stock are redeemed for cash. For information related to the equity ownership of The Resolute Fund, L.P. and certain of its affiliated funds, JZ Equity Partners, plc and Seacon Holdings Limited, see "Principal and Selling Stockholders."

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Management Agreements

The Jordan Company, L.P.     In consideration for the services The Jordan Company, L.P. rendered in connection with the Acquisition and related financings, at the closing of the Acquisition, we paid The Jordan Company, L.P. a $14.0 million fee, agreed to reimburse The Jordan Company, L.P. for certain expenses incurred in connection with the Acquisition and related financings and entered a management consulting agreement to pay The Jordan Company, L.P. a quarterly management fee. The quarterly management fee payable to The Jordan Company, L.P. with respect to any fiscal quarter is calculated by reference to the Consolidated EBITDA (as defined in our senior subordinated credit agreement) realized by us and our subsidiaries during the most recently completed fiscal quarter, and is equal to the sum of (i) 1.5% of the first $50.0 million of Consolidated EBITDA realized in such quarter plus (ii) the product of (A) the ratio of the aggregate number of shares of our common stock then held by each of our stockholders other than Seacon Holdings Limited and members of our management team to the aggregate number of shares of our common stock then held by each of our stockholders other than members of our management team, times (B) 2.5%, times (C) any Consolidated EBITDA in excess of $50.0 million realized in such quarter. The quarterly management fee will not be required to be paid by us, and instead will accrue at an rate per annum equal to 5%, in the event that such payment is prohibited by any of the agreements or instruments governing our or our subsidiaries' indebtedness or we or any of our subsidiaries shall have either not paid cash interest or principal payments with respect to any of our or their indebtedness on any scheduled payment date and such payments have not been made within applicable cure periods, have not paid or accrued cash dividends on any dividend payment date in respect of any of our equity securities as required by our certificate of incorporation or as declared by our board of directors or have failed to make any redemption of our preference shares on any applicable redemption date as required by our certificate of incorporation. Under the management consulting agreement, The Jordan Company, L.P. renders consulting services to us in connection with our acquisitions, divestitures and investments, our financial and business affairs, our relationships with our lenders, stockholders and other third parties, and the expansion of our business. Under the terms of the management consulting agreement, The Jordan Company, L.P. and its affiliates may engage in acquisitions and business transactions with no obligation to consummate such acquisitions or business transactions through us or any of our subsidiaries. The management consulting agreement continues until December 31, 2009, after which it renews automatically for successive one-year terms unless terminated pursuant to its provisions. For the fiscal quarter ended March 31, 2005, we accrued a quarterly management fee of $1.1 million to The Jordan Company, L.P. The management consulting agreement will be terminable by us upon consummation of this offering. For information relating to the equity ownership of JZ Equity Partners, plc, which is advised by an affiliate of The Jordan Company, L.P., see "Principal and Selling Stockholders."

Klesch & Company Limited.     In consideration for the services Klesch & Company Limited rendered in connection with the Acquisition and related financings, at the closing of the Acquisition, we agreed to reimburse Klesch & Company Limited for certain expenses incurred in connection with the Acquisition and related financings and entered a management advisory agreement to pay Klesch & Company Limited a quarterly management fee. The quarterly management fee payable to Klesch & Company Limited with respect to any fiscal quarter is calculated by reference to the Consolidated EBITDA (as defined in our senior subordinated credit agreement) realized by us and our subsidiaries during the most recently completed fiscal quarter, and is equal to the sum of (i) 1.0% of the first $50.0 million of Consolidated EBITDA realized in such quarter plus (ii) the product of (A) the ratio of the aggregate number of shares of our common stock then held by Seacon Holdings Limited to the aggregate number of shares of our common stock then held by each of our stockholders other than members of our management team, times (B) 2.5%, times (C) any Consolidated EBITDA in excess of $50.0 million realized in such quarter. The quarterly management fee will not be required to be paid by us, and instead will accrue at an rate per annum equal to 5%, in the event that such payment is prohibited by any of the agreements or instruments governing our or our subsidiaries' indebtedness or we or any of our subsidiaries shall have either not paid cash interest or principal payments with respect to any of our or their indebtedness on any scheduled payment date and such payments have

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not been made within applicable cure periods, have not paid or accrued cash dividends on any dividend payment date in respect of any of our equity securities as required by our certificate of incorporation or as declared by our board of directors or have failed to make any redemption of our preference shares on any applicable redemption date as required by our certificate of incorporation. Under the management advisory agreement, Klesch & Company Limited renders consulting services to us in connection with our acquisitions, divestitures and investments, our financial and business affairs, our relationships with our lenders, stockholders and other third parties, and the expansion of our business. Under the terms of the management advisory agreement, Klesch & Company Limited and its affiliates may engage in acquisitions and business transactions with no obligation to consummate such acquisitions or business transactions through us or any of our subsidiaries. The management advisory agreement continues until December 31, 2009, after which it renews automatically for successive one-year terms unless terminated pursuant to its provisions. For the fiscal quarter ended March 31, 2005, we accrued a quarterly management fee of $0.5 million to Klesch & Company Limited. The management advisory agreement will be terminable by us upon consummation of this offering.

Seacon Holdings Limited.     In consideration for the services Seacon Holdings Limited rendered in connection with the Acquisition and related financings, at the closing of the Acquisition, we entered into a transaction fee agreement with Seacon Holdings Limited pursuant to which we paid Seacon Holdings Limited a $12.0 million fee at the time of the closing of the Acquisition. For more information relating to the equity ownership of Seacon Holdings Limited, see "Principal and Selling Stockholders."

Tax Sharing Agreement

At the closing of the Acquisition, we entered into a tax sharing agreement with our subsidiaries. Under the agreement, our subsidiaries consent to filing joint federal income tax returns with us for any taxable year for which a consolidated return can be filed and each taxable year thereafter. For each taxable year during which a subsidiary is included in a consolidated federal income tax return, each subsidiary will pay us an amount equal to its estimated federal tax liability for that taxable year and all prior years, with certain adjustments as set forth in the agreement.

Shareholders Agreement

Our stockholders have entered in a shareholders agreement setting forth certain rights and restrictions relating to ownership of our securities. Under the shareholders agreement, our stockholders agreed to vote for the board of directors nominated in the agreement. The shareholders agreement restricts each stockholder's ability to transfer or otherwise dispose of shares of our common stock, except to certain permitted transferees or pursuant to a public offering or a Rule 144 sale under the Securities Act of 1933. The shareholders agreement entitles the parties to certain other rights in connection with the shares of common stock, including rights of first refusal, tag-along rights, drag-along rights and rights to participate in sales made by other stockholders. The shareholders agreement also entitles the parties to rights to register their common stock in specified circumstances. See "Description of Capital Stock—Registration Rights." All the foregoing provisions of the stockholders agreement, except the registration rights, will terminate upon the offering.

Employment Agreements

We have entered into an employment agreement with Brian M. Sondey, our Chief Executive Officer as described in "Management—Employee Agreements."

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DESCRIPTION OF CAPITAL STOCK

The following is a description of the material terms of our amended and restated certificate of incorporation and bylaws as presently in effect and as anticipated to be in effect upon the completion of this offering. We also refer you to our certificate of incorporation and bylaws, copies of which will be filed as exhibits to the registration statement of which this prospectus forms a part.

Our authorized capital stock presently consists of                shares of common stock, par value $0.001 per share, and                shares of preferred stock, par value $0.001 per share, of which                shares have been designated as Series A 12.0% cumulative senior preferred stock, par value $0.001 per share. As of December 31, 2004, there were:

•  100,000 shares of our common stock outstanding;
•  200,000 shares of our Series A 12.0% cumulative senior preferred stock outstanding; and
•  no shares of our undesignated preferred stock outstanding.

After giving effect to the sale to the public of the shares of common stock offered in this prospectus, there will be (x)                                  shares of common stock outstanding, assuming no exercise of the underwriters' over-allotment option and assuming no exercise after                 ,          2005 of outstanding options or the warrant and (y)                shares of our Series A 12.0% cumulative senior preferred stock outstanding.

Preferred Stock

Following the closing of this offering, we will have                shares of our Series A 12.0% cumulative senior preferred stock outstanding.

Ranking.     The Series A 12.0% cumulative senior preferred stock will, with respect to dividend rights and rights on liquidation, dissolution or winding up, rank (x) senior to any class or series of our capital stock, including our common stock, that ranks junior to the Series A 12.0% cumulative senior preferred stock, (y) on parity with respect to any new class or series of our capital stock created after this offering that ranks on parity to the Series A 12.0% cumulative senior preferred stock and (z) junior to any new class or series of our capital stock created after this offering that ranks senior to the Series A 12.0% cumulative senior preferred stock.

Dividends.     The holders of the Series A 12.0% cumulative senior preferred stock will be entitled to receive, when, as and if declared by our board of directors, cash dividends on each outstanding share of Series A 12.0% cumulative senior preferred stock at a rate of 12% per annum on the liquidation preference of such share of Series A 12.0% cumulative senior preferred stock, which is initially equal to $1,000 per share and is subject to adjustment for subdivisions or combinations affecting the number of shares of Series A 12.0% cumulative senior preferred stock. Such dividends shall be paid in cash or accrue semi-annually in arrears on each June 30 and December 31 of each year. Accrued and unpaid dividends will compound on each such semi-annual date at a rate equal to 12% per annum. So long as any shares of Series A 12.0% cumulative senior preferred stock remain outstanding or any dividends payable on shares of Series A 12.0% cumulative senior preferred stock have not been paid full in cash, then we may not declare or pay any dividends, or redeem, purchase or otherwise acquire for consideration (other than a repurchase pursuant to the terms of any agreement between us and our employees), any shares of our capital stock, including shares of common stock, ranking junior to the Series A 12.0% cumulative senior preferred stock without the prior written consent of holders of a majority of the outstanding shares of Series A 12.0% cumulative senior preferred stock.

Rights upon Liquidation.     In the event of any liquidation, dissolution or winding up of us, before any distribution or payment is made to the holders of any class or series of our capital stock, including the common stock, that ranks junior to our Series A 12.0% cumulative senior preferred stock upon liquidation, the holders of shares of Series A 12.0% cumulative senior preferred stock shall be entitled to be paid an amount equal to the liquidation preference of such share of Series A 12.0% cumulative senior preferred stock plus all accrued and unpaid dividends thereon.

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Optional and Mandatory Redemption.     We shall have the right to redeem, in whole or in part, any outstanding shares of our Series A 12.0% cumulative senior preferred stock, at any time, at a redemption price equal to the liquidation preference of such share of Series A 12.0% cumulative senior preferred stock plus all accrued and unpaid dividends thereon. Upon the occurrence of certain change of control events involving us, we will be required to redeem all of the outstanding shares of our Series A 12.0% cumulative senior preferred stock at a redemption price equal to the liquidation preference of such share of Series A 12.0% cumulative senior preferred stock plus accrued but unpaid dividends thereon.

Voting and Consent Rights.     Unless the consent or approval of a greater number of shares shall then be required by law, the affirmative vote of the holders of a majority of the outstanding shares of Series A 12.0% cumulative senior preferred stock shall be necessary in order for us to authorize or issue any class or series of our capital stock that ranks senior to the Series A 12.0% cumulative senior preferred stock or to authorize, adopt or approve any amendment to our certificate of incorporation that would increase or decrease the par value of our Series A 12.0% cumulative senior preferred stock, alter or change the powers, preferences or rights of the shares or our Series A 12.0% cumulative senior preferred stock in a manner that is materially adverse to the holders of our Series A 12.0% cumulative senior preferred stock. Other than as set forth above, or as otherwise provided by applicable law, the holders of shares of Series A 12.0% cumulative senior preferred stock shall not have any right to vote on any matters to be voted on by our stockholders.

Additional Classes of Preferred Stock .    Our board of directors has the authority, without action by our stockholders (other than as described above), to designate and issue additional shares of preferred stock in one or more series and to fix the rights, preferences, privileges and related restrictions, including dividend rights, dividend rates, conversion rights, voting rights, terms of redemption, redemption prices, liquidation preferences and the number of shares constituting any series or the designation of the series. The issuance of any such preferred stock may delay, impede or prevent the completion of a merger, tender offer or other takeover attempt of our company without further action of our stockholders, including a tender offer or other transaction that some, or a majority, of our stockholders might believe to be in their best interests or in which stockholders may receive a premium for their stock over its then current market price. At present, we have no plans to issue any new class or series of our preferred stock following this offering other than our existing Series A 12.0% cumulative senior preferred stock.

Common Stock

The holders of common stock are entitled to one vote per share on all matters to be voted upon by stockholders, including elections of directors. No holder of common stock may cumulate votes in voting for our directors. Subject to the rights of any holders of any outstanding preferred stock, the holders of common stock are entitled to receive dividends, if any, that the board of directors may from time to time declare out of funds legally available. See "Dividend Policy" for more information regarding our dividend policy. In the event of our liquidation, dissolution or winding up, the holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities, subject to prior distribution rights of preferred stock then outstanding.

The common stock has no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the common stock. All outstanding shares of common stock are fully paid and nonassessable, and the shares of common stock to be issued upon completion of this offering will be fully paid and nonassessable.

Our authorized but unissued shares of common stock will be available for future issuance without additional stockholder approval. While the authorized but unissued shares are not designed to deter or prevent a change of control, under some circumstances we could use the authorized but unissued shares to create voting impediments or to frustrate persons seeking to effect a takeover or otherwise gain control by, for example, issuing those shares in private placements to purchasers who might side with our board of directors in opposing a hostile takeover bid.

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The rights, preferences and privileges of holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock which we may designate and issue in the future.

Registration Rights

We have entered into a shareholders agreement that provides some of our stockholders both demand registration rights and piggyback registration rights. We refer to shares of our common stock that are subject to registration rights agreements as registrable securities.

Demand Registration Rights.     At any time and from time to time after the first anniversary of this offering, the holders of at least 25% of our common stock on a fully diluted basis or owning registrable securities with an expected value in a registered public offering of at least $50 million have rights, at their request, to have their shares registered for resale under the Securities Act. Upon receipt of such request, we must give notice to all other holders of registrable securities and we generally are required to use our best efforts to effect such registration. We are not required to effect any registration requested by a stockholder if we have received more than three registration requests from such stockholder or if we have effected any registration (other than on Form S-3 or any successor form relating to secondary offerings) within 180 days prior to such request. We are also not required to effect any registration statement if such request for registration is for less than 20% of the shares of common stock then outstanding and the aggregate purchase price of the shares to be included in the requested registration is less than $50 million. We are generally obligated to bear the expenses, other than underwriting discounts and sales commissions, of all such registrations.

Piggyback Registration Rights.     The holders of registrable securities have rights to have their shares registered for resale under the Securities Act if we register any of our securities, either for our own account or for the account of other stockholders, subject to the right of underwriters to limit the number of shares included in an underwritten offering.

Delaware Business Combination Statute

Section 203 of the Delaware General Corporation Law provides that, subject to exceptions set forth therein, an interested stockholder of a Delaware corporation shall not engage in any business combination, including mergers or consolidations or acquisitions of additional shares of the corporation, with the corporation for a three-year period following the date that the stockholder becomes an interested stockholder unless:

•  prior to that date, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
•  upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85 percent of the voting stock of the corporation outstanding at the time the transaction commenced, other than statutorily excluded shares; or
•  on or subsequent to such date, the business combination is approved by the board of directors of the corporation and authorized at an annual or special meeting of stockholders by the affirmative vote of at least 66 2/3 percent of the outstanding voting stock which is not owned by the interested stockholder.

Except as otherwise set forth in Section 203, an interested stockholder is defined to include:

•  any person that is the owner of 15 percent or more of the outstanding voting stock of the corporation, or is an affiliate or associate of the corporation and was the owner of 15 percent or more of the outstanding voting stock of the corporation at any time within three years immediately prior to the date of determination; and
•  the affiliates and associates of any such person.

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Section 203 may make it more difficult for a person who would be an interested stockholder to effect various business combinations with a corporation for a three-year period. We have not elected to be exempt from the restrictions imposed under Section 203. The provisions of Section 203 may encourage persons interested in acquiring us to negotiate in advance with our board, because the stockholder approval requirement would be avoided if a majority of the directors then in office approves either the business combination or the transaction which results in any such person becoming an interested stockholder. These provisions also may have the effect of preventing changes in our management. It is possible that these provisions could make it more difficult to accomplish transactions which our stockholders may otherwise deem to be in their best interests.

Limitations on Director Liability

Under the Delaware General Corporation Law, we may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), by reason of the fact that he or she is or was our director, officer, employee or agent, or is or was serving at our request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to our best interests, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.

In addition, Section 102(b)(7) of the Delaware General Corporation Law provides that a certificate of incorporation may contain a provision eliminating or limiting the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that such provision shall not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law (relating to liability for unauthorized acquisitions or redemptions of, or dividends on, capital stock) or (iv) for any transaction from which the director derived an improper personal benefit. Our certificate of incorporation contains the provisions permitted by Section 102(b)(7) of the Delaware General Corporation Law.

Transfer Agent and Registrar

The transfer agent and registrar for the common stock is                                                     .

New York Stock Exchange Listing

We will apply to list our common stock on the New York Stock Exchange under the symbol "TAL".

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SHARES ELIGIBLE FOR FUTURE SALE

Before this offering, there has not been any public market for common stock, and we cannot predict the effect, if any, that market sales by our existing stockholders of shares of common stock or the availability of shares of common stock for sale will have on the market price of the common stock. Nevertheless, sales by our existing stockholders of substantial amounts of common stock in the public market, or the perception that such sales could occur, could adversely affect the market price of our common stock and could impair our future ability to raise capital through the sale of equity securities.

Upon completion of this offering, we will have a total of                                      shares of common stock outstanding, assuming no outstanding options are exercised after                          , 2005. Shares sold in this offering will be freely tradable without restriction or further registration under the Securities Act, except for any shares which may be held or acquired by our "affiliates," as that term is defined in Rule 144 promulgated under the Securities Act, which shares will be subject to the volume limitations and other restrictions of Rule 144 described below. The remaining                              shares of common stock outstanding will be deemed "restricted securities" as defined under Rule 144. Restricted securities may be sold in the public market only if registered under the Securities Act or pursuant to an exemption from such registration, including, among others, the exemptions provided by Rules 144, 144(k) and 701 promulgated under the Securities Act, summarized below.

Under the lock-up agreements described below and the provisions of Rules 144, 144(k) and 701, additional shares will be available for sale in the public market as follows:


Maximum
Number of
Shares
Date
                 After the date of this prospectus
                 After 180 days from the date of this prospectus (subject, in some cases, to volume limitations and contractual vesting schedules)

In addition, as of March 31, 2005, options to purchase a total of 3,950 shares of common stock are outstanding, all of which will be exercisable concurrent with this offering (without regard to the lock-up period referred to above).

Lock-up Agreements

Subject to certain exceptions described under the caption "Underwriting," our officers, directors, and existing stockholders, including each selling stockholder, have agreed that they will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any shares of our common stock or securities convertible into or exchangeable or exercisable for any shares of our common stock, enter into a transaction that would have the same effect, or enter into any swap, hedge, or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of our common stock, whether any of these transactions are to be settled by delivery of our common stock or other securities, in cash or otherwise, or publicly disclose the intention to make any offer, sale, pledge, or disposition, or to enter into any such transaction, swap, hedge, or other arrangement, without, in each case, the prior written consent of Credit Suisse First Boston LLC for a period of 180 days after the date of this prospectus. However, in the event that either (1) during the last 17 days of the "lock-up" period, we release earnings results or material news or a material event relating to us occurs or (2) prior to the expiration of the "lock-up" period, we announce that we will release earnings results during the 16-day period beginning on the last day of the "lock-up" period, then in either case the expiration of the "lock-up" will be extended until the expiration of the 18-day period beginning on the date of the release of the earnings results or the occurrence of the material news or event, as applicable, unless Credit Suisse First Boston LLC waives, in writing, such an extension.

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Rule 144

In general, under Rule 144 as currently in effect a person, including an affiliate, who has beneficially owned shares for at least one year is entitled to sell, within any three-month period commencing 90 days after the date of this prospectus, a number of shares that does not exceed the greater of:

•  one percent of the number of shares of common stock then outstanding (approximately              shares immediately after this offering); or
•  the average weekly trading volume of our common stock on the New York Stock Exchange during the four calendar weeks before a notice of the sale on Form 144 is filed.

Sales under Rule 144 are also subject to specified manner of sale provisions and notice requirements and to the availability of specified public information about our company.

Rule 144(k)

Under Rule 144(k), a person who is not deemed to have been our affiliate at any time during the 90 days preceding a sale and who has beneficially owned the shares proposed to be sold for at least two years, including the holding period of any prior owner except an affiliate of us, is entitled to sell those shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144.

Rule 701

Shares of our common stock issued in reliance on Rule 701, such as those shares acquired upon exercise of options granted under our stock plans or other compensatory arrangement, are also restricted and, beginning 90 days after the effective date of this prospectus, may be sold by stockholders other than our affiliates subject only to the manner of sale provisions of Rule 144 and by affiliates under Rule 144 without compliance with its one-year holding requirement.

Registration Rights

Following this offering and, in some cases, the expiration of the lock-up period described above, the holders of              shares of our outstanding common stock will have demand registration rights with respect to their shares of common stock that will enable them to require us to register their shares of common stock under the Securities Act, and they will also have rights to participate in any of our future registrations of securities by us. See "Description of Capital Stock—Registration Rights" for more information regarding these registration rights.

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CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES TO NON-U.S. HOLDERS

This section describes the material United States federal income and estate tax consequences of the ownership and disposition of shares of our common stock by a non-U.S. holder. When we refer to a non-U.S. holder, we mean a beneficial owner of our common stock that, for U.S. federal income tax purposes, is other than:

•  a citizen or resident of the United States;
•  a corporation (including for this purpose any other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States or any political subdivision thereof;
•  an estate the income of which is subject to U.S. federal income taxation regardless of its source; or
•  a trust that is subject to the primary supervision of a U.S. court and to the control of one or more U.S. persons, or that has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

If a partnership (including for this purpose any other entity, either organized within or without the United States, treated as a partnership for U.S. federal income tax purposes) holds the shares, the tax treatment of a partner as a beneficial owner of the shares generally will depend upon the status of the partner and the activities of the partnership. Foreign partnerships also generally are subject to special U.S. tax documentation requirements.

This section does not consider the specific facts and circumstances that may be relevant to a particular non-U.S. holder and does not address the treatment of a non-U.S. holder under the laws of any state, local or foreign taxing jurisdiction. This section is based on the tax laws of the United States, including the Internal Revenue Code of 1986, as amended (the "Code"), existing and proposed regulations, and administrative and judicial interpretations, all as currently in effect. These laws are subject to change, possibly on a retroactive basis.

You should consult a tax advisor regarding the U.S. federal tax consequences of acquiring, holding and disposing of our common stock in your particular circumstances, as well as any tax consequences that may arise under the laws of any state, local or foreign taxing jurisdiction.

Dividends

Except as described below, dividends paid to you are subject to withholding of U.S. federal income tax at a 30% rate or at a lower rate if you are eligible for the benefits of an income tax treaty that provides for a lower rate. Even if you are eligible for a lower treaty rate, we will generally be required to withhold at a 30% rate (rather than the lower treaty rate) on dividend payments to you, unless you have furnished to us a valid Internal Revenue Service Form W-8BEN or an acceptable substitute form upon which you certify, under penalties of perjury, your status as a non-United States person and your entitlement to the lower treaty rate with respect to such payments. If you are eligible for a reduced rate of U.S. withholding tax under a tax treaty, you may obtain a refund of any amounts withheld in excess of that rate by filing a refund claim with the United States Internal Revenue Service.

If dividends paid to you are "effectively connected" with your conduct of a trade or business within the United States, and, if required by a tax treaty, the dividends are attributable to a permanent establishment that you maintain in the United States, we generally are not required to withhold tax from the dividends, provided that you have furnished to us a valid Internal Revenue Service Form W-8ECI or an acceptable substitute form upon which you certify, under penalties of perjury, your status as a non-United States person and your entitlement to this exemption from withholding. In lieu of withholding, "effectively connected" dividends are taxed at rates applicable to United States citizens, resident aliens and domestic U.S. corporations. If you are a corporate non-U.S. holder, "effectively connected" dividends that you receive may, under certain circumstances, be subject to an additional "branch profits tax" at a 30% rate or at a lower rate if you are eligible for the benefits of an income tax treaty that provides for a lower rate.

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Gain on Disposition of Common Stock

If you are a non-U.S. holder, you generally will not be subject to United States federal income tax on gain that you recognize on a disposition of our common stock unless:

•  you are an individual who is present in the United States for 183 days or more in the taxable year of disposition and certain other conditions are met;
•  such gain is effectively connected with your conduct of a trade or business within the United States and, if certain tax treaties apply, is attributable to a U.S. permanent establishment maintained by you;
•  you are subject to the Code provisions applicable to certain U.S. expatriates; or
•  we are or have been a "U.S. real property holding corporation" for U.S. federal income tax purposes and, assuming that our common stock is deemed to be "regularly traded on an established securities market," you held, directly or indirectly at any time during the five-year period ending on the date of disposition or such shorter period that such shares were held, more than five percent of our common stock. We have not been, are not and do not anticipate becoming a United States real property holding corporation for United States federal income tax purposes.

Special rules may apply to certain non-U.S. holders, such as "controlled foreign corporations," "passive foreign investment companies," and corporations that accumulate earnings to avoid U.S. federal income tax. Such entities should consult their own tax advisors to determine the U.S. federal, state, local and other tax consequences that may be relevant to them.

Federal Estate Taxes

If our common stock is held by a non-U.S. holder at the time of death, such stock will be included in the holder's gross estate for United States federal estate tax purposes, unless an applicable estate tax treaty provides otherwise.

Backup Withholding and Information Reporting

If you are a non-U.S. holder, you are generally exempt from backup withholding and information reporting on Internal Revenue Service Form 1099 with respect to dividend payments and the payment of the proceeds from the sale of our common stock effected at a United States office of a broker, as long as

•  the income associated with such payments is otherwise exempt from United States federal income tax,
•  the payor or broker does not have actual knowledge or reason to know that you are a United States person and
•  you have furnished to the payor or broker a valid Internal Revenue Service Form W-8BEN or an acceptable substitute form upon which you certify, under penalties of perjury, that you are a non-United States person, or other documentation upon which it may rely to treat the payments as made to a non-United States person in accordance with U.S. Treasury regulations (or you otherwise establish an exemption).

Payment of the proceeds from the sale of our common stock effected at a foreign office of a broker generally will not be subject to information reporting or backup withholding. However, a sale of our common stock that is effected at a foreign office of a broker will be subject to information reporting and backup withholding if:

•  the proceeds are transferred to an account maintained by you in the United States,
•  the payment of proceeds or the confirmation of the sale is mailed to you at a United States address, or

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•  the sale has some other specified connection with the United States as provided in U.S. Treasury regulations,

unless the documentation requirements described above are met or you otherwise establish an exemption and the broker does not have actual knowledge or reason to know that you are a United States person.

In addition, a sale of our common stock will be subject to information reporting if it is effected at a foreign office of a broker that is:

•  a United States person,
•  a controlled foreign corporation for United States tax purposes,
•  a foreign person 50% or more of whose gross income is effectively connected with the conduct of a United States trade or business for a specified three-year period, or
•  a foreign partnership, if at any time during its tax year one or more of its partners are "U.S. persons", as defined in U.S. Treasury regulations, who in the aggregate hold more than 50% of the income or capital interest in the partnership, or such foreign partnership is engaged in the conduct of a United States trade or business,

unless the documentation requirements described above are met or you otherwise establish an exemption and the broker does not have actual knowledge or reason to know that you are a United States person. Backup withholding will apply if the sale is subject to information reporting and the broker has actual knowledge that you are a United States person.

You generally may obtain a refund of any amounts withheld under the backup withholding rules that exceed your income tax liability by filing a refund claim with the Internal Revenue Service.

In addition to the foregoing, we must report annually to the IRS and to each non-U.S. holder on Internal Revenue Service Form 1042-S the entire amount of any distribution irrespective of any estimate of the portion of the distribution that represents a taxable dividend. This information may also be made available to the tax authorities in the country in which the non-U.S. holder resides under the provisions of an applicable income tax treaty.

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UNDERWRITING

Credit Suisse First Boston LLC, Deutsche Bank Securities Inc. and Jefferies & Company, Inc. are acting as joint bookrunning managers of the offering. Under the terms and subject to the conditions contained in an underwriting agreement dated                              , 2005, we have agreed to sell to the underwriters named below, for whom Credit Suisse First Boston LLC, Deutsche Bank Securities Inc. and Jefferies & Company, Inc. are acting as representatives, the following respective numbers of shares of common stock:


Underwriter Number
of Shares
Credit Suisse First Boston LLC      
Deutsche Bank Securities Inc. 
Jefferies & Company, Inc.      
UBS Securities LLC      
 
                        
Total      

The underwriting agreement provides that the underwriters are obligated to purchase all the shares of common stock in the offering if any are purchased, other than those shares covered by the over-allotment option described below. The underwriting agreement also provides that if an underwriter defaults the purchase commitments of non-defaulting underwriters may be increased or the offering may be terminated.

The selling stockholders have granted to the underwriters a 30-day option to purchase on a pro rata basis up to                          additional shares at the initial public offering price less the underwriting discounts and commissions. The option may be exercised only to cover any over-allotments of common stock.

The underwriters propose to offer the shares of common stock initially at the public offering price on the cover page of this prospectus and to selling group members at that price less a selling concession of $              per share. The underwriters and selling group members may allow a discount of $              per share on sales to other broker/dealers. After the initial public offering the representatives may change the public offering price and concession and discount to broker/dealers.

The following table summarizes the compensation and estimated expenses we will pay:


  Per Share Total
  Without
Over-allotment
With
Over-allotment
Without
Over-allotment
With
Over-allotment
Underwriting discounts and commissions paid by us $                 $                 $                 $                
Expenses payable by us $   $   $   $  
Underwriting discounts and commissions paid by the selling stockholders $                 $                 $                 $                
Expenses payable by the selling stockholders $   $   $   $  

The representatives have informed us that they do not expect sales to accounts over which the underwriters have discretionary authority to exceed 5% of the shares of common stock being offered.

We have agreed that we will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or file with the Securities and Exchange Commission a registration statement under the Securities Act of 1933 (the "Securities Act") relating to, any shares of our common stock or securities convertible into or exchangeable or exercisable for any shares of our common stock, or publicly disclose the intention to make any offer, sale, pledge, disposition or filing, without the prior written consent of Credit Suisse First Boston LLC for a period of 180 days after the date of this prospectus. However, in the event that either (1) during the last 17 days of the "lock-up" period, we

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release earnings results or material news or a material event relating to us occurs or (2) prior to the expiration of the "lock-up" period, we announce that we will release earnings results during the 16-day period beginning on the last day of the "lock-up" period, then in either case the expiration of the "lock-up" will be extended until the expiration of the 18-day period beginning on the date of the release of the earnings results or the occurrence of the material news or event, as applicable, unless Credit Suisse First Boston LLC waives, in writing, such an extension.

Our officers and directors and existing stockholders, including each selling stockholder, have agreed that they will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any shares of our common stock or securities convertible into or exchangeable or exercisable for any shares of our common stock, enter into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of our common stock, whether any of these transactions are to be settled by delivery of our common stock or other securities, in cash or otherwise, or publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement, without, in each case, the prior written consent of Credit Suisse First Boston LLC for a period of 180 days after the date of this prospectus. However, in the event that either (1) during the last 17 days of the "lock-up" period, we release earnings results or material news or a material event relating to us occurs or (2) prior to the expiration of the "lock-up" period, we announce that we will release earnings results during the 16-day period beginning on the last day of the "lock-up" period, then in either case the expiration of the "lock-up" will be extended until the expiration of the 18-day period beginning on the date of the release of the earnings results or the occurrence of the material news or event, as applicable, unless Credit Suisse First Boston LLC waives, in writing, such an extension.

We and the selling stockholders have agreed to indemnify the underwriters against liabilities under the Securities Act, or contribute to payments that the underwriters may be required to make in that respect.

We will apply to list the shares of common stock on the New York Stock Exchange.

Certain of the underwriters and their respective affiliates have provided, and may provide in the future, investment banking and other financial services for us in the ordinary course of business, for which they have received and would receive customary compensation. In particular, affiliates of Jefferies & Company, Inc. performed financial advisory services for us in connection with the Acquisition.

Prior to this offering, there has been no public market for our common stock. The initial public offering price has been determined by a negotiation between us and the representatives and will not necessarily reflect the market price of our common stock following the offering. The principal factors that were considered in determining the public offering price included:

•  the information presented in this prospectus and otherwise available to the underwriters;
•  market conditions for initial public offerings;
•  the history of and prospects for the industry in which we compete;
•  the ability of our management;
•  the prospectus for our future earnings;
•  the present state of our development and our current financial condition;
•  the recent market prices of, and the demand for, publicly traded common stock of generally comparable companies; and
•  the general condition of the securities markets at the time of this offering.

In connection with the offering the underwriters may engage in stabilizing transactions, over-allotment transactions, syndicate covering transactions and penalty bids in accordance with Regulation M under the Securities Exchange Act of 1934.

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•  Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum.
•  Over-allotment involves sales by the underwriters of shares in excess of the number of shares the underwriters are obligated to purchase, which creates a syndicate short position. The short position may be either a covered short position or a naked short position. In a covered short position, the number of shares over-allotted by the underwriters is not greater than the number of shares that they may purchase in the over-allotment option. In a naked short position, the number of shares involved is greater than the number of shares in the over-allotment option. The underwriters may close out any covered short position by either exercising their over-allotment option and/or purchasing shares in the open market.
•  Syndicate covering transactions involve purchases of the common stock in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of shares to close out the short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option. If the underwriters sell more shares than could be covered by the over-allotment option, a naked short position, the position can only be closed out by buying shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering.
•  Penalty bids permit the representatives to reclaim a selling concession from a syndicate member when the common stock originally sold by the syndicate member is purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.

These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our common stock or preventing or retarding a decline in the market price of the common stock. As a result, the price of our common stock may be higher than the price that might otherwise exist in the open market. These transactions may be effected on the New York Stock Exchange or otherwise and, if commenced, may be discontinued at any time.

A prospectus in electronic format may be made available on the web sites maintained by one or more of the underwriters, or selling group members, if any, participating in this offering and one or more of the underwriters participating in this offering may distribute prospectuses electronically. The representatives may agree to allocate a number of shares to underwriters and selling group members for sale to their online brokerage account holders. Internet distributions will be allocated by the underwriters and selling group members that will make internet distributions on the same basis as other allocations.

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NOTICE TO CANADIAN RESIDENTS

Resale Restrictions

The distribution of the shares of common stock in Canada is being made only on a private placement basis exempt from the requirement that we prepare and file a prospectus with the securities regulatory authorities in each province where trades of shares of common stock are made. Any resale of the shares of common stock in Canada must be made under applicable securities laws which will vary depending on the relevant jurisdiction, and which may require resales to be made under available statutory exemptions or under a discretionary exemption granted by the applicable Canadian securities regulatory authority. Purchasers are advised to seek legal advice prior to any resale of the shares of common stock.

Representations of Purchasers

By purchasing shares of common stock in Canada and accepting a purchase confirmation a purchaser is representing to us and the dealer from whom the purchase confirmation is received that:

•  the purchaser is entitled under applicable provincial securities laws to purchase the shares of common stock without the benefit of a prospectus qualified under those securities laws,
•  where required by law, that the purchaser is purchasing as principal and not as agent, and
•  the purchaser has reviewed the text above under Resale Restrictions.

Rights of Action – Ontario Purchasers Only

Under Ontario securities legislation, a purchaser who purchases a security offered by this prospectus during the period of distribution will have a statutory right of action for damages, or while still the owner of the shares of common stock, for rescission against us in the event that this circular contains a misrepresentation without regard to whether the purchaser relied on the misrepresentation. The right of action for damages is exercisable not later than the earlier of 180 days from the date the purchaser first had knowledge of the facts giving rise to the cause of action and three years from the date on which payment is made for the shares of common stock. If a purchaser elects to exercise the right of action for recession, the purchaser will have no right of action for damages against us. In no case will the amount recoverable in any action exceed the price at which the securities were offered to the purchaser and if the purchaser is shown to have purchased the securities with knowledge of the misrepresentation, we will have no liability. In the case of an action for damages, we will not be liable for all or any portion of the damages that are proven to not represent the depreciation in value of the shares of common stock as a result of the misrepresentation relied upon. These rights are in addition to, and without derogation from, any other rights or remedies available at law to an Ontario purchaser. The foregoing is a summary of the rights available to an Ontario purchaser, Ontario purchasers should refer to the complete text of the relevant statutory provisions.

Enforcement of Legal Rights

All of our directors and officers as well as the experts named herein may be located outside of Canada and, as a result, it may not be possible for Canadian purchasers to effect service of process within Canada upon us or those persons. All or a substantial portion of our assets and the assets of those persons may be located outside of Canada and, as a result, it may not be possible to satisfy a judgment against us or those persons in Canada or to enforce a judgment obtained in Canadian courts against us or those persons outside of Canada.

Taxation and Eligibility for Investment

Canadian purchasers of shares of common stock should consult their own legal and tax advisors with respect to the tax consequences of an investment in the shares of common stock in their particular circumstances and about the eligibility of the shares of common stock for investment by the purchaser under relevant Canadian legislation.

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LEGAL MATTERS

Certain legal matters in connection with the sale of the shares of common stock offered hereby will be passed upon for us by Mayer, Brown, Rowe & Maw LLP, New York, New York. The underwriters have been represented by Cravath, Swaine & Moore LLP, New York, New York. Mayer, Brown, Rowe & Maw LLP from time to time represents TAL International Group, Inc. in connection with other matters.

EXPERTS

The consolidated financial statements and schedule of TAL International Group, Inc. at December 31, 2004 and for the two month period November 1, 2004 through December 31, 2004, and the combined consolidated financial statements and schedule of the Predecessor at December 31, 2003 and for the ten month period January 1, 2004 through October 31, 2004 and for each of the two years in the period ended December 31, 2003, appearing in this prospectus and registration statement have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports thereon appearing elsewhere herein, and are included in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the Securities and Exchange Commission a registration statement on Form S-1 under the Securities Act that registers the shares of our common stock to be sold in this offering. This prospectus does not contain all of the information set forth in the registration statement, certain parts of which are omitted in accordance with the rules and regulations of the Securities and Exchange Commission. For further information about us and the shares to be sold in this offering, please refer to the registration statement. Statements contained in this prospectus as to the contents of any agreement or any other document referred to are not necessarily complete and, in each instance, we refer you to the copy of the agreement or other document filed as an exhibit to the registration statement. Each of these statements is qualified in all respects by this reference.

You may read and copy the registration statement, and the exhibits and schedules to the registration statement, at the public reference room maintained by the Securities and Exchange Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further information regarding the public reference room. You may also obtain copies of all or part of the registration statement by mail from the Public Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.

The Securities and Exchange Commission also maintains a website that contains reports, proxy and information statements and other information about issuers, including TAL International Group, Inc. that file electronically with the Commission. The address of that site is http://www.sec.gov.

Upon completion of this offering, we will be become subject to the reporting and information requirements of the Securities Exchange Act of 1934, as amended, and we will file reports, proxy statements and other information with the Securities and Exchange Commission.

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INDEX TO FINANCIAL STATEMENTS


  Page
CONSOLIDATED FINANCIAL STATEMENTS – DECEMBER 31, 2002, 2003 AND 2004
Report of Independent Registered Public Accounting Firm   F-2  
Combined Consolidated Balance Sheet at December 31, 2003 (Predecessor) and Consolidated Balance Sheet at December 31, 2004 (Successor)   F-3  
Combined Consolidated Statements of Operations for the years ended December 31, 2002 and 2003 (Predecessor), the ten months ended October 31, 2004 (Predecessor) and the Consolidated Statement of Operations for the two months ended December 31, 2004 (Successor)   F-4  
Combined Consolidated Statements of Owner's Net Investment and Comprehensive Income (Loss) for the years ended December 31, 2002 and 2003 (Predecessor), the ten months ended October 31, 2004 (Predecessor) and the Consolidated Statements of Stockholders' Equity (Deficit) and Comprehensive Income for the two months ended December 31, 2004 (Successor)   F-5  
Combined Consolidated Statements of Cash Flows for the years ended December 31, 2002 and 2003 (Predecessor), the ten months ended October 31, 2004 (Predecessor) and the Consolidated Statement of Cash Flows for the two months ended December 31, 2004 (Successor)   F-6  
Notes to Financial Statements   F-7  
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – MARCH 31, 2004 AND 2005
Consolidated Balance Sheets at December 31, 2004 (Successor) and March 31, 2005 (Successor)   F-25  
Combined Consolidated Statement of Operations for the three months ended March 31, 2004 (Predecessor) and Consolidated Statement of Operations for the three months ended March 31, 2005 (Successor)   F-26  
Combined Consolidated Statement of Cash Flows for the three months ended March 31, 2004 (Predecessor) and Consolidated Statement of Cash Flows for the three months ended March 31, 2005 (Successor)   F-27  
Notes to Unaudited Financial Statements   F-28  

F-1




Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
TAL International Group, Inc.

We have audited the accompanying consolidated balance sheet of TAL International Group, Inc. as of December 31, 2004 (the "Successor Company") and the combined consolidated balance sheet of Transamerica Maritime Container as of December 31, 2003 (the "Predecessor Company"), and the related consolidated statements of operations, stockholders' equity (deficit) and comprehensive income, and cash flows for the period November 1, 2004 through December 31, 2004 (Successor Company), and the combined consolidated statements of operations, owner's net investment and comprehensive income (loss), and cash flows for the period from January 1, 2004 through October 31, 2004 and for each of the two years in the period ended December 31, 2003 (Predecessor Company). These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the Successor Company consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of TAL International Group, Inc. at December 31, 2004, and the consolidated results of its operations and its cash flows for the period November 1, 2004 through December 31, 2004, in conformity with U.S. generally accepted accounting principles. Further, in our opinion, the Predecessor Company combined consolidated financial statements referred to above present fairly, in all material respects, the combined consolidated financial position of Transamerica Maritime Container at December 31, 2003, and the combined consolidated results of its operations and its cash flows for the period January 1, 2004 through October 31, 2004 and for each of the two years in the period ended December 31, 2003, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 2 to the accompanying financial statements, in 2002 the Predecessor Company changed its method of accounting for (i) goodwill and other intangible assets and (ii) the impairment or disposal of long-lived assets.

/s/ Ernst & Young LLP

Stamford, Connecticut
June 24, 2005

F-2




TAL International Group, Inc.
Combined Consolidated Balance Sheet and Consolidated Balance Sheet
(Dollars in thousands, except share data)


  Predecessor Successor
  December 31,
  2003 2004
Assets:            
Cash and cash equivalents $ 3,161   $ 17,668  
Accounts receivable, net of allowances of $2,032 and $225   37,593     35,014  
Net investment in direct finance leases   6,562     13,262  
Leasing equipment, net of accumulated depreciation and allowances of $986,071 and $19,029   977,022     1,103,423  
Leasehold improvements and other fixed assets, net of accumulated depreciation and amortization of $25,321 and $566   258     4,255  
Equipment held for sale   12,458     11,578  
Goodwill       73,570  
Deferred financing costs       47,343  
Other assets   16,936     14,770  
Total assets $ 1,053,990   $ 1,320,883  
Liabilities and stockholders' equity (deficit) / owner's net investment:            
Accounts payable $ 5,560   $ 4,580  
Accrued expenses   46,451     40,039  
Income taxes payable   43,713     1,557  
Deferred income tax liability   243,026     2,393  
Due to affiliates   614,242      
Debt:            
Senior secured credit facility       797,000  
Senior unsecured credit agreement       275,000  
Total liabilities   952,992     1,120,569  
Preferred stock, Series A, subject to redemption, 200,000 shares issued and outstanding       203,738  
Common stock, subject to redemption, 3,333.63 shares issued and outstanding       3  
Stockholders' equity (deficit) / owner's net investment:            
Preferred stock, $.001 par value, 500,000 shares authorized and 200,000 shares issued and outstanding        
Common stock, $.001 par value, 200,000 shares authorized and 100,000 shares issued and outstanding        
Additional paid-in capital       97  
Accumulated deficit       (3,541
Accumulated other comprehensive income       17  
Total stockholders' equity (deficit)       (3,427
Owner's net investment   100,998      
Total liabilities and stockholders' equity (deficit) / owner's net investment $ 1,053,990   $ 1,320,883  

See accompanying notes to the consolidated financial statements.

F-3




TAL International Group, Inc.
Combined Consolidated Statements of Operations and Consolidated Statement of Operations
(Dollars in thousands, except share data)


  Predecessor Successor
  Years ended December 31, Ten months
ended
Two months
ended
  2002 2003 October 31,
2004
December 31,
2004
Revenues:                              
Leasing revenues $ 303,786   $ 301,352   $ 242,755   $ 48,180  
Management fee income   5,927     6,612     6,046     1,071  
Equipment trading revenue   15,893     15,235     9,641     1,713  
Other revenues   2,395     2,823     3,066     498  
Total revenues   328,001     326,022     261,508     51,462  
Expenses:                        
Equipment trading expenses   12,937     12,822     7,044     1,361  
Direct operating expenses   53,595     37,268     23,043     4,372  
Administrative expenses   33,383     38,404     29,014     6,419  
Depreciation and amortization   150,256     134,985     119,449     19,769  
Equipment rental expense   37,307     36,264     4,342     1,140  
Provision for doubtful accounts (reversal)   (322   (33   300     225  
Net loss (gain) on sale of leasing equipment   55,782     35,940     3,325     (126
Interest and debt expense   25,063     23,756     22,181     13,185  
Unrealized (gain) on interest rate swaps               (2,432
Other Parent Company charges   3,563         28,360      
Total expenses   371,564     319,406     237,058     43,913  
Income (loss) before income taxes and cumulative effect of
accounting change
  (43,563   6,616     24,450     7,549  
Income tax (benefit) expense   (15,783   740     8,926     2,680  
Income (loss) before cumulative effect of accounting change   (27,780   5,876     15,524     4,869  
Cumulative effect of accounting change   (35,377            
Net income (loss) $ (63,157 $ 5,876   $ 15,524     4,869  
Preferred stock dividends and accretion to redemption value                     (8,410
Net (loss) applicable to common stockholders                   $ (3,541
Basic and diluted loss per share applicable to common stockholders*                   $ (35.41
For the periods ending October 31, 2004 and prior, owner's equity consisted of owner's net investment and thus no income (loss) per share data has been presented.

See accompanying notes to the consolidated financial statements.

F-4




TAL International Group, Inc.

Combined Consolidated Statements of Owner's Net Investment and Comprehensive Income (Loss) and Consolidated Statements of Stockholders' Equity (Deficit) and Comprehensive Income
(Dollars in thousands, except share amounts)


  Common Stock
  Shares Amount Additional
Paid-in
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
Income
Owner's
Net
Investment
Comprehensive
Income
(Loss)
                                           
Predecessor:                                          
Balance at December 31, 2001     $     —   $     —   $     —   $ 240   $ 173,829  
Comprehensive loss:                                    
Net loss                       (63,157 $ (63,157
Foreign currency translation adjustment                   50     50     50  
Comprehensive loss                                     $ (63,107
Capital contributions from Parent                       6,300        
Distributions to Parent                       (5,500      
Balance at December 31, 2002                   290     111,522        
                                           
Comprehensive income:                                          
Net income                       5,876   $ 5,876  
Foreign currency translation adjustment                   187     187     187  
Comprehensive income                                     $ 6,063  
Distributions to Parent                       (16,587      
Balance at December 31, 2003                   477     100,998        
                                           
Comprehensive income:                                          
Net income                       15,524   $ 15,524  
Foreign currency translation adjustment                   52     52     52  
Comprehensive income                                     $ 15,576  
Capital contributions from Parent                                 37,694        
Distributions to Parent                       (12,390      
Balance at October 31, 2004     $   $   $   $ 529   $ 141,878        
                                           
Successor:                                          
Sale of common stock   96,666   $   $ 97   $   $   $        
Comprehensive income:                                          
Net income               4,869           $ 4,869  
Foreign currency translation adjustment                   17         17  
Comprehensive income                                     $ 4,886  
Accretion of preferred stock to redemption value                     (4,672                  
Preferred stock dividends               (3,738              
Balance at December 31, 2004   96,666   $   $ 97   $ (3,541 $ 17   $        

See accompanying notes to the consolidated financial statements.

F-5




TAL International Group, Inc.
Combined Consolidated Statements of Cash Flows and Consolidated Statement of Cash Flows
(Dollars in thousands)


  Predecessor Successor
  Years ended December 31, Ten months
ended
Two months
ended
  2002 2003 October 31,
2004
December 31,
2004
Cash flows from operating activities:                        
Net income $ (63,157 $ 5,876   $ 15,524   $ 4,869  
Adjustments to reconcile net income to net cash provided by operating activities:                        
Cumulative effect of accounting change   35,377              
Depreciation and amortization   150,256     134,985     119,449     19,769  
Net loss (gain) on sale of leasing equipment   55,782     35,940     3,325     (126
Deferred income taxes   (57,139   (42,973   (20,782   2,300  
Unrealized (gain) on interest rate swaps               (2,432
Changes in operating assets and liabilities:                        
Accounts receivable   18,410     7,362     (5,701   2,882  
Accounts payable   2,068     (2,037   13,558     (14,030
Accrued expenses   (7,801   (18,784   (13,351   10,353  
Income taxes payable   (2,437   2,357     (12,793   380  
Other assets   (11,897   1,524     3,438     5,449  
Other, net   3,617     (584   3,729     (2,484
Net cash provided by operating activities   123,079     123,666     106,396     26,930  
                         
Cash flows from investing activities:                        
Cash paid to consummate the Acquisition, net of cash acquired               (1,209,242
Purchases of leasing equipment   (77,645   (94,822   (256,882   (29,775
Proceeds from sale of equipment   34,486     46,771     50,741     10,111  
Net finance lease receivables (originated) collected   (1,716   (3,955   (7,442   574  
Net cash (used in) investing activities   (44,875   (52,006   (213,583   (1,228,332
                         
Cash flows from financing activities:                        
Proceeds from issuance of preferred stock               195,328  
Proceeds from issuance of common stock               100  
Proceeds from borrowings               1,031,642  
Change in due to affiliates, net   (85,151   (53,332   90,061      
Net debt payments               (8,000
Distributions to Parent   (5,500   (16,587   (12,390    
Capital contributions   6,300         37,694      
Proceeds from settlement of leveraged leases   5,628              
Net cash provided by (used in) financing activities   (78,723   (69,919   115,365     1,219,070  
                         
Net increase (decrease) in cash and cash equivalents   (519   1,741     8,178     17,668  
Cash and cash equivalents, beginning of period   1,939     1,420     3,161      
Cash and cash equivalents, end of period $ 1,420   $ 3,161   $ 11,339   $ 17,668  
                         
Supplemental disclosure:                        
Interest paid $   $   $   $ 32  
Income taxes paid $   $   $   $  

See accompanying notes to the consolidated financial statements.

F-6




TAL International Group, Inc.
Notes to Financial Statements

Note 1 – Description of Business and Basis of Presentation

TAL International Group, Inc. ("TALI," the "Company," or "Successor") was formed on October 26, 2004 and commenced operations on November 4, 2004 with the completion of the acquisition transaction described below. The agreements affecting this acquisition provided for an effective date of October 31, 2004 at which date the risks and rewards of ownership of the business were transferred to TALI. Accordingly, the accompanying financial statements have been prepared giving effect to the acquisition on October 31, 2004. TALI is controlled by funds affiliated with The Jordan Company, L.P. (the "Principal Investors"). TALI consists of the consolidated accounts of Trans Ocean Ltd. ("TOL") and TAL International Corporation, formerly known as Transamerica Leasing Inc., ("TAL") and their subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation.

Transamerica Maritime Container ("TMC" or the "Predecessor") consisted of the maritime container operations of Transamerica Finance Corporation ("TFC," the "Parent" or "Parent Company"). The combined consolidated financial statements of the Predecessor have been derived from the accounting records of TOL and TAL and certain of their subsidiaries. Material intercompany and inter-division balances have been eliminated in combination and consolidation. TOL and TAL were wholly owned indirect subsidiaries of TFC, which is an indirect subsidiary of AEGON N. V. ("AEGON").

The Successor and Predecessor companies provide long-term leases, service leases and finance leases, along with maritime container management services, through a worldwide network of offices, third party depots and other facilities. The Company operates in both international and domestic markets. The majority of the Company's business is derived from leasing its containers to shipping line customers through a variety of long-term and short-term contractual lease arrangements. The Company also provides container sales and positioning services. TALI also enters into management agreements with third party container owners under which the Company manages the leasing and selling of containers on behalf of the third party owners.

Effective October 31, 2004, TALI acquired all of the outstanding capital stock of TOL and TAL for approximately $1.2 billion in cash, including $275 million of financing provided by the seller. This acquisition of TOL and TAL is referred to as the "Acquisition." The Acquisition was accounted for using the purchase method of accounting, and, accordingly, the consideration paid has been preliminarily allocated based on the estimated fair values of the assets acquired and liabilities assumed. The Company has not yet completed the assessment of certain pre-acquisition contingencies. These assessments are expected to be completed in the third quarter 2005. The excess of the consideration paid over the estimated fair value of the net assets acquired and liabilities assumed, including separately identifiable intangible assets, was allocated to goodwill.

The following table sets forth the preliminary allocation of the purchase price in connection with the acquisition (in thousands):


Working capital $ 5,769  
Leasing equipment   1,101,242  
Finance lease receivables   13,836  
Leasehold improvements and other fixed assets   4,394  
Equipment held for sale   11,039  
Intangibles   4,800  
Goodwill   73,570  
Purchase price $ 1,214,650  

F-7




TAL International Group, Inc.
Notes to Financial Statements (Continued)

The following unaudited pro forma information presents the results of operations of the Company as if the Acquisition had taken place at the beginning of each respective period. The pro forma financial information is not necessarily indicative of the actual results of operations had the transaction been effected on the assumed date. The following is the pro forma information for the years ended December 31, 2003 and 2004 (in thousands, except share data):


  2003 2004
Total revenues $ 329,368   $ 315,864  
Net income (loss) applicable to common stockholders $ (12,208 $ 6,198  
Basic and diluted earnings (loss) per common share $ (122.08 $ 61.98  

The pro forma net income amounts reflect the following items: (i) reversal of amortization of initial direct lease costs, (ii) adjustments to depreciation expense arising from the valuation of the leasing equipment as a result of the purchase price allocation from the Acquisition, (iii) increase in net loss (gain) on sale of leasing equipment associated with the fair value adjustments to leasing equipment under the purchase method of accounting, (iv) adjustments for interest expense from new borrowings related to the Acquisition and the elimination of historical interest on debt repaid in the Acquisition, (v) elimination of non-recurring Predecessor expenses, (vi) to record management fees resulting from the Acquisition, (vii) the related income tax effect of the above items based upon a pro forma effective income tax rate of 37.0% and (viii) adjustments for the accrued dividends related to the preferred stock.

Note 2 – Summary of Significant Accounting Policies

Principles of Consolidation

As a result of the Acquisition, the financial information for the period after October 31, 2004 represents that of the Successor Company. Prior to October 31, 2004, the combined consolidated financial statements include the accounts of the Predecessor Company as described above. Due to the change in the basis of accounting resulting from the application of the purchase method of accounting, the Predecessor Company's combined consolidated financial statements and Successor Company's consolidated financial statements are not necessarily comparable.

The consolidated financial statements include the accounts of the respective entities and their subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

Cash and Cash Equivalents

Cash and cash equivalents includes all cash balances and highly liquid investments having original maturities of three months or less at the time of purchase.

Allowance for Doubtful Accounts

The Company's allowance for doubtful accounts is provided based upon a review of the collectibility of its receivables. This review is based on the risk profile of the receivables, credit quality indicators such as the level of past-due amounts and economic conditions. Generally, the Company does not require collateral on accounts receivable balances. An account is considered past due when a payment has not been received in accordance with the contractual terms. Accounts are generally charged off after an analysis is completed which indicates that collection of the full principal balance is in doubt. Changes in economic conditions or other events may necessitate additions or deductions to the allowance for doubtful accounts. The allowance for doubtful accounts is intended to provide for losses inherent in the accounts receivable, and requires the application of estimates and judgments as to the outcome of collection efforts and the realization of collateral, among other things. The Company believes its allowance for doubtful accounts is adequate to provide for credit losses inherent in its accounts receivable.

F-8




TAL International Group, Inc.
Notes to Financial Statements (Continued)

Concentration of Credit Risk

The equipment leases and trade receivables subject the Company to potential credit risk. The Company extends credit to its customers based upon an evaluation of the customer's financial condition and credit history. For the year ended December 31, 2002, two customers accounted for 11% and 10% of leasing revenues, respectively. For the year ended December 31, 2003, one customer accounted for 15% of leasing revenues. The same one customer accounted for 16% of leasing revenues for both the ten months ended October 31, 2004 and two months ended December 31, 2004.

Net Investment in Direct Finance Leases

The amounts reported as net investment in direct finance leases are recorded at the aggregate future lease payments, including any purchase options granted to customers, less unearned income. Interest from these leases is recognized over the term of the lease using the effective interest method.

Leasing Equipment

Leasing equipment is recorded at cost and depreciated to an estimated residual value on a straight-line basis over the estimated useful life. The estimated useful lives for the Company's leasing equipment ranges from 10 to 15 years from the date of manufacture, for both the Successor and Predecessor companies. Costs incurred to place new equipment into service, including costs to transport the equipment to its initial on-hire location, are capitalized. The Company charges repair and maintenance costs, that do not extend the lives of the assets, to direct operating expenses as incurred.

An allowance is provided through direct operating expenses based on the net book value of a percentage of the units on lease to certain customers that are considered to be non-performing which the Company believes its will not ultimately recover. The percentage is developed based on historical experience.

Leasehold Improvements and Other Fixed Assets

Leasehold improvements are recorded at cost and amortized on a straight-line basis over the shorter of the initial term of the respective lease or the estimated useful life of the improvement. Costs of major additions and improvements are capitalized. Expenditures for maintenance and repairs are expensed as incurred. Other fixed assets, which consist primarily of computer software, computer equipment and furniture, are recorded at cost and amortized on a straight-line basis over their respective estimated useful lives, which range from three to seven years.

Equipment Held for Sale

In accordance with the Financial Accounting Standards Board ("FASB") Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets ("SFAS No. 144"), container equipment held for sale is carried at the lower of its fair value, based on current transactions, less costs to sell or carrying value; depreciation on such assets is halted and disposals generally occur within ninety days. Subsequent changes to the asset's fair value, either increases or decreases, are recorded as adjustments to the carrying value of the equipment held for sale; however, any such adjustments would not exceed the equipment's carrying value at the time it was initially classified as held for sale. Initial write-downs of assets held for sale are recorded as an impairment charge and are included in net loss (gain) on sale of leasing equipment. Realized gains and losses resulting from the sale of equipment held for sale are recorded as a (gain) loss on sale of leasing equipment.

Goodwill

In connection with the Acquisition, the Company recorded $73.6 million of goodwill, of which, the Company determined that there was no impairment at December 31, 2004. The Company and the

F-9




TAL International Group, Inc.
Notes to Financial Statements (Continued)

Predecessor account for goodwill in accordance with Statement of Financial Accounting Standards No. 141, Goodwill and Other Intangible Assets ("SFAS No. 141"). SFAS No. 141 requires goodwill and other intangible assets with indefinite lives to be reviewed for impairment annually or more frequently if circumstances indicate a possible impairment. During 2002, the Predecessor completed its assessment of its previously recognized goodwill and performed the initial impairment test required upon adoption of SFAS No. 141 in 2002. The impairment test consisted of comparing the unamortized balance of the goodwill to the implied fair value of the goodwill, which was determined using a discounted cash flow model. As a result of this test, the Predecessor recognized an impairment loss of $35.4 million (no tax benefit) as the cumulative effect of a change in accounting principle in the first quarter of 2002. This amount represented the full unamortized balance of goodwill at January 1, 2002.

Deferred Financing Costs

Deferred financing costs represent the fees incurred during the financing of the Company's debt obligations and are being amortized over the estimated term of the obligations using the effective interest method.

Initial Direct Costs

In accordance with FASB Statement No. 91, Accounting for Nonrefundable Fees and Costs Associated with Originating or Acquiring Loans and Initial Direct Costs of Leases , certain costs incurred to move ("reposition") existing leasing equipment that is placed under a new lease contract are capitalized. The Company's criteria for capitalization of these costs are as follows: the new contract term must be greater than one year in length, a required minimum number of twenty-foot equivalent units ("TEU") must be placed on-hire, and the TEU are required to be moved overseas. Initial direct costs are amortized on a straight-line basis over the lease term.

Intangibles

As a result of the preliminary purchase allocation, the Company has recorded an intangible asset for the fair value of its lease relationships, which is included in other assets at December 31, 2004. The fair value of the asset on the date of the Acquisition was $4.8 million, which is being amortized over a period of three to seven years. Accumulated amortization was $0.1 million as of December 31, 2004. Estimated amortization for each of the next five years will be approximately $0.9 million, $0.9 million, $0.8 million, $0.6 million, and $0.6 million, respectively. No intangible assets existed prior to the Acquisition.

Fair Value of Financial Instruments

The carrying amounts for cash and cash equivalents, accounts receivable, other assets, accounts payable, and accrued expenses approximate fair value at December 31, 2003 and 2004 because of the short-term maturity of those instruments.

As the senior secured and senior unsecured facility agreements commenced within 60 days of year end, and because the interest on the senior secured facility is based on variable interest rates and the interest on the senior unsecured agreement bears interest at an increasing rate over the term of the obligation, the Company believes that the carrying value of the debt instruments at December 31, 2004 approximates fair value.

Due to Affiliates

Due to affiliates includes amounts due to TFC and other related entities and consisted of borrowings and costs incurred on the Company's behalf. Interest was charged monthly on the average daily balance of these advances.

F-10




TAL International Group, Inc.
Notes to Financial Statements (Continued)

Revenue Recognition

Operating Leases with Customers

  The Company enters into long-term leases and service leases with ocean carriers, principally as lessor in operating leases, for marine cargo containers. Long-term leases provide the ocean carriers with specified container equipment for a specified term. The rentals are based upon the number of containers leased, the applicable per diem rate and the length of the lease. Long-term leases typically range for a period of three to eight years. Revenues are recognized on a straight-line basis over the life of the respective lease. Advanced billings are deferred and recognized in the period earned. Service leases do not specify the exact number of containers to be leased or the term that each container will remain on-hire but allow the ocean carrier to pick up and drop off containers at various locations specified in the lease agreement. Under a service lease, rental revenue is based on the number of containers utilized at contracted per diem rates. Revenue for customers where collection is not assured is deferred and recognized when the amounts are received. Also, in accordance with EITF No. 99-19, Reporting Revenue Gross as a Principal versus Net as an Agent, the Company recognizes billings to customers for damages incurred and certain other pass through costs as leasing revenue as it is earned based on the terms of the contractual agreements with the customer.

Direct Financing Leases with Customers

  The Company enters into direct financing leases as lessor for container equipment owned by the Company. The net investment in direct financing leases represents the receivables due from lessees, net of unearned income. Unearned income is recognized on a level yield basis over the lease term and is recorded as other revenue. Direct financing leases are usually long-term in nature, typically ranging for a period of five to ten years and may include a bargain purchase option to purchase the equipment at the end of the lease term.

Management Fee Income

  The Company manages equipment, which is owned by third parties and earns management fees based on the income earned by the leasing of that equipment. Amounts collected by the Company as agent on behalf of third parties that own such equipment are not included in revenue and costs paid for managed equipment are not included in expense.

Equipment Trading Revenue

  Equipment trading revenue represents the proceeds on the sale of equipment purchased for resale. The related expenses are recognized as incurred and are disclosed as equipment trading expense in the consolidated statements of operations.

Other Revenues

  Other revenues include fee income for third party positioning of equipment and income earned on direct finance leases.

Direct Operating Expenses

Direct operating expenses are directly related to the Company's equipment under and available for lease. These expenses primarily consist of the Company's costs to repair and maintain the equipment, to store the equipment when it is not on lease, to reposition the equipment and a provision for equipment lost or not expected to be returned. These costs are recognized when incurred. In limited situations, certain repositioning costs may be capitalized.

F-11




TAL International Group, Inc.
Notes to Financial Statements (Continued)

Equipment Rental Expense

Equipment rental expense is the Company's cost of equipment that it leases from others.

Derivative Instruments

The Company accounts for derivative instruments in accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities ("SFAS No. 133"), as amended and interpreted. SFAS No. 133, requires that all derivative instruments be recorded on the balance sheet at their fair value and established criteria for both the designation and effectiveness of hedging activites.

Income Taxes

The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes , ("SFAS No. 109"). Under SFAS No. 109, deferred tax assets and liabilities are determined based on the difference between the Company's financial statements and the tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

In conjunction with the Acquisition, both the seller and the purchaser elected to have the provisions of Internal Revenue Code Section 338(h)(10) apply to the sale, resulting in the transaction being treated as a taxable asset sale for U.S. income tax purposes. As a result of this election, the tax basis of the Company's assets and liabilities have been adjusted to fair market value, resulting in the elimination of the U.S. net deferred tax liability balance that existed immediately prior to the sale.

Prior to the Acquisition, taxable results for the Company were included in the consolidated federal and certain state income tax returns filed by Transamerica Corporation ("Transamerica"), the parent of TFC. Transamerica, by the terms of a tax sharing agreement with TFC, generally required the Company to accrue and settle income tax obligations as if its individual legal subsidiaries filed separate returns with the applicable taxing authorities. All other state, local and foreign tax requirements were satisfied by the various legal subsidiaries directly with the appropriate taxing authorities. Under the tax sharing agreement, Transamerica provided TFC and its subsidiaries an unlimited carryforward period for the utilization of all federal tax attributes including, but not limited to, net operating losses, foreign tax credits, capital losses and charitable contributions. The Company provided for deferred income taxes based on enacted tax rates in effect on the dates that the temporary differences between the book and tax bases of assets and liabilities were expected to reverse.

The earnings associated with the Company's investments in its foreign subsidiaries are considered as indefinitely invested. Therefore, no provisions for U.S. federal income taxes on those earnings or translation adjustments have been provided.

Foreign Currency Translation

The net assets and operations of foreign subsidiaries included in the consolidated financial statements are attributable primarily to the Company's European operations. The accounts of these subsidiaries have been converted at rates of exchange in effect at year-end as to balance sheet accounts and at a weighted average of exchange rates for the year as to income statement accounts. The effects of changes in exchange rates in translating foreign subsidiaries' financial statements are included in shareholder's equity (deficit) and owner's net investment as accumulated other comprehensive income.

Stock-Based Compensation

The Company accounts for its stock-based compensation plans using the intrinsic value method prescribed in Accounting Practices Board Opinion No. 25, Accounting for Stock Issued to Employees

F-12




TAL International Group, Inc.
Notes to Financial Statements (Continued)

("APB No. 25"). Under the intrinsic value method, compensation cost equal to the difference between the fair value of the shares and the exercise price on the date of grant is recognized from the date of grant over the vesting period of the options. The Company has adopted the disclosure only provisions of SFAS No. 123,

The following table illustrates the effect on net income (loss) and earnings (loss) per share had the fair value method of accounting been applied to the Company's stock compensation plans for the two months ended December 31, 2004 (in thousands).


Net loss applicable to common stockholders:      
As reported $ (3,541
Deduct: Stock-based compensation expense determined under
the fair value method, net of taxes
  (3
Pro forma net loss applicable to common stockholders $ (3,544
Basic and diluted loss per common share:      
As reported $ (35.41
Pro forma   (35.44

These pro forma disclosures take into account options to purchase common shares granted at November 4, 2004. There were no options granted by the Company prior to that time. The fair value of options was estimated using the Black Scholes pricing model based on the market price at the grant date of $1.00 per share and the following assumptions: risk free interest rate of 3.52%, expected life of 4 years, volatility of 50%, and no dividends. The maximum contractual life of the options granted was 10 years.

Comprehensive Income (Loss)

Comprehensive income (loss) includes net income and foreign translation adjustments. No other elements of comprehensive income (loss) exist.

Earnings (Loss) Per Share

Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share reflect the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the two months ended December 31, 2004, diluted loss per share was the equivalent of basic loss per share due to the net loss.

Use of Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results may differ from those estimates.

Recently Issued Accounting Pronouncements

In December 2003, the FASB issued FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities , ("FIN 46R") which addresses how a business should

F-13




TAL International Group, Inc.
Notes to Financial Statements (Continued)

evaluate whether it has a controlling financial interest in an entity through means other than voting rights and, accordingly, should consolidate the entity. FIN 46R revised FASB Interpretation No. 46 which was issued in January 2003. The Company adopted FIN 46R as of December 31, 2003. There was no impact on its financial condition or results of operations.

In December 2004, the FASB issued SFAS No. 123R, Share-Based Payment, (revised 2004), ("SFAS No. 123R"). This Statement is a revision of SFAS No. 123. SFAS No. 123R supercedes APB No. 25, and its related implementation guidance. SFAS No. 123R requires companies to recognize in the statement of operations the fair value of all employee share-based payments, including grants of employee stock options, as well as compensatory employee stock purchase plans. The Company is evaluating the requirements under SFAS 123R including the valuation methods and support for the assumptions that underlie the valuation of the awards, as well as the transition methods (modified prospective transition method or modified retrospective transition method). The Company is required to adopt SFAS No. 123R on January 1, 2006. Based on the number of options currently outstanding, management does not expect the adoption of SFAS No. 123R to have a significant impact on the financial position, results of operations or cash flows for the Company. However, all future grants of shared-based compensation will result in the recognition of compensation expense.

In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets – an amendment of APB Opinion No. 29 ("SFAS No. 153"). This statement amends Accounting Practices Board Opinion No. 29, Accounting for Nonmonetary Transaction, to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. The Company does not expect the introduction of SFAS 153 to have any impact on its consolidated financial statements.

In December 2004, the FASB issued FASB Staff Position ("FSP") 109-1 and 109-2. FSP 109-1 provides guidance on the application of SFAS No. 109, Accounting for Income Taxes, with regard to the tax deduction on qualified production activities provision with H.R. 4520 The American Jobs Creation Act of 2004 (the "Act") that was enacted on October 22, 2004. FSP 109-2 provides guidance on a special one-time dividends received deduction on the repatriation of certain foreign earnings of qualifying U.S. taxpayers. In FSP 109-2, the FASB acknowledged that, due to the proximity of the Act's enactment date to many companies' year ends and the fact that numerous provisions within the Act are complex and pending further regulatory guidance, many companies may not be in a position to assess the impacts of the Act on their plans for repatriation of reinvestment of foreign earnings. Therefore, the FSP provided companies with a practical exception to the permanent reinvestment standards of SFAS No. 109 and APB No. 23 by providing additional time to determine the amount of earnings, if any, that they intend to repatriate under the Act's provisions. The Company is not yet in a position to decide whether, and to what extent, it might repatriate foreign earnings to the U.S. Therefore, under the guidance provided in FSP 109-2, no deferred income tax liability has been recorded in connection with the repatriation provisions of the Act. The Company is currently analyzing the impact of the temporary dividends received deduction provisions contained in the Act.

Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or not significant to the Company's consolidated financial statements.

F-14




TAL International Group, Inc.
Notes to Financial Statements (Continued)

Note 3 – Net Investment in Direct Finance Leases

The following table represents the components of the net investment in direct finance leases at December 31, 2003 and 2004 (in thousands):


  Predecessor Successor
  2003 2004
Gross direct finance lease receivables $ 7,686   $ 15,292  
Unearned income   (1,124   (2,030
Net investment in direct finance leases $ 6,562   $ 13,262  

Contractual maturities of TALI's gross direct finance lease receivables subsequent to December 31, 2004 are as follows (in thousands):


2005 $ 5,103  
2006   4,251  
2007   3,511  
2008   1,627  
2009 and thereafter   800  
  $ 15,292  

Note 4 – Debt Obligations

Senior Secured Credit Facility

In connection with the Acquisition, the Company entered into a credit agreement (the "Senior Secured Credit Facility") with Fortis Bank (Nederland) N.V. The Senior Secured Credit Facility provides for a maximum borrowing of $875.0 million. Under the Senior Secured Credit Facility, from the date of the Acquisition until November 3, 2006, the Company is permitted to obtain loans of up to an aggregate maximum principal amount of $875.0 million on a revolving basis, subject to a borrowing capacity limitation discussed below. As of December 31, 2004, $797.0 million was outstanding under the Senior Secured Credit Facility and $28.1 million was available based on the borrowing capacity limitation. On November 3, 2006, the aggregate principal amount of the revolving loans then outstanding under this facility will be converted into term loans and the Company's ability to obtain further loans under this facility will cease. This facility is secured by a first priority lien on substantially all of the Company's assets, other than real property interests and certain other specified assets. The final maturity date of the Senior Secured Credit Facility is January 18, 2012.

The borrowing capacity under the Senior Secured Credit Facility is based upon a decreasing advance rate percentage of the net book values of the Company's eligible containers, subject to certain adjustments. With respect to the eligible containers owned by the Company at the time of the Acquisition, the applicable advance rate percentage was initially 76.5%, which advance rate percentage decreases by 1% for each full calendar quarter that shall have elapsed since the date of the Acquisition. With respect to eligible containers acquired by the Company after the date of the Acquisition, the applicable advance rate percentage is 80% until November 3, 2006, at which time the advance rate percentage decreases by 1% for each full calendar quarter that shall have elapsed since such date.

The loans under the Senior Secured Credit Facility bear interest at either the LIBOR rate plus 2.75% per annum or, in a limited set of circumstances, the higher of Citibank N.A.'s prime rate plus 1.5% or the federal funds rate plus 2%. Each of the foregoing interest rates will be increased by 0.5% in the event that the Company does not refinance this facility in full by April 30, 2006. As of December 31,

F-15




TAL International Group, Inc.
Notes to Financial Statements (Continued)

2004, the weighted average interest rate under this facility was 5.22%, including the effect of the interest rate swap contracts, which cover a notional amount of $500 million of borrowings under this agreement. Additionally, the Company pays the lenders under this facility a commitment fee equal to 0.5% per annum on any unused portion of the maximum commitment amount. Accrued interest and fees and a portion of the outstanding principal amount of the loans, together with certain other amounts, are payable on a quarterly basis. The portion of the outstanding principal amount of the loans, if any, payable on a quarterly basis is equal to the amount by which the principal amount of the loans then outstanding exceeds the Company's then effective borrowing capacity, after taking into account any decrease to the Company's borrowing capacity resulting from a reduction in the applicable decreasing advance rate percentages as discussed above.

The Senior Secured Credit Facility contains financial covenants, including, but not limited to, a requirement that the Company maintain, commencing with the fiscal quarter ending December 31, 2005, a Consolidated EBIT to consolidated cash interest expense ratio as defined, of at least 1.00 to 1.00, as well as restrictions on incurring indebtedness or liens, paying dividends and other restricted payments, the making of certain investments and certain other matters.

Interest Rate Swaps

To hedge the risk associated with fluctuations in interest rates, the Company entered into an interest rate swap agreement on December 14, 2004, with a financial institution to fix the floating interest rate on the Senior Secured Credit Facility. The interest rate swap contracts have a fixed rate of 3.8225%, a term of seven years, cover a notional amount of $500 million, and require the Company to settle the difference in interest obligations quarterly. The Company recognized additional interest expense of $0.4 million under the interest rate swap contracts for the two months ended December 31, 2004.

As the interest rate swaps do not meet the criteria for hedge accounting, they are accounted for on a mark-to-market basis in the consolidated statement of operations. The fair value of the interest rate swaps at December 31, 2004 was $2.4 million and is included in other assets on the consolidated balance sheet.

Senior Unsecured Credit Agreement

In connection with the Acquisition, the Company entered into a credit agreement (the "Senior Unsecured Credit Agreement") with Transamerica Accounts Holding Corporation, an entity controlled by TFC, and various other lenders, which provided for a $275.0 million senior unsecured term loan facility. The Senior Unsecured Credit Agreement bears interest at an increasing interest rate which was initially equal to 8.75% per annum at the date of the Acquisition and which increases by 0.25% per annum for each successive 90-day period commencing after the date of the Acquisition, up to a maximum interest rate of 11.5% per annum. As of December 31, 2004, the interest rate under this facility was 8.75%. Accrued interest on this facility is payable in arrears semi-annually. The aggregate outstanding principal amount of the loans under this facility mature and are repayable on November 2, 2014. This facility contains covenants including restrictions on incurring indebtedness or liens, paying dividends and other restricted payments, the making of certain investments and certain other matters.

In the event that the Company does not prepay the entire outstanding principal amount of the loans under this facility on or prior to November 3, 2005, the lenders will have the right to require the Company to enter into a new indenture providing for the issuance to the lenders of a new class of notes in exchange for all of the outstanding loans under the Senior Unsecured Credit Agreement. The new indenture and the new notes issued to the lenders thereunder will have substantially the same terms as the facility, but will additionally provide the holders of such new notes certain registration rights requiring the Company to file, and cause to become effective, a registration statement under the Securities Act of 1933 which provides for an offer to the holders of the new notes to exchange such

F-16




TAL International Group, Inc.
Notes to Financial Statements (Continued)

new notes for a like principal amount of debt securities which will be identical in all material respects to the new notes but which shall have been registered pursuant to an effective registration statement under the Securities Act of 1933.

In connection with the Acquisition and the Company's entry into this facility, the Company agreed to deposit $6.0 million into an escrow account, which amount, or a portion thereof, is to be distributed to the lenders in the event that all or a portion of the outstanding loans under this facility are either repaid or transferred by the existing lenders during certain specified time periods. In the event that no portion of the outstanding loans under this facility are either so repaid or transferred on or prior to the last day of the months March, April, May, June, July and August of 2005, the entire $6.0 million of escrowed funds will have been disbursed to the lenders, in monthly installments of $1.0 million. In the event that all or a portion of the outstanding loans under the Senior Unsecured Credit Agreement are repaid or transferred on or prior to the last day of such months, a portion of the remaining escrowed funds will be disbursed to the Company, which portion will be determined by reference to the portion of the original principal amount of the loans under this facility that are so repaid or transferred.

Note 5 – Capital Stock

Redeemable Preferred Stock

The Company's board of directors amended the Company's certificate of incorporation and authorized 500,000 shares of preferred stock and designated 200,000 of them as Series A 12% Cumulative Senior Preferred Stock ("Series A Preferred Stock"). In October 2004, the Company sold all 200,000 shares of the Series A Preferred Stock for net proceeds of $195.3 million (net of issuance costs of $4.7 million). The Company has accounted for these issuance costs as a charge against net income available to common stockholders in the two months ended December 31, 2004. The liquidation preference of the Series A Preferred Stock is $1,000 per share plus accrued dividends.

Dividends on the Series A Preferred Stock are cumulative, whether or not declared, and are payable semi-annually in cash or, at the option of the Company, may be deferred until the occurrence of a mandatory redemption event, as defined. No dividends may be paid on the Company's common stock until all accrued but unpaid dividends on the Series A Preferred Stock are fully paid. Accrued dividends are accounted for as a charge against net income available to common stockholders as accrued.

The Company may at its sole option elect to redeem shares of the Series A Preferred Stock, in whole or in part, at any time at a redemption price equal to the liquidation preference plus accrued but unpaid dividends as of the redemption date. The Company has an obligation to redeem all shares of the Series A Preferred Stock upon the occurrence of a change in control, as defined. A change in control includes any event by which the holders of the majority of the Company's common stock, as of the date of sale of the Series A Preferred Stock, no longer hold such a majority. Since the holders of the Series A Preferred Stock control the Company's board of directors, the occurrence of an event causing a change in control is not within the control of the Company and, accordingly, the carrying amount of the Series A Preferred Stock has been classified outside of permanent stockholders' equity. The holders of the Series A Preferred Stock have no conversion or voting rights.

Common Stock

In connection with the Acquisition, certain employees of the Company purchased 1,900 shares of the Series A Preferred Stock and 3,333.63 shares of the Company's common stock at the same price and terms per share as paid by all of the other equity investors. In connection with the purchase of these securities, the Company entered into a subscription agreement (the "Subscription Agreement") with these employee shareholders. The Subscription Agreement provides that if the employment by the

F-17




TAL International Group, Inc.
Notes to Financial Statements (Continued)

Company of an employee is terminated, the Company may repurchase from the terminated employee, or the terminated employee may cause the Company to repurchase, depending upon the reason for such employee's termination, such employee's shares of the Company's common stock and the Series A Preferred Stock. In the event that an employee's employment is terminated by the Company for cause, the Company has the right to repurchase all or any portion of such employee's shares of Company common stock and the Series A Preferred Stock at a price per share equal to $1.00 per share, in the case of common stock, or $1,000 per share in the case of the Series A Preferred Stock. In the event that an employee's employment is terminated by the Company without cause or by such employee, the Company has the right to repurchase, and such employee has the right to require the Company to repurchase, all or any portion of shares of its common stock and the Series A Preferred Stock at a price per share determined on the basis of when such termination shall have occurred. With respect to shares of common stock, such price per share will range from a minimum per share price, in the event that such termination occurs prior to the first anniversary of the Acquisition, of $1.00, up to a maximum per share price, in the event that such termination occurs on or after the fourth anniversary of the Acquisition, equal to the greater of (i) $1.00 or (ii) the fair market value of such share which shall be determined by reference to a multiple of the Company's operating cash flow during the last four full fiscal quarters preceding the date of determination less certain of the Company's outstanding indebtedness and other amounts, as defined. With respect to shares of the Series A Preferred Stock, such price per share will range from a minimum per share price, in the event that such termination occurs prior to the first anniversary of the Acquisition, of $1,000 up to a maximum per share price, in the event that such termination occurs on or after the fourth anniversary of the Acquisition, equal to (i) $1,000, in the event that the price per share for common stock would equal $1 as described above, or (ii) the aggregate liquidation value per share of the Series A Preferred Stock, including accrued but unpaid dividends. These repurchase provisions will terminate upon the closing of an initial public offering of the Company's common stock. These provisions require the classification of these common shares subject to the subscription agreements outside of permanent equity in the accompanying consolidated balance sheet at December 31, 2004.

Note 6 – Stock Options

During 2004, TALI's board of directors adopted the 2004 Management Stock Plan (the "Plan"), which provides for the issuance of awards in the form of stock options, stock appreciation rights, restricted stock and certain other instruments to employees, consultants and members of the Company's board of directors. A total of 5,265 shares have been reserved for issuance under the Plan. During 2004, options for a total of 3,950 shares were issued at an exercise price of $1.00 per share, which the board of directors believed equaled the fair value per share of the Company's common stock. All such options remained outstanding at December 31, 2004. All options granted during 2004 vest ratably over four years, except upon a change in control, as defined, in which case all outstanding unvested options become fully vested and exercisable. No options were vested at December 31, 2004. All options granted during 2004 had an initial contractual life of ten years and have a remaining contractual life of 9.8 years at December 31, 2004. The fair value of options granted during 2004 was $0.64 per share. The fair value of options was estimated using the Black Scholes pricing model based on the market price at the grant date of $1.00 per share and the following assumptions: risk free interest rate of 3.52%, expected life of 4 years, volatility of 50%, and no dividends. The maximum contractual life of the options granted was 10 years.

Because the Company's stock options have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models for valuing options do not necessarily provide a reliable single measure of their fair values.

F-18




TAL International Group, Inc.
Notes to Financial Statements (Continued)

Note 7 – Earnings (Loss) Per Share

The following table sets forth the calculation of basic and diluted loss per share of the Successor for the two months ended December 31, 2004 (in thousands, except share data):


Numerator:      
Net loss applicable to common stockholders for basic and diluted loss per share $ (3,541
Denominator:      
Weighted average shares outstanding for basic earnings per share   100,000  
Dilutive stock options    
Weighted average shares for diluted earnings per share   100,000  
Loss per share:      
Basic and diluted $ (35.41

Stock options (3,950 options) were anti-dilutive for the two months ended December 31, 2004.

For the periods ending October 31, 2004 and prior, owner's equity consisted of owner's net investment, and, accordingly no income (loss) per share data has been presented.

Note 8 – Net Loss (Gain) on Sale of Leasing Equipment

The net loss (gain) on sale of leasing equipment consists of the following (in thousands):


  Predecessor Successor
  Years ended December 31, Ten months
ended
October 31, 2004
Two months
ended
December 31, 2004
  2002 2003
Impairment loss on equipment held for sale $ 39,914   $ 43,895   $ 16,726   $ 925  
Loss (gain) on sale of equipment – net   15,868     (7,955   (13,401   (1,051
Net loss (gain) on sale of leasing equipment $ 55,782   $ 35,940   $ 3,325   $ (126

F-19




TAL International Group, Inc.
Notes to Financial Statements (Continued)

Note 9 – Income Taxes

The following table sets forth the income tax (benefit) expense for the Predecessor and Successor for the periods indicated (in thousands):


  Predecessor Successor
  Years ended December 31, Ten months
ended
October 31, 2004
Two months
ended
December 31, 2004
  2002 2003
Current taxes:
Federal $ 38,472   $ 42,464   $ 26,929   $ 240  
State   2,660     856     2,464      
Foreign   224     393     315     140  
    41,356     43,713     29,708     380  
Deferred taxes:
Federal   (53,480   (39,803   (18,850   2,107  
State   (3,659   (3,170   (1,932   187  
Foreign               6  
    (57,139   (42,973   (20,782   2,300  
Total $ (15,783 $ 740   $ 8,926   $ 2,680  

The following table reconciles federal income taxes computed at the statutory rate with income tax (benefit) expense (in thousands):


  Predecessor Successor
  Years ended December 31, Ten months
ended
October 31, 2004
Two months
ended
December 31, 2004
  2002 2003
Federal income taxes at statutory rate $ (15,247 $ 2,316   $ 8,558   $ 2,642  
State income taxes (net of federal income
tax benefit)
  (650   89     346     121  
Reversal of state tax liabilities (net of
federal income tax expense)
      (1,594        
Other / effect of permanent differences   114     (71   22     (83
  $ (15,783 $ 740   $ 8,926   $ 2,680  

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting purposes. Under a tax sharing agreement in existence for the predecessor period, Transamerica provided an unlimited carryforward period for the utilization of all federal tax attributes including, but not limited to, net operating losses, foreign tax credits, capital losses and charitable contributions. At October 31, 2004, the Company transferred all of its deferred income taxes to TFC for final settlement.

F-20




TAL International Group, Inc.
Notes to Financial Statements (Continued)

Deferred income tax assets and liabilities are comprised of the following (in thousands):


  Predecessor Successor
  Years ended December 31,
  2003 2004
Deferred income tax assets:
Allowance for losses $ 3,930   $ 110  
Write down of assets held for sale   9,122     153  
Accrued liabilities   16,244     3,737  
State income taxes   7,030     65  
Other   3,471      
Net operating loss carryforwards       652  
    39,797     4,717  
Deferred income tax liabilities:      
Accelerated depreciation   278,699     7,110  
Prepaid positioning   4,124      
    282,823     7,110  
Net deferred income tax liability $ 243,026   $ 2,393  

The Company made no cash payments for income taxes in any of the periods presented.

Note 10 – Related Party Transactions

In consideration for services rendered in connection with the Acquisition and related financings, the Company paid The Jordan Company, L.P., Seacon Holdings Limited and certain of its affiliates, and certain holders of the Company's Series A Preferred Stock and common stock, fees and expenses of $27.5 million. The Company also entered into management consulting agreements with The Jordan Company, L.P. and Klesch & Company Limited under which, commencing with the first quarter 2005, the Company will pay or accrue a management fee to each. These fees will be based on specified percentages of certain of the Company's operating results, including consolidated EBITDA, as defined. The management consulting agreements continue until December 31, 2009, after which they renew automatically for successive one-year terms unless terminated pursuant to the provisions of the agreement.

Prior to the Acquisition and in the normal course of its operations, the Predecessor had transactions with the Parent and its affiliates. These transactions consisted of borrowings and repayments, capital transactions, interest on advances and pension, stock savings plans and other post retirement benefits. In addition, the Predecessor was charged a corporate service fee for costs related to services provided by TFC. These expenses included legal, human resources, tax, treasury, certain information technology functions and other services. The determination of these expenses was based upon specific identification, salary and headcount statistics, estimates based on analyses of time spent by individual employees among affiliates or other reasonable measures of allocation. Management believes that the allocation methodologies used were reasonable. Had the Predecessor not been part of the consolidated operations of TFC, actual expenses incurred may have been different from the allocation methods used. These transactions, along with federal and state income tax liabilities, were generally settled through the due to affiliates account.

The Predecessor allocated certain overhead costs to its affiliates. These costs included legal, human resources, finance and certain information technology functions. The allocation of these costs was based upon specific identification, salary and headcount statistics and estimates based on analyses of time spent by individual employees.

F-21




TAL International Group, Inc.
Notes to Financial Statements (Continued)

The following table sets forth certain of these transactions and their effects on the combined consolidated financial statements for the years ended December 31, 2002, and 2003 and the ten months ended October 31, 2004 (in thousands, except percentage amounts):


  Years ended December 31, Ten months ended
  2002 2003 October 31, 2004
TFC allocated interest $ 25,417   $ 24,020   $ 22,265  
Average annual interest rate   3.7   3.7   3.8
Corporate service fee   3,599     2,885      
Overhead costs allocated to affiliates   (756   (1,584    
Employee compensation   3,563         27,012  
Other Parent costs           1,348  

Pension and Stock Savings Plans and Other Post Employment Benefits

The Company participated with AEGON USA, Inc., an indirect U.S. subsidiary of AEGON, and certain of its subsidiaries (collectively, "AEGON USA") in a number of non-contributory defined benefit pension plans and other benefit programs covering most U.S. salaried employees and certain other participants. In addition, the Company participated in the AEGON USA Employee Stock Savings Plan ("the 401(k) plan"). The 401(k) plan was a contributory defined contribution plan covering eligible U.S employees that elected to participate. The total (income) expense relating to these plans totaled ($0.7 million), $0.2 million and $0.8 million for the years ended December 31, 2002 and 2003 and ten months ended October 31, 2004, respectively. Prior to the Acquisition, the maintenance of and the liability for the pension plans and other plans were the responsibility of AEGON USA.

Note 11 – Savings Plan

The Company's employees participate in a defined contribution plan generally covering all of its U.S. salaried employees. Under the provisions of the Plan, an employee is vested with respect to Company contributions after four years of service. The Company matches employee contributions up to 3% of qualified compensation. Contributions for the two months ended December 31, 2004, comprising of employer match and a voluntary contribution, approximated $0.3 million.

Note 12 – Rental Income Under Operating Leases

The following are the minimum future rentals at December 31, 2004 due TALI under operating leases of containers (in thousands):


2005 $ 165,778  
2006   134,789  
2007   101,738  
2008   62,411  
2009 and thereafter   66,357  
  $ 531,073  

Note 13 – Commitments and Contingencies

Lease Commitments

The Company has non-cancelable operating lease agreements principally for equipment and for facilities used in the Company's operations. Total rent expense was $39.4 million, $38.0 million, $5.9 million, and $1.2 million, for the years ended December 31, 2002 and 2003, the ten months ended October 31, 2004, and the two months ended December 31, 2004, respectively.

F-22




TAL International Group, Inc.
Notes to Financial Statements (Continued)

Future minimum rental commitments under non-cancelable operating leases at December 31, 2004 were as follows (in thousands):


2005 $ 3,434  
2006   1,223  
2007   1,006  
2008   1,346  
2009 and thereafter   3,701  
  $ 10,710  

At December 31, 2004 the aggregate future minimum rentals to be received under non-cancelable subleases were as follows (in thousands):


2005 $ 712  
2006   380  
2007   409  
2008   430  
2009 and thereafter   1,469  
  $ 3,400  

Purchase Commitments

At December 31, 2004, the Company had commitments to purchase equipment in the amount of $35.2 million payable through the end of 2005.

Contingencies

The Company is party to various pending or threatened legal or regulatory proceedings arising in the ordinary course of its business. Based upon information presently available, management of the Company does not expect any liabilities arising from these matters to have a material effect on the consolidated financial position, results of operations or cash flows of the Company.

Indemnities

The Senior Secured Credit Facility and the Senior Unsecured Credit Agreement contain standard provisions present in loans of these types which obligate the Company to reimburse the lenders thereunder for any increased costs associated with continuing to hold the loans thereunder on its books which arise as a result of broadly defined regulatory changes, including changes in reserve requirements and bank capital requirements. These indemnities would have the practical effect of increasing the interest rate on our debt if they were to be triggered. In all cases, the Company has the right to repay the applicable loan and avoid the increased costs. The term of these indemnities matches the length of the related term of the applicable loan.

Note 14 – Segment and Geographic Information

Industry Segment Information

The Company's operations include the acquisition, leasing, re-leasing and subsequent sale of multiple types of intermodal containers. Intermodal freight containers are large, standardized steel boxes used to transport freight by ship, rail or truck. The Company leases three principal types of containers (1) dry freight containers, which are used for general cargo such as manufactured component parts,

F-23




TAL International Group, Inc.
Notes to Financial Statements (Continued)

consumer staples, electronics and apparel, (2) refrigerated containers, which are used for perishable items such as fresh and frozen foods, and (3) special containers, which are used for heavy and oversized cargo such as marble slabs, building products and machinery. As such, the Company believes that the business operates in one industry segment.

Geographic Segment Information

The Company's customers use the containers for their global trade utilizing many worldwide trade routes. The Company earns its revenue from international containers when the containers are in use and carrying cargo around the world. Substantially all of the Company's leasing related revenues are denominated in U.S. dollars. As all of the Company's containers are used internationally, where no one container is domiciled in one particular place for a prolonged period of time, all of the Company's long-lived assets are considered to be international. The following table represents the allocation of domestic and international revenues for the periods indicated based the customers' primary domicile (in thousands):


  Predecessor Successor
  Years ended December 31, Ten months
ended
October 31, 2004
Two months
ended
December 31, 2004
  2002 2003
Total Revenues:
Domestic $ 33,611   $ 35,492   $ 26,730   $ 4,902  
Singapore   35,626     50,283     41,946     8,539  
Japan   45,429     38,090     28,387     5,663  
Other international   213,335     202,157     164,445     32,358  
Total $ 328,001   $ 326,022   $ 261,508   $ 51,462  

Note 15 – Subsequent Events

On February 9, 2005, the Company's board of directors approved and on April 1, 2005, the Company sold to certain employees, 1,205 shares of its Series A Preferred Stock for $1,000 per share and 528.71 shares of common stock for $1.00 per share. In addition the Company's board of directors approved the grant of options to purchase 528.71 shares for an exercise price of $1.00 per share.

On May 17, 2005, the Company's board of directors authorized the filing of a registration statement with the Securities and Exchange Commission for an initial public offering of its common stock.

F-24




TAL International Group, Inc.
Consolidated Balance Sheets
(Dollars in thousands, except share data)


  Successor
  December 31,
2004
March 31,
2005
    (Unaudited)
Assets:      
Cash and cash equivalents $ 17,668   $ 25,738  
Accounts receivable, net of allowances of $225 and $0   35,014     39,862  
Net investment in direct finance leases   13,262     15,162  
Leasing equipment, net of accumulated depreciation and allowances of $19,029 and $46,425   1,103,423     1,088,720  
Leasehold improvements and other fixed assets, net of accumulated depreciation and amortization of $566 and $793   4,255     4,028  
Equipment held for sale   11,578     34,780  
Goodwill   73,570     73,570  
Deferred financing costs   47,343     45,820  
Other assets   14,770     19,356  
Total assets $ 1,320,883   $ 1,347,036  
Liabilities and stockholders' equity (deficit):      
Accounts payable $ 4,580   $ 11,821  
Accrued expenses   40,039     83,702  
Income taxes payable   1,557     598  
Deferred tax liability   2,393     10,225  
Debt:      
Senior secured credit facility   797,000     752,000  
Senior unsecured credit agreement   275,000     275,000  
Total liabilities   1,120,569     1,133,346  
Preferred stock, Series A, subject to redemption, 200,000 shares issued and outstanding   203,738     209,766  
Common stock, subject to redemption, 3,333.63 shares issued and outstanding   3     3  
Stockholders' equity (deficit):      
Preferred stock, $.001 par value, 500,000 shares authorized and 200,000 shares issued and outstanding        
Common stock, $.001 par value, 200,000 shares authorized and 100,000 shares issued and outstanding        
Additional paid-in capital   97     97  
Retained earnings (accumulated deficit)   (3,541   3,816  
Accumulated other comprehensive income   17     8  
Total stockholders' equity (deficit)   (3,427   3,921  
Total liabilities and stockholders' equity (deficit) $ 1,320,883   $ 1,347,036  

See accompanying notes to unaudited consolidated financial statements.

F-25




TAL International Group, Inc.
Combined Consolidated Statement of Operations and Consolidated Statement of Operations
(Dollars in thousands, except share data)


  Predecessor Successor
  Three months ended March 31,
  2004 2005
  (Unaudited)
Revenues:            
Leasing revenues $ 73,331   $ 71,991  
Management fee income   2,046     1,996  
Equipment trading revenue   2,155     2,508  
Other revenues   1,193     1,037  
Total revenues   78,725     77,532  
Expenses:            
Equipment trading expenses   1,625     2,065  
Direct operating expenses   5,074     6,870  
Administrative expenses   8,481     9,709  
Depreciation and amortization   35,618     29,285  
Equipment rental expense   1,435     247  
Provision (reversal) for doubtful accounts   163     (225
Net loss (gain) on sale of leasing equipment   5,098     (4,375
Interest and debt expense   6,887     21,114  
Unrealized (gain) on interest rate swaps       (10,060
Other Parent Company charges and management fees   10,635     1,626  
Total expenses   75,016     56,256  
Income before income taxes   3,709     21,276  
Income tax expense   1,327     7,891  
Net income $ 2,382     13,385  
Preferred stock dividends         (6,028
Net income applicable to common stockholders       $ 7,357  
Basic and diluted earnings per share applicable to common stockholders*       $ 73.57  
* For the period ending March 31, 2004, no income (loss) per share data has been presented as the Predecessor was a component of TFC.

See accompanying notes to unaudited consolidated financial statements.

F-26




TAL International Group, Inc.
Combined Consolidated Statement of Cash Flows and Consolidated Statement of Cash Flows
(Dollars in thousands)


  Predecessor Successor
  Three months ended March 31,
  2004 2005
  (Unaudited)
Cash flows from operating activities:            
Net Income $ 2,382   $ 13,385  
Adjustments to reconcile net income to net cash provided by operating activities:            
Depreciation and amortization   35,618     29,285  
Net loss (gain) on sale of leasing equipment   5,098     (4,375
Unrealized (gain) on interest rate swaps       (10,060
Deferred income taxes   (3,090   7,832  
Changes in operating assets and liabilities:            
Accounts receivable   (7,873   (4,848
Accounts payable   1,802     7,241  
Accrued expenses   23,184     43,663  
Income taxes payable   12,866     (959
Other assets   (2,601   6,997  
Equipment purchased for resale   (530   (22,050
Other, net   748     (1,075
Net cash provided by operating activities   67,604     65,036  
Cash flows from investing activities:            
Purchases of leasing equipment   (159,676   (53,529
Proceeds from sale of equipment   18,916     43,463  
Net finance lease receivables (originated)   (4,247   (1,900
Net cash (used in) investing activities   (145,007   (11,966
Cash flows from financing activities:            
Change in due to affiliates, net   77,087      
Net debt payments       (45,000
Capital contributions   3,260      
Net cash provided by / (used in) financing activities   80,347     (45,000
Net increase in cash and cash equivalents   2,944     8,070  
Cash and cash equivalents, beginning of period   3,161     17,668  
Cash and cash equivalents, end of period $ 6,105   $ 25,738  
Supplemental disclosures:            
Interest paid $   $ 10,170  
Income taxes paid $   $ 756  

See accompanying notes to unaudited consolidated financial statements.

F-27




TAL International Group, Inc.
Notes to Unaudited Consolidated Financial Statements

Note 1 – Organization, Description of the Business and Basis of Presentation

TAL International Group, Inc. ("TALI," the "Company," or "Successor") was formed on October 26, 2004 and commenced operations on November 4, 2004 with the completion of the acquisition transaction described below. The agreements affecting this acquisition provided for an effective date of October 31, 2004 at which date the risks and rewards of ownership acquired of the business were transferred to TALI. TALI is controlled by funds affiliated with The Jordan Company, L.P. (the "Principal Investors"). TALI consists of the consolidated accounts of Trans Ocean Ltd. ("TOL") and TAL International Corporation, formerly known as Transamerica Leasing Inc., ("TAL") and their subsidiaries.

Transamerica Maritime Container ("TMC" or the "Predecessor") consisted of the maritime container operations of Transamerica Finance Corporation ("TFC," the "Parent" or "Parent Company"). The combined consolidated financial statements of the Predecessor have been derived from the accounting records of TOL and TAL and certain of their subsidiaries. Material intercompany and inter-division balances have been eliminated in combination and consolidation. TOL and TAL were wholly owned indirect subsidiaries of TFC, which is an indirect subsidiary of AEGON N. V. ("AEGON").

The Successor and Predecessor companies provide long-term leases, service leases and finance leases, along with maritime container management services, through a worldwide network of offices, third party depots and other facilities. The Company operates in both international and domestic markets.

The consolidated financial statements of the Successor as of March 31, 2005 (unaudited) and December 31, 2004 and for the three months ended March 31, 2005 (unaudited), and the combined consolidated financial statements of the Predecessor for the three months ended March 31, 2004 (unaudited) included herein have been prepared by the Company, without audit, pursuant to the U.S. generally accepted accounting principles and rules and regulations of the Securities and Exchange Commission (the "SEC"). However, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These financial statements reflect, in the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the results for the interim periods. The results of operations for such interim periods are not necessarily indicative of the results for the full year. These financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included elsewhere in this Prospectus and Registration Statement.

Effective October 31, 2004, TALI acquired all of the outstanding capital stock of TOL and TAL for approximately $1.2 billion in cash, including $275 million of financing provided by the seller. This acquisition of TOL and TAL is referred to as the "Acquisition." The Acquisition was accounted for using the purchase method of accounting and accordingly, the consideration paid has been preliminarily allocated based on the estimated fair values of the assets acquired and liabilities assumed. The Company has not yet completed the assessment of certain pre-acquisition contingencies. These assessments are expected to be completed in the third quarter 2005. The excess of the consideration paid over the estimated fair value of the net assets acquired and liabilities assumed, including separately identifiable intangible assets, were allocated to goodwill.

The following unaudited pro forma information presents the results of operations of the Company as if the Acquisition had taken place as of January 1, 2004. The pro forma financial information is not necessarily indicative of the actual results of operations had the transaction been effected on the assumed date. The following is the pro forma information for the three months ended March 31, 2004 (in thousands, except share data):

F-28




TAL International Group, Inc.
Notes to Unaudited Consolidated Financial Statements  (Continued)


Total revenues $ 79,593  
Net income applicable to common stockholders $ 698  
Basic and diluted earnings per common share $ 6.98  

The pro forma net income amounts reflect the following items: (i) reversal of the amortization of initial direct lease costs, (ii) adjustments to depreciation expense arising from the valuation of the leasing equipment, as a result of the purchase price allocation from the Acquisition, (iii) increase in net loss (gain) on sale of leasing equipment associated with the fair value adjustments to leasing equipment under the purchase method of accounting, (iv) adjustments for interest expense from new borrowings related to the Acquisition and the elimination of historical interest on debt repaid in the Acquisition, (v) elimination of non-recurring Predecessor expenses, (vi) to record management fees resulting from the Acquisition, (vii) the related income tax effect of the above items based upon a pro forma effective income tax rate of 37.0% and (viii) adjustments for the accrued dividends related to the preferred stock.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenues and expenses during the reporting period and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.

Recently Issued Accounting Pronouncements

In December 2004, the FASB issued SFAS No. 123R, Share-Based Payment, (revised 2004), ("SFAS No. 123R"). This Statement is a revision of SFAS No. 123. SFAS No. 123R supercedes APB No. 25, and its related implementation guidance. SFAS No. 123R requires companies to recognize in the statement of operations the fair value of all employee share-based payments, including grants of employee stock options, as well as compensatory employee stock purchase plans. The Company is evaluating the requirements under SFAS 123R including the valuation methods and support for the assumptions that underlie the valuation of the awards, as well as the transition methods (modified prospective transition method or modified retrospective transition method). The Company is required to adopt SFAS No. 123R on January 1, 2006. Based on the number of options currently outstanding, management does not expect the adoption of SFAS No. 123R to have a significant impact on the financial position, results of operations or cash flows for the Company. However, all future grants of share-based compensation will result in the recognition of compensation expense.

In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets – an amendment of APB Opinion No. 29 ("SFAS No. 153"). This statement amends APB Opinion No. 29 to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. The Company does not expect the introduction of SFAS No. 153 to have any impact on its consolidated financial statements.

In December 2004, the FASB issued FASB Staff Position ("FSP") 109-1 and 109-2. FSP 109-1 provides guidance on the application of SFAS No. 109, Accounting for Income Taxes, with regard to the tax deduction on qualified production activities provision with H.R. 4520 The American Jobs Creation Act of 2004 (the "ACT") that was enacted on October 22, 2004. FSP 109-2 provides guidance on a special one-time dividends received deductions on the repatriation of certain foreign earnings of qualifying U.S. taxpayers. In FSP 109-2, the FASB acknowledged that, due to the proximity of the Act's enactment date to many companies' year ends and the fact that numerous provisions within the Act are complex and pending further regulatory guidance, many companies may not be in a position to assess the impacts of the Act on their plans for repatriation of reinvestment of

F-29




TAL International Group, Inc.
Notes to Unaudited Consolidated Financial Statements  (Continued)

foreign earnings. Therefore, the FSP provided companies with a practical exception to the permanent reinvestment standards of SFAS No. 109 and APB No. 23 by providing additional time to determine the amount of earnings, if any, that they intends to repatriate under the Act's provisions. The Company is not yet in a position to decide whether, and to what extent, it might repatriate foreign earnings to the U.S. Therefore, under the guidance provided in FSP 109-2, no deferred income tax liability has been recorded in connection with the repatriation provisions of the Act. The Company is currently analyzing the impact of the temporary dividends received deduction provisions contained in the Act.

Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or not significant to the Company's consolidated financial statements.

Principles of Consolidation

As a result of the Acquisition, the financial information for the quarter ended March 31, 2005 represents that of the Successor Company. The combined consolidated financial statements for the three months ended March 31, 2004 include the accounts of the Predecessor Company as described above. Due to the change in the basis of accounting resulting from the application of the purchase method of accounting, the Predecessor Company's combined consolidated financial statements and Successor Company's consolidated financial statements are not necessarily comparable.

The consolidated financial statements include the accounts of the respective entities and their subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year presentation.

Note 2 – Stock-Based Compensation

The Company accounts for its stock-based compensation plans using the intrinsic value method prescribed in Accounting Practices Board Opinion No. 25, Accounting for Stock Issued to Employees ("APB 25"). Under the intrinsic value method, compensation cost equal to the difference between the fair value of the shares and the exercise price on the date of grant is recognized from the date of grant over the vesting period of the options. The Company had adopted the disclosure only provisions of SFAS No. 123, Accounting for Stock-Based Compensation ("SFAS No. 123"), as amended by SFAS No. 148, Accounting for Stock-Based Compensation – Transition and Disclosure ("SFAS No. 148").

The following table illustrates the effect on net income and earnings per share had the fair value method of accounting been applied to the Company's stock compensation plans for the three months ended March 31, 2005 (in thousands, except share data).


Net income applicable to common stockholders:      
As reported $ 7,357  
Deduct: Stock-based compensation expense determined under the fair value method, net of taxes   (3
Pro forma net income applicable to common stockholders $ 7,354  
Basic and diluted earnings per common share:      
As reported $ 73.57  
Pro forma   73.54  

These pro forma disclosures take into account options to purchase common shares granted at November 4, 2004. There were no options granted by the Company prior to that time. The fair value of options was estimated using the Black Scholes pricing model based on the market price at the grant

F-30




TAL International Group, Inc.
Notes to Unaudited Consolidated Financial Statements  (Continued)

date of $1.00 per share and the following assumptions: risk free interest rate of 3.52%, expected life of 4 years, volatility of 50%, and no dividends. The maximum contractual life of the options granted was 10 years.

Note 3 – Earnings (Loss) Per Share

The following table sets forth the calculation of basic and diluted loss per share of the Successor for the three months ended March 31, 2005 (in thousands, except share data):


Numerator:      
Net earnings applicable to common stockholders for basic and diluted earnings per share $ 7,357  
       
Denominator:      
Weighted average shares outstanding for basic earnings per share   100,000  
Dilutive stock options    
Weighted average shares for diluted earnings per share   100,000  
       
Basic and diluted earnings per share $ 73.57  

For the three months ended March 31, 2005, there were no dilutive stock options.

For the period ending March 31, 2004, no income (loss) per share data has been presented as the Predecessor was a component of TFC.

Note 4 – Comprehensive Income (Loss)

Comprehensive income (loss) includes net income and foreign translation adjustments. No other elements of comprehensive income (loss) exist. Comprehensive income (loss) for the three months ended March 31, 2004 and 2005 was $2.4 million and $13.4 million, respectively.

Note 5 – Income Taxes

The consolidated income tax expense for the three months ended March 31, 2004 and 2005 was determined based upon estimates of the Company's consolidated effective income tax rates for the three months ended March 31, 2004 and 2005. The difference between the consolidated effective income tax rate and the U.S. federal statutory rate is primarily attributable to state income taxes.

Note 6 – Interest Rate Swaps

To hedge the risk associated with fluctuations in interest rates, the Company entered into an interest rate swap agreement on December 14, 2004, with a financial institution to fix the floating interest rates on the Senior Secured Credit Facility. The interest rate swap contracts have a fixed rate of 3.8225%, a term of seven years and cover a notional amount of $500 million, and require the Company to settle the difference in interest obligations quarterly. The Company recognized additional interest expense of $1.5 million under the interest rate swap contracts for the three months ended March 31, 2005.

The interest rate swaps are accounted for on a mark-to-market basis. The fair value of the interest rate swaps was $12.5 million at March 31, 2005, which is included in other assets, and the change in fair value from January 1, 2005 to March 31, 2005 of $10.1 million is disclosed separately in the consolidated statement of operations.

F-31




TAL International Group, Inc.
Notes to Unaudited Consolidated Financial Statements  (Continued)

Note 7 – Related Party Transactions

The Company recorded a total of $1.6 million in management fees and expenses relating to the management consulting agreements with The Jordan Company, L.P. and Klesch & Company Limited. These fees were based on specified percentages of certain of the Company's operating results including consolidated EBITDA, as defined. The management consulting agreements continue until December 31, 2009, after which they renew automatically for successive one-year terms unless terminated pursuant to the provisions of the agreement.

Prior to the Acquisition and in the normal course of its operations, the Predecessor had transactions with its Parent and their affiliates. These transactions consisted of borrowings and repayments, capital transactions, interest on advances and pension, stock savings plans and other post retirement benefits. Other Parent costs included legal, human resources, finance and certain information technology functions. The allocation of these costs was based upon specific identification, salary and headcount statistics and estimates based on analyses of time spent by individual employees. Had the Predecessor not been part of the consolidated operations of TFC, actual expenses incurred may have been different. These transactions, along with federal and state income tax liabilities, were generally settled through the due to affiliates account.

The following table sets forth certain of these transactions and their effects on the condensed combined consolidated financial statements for the three months ended March 31, 2004 (in thousands, except percentage amounts):


TFC allocated interest $ 6,948  
Average annual interest rate   4.0
Employee compensation   10,230  
Other Parent costs   405  

Note 8 – Segment and Geographic Information

Industry Segment Information

The Company's operations include the acquisition, leasing, re-leasing and subsequent sale of multiple types of intermodal containers. Intermodal freight containers are large, standardized steel boxes used to transport freight by ship, rail or truck. The Company leases three principal types of containers (1) dry freight containers, which are used for general cargo such as manufactured component parts, consumer staples, electronics and apparel, (2) refrigerated containers, which are used for perishable items such as fresh and frozen foods, and (3) special containers, which are used for heavy and oversized cargo such as marble slabs, building products and machinery. As such, the Company believes that the business operates in one industry segment.

Geographic Segment Information

The Company's customers use the containers for their global trade utilizing many worldwide trade routes. The Company earns its revenue from international containers when the containers are in use and carrying cargo around the world. Substantially all of the Company's leasing related revenues are denominated in U.S. dollars. As all of the Company's containers are used internationally, where no one container is domiciled in one particular place for a prolonged period of time, all of the Company's long-lived assets are considered to be international. The following table represents the allocation of domestic and international revenues for the periods indicated based the customers' primary domicile (in thousands):

F-32




TAL International Group, Inc.
Notes to Unaudited Consolidated Financial Statements  (Continued)


  Predecessor Successor
  Three months ended March 31,
  2004 2005
Total revenues:      
Domestic $ 8,393   $ 7,628  
Singapore   12,064     12,939  
Japan   8,110     8,386  
Other international   50,158     48,579  
Total $ 78,725   $ 77,532  

Note 9 – Commitments and Contingencies

At March 31, 2005, commitments for capital expenditures totaled approximately $41.1 million for the remainder of 2005.

Note 10 – Subsequent Events

On February 9, 2005, the Company's board of directors approved and on April 1, 2005, the Company sold 1,205 shares of its Series A Preferred Stock for $1,000 per share and 528.71 shares of common stock for $1.00 per share. In addition, the Company's Board of Directors approved the grant to purchase options of 528.71 shares for an exercise price of $1.00 per share.

On May 17, 2005 the Company's board of directors authorized the filing of a registration statement with the Securities and Exchange Commission for an initial public offering of its common stock.

F-33




Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of
TAL International Group, Inc.

We have audited the consolidated balance sheet of TAL International Group, Inc. as ofDecember 31, 2004 (the "Successor Company") and the combined consolidated balance sheet of Transamerica Maritime Container as of December 31, 2003 (the "Predecessor Company"), and the related consolidated statements of operations, stockholders' equity (deficit) and comprehensive income, and cash flows for the period November 1, 2004 through December 31, 2004 (Successor Company), and the combined consolidated statements of operations, owner's net investment and comprehensive income (loss), and cash flows for the period from January 1, 2004 through October 31, 2004 and for each of the two years in the period ended December 31, 2003 (Predecessor Company) and have issued our report thereon dated June 24, 2005 (included elsewhere in this Registration Statement). Our audits also included the financial statement schedule listed in Item 16(b) of Form S-1 of this Registration Statement. This schedule is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement schedule based on our audits.

In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ Ernst & Young LLP

Stamford, Connecticut
June 24, 2005

II-5




TAL International Group, Inc.

Schedule II – Valuation and Qualifying Accounts and Reserves

Years ended December 31, 2002, 2003 and 2004

(In thousands)


  Beginning
Balance
Additions/
(Reversals)
Write-offs Other(a) Ending
Balance
Allowance for doubtful accounts:                        
Successor:                        
For the two months ended December 31, 2004 $   $ 225   $   $   $ 225  
Predecessor:                        
For the ten months ended October 31, 2004 $ 2,032   $ 300   $ (38   16   $ 2,310  
For the year ended December 31, 2003   1,996     (34   (5   75     2,032  
For the year ended December 31, 2002   3,161     (323   (816   (26   1,996  
                         
Allowance for equipment loss:                        
Successor:                        
For the two months ended December 31, 2004 $   $   $   $   $  
Predecessor:                        
For the ten months ended October 31, 2004 $ 3,402   $ (1,615 $ (114 $   $ 1,673  
For the year ended December 31, 2003   7,835     (4,221   (212       3,402  
For the year ended December 31, 2002   5,782     2,370     (317       7,835  
(a) Primarily relates to the effect of foreign currency translation.

II-6







PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13.    OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table shows the expenses to be incurred in connection with the offering described in this registration statement, all of which will be paid by the registrant. All amounts are estimates, other than the SEC registration fee, the NASD filing fee and the New York Stock Exchange listing fee.


SEC registration fee $ 23,687.13  
NASD filing fee   20,625.00  
New York Stock Exchange listing fee  
Accounting fees and expenses  
Legal fees and expenses  
Printing and engraving expenses  
Transfer agent's fees  
Blue sky fees and expenses  
Miscellaneous                                 
Total $                            *  

* To be completed by amendment.

ITEM 14.    INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 102 of the Delaware General Corporation Law ("DGCL"), as amended, allows a corporation to eliminate the personal liability of directors of a corporation to the corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director, except where the director breached his duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware law or obtained an improper personal benefit.

Section 145 of the DGCL provides, among other things, that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, agent or employee of the corporation or is or was serving at the corporation's request as a director, officer, agent, or employee of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys' fees, judgment, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding. The power to indemnify applies (a) if such person is successful on the merits or otherwise in defense of any action, suit or proceeding or (b) if such person acted in good faith and in a manner he reasonably believed to be in the best interest, or not opposed to the best interest, of the corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The power to indemnify applies to actions brought by or in the right of the corporation as well, but only to the extent of defense expenses (including attorneys' fees but excluding amounts paid in settlement) actually and reasonably incurred and not to any satisfaction of judgment or settlement of the claim itself, and with the further limitation that in such actions no indemnification shall be made in the event of any adjudication of negligence or misconduct in the performance of duties to the corporation, unless the court believes that in light of all the circumstances indemnification should apply.

Section 174 of the DGCL provides, among other things, that a director, who willfully or negligently approves of an unlawful payment of dividends or an unlawful stock purchase or

II-1




redemption, may be held liable for such actions. A director who was either absent when the unlawful actions were approved or dissented at the time, may avoid liability by causing his or her dissent to such actions to be entered in the books containing the minutes of the meetings of the board of directors at the time such action occurred or immediately after such absent director receives notice of the unlawful acts.

Our certificate of incorporation provides that, pursuant to Delaware law, our directors shall not be liable for monetary damages for breach of the directors' fiduciary duty of care to us and our stockholders. This provision in the certificate of incorporation does not eliminate the duty of care, and in appropriate circumstances equitable remedies such as injunctive or other forms of non-monetary relief will remain available under Delaware law. In addition, each director will continue to be subject to liability for breach of the director's duty of loyalty to us or our stockholders, for acts or omissions not in good faith or involving intentional misconduct or knowing violations of law, for actions leading to improper personal benefit to the director and for payment of dividends or approval of stock repurchases or redemptions that are unlawful under Delaware law. The provision also does not affect a director's responsibilities under any other law, such as the federal securities laws or state or federal environmental laws.

Our bylaws permit us to indemnify our directors and officers to the fullest extent permitted by Delaware law and to advance litigation expenses upon our receipt of an undertaking by a director or officer to repay such advances if it is ultimately determined that such director or officer is not entitled to indemnification. The indemnification provisions contained in our bylaws are not exclusive of any other rights to which a person may be entitled by law, agreement, vote of stockholders or disinterested directors or otherwise. We intend to obtain directors' and officers' liability insurance in connection with this offering.

In addition, we have entered or, concurrently with this offering, may enter, into agreements to indemnify our directors and certain of our officers in addition to the indemnification provided for in the certificate of incorporation and bylaws. These agreements will, among other things, indemnify our directors and some of our officers for certain expenses (including attorneys fees), judgments, fines and settlement amounts incurred by such person in any action or proceeding, including any action by or in our right, on account of services by that person as a director or officer of TAL International Group, Inc. or as a director or officer of any of our subsidiaries, or as a director or officer of any other company or enterprise that the person provides services to at our request.

The underwriting agreement provides for indemnification by the underwriters of us and our officers and directors, and by us of the underwriters, for certain liabilities arising under the Securities Act or otherwise in connection with this offering.

ITEM 15.    RECENT SALES OF UNREGISTERED SECURITIES.

Since the incorporation of the registrant on October 26, 2004, the registrant has sold the following securities without registration under the Securities Act of 1933:

•  In November 2004, the registrant sold 96,666.37 shares of its common stock and 198,100 shares of its Series A 12.0% cumulative senior preferred stock for an aggregate offering price of $198,196,666.37 to the following: 52,555.85 shares of common stock and 119,785.41741 shares of Series A 12.0% cumulative senior preferred stock to The Resolute Fund, L.P.; 2,066.69 shares of common stock and 4,710.39778 shares of Series A 12.0% cumulative senior preferred stock to The Resolute Fund Singapore PV, L.P.; 2,480.02 shares of common stock and 5,652.47563 shares of Series A 12.0% cumulative senior preferred stock to The Resolute Fund Netherlands PV I, L.P.; 2,066.69 shares of common stock and 4,710.39778 shares of Series A 12.0% cumulative senior preferred stock to The Resolute Fund Netherlands PV II, L.P.; 62.00 shares of common stock and 141.31140 shares of Series A 12.0% cumulative senior preferred stock to The Resolute Fund NQP, L.P.; 6,372.84 shares of common stock and 14,525.00000 shares of Series A 12.0% cumulative senior preferred stock to JZ Equity Partners plc; 4,248.56 shares of common stock and 9,683.33333 shares of Series A 12.0% cumulative senior preferred stock to Fairholme Partners, L.P.; 4,248.56 shares of common stock and

II-2




  9,683.33333 shares of Series A 12.0% cumulative senior preferred stock to Fairholme Ventures II, LLC; 4,248.57 shares of common stock and 9,683.33334 shares of Series A 12.0% cumulative senior preferred stock to Fairholme Holdings, Ltd.; 877.50 shares of common stock and 2,000.00000 shares of Series A 12.0% cumulative senior preferred stock to Edgewater Private Equity Fund III, L.P.; 5,495.34 shares of common stock and 12,525.00000 shares of Series A 12.0% cumulative senior preferred stock to Edgewater Private Equity Fund IV, L.P.; and 11,943.75 shares of common stock and 5,000.00000 shares of Series A 12.0% cumulative senior preferred stock to Seacon Holdings Limited. These securities were issued in reliance on the exemption from registration provided by Section 4(2) and Regulation D, Rule 506, under the Securities Act.
•  In November 2004, the registrant sold 3,333.63 shares of its common stock and 1,900 shares of its Series A 12.0% cumulative senior preferred stock for an aggregate offering price of $1,903,333.63 to the following: 2,938.75 shares of common stock and 1,000 shares of Series A 12.0% cumulative senior preferred stock to Brian M. Sondey; 54.84 shares of common stock and 125 shares of Series A 12.0% cumulative senior preferred stock to Chand Khan; 76.78 shares of common stock and 175 shares of Series A 12.0% cumulative senior preferred stock to Frederico Baptista; 76.78 shares of common stock and 175 shares of Series A 12.0% cumulative senior preferred stock to Adrian Dunner; 76.78 shares of common stock and 175 shares of Series A 12.0% cumulative senior preferred stock to John C. Burns; 54.84 shares of common stock and 125 shares of Series A 12.0% cumulative senior preferred stock to Bernd Schackier; and 54.86 shares of common stock and 125 shares of Series A 12.0% cumulative senior preferred stock to John Pearson. These securities were issued in reliance on the exemption from registration provided by Section 4(2) and Regulation D, Rule 506, under the Securities Act.
•  In April 2005, the registrant sold 528.71 shares of its common stock and 1,205 shares of its Series A 12.0% cumulative senior preferred stock for an aggregate offering price of $1,205,528.71 to certain managers and other employees (other than the named executive officers) of the registrant.

From the incorporation of the registrant on October 26, 2004 to the date of this filing, the registrant granted options to purchase approximately 4,478.71 shares of common stock under the registrant's 2004 Management Stock Plan. No shares of common stock have been issued upon exercise of these options and options to purchase approximately 4,478.71 shares of common stock remain outstanding. All options were granted under Rule 701 promulgated under the Securities Act or, in the case of employees who are officers or directors of the registrant or are accredited investors, Section 4(2) of the Securities Act.

There were no underwriters employed in connection with any of the transactions set forth in this Item 15. The recipients of securities in each such transactions represented their intention to acquire the securities for investment only and not with a view to any distribution thereof. Appropriate legends were affixed to the share certificates and other instruments issued in such transactions. All recipients were given the opportunity to ask questions and receive answers from representatives of the registrant concerning the business and financial affairs of the registrant. Each of the recipients that were employees of the registrant had access to such information through their employment with the registrant.

ITEM 16.    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a)    See the exhibit index, which is incorporated herein by reference.

II-3




(b)  The following financial statement schedules are filed as part of this Registration Statement:

Report of Independent Registered Public Accounting Firm   II-5  
Schedule II—Valuation and Qualifying Accounts and Reserves   II-6  

ITEM 17.    UNDERTAKINGS.

(a)    The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

(b)    Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against pubic policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

(c)    The undersigned registrant hereby undertakes that:

(1)    For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2)    For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-4




SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Purchase, State of New York, on June 30, 2005.

TAL International Group, Inc.
By: /s/ Brian M. Sondey____________________________
       Brian M. Sondey
        Chief Executive Officer and President

POWER OF ATTORNEY

Each of the undersigned does hereby constitute and appoint Brian M. Sondey, Chand Khan and Marc Pearlin, and each of them severally, his or her true and lawful attorney-in-fact with power of substitution and resubstitution to sign in his or her name, place and stead, in any and all capacities, to do any and all things and execute any and all instruments that the attorney may deem necessary or advisable under the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission in connection with this registration statement and the registration under the Securities Act of 1933 of the common stock of the registrant, including specifically, but without limiting the generality of the foregoing, the power and authority to sign his or her name in his or her respective capacity as a member of the board of directors or officer of the registrant, the registration statement and/or any other form or forms as may be appropriate to be filed with the Securities and Exchange Commission as any of them may deem appropriate in connection therewith, to any and all amendments thereto, including post-effective amendments, to such registration statement, to any related Rule 462(b) registration statement and to any other documents filed with the Securities and Exchange Commission, as fully for all intents and purposes as he or she might or could do in person, and hereby ratifies and confirms all said attorneys-in-fact and agents, each acting alone, and his or her substitute or substitutes, may lawfully do or cause to be done by virtue of this prospectus.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on June 30, 2005.


Signature Title
                        /s/ Brian M. Sondey                        ______________________________________ Chief Executive Officer, President and Director
Brian M. Sondey  
                            /s/ Chand Khan                            ______________________________________ Vice President and Chief Financial Officer
Chand Khan  
______________________________________  Chairman of the Board and Director
A. Gary Klesch  
                            /s/ John W. Jordan II                        ______________________________________ Director
John W. Jordan II  
                         /s/ David W. Zalaznick                     ______________________________________ Director
David W. Zalaznick  
                    /s/ A. Richard Caputo, Jr.                    ______________________________________ Director
A. Richard Caputo, Jr.  
______________________________________  Director
Ed Horne  
______________________________________  Director
Bruce Berkowitz  
                           /s/ Douglas J. Zych                           ______________________________________ Director
Douglas J. Zych  
                            /s/ Brian J. Higgins                        ______________________________________ Director
Brian J. Higgins  

S-1




INDEX TO EXHIBITS


Exhibit
No.
Description
*1.1 Form of Underwriting Agreement
2.1 Stock Purchase Agreement, dated July 10, 2004, by and between TA Leasing Holding Co, Inc. and Klesch & Company Limited
*2.2 First Amendment to Stock Purchase Agreement, dated August 10, 2004, by and among TA Leasing Holding Co, Inc., Klesch & Company Limited and Transamerica Corporation
*2.3 Second Amendment to Stock Purchase Agreement, dated September 30, 2004, by and among TA Leasing Holding Co, Inc., Klesch & Company Limited and Transamerica Corporation
*2.4 Third Amendment to Stock Purchase Agreement, dated November 3, 2004, by and among TA Leasing Holding Co, Inc., Klesch & Company Limited, TAL International Group, Inc. and Transamerica Corporation
*2.5 Fourth Amendment to Stock Purchase Agreement, dated [                ], 2005, by and among TA Leasing Holding Co, Inc., Klesch & Company Limited, TAL International Group, Inc. and Transamerica Corporation
*2.6 Fifth Amendment to Stock Purchase Agreement, dated March 31, 2005, by and among TA Leasing Holding Co, Inc., Klesch & Company Limited, TAL International Group, Inc. and Transamerica Corporation
*3.1 Amended and Restated Certificate of Incorporation of TAL International Group, Inc.
*3.2 Amended and Restated Bylaws of Incorporation of TAL International Group, Inc.
*4.1 Form of Common Stock Certificate
*5.1 Form of Opinion of Mayer, Brown, Rowe & Maw LLP
10.1 Credit Agreement, dated as of November 3, 2004, by and between, TAL International Corporation, Trans Ocean Ltd., Trans Ocean Container Corporation, the Lenders party thereto and Fortis Bank (Nederland) N.V.
10.2 Amendment No. 1 to Credit Agreement, effective as of November 3, 2004, by and between, TAL International Corporation, Trans Ocean Ltd., Trans Ocean Container Corporation, the Lenders party thereto and Fortis Bank (Nederland) N.V.
10.3 Credit Agreement, dated as of November 3, 2004, by and between TAL International Group, Inc., the Lenders party thereto and Transamerica Accounts Holding Corporation
10.4 Amendment No. 1 to Credit Agreement, dated as of March 31, 2005, by and between TAL International Group, Inc., the Lenders party thereto and Transamerica Accounts Holding Corporation
10.5 Amendment No. 2 to Credit Agreement, dated as of May 14, 2005, by and between TAL International Group, Inc., the Lenders party thereto and Transamerica Accounts Holding Corporation
10.6 Intercreditor Agreement, dated as of November 3, 2004, by and between TAL International Group, Inc., TAL International Corporation, Trans Ocean Ltd., Trans Ocean Container Corporation, Transamerica Accounts Holding Corporation and Fortis Bank (Nederland) N.V.
*10.7 Shareholders Agreement, dated as of November 3, 2004, by and among TAL International Group, Inc. and certain of its stockholders




Exhibit
No.
Description
10.8 Investor Subscription Agreement, dated as of November 3, 2004, by and among TAL International Group, Inc., The Resolute Fund, L.P., The Resolute Fund Singapore PV, L.P., The Resolute Fund Netherlands PV I, L.P., The Resolute Fund Netherlands PV II, L.P., The Resolute Fund NQP, L.P., JZ Equity Partners plc, Fairholme Partners, L.P., Fairholme Ventures II, LLC, Fairholme Holdings, Ltd., Edgewater Private Equity Fund III, L.P., Edgewater Private Equity Fund IV, L.P. and Seacon Holdings Limited
*10.9 Management Subscription Agreement, dated as of November 3, 2004, by and among TAL International Group, Inc., Brian M. Sondey, Chand Khan, Frederico Baptista, Adrian Dunner, John C. Burns, Bernd Schackier and John Pearson
10.10 Management Consulting Agreement, dated as of November 3, 2004, by and between TAL International Group, Inc. and The Jordan Company, L.P.
10.11 Management Advisory Agreement, dated as of November 3, 2004, by and between TAL International Group, Inc. and Klesch & Company Limited
10.12 Tax Sharing Agreement, dated as of November 3, 2004, by and among TAL International Group, Inc., TAL International Corporation, Trans Ocean Ltd., Trans Ocean Container Corporation, Transamerica Leasing Do Brasil Ldta.
10.13 Employment Agreement, dated as of November 3, 2004, by and between TAL International Group, Inc. and Brian M. Sondey
10.14 2004 Management Stock Plan
10.15 Stock Option Agreement, dated November 3, 2004, by and between TAL International Group, Inc. and Brian M. Sondey
10.16 Stock Option Agreement, dated November 3, 2004, by and between TAL International Group, Inc. and Chand Khan
10.17 Stock Option Agreement, dated November 3, 2004, by and between TAL International Group, Inc. and Frederico Baptista
10.18 Stock Option Agreement, dated November 3, 2004, by and between TAL International Group, Inc. and John C. Burns
10.19 Stock Option Agreement, dated November 3, 2004, by and between TAL International Group, Inc. and Bernd Schackier
10.20 Stock Option Agreement, dated November 3, 2004, by and between TAL International Group, Inc. and John Pearson
10.21 Stock Option Agreement, dated November 3, 2004, by and between TAL International Group, Inc. and Adrian Dunner
*10.22 Form of Indemnity Agreement between TAL International Group, Inc. and each of its current officers and directors
21.1 Subsidiaries of TAL International Group, Inc.
23.1 Consent of Ernst & Young LLP
*23.2 Consent of Mayer, Brown, Rowe & Maw LLP (included in Exhibit 5.1)
24.1 Powers of Attorney (included on the signature page to this registration statement
* To be filed by amendment.





                                                                     EXHIBIT 2.1

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


                            STOCK PURCHASE AGREEMENT


                                 by and between


                          TA LEASING HOLDING CO, INC.,


                                       and


                            KLESCH & COMPANY LIMITED


                               Dated July 10, 2004


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





                            STOCK PURCHASE AGREEMENT

         This STOCK PURCHASE AGREEMENT is made as of July 10, 2004, by and
between TA LEASING HOLDING CO., INC., a Delaware corporation ("Seller"),
TRANSAMERICA CORPORATION, in its capacity as guarantor pursuant to Section 5.12,
and KLESCH & COMPANY LIMITED, an English-registered limited company
("Purchaser"). Capitalized terms used in this Agreement not otherwise defined
have the meanings ascribed to them in Section 1.01 hereof.

                                    RECITALS

         A. Seller owns all of the issued and outstanding shares of Capital
Stock of the companies set forth on Schedule 1 hereto (the "Companies").

         B. Seller and the Purchased Entities (as defined herein) are engaged in
the marine container leasing business and related businesses (the "Business").

         C. Prior to the closing of the transactions contemplated hereby, Seller
and its Affiliates will engage in a restructuring (the "Restructuring") pursuant
to which, among other things, the Reorganized Subsidiaries (as defined below)
will be distributed by the Companies and/or their Affiliates, as the case may
be, on the terms set forth on Schedule 5.08. "Reorganized Subsidiaries" shall
mean each of the companies set forth on Schedule 2 hereto.

         D. Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller, the Purchased Entities by delivery of the Shares (as
defined herein), on the terms and conditions set forth in this Agreement.

         NOW, THEREFORE, in consideration of the foregoing premises and the
mutual representations, warranties and agreements set forth herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

                                   ARTICLE I

                                   DEFINITIONS

         Section 1.01 Definitions. For purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:

         "2003 EBITDA" shall mean the aggregate EBITDA of the Purchased Entities
for the year ended December 31, 2003.

         "Acquisition" shall have the meaning set forth in Section 2.01.

         "Acquisition Proposal" shall mean any proposal or offer made by any
Person other than Purchaser or any of its Affiliates to acquire all or a
substantial part of the business or properties of the Purchased Entities or any
capital stock of the Purchased Entities, whether by





merger, tender offer, exchange offer, sale of assets or similar transactions
involving the Purchased Entities or any subsidiary, division or operating or
principal business unit thereof.

         "Adjusted Purchase Price" shall have the meaning set forth in Section
2.05(c).

         "Aegon Approval" shall have the meaning set forth in Section 7.01(d).

         "Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with,
such Person; provided that, for the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
ownership of fifty percent (50%) or more of the equity interest of such Person
or the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.

         "Agreement" means this agreement and all amendments made hereto by
written agreement between Seller and Purchaser, including all Schedules and
Exhibits attached hereto.

         "Ancillary Agreements" means the Noncompete Agreement and the
Transition Services Agreement.

         "Applicable Law" shall have the meaning set forth in Section 3.04.

         "Applicable Settlement Rate" shall have the meaning set forth in
Section 2.05(c).

         "Balance Sheet" shall mean the most recent balance sheet of the
Purchased Entities included in the Combined Financial Statements.

         "Benefit Plan" means any Plan, existing at the Closing Date or prior
thereto, with respect to which the Purchased Entities may reasonably be expected
to have any liability, or under which any Employee, former Employee, director,
agent or independent contractor of the Purchased Entities or any beneficiary
thereof is covered, is eligible for coverage or has benefit rights.

         "Bonus Period" shall have the meaning set forth in Section 5.10(e).

         "Bonus Plans" shall have the meaning set forth in Section 5.10(e).

         "Business" shall have the meaning set forth in the Recitals.

         "Business Day" means each day other than Saturday, Sunday or a day on
which banking institutions in the State of New York are authorized or obligated
by law or regulation to close.

         "Business Material Adverse Effect" means any circumstance, development,
change or effect that either individually or in the aggregate is materially
adverse (x) to the business, properties, assets, liabilities, financial
condition or results of operations of the Purchased Entities, taken as a whole,
or (y) to the ability of Seller to perform its obligations under this Agreement;
provided, however, that none of the following will be deemed, individually or
together, to constitute a "Business Material Adverse Effect": (i) any changes,
circumstances


                                      -2-



or effects resulting from or relating to changes in general economic conditions,
(ii) any changes in conditions or developments generally applicable to the
industries in which the Purchased Entities are involved that do not affect the
Purchased Entities disproportionately to other Persons in such industry, (iii)
any changes or modifications required by Applicable Law on and after the date
hereof, and (iv) any changes, circumstances or effects attributable to the
announcement or pendency of the transactions contemplated by this Agreement
(including any cancellations of lease agreements, any reductions in sales, any
disruption in supplier, manufacturer, depot agent or similar relationships or
any loss of employees), or resulting from or relating to compliance with the
terms of, or the taking of any action required by, this Agreement.

         "Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants or options to purchase any of the foregoing.

         "Closing" shall have the meaning set forth in Section 2.02(a).

         "Closing Date" shall have the meaning set forth in Section 2.02(a).

         "Closing Date LIBOR" shall have the meaning set forth in Section
2.05(c).

         "Closing Date Payment" shall have the meaning set forth in Section
2.03.

         "Code" means the Internal Revenue Code of 1986, as amended.

         "Combined Financial Statements" shall have the meaning set forth in
Section 2.04(a).

         "Commitment Letters" means one or more executed commitment letters from
one or more financial institutions, issued to Purchaser, pursuant to which the
financial institutions named therein agree to provide to Purchaser, bridge loan
financing in an aggregate amount of not less than $1,200,000,000 to fund the
Acquisition, on terms consistent with the provisions of this Agreement, subject
only to customary and normal conditions for transactions of this type, and
otherwise on terms no less favorable in the aggregate to Purchaser than those
set forth in the term sheets delivered to Seller on July 8, 2004.

         "Companies" shall have the meaning set forth in the Recitals.

         "Company Group" means any combined, unitary, consolidated or other
affiliated group within the meaning of Section 1504 of the Code or otherwise, of
which any Purchased Entity is or has been a member for Federal, state, local or
foreign Tax purposes.

         "Confidentiality Obligations" means any confidentiality obligations set
forth herein, in the Non-Disclosure Agreement or in any Ancillary Agreement to
which the parties hereto are parties or by which they are bound.

         "Confidentiality Regulations" means Treasury Regulation Section
1.6011-4(b)(3) or any successor provision of the Treasury Regulations
promulgated under Section 6011 of the Code.


                                      -3-




         "Consent" shall have the meaning set forth in Section 3.04.

         "Container Leases" means those lease agreements pursuant to which a
Purchased Entity leases Containers to a lessee.

         "Containers" means marine containers (including dry cargo containers,
refrigerated containers, gen sets, open top containers, flat racks and all other
related equipment).

         "Contracts" shall have the meaning set forth in Section 3.13.

         "Cut-Off Date" means the last day of the month immediately preceding
the month in which the Closing occurs.

         "Disclosure Schedule" means the document delivered by Seller to
Purchaser simultaneously with the execution hereof containing the information
required to be included therein pursuant to this Agreement.

         "DOJ" shall have the meaning set forth in Section 5.06(b).

         "EBITDA" of the Purchased Entities for any fiscal year shall mean, for
the Purchased Entities in the aggregate, the amount calculated and adjusted in
accordance with Schedule 1.01(a). Schedule 1.01(a) sets forth all of the items
and adjustments to be included in the calculation of EBITDA.

         "EBITDA Notice of Objection" shall have the meaning set forth in
Section 2.04(b).

         "EBITDA Statement" shall have the meaning set forth in Section 2.04(a).

         "Employee" shall have the meaning set forth in Section 3.19(c).

         "Environmental Laws" shall have the meaning set forth in Section 3.18.

         "Equipment Held for Lease" means equipment held for lease of the
Purchased Entities as presented and calculated in accordance with the Combined
Financial Statements and March 31, 2004 Balance Sheet.

         "Equity Commitments" means (i) Purchaser's commitment to provide an
aggregate of $75,000,000 in equity funding to fund the Acquisition, and (ii) one
or more executed commitment letters from one or more financial institutions,
issued to Purchaser, pursuant to which the financial institutions named therein
agree to provide to Purchaser equity financing in an aggregate amount of not
less than $125,000,000 to fund the Acquisition, on terms consistent with the
provisions of this Agreement, subject only to customary and normal conditions
for transactions of this type, and otherwise on terms no less favorable in the
aggregate to Purchaser than those set forth in the term sheets delivered to
Seller on July 8, 2004.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.


                                      -4-



         "ERISA Affiliate" means, with respect to any Person, trade or business,
any other Person, trade or business that is, or was at the relevant time, a
member of a group described in Section 414(b), (c), (m) or (o) of the Code (or
the regulations or administrative rulings issued thereunder) or Section
4001(b)(1) of ERISA that includes or included the first Person, trade or
business, or that is, or was at the relevant time, a member of the same
"controlled group" as the first Person, trade or business pursuant to Section
4001(a)(14) of ERISA.

         "Federal Income Tax" means any Tax imposed under Subtitle A of the
Code.

         "Financial Institution" shall have the meaning set forth in Section
5.12.

         "Final Allocation" shall have the meaning set forth in Section 6.08.

         "Final Determination" means (i) with respect to Federal Income Taxes, a
"determination" as defined in Section 1313(a) of the Code or execution of an
Internal Revenue Service Form 870-AD and (ii) with respect to Taxes other than
Federal Income Taxes, any final determination of liability in respect of a Tax
that, under applicable law, is not subject to further appeal, review or
modification through proceedings or otherwise (including the expiration of a
statute of limitations or a period for the filing of claims for refunds, amended
returns or appeals from adverse determinations).

         "Final Purchase Price" shall have the meaning set forth in Section
2.05(c).

         "Forte License Agreement" shall have the meaning set forth in Section
3.11(f).

         "FTC" shall have the meaning set forth in Section 5.06(b).

         "FTC Letter" shall have the meaning set forth in Section 5.06(a).

         "GAAP" shall mean, at any time or during any period, United States
generally accepted accounting principles as in effect at such time or during
such period (or if no period is specified, as of the date of this Agreement),
applied on a consistent basis.

         "Governmental Entity" shall have the meaning set forth in Section 3.04.

         "Guarantor" shall have the meaning set forth in Section 5.12.

         "Guaranty" shall have the meaning set forth in Section 5.12.

         "Hazardous Substances" means any petroleum and petroleum products,
material or substance that is defined as a "hazardous waste," "hazardous
material," "hazardous substance," "solid waste," "restricted hazardous waste,"
"industrial waste," "contaminant," "pollutant," "toxic waste" or "toxic
substance" or words of similar meaning or effect under any provision of any
Environmental Law.

         "HIPAA" means the Health Insurance Portability and Accountability Act
of 1996, as amended.

         "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.


                                      -5-



         "Indebtedness" shall mean (i) all indebtedness for borrowed money or
for the deferred purchase price of property or services (other than current
trade liabilities incurred in the ordinary course of business and payable in
accordance with customary practices), (ii) any other indebtedness that is
evidenced by a note, bond, debenture or similar instrument, (iii) all
obligations under financing leases, (iv) all obligations in respect of
acceptances issued or created, (v) all liabilities secured by any Lien on any
property and (vi) all guarantee obligations.

         "Indemnified Guarantees" means the financial or performance guarantees
currently in effect and provided for the benefit of the Business which are set
forth on a schedule to be provided by Seller to Purchaser within ten (10) days
of the date hereof; provided, however, that "Indemnified Guarantees" shall not
include any guarantees that are terminable and for which Purchaser has delivered
a notice to Seller to terminate such guarantee at least ten (10) days prior to
the Closing Date.

         "Indemnified Party" shall have the meaning set forth in Section
9.04(a).

         "Indemnifying Party" shall have the meaning set forth in Section
9.04(a).

         "Indemnity Threshold" shall have the meaning set forth in Section
9.05(a).

         "Independent Expert" shall have the meaning set forth in Section
2.04(b).

         "Insurance Claim" shall have the meaning set forth in Section 5.13.

         "Initial Allocation" shall have the meaning set forth in Section 6.08.

         "Intellectual Property" means all goodwill, customer lists, works of
authorship, inventions, patents, patent applications, trade secrets, trade
secret rights, software, source codes, copyright rights and registrations,
trademarks, trade names, service marks, emblems, logos, insignia and related
marks and registrations, models, technical information, confidential business
information, specifications, technical manuals and data, data bases, drawings,
proprietary processes, product and services information and development and any
and all other intellectual property in any format or medium, and copies and
tangible embodiments thereof.

         "Intercompany Agreement" shall have the meaning set forth in Section
3.25.

         "Judgment" shall have the meaning set forth in Section 3.04.

         "Knowledge" when used in any representation or warranty with respect to
Seller means actual knowledge of any of the individuals set forth on Schedule
1.01(b) hereto or the knowledge such individuals should have acquired in the
prudent exercise of each such individual's duties, and when used in any
representation or warranty with respect to Purchaser means actual knowledge of
A. Gary Klesch, Ed Horne and David Green or the knowledge such individuals
should have acquired in the prudent exercise of each such individual's duties.

         "Leased-In Containers" means Containers that a Purchased Entity, as
lessee, leases (whether pursuant to personal property lease agreements or
pursuant to finance leases, loan agreements or other secured financing
arrangements).

         "Leased Property" shall have the meaning set forth in Section 3.10.


                                      -6-




         "License Agreements" shall mean all agreements (including any
outstanding decrees, orders, judgments, settlement agreements or stipulations)
to which any Purchased Entity is a party or otherwise bound (whether between any
Purchased Entity and an independent Person or inter-corporate) which contain
provisions granting any Purchased Entity rights in any Intellectual Property.

         "Liens" shall have the meaning set forth in Section 3.09.

         "Losses" shall have the meaning set forth in Section 9.02.

         "Major Customers" shall have the meaning set forth in Section 3.22.

         "Managed Containers" means Containers, other than Owned Containers and
Leased-In Containers, that are managed by a Purchased Entity on behalf of a
third party pursuant to management agreements.

         "March 31, 2004 Balance Sheet" shall have the meaning set forth in
Section 3.05.

         "Minor Claims" shall have the meaning set forth in Section 9.05(a).

         "Multiemployer Plan" means a multiemployer plan within the meaning of
Section 3(37) of ERISA with respect to which the Companies or any ERISA
Affiliate of the Companies has, since 1999, had an obligation to contribute or,
with respect 1999 and years occurring thereafter, has or could have withdrawal
liability under Section 4201 of ERISA.

         "Names" and "Marks" shall have the meaning set forth in Section
5.04(a).

         "Net Working Capital" means the net working capital of the Purchased
Entities, which shall be calculated in accordance with the accounting principles
used in the preparation of the March 31, 2004 Balance Sheet and in accordance
with Schedule 1.01(c).

         "Noncompete Agreement" means that certain Noncompete Agreement between
Purchaser and Transamerica Corporation, substantially in the form of Exhibit A
hereto.

         "Non-Disclosure Agreement" means that certain Non-Disclosure Agreement
entered into by and between Transamerica Finance Corporation and Purchaser,
dated as of March 18, 2004.

         "Owned Containers" means Containers that are owned by a Purchased
Entity.

         "Owned Intellectual Property" shall mean all Intellectual Property
owned by any Purchased Entity.

         "Permits" means all permits, licenses, franchises, approvals or
authorizations from a Governmental Entity.

         "Permitted Liens" shall have the meaning set forth in Section 3.09.

         "Person" means any individual, partnership, joint venture, association,
joint stock company, corporation, trust, trustee, limited liability company,
unincorporated organization, or government or other department, agency or
political subdivision thereof.


                                      -7-



         "Plan" means any bonus, incentive compensation, deferred compensation,
pension, profit sharing, retirement, stock purchase, stock option, stock
ownership, stock appreciation rights, phantom stock, leave of absence, layoff,
vacation, day or dependent care, legal services, cafeteria, life, health,
accident, disability, worker's compensation or other insurance, severance,
separation or other employee benefit plan, practice, policy or arrangement of
any kind, whether written or oral, or whether for the benefit of a single
individual or more than one individual including, but not limited to, any
"employee benefit plan" within the meaning of Section 3(3) of ERISA, but
excluding, however, any governmental plan or program requiring the mandatory
payment of social insurance taxes or similar contributions to a governmental
fund with respect to the wages of an employee.

         "Plan Sponsor" shall have the meaning given such term in ERISA Section
3(16)(B).

         "Post-Closing Notice of Objection" shall have the meaning set forth in
Section 2.05(b).

         "Post-Closing Tax Period" means any taxable period (or portion thereof)
beginning after the Closing Date.

         "Pre-Closing Tax Period" means any taxable period (or portion thereof)
ending on or before 11:59 p.m. on the Closing Date.

         "Proceeding" shall have the meaning set forth in Section 3.14.

         "Property Taxes" shall have the meaning set forth in Section 6.02(b).

         "Purchase Price" shall have the meaning set forth in Section 2.01.

         "Purchased Entities" means the Companies and each of the other Persons
set forth on Schedule 1.01(d).

         "Purchaser" shall have the meaning set forth in the Preamble to this
Agreement.

         "Purchaser Indemnitees" shall have the meaning set forth in Section
9.02.

         "Purchaser Material Adverse Effect" shall have the meaning set forth in
Section 4.01.

         "Purchaser's Benefit Plans" shall have the meaning set forth in Section
5.10(d).

         "Reorganized Subsidiaries" shall have the meaning set forth in the
Recitals.

         "Restructuring" shall have the meaning set forth in the Recitals.

         "Section 338(g) Elections" shall have the meaning set forth in Section
6.07(b).

         "Section 338(h)(10) Companies" shall have the meaning set forth in
Section 6.07(a).

         "Section 338(h)(10) Elections" shall have the meaning set forth in
Section 6.07(a).


                                      -8-



         "Selected Accounting Firm" means a nationally recognized accounting
firm mutually chosen by Seller and Purchaser.

         "Seller" shall have the meaning set forth in the Preamble to this
Agreement.

         "Seller Indemnitees" shall have the meaning set forth in Section 9.03.

         "Shares" means all the issued and outstanding Capital Stock of the
Companies.

         "Statement" shall have the meaning set forth in Section 2.05(a).

         "Straddle Period" shall have the meaning set forth in Section 6.01.

         "Subsidiary Shares" means all the issued and outstanding Capital Stock
of the Purchased Entities, other than the Shares.

         "Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
windfall profits, environmental (including taxes under Code section 59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever or any obligation to contribute
to the payment of Taxes determined on a consolidated, combined or unitary basis
with respect to a group of corporations that includes Seller and the Purchased
Entities, including any interest, penalty, or addition thereto.

         "Tax Adjustment Amount" shall have the meaning set forth in Section
2.06(a).

         "Tax Benefit" with respect to any event or adjustment for any Person
means the positive excess, if any, of the Tax liability of such Person without
regard to such event or adjustment over the Tax liability of such Person taking
into account such event or adjustment, with all other circumstances remaining
unchanged.

         "Tax Claim" shall have the meaning set forth in Section 6.10(a).

         "Tax Cost" with respect to any event or adjustment for any Person means
the positive excess, if any, of the Tax liability of such Person taking such
event or adjustment into account over the Tax liability of such Person without
regard to such event or adjustment, with all other circumstances remaining
unchanged.

         "Tax Return" means any return (including estimated returns),
declaration, report, claim for refund, or information return or statement
relating to Taxes, including any schedule or attachment thereto.

         "Taxing Authority" means any governmental or regulatory authority, body
or instrumentality exercising any authority to impose, regulate or administer
the imposition of Taxes.

         "Tax Structure" shall have the meaning set forth in Section 5.01.

         "Tax Treatment" shall have the meaning set forth in Section 5.01.


                                       -9-



         "Third Party Claim" shall have the meaning set forth in Section
9.04(a).

         "Transfer Tax" or "Transfer Taxes" means any federal, state, county,
local, foreign and other sales, use, value added, transfer, conveyance,
documentary transfer, recording or other similar tax, fee or charge imposed upon
the sale, transfer or assignment of property or any interest therein or the
recording thereof pursuant to this Agreement, and any penalty, addition to tax
or interest with respect thereto.

         "Transition Services Agreement" means that certain Transition Services
Agreement between Purchaser and Seller, substantially in the form of Exhibit B
hereto.

         "Unaudited Financial Statements" shall have the meaning set forth in
Section 3.05(a). Section 1.02 Construction. Unless the context otherwise clearly
indicates, words used in the singular include the plural and words used in the
plural include the singular. The Schedules and Exhibits referred to herein shall
be incorporated into this Agreement as an integral part hereof to the same
extent as if they were set forth verbatim herein. All "Article" and "Section"
references herein are references to Articles and Sections of this Agreement,
unless otherwise specified. The Recitals and the captions and headings of
Articles and Sections of this Agreement are solely for the purpose of reference,
are not part of the agreement of the parties and shall not affect the meaning or
interpretation of this Agreement. All references herein to dollars (or $) shall
mean US Dollars.

                                   ARTICLE II

              PURCHASE AND SALE OF SHARES AND RELATED TRANSACTIONS

         Section 2.01 Purchase and Sale of Shares. Upon the terms and subject to
the conditions of this Agreement, at the Closing (as defined in Section
2.02(a)), Seller agrees to sell, transfer, assign and deliver to Purchaser, the
Purchased Entities by delivering all of the Shares, free and clear of all Liens,
and Purchaser agrees to purchase, acquire and accept from Seller, the Shares,
for an aggregate purchase price of $1,325,000,000, subject to adjustment before
the Closing Date as set forth in Section 2.04 (the "Purchase Price"), payable as
set forth in Section 2.03 and subject to further adjustment after the Closing
Date as set forth in Section 2.05 and 2.06. The purchase and sale of the Shares
are collectively referred to in this Agreement as the "Acquisition".

         Section 2.02 Closing; Effective Time. (a) The closing of the
Acquisition (the "Closing") shall take place at the offices of Gibson, Dunn &
Crutcher LLP, 200 Park Avenue, New York, New York, at 10:00 a.m. on the third
Business Day after the conditions set forth in Section 7.01 have been satisfied
(or waived), or, if on such day any other condition set forth in Article VII has
not been satisfied (or waived by the party or parties entitled to the benefit
thereof), as soon as practicable after all the conditions set forth in Article
VII have been satisfied (or waived by the party or parties entitled to the
benefit thereof), or at such other place, time and date as may be agreed by
Seller and Purchaser. The date on which the Closing occurs is referred to in
this Agreement as the "Closing Date".

         (b) In the case of any Purchased Entity that has its principal place of
business in the United States, the Closing shall be deemed to be effective as of
11:59 p.m. New York City time on the calendar day which is the Closing Date, and
in the case of any Purchased


                                      -10-



Entity that has its principal place of business in a jurisdiction outside the
United States, the Closing shall be deemed to be effective as of 11:59 p.m.
local time in such principal place of business on the calendar day which is the
Closing Date. Notwithstanding anything herein to the contrary, with respect to
each Employee, the Closing shall be deemed to be effective as of 11:59 p.m.
local time in the city of employment for each such Employee.

         Section 2.03 Payment of Purchase Price; Delivery of Shares. At Closing,
Purchaser shall deliver to Seller payment, by wire transfer of immediately
available funds to an account designated in writing by Seller (such designation
to be made at least one Business Day prior to the Closing Date), in an amount
equal to the Purchase Price (the "Closing Date Payment"). At the Closing, Seller
shall deliver to Purchaser or its designee stock certificates of the Companies,
duly endorsed in blank (or accompanied by duly executed stock powers),
representing the Shares so as to transfer and assign to Purchaser, good and
valid title to the Shares, free and clear of all Liens.

         Section 2.04 Pre-Closing Purchase Price Adjustment.

         (a) 2003 EBITDA. Within seven (7) Business Days after the date of this
Agreement, Seller shall deliver to Purchaser the combined historical balance
sheets of the Purchased Entities as of December 31 in each of the years 2002 and
2003, together with combined historical statements of income, stockholders'
equity and cash flows for the periods ended December 31 in each of the years
2001, 2002 and 2003, all certified by Ernst & Young LLP, independent certified
public accountants, whose reports thereon are included therein (collectively,
the "Combined Financial Statements"), together with a statement (the "EBITDA
Statement") prepared by management of Seller and audited by Ernst & Young LLP in
accordance with auditing standards generally accepted in the United States,
setting forth the 2003 EBITDA. Concurrently with the delivery of the Combined
Financial Statements and the EBITDA Statement, Seller shall also authorize and
instruct Ernst & Young LLP to provide access to Purchaser's accountants to
working papers prepared by Ernst & Young LLP in the course of the audit of the
Combined Financial Statements (but not including working papers considered
proprietary, privileged or otherwise prohibited from disclosure under applicable
AICPA guidelines and ethical standards).

         (b) Objections; Resolution of Disputes.

         (i) Unless Purchaser notifies Seller in writing, within 30 days after
     Seller's delivery to Purchaser of the EBITDA Statement, of any objection to
     the conformity of the calculations and adjustments set forth in the EBITDA
     Statement with the calculations and adjustments set forth in Schedule
     1.01(a) (the "EBITDA Notice of Objection"), the EBITDA Statement shall
     become final and binding. During such 30-day period, Purchaser and its
     representatives shall be afforded reasonable access, during normal business
     hours, to Seller's employees for purposes of reviewing the EBITDA Statement
     and related books and records. Any EBITDA Notice of Objection shall specify
     in reasonable detail the basis for the objections set forth therein.

         (ii) If Purchaser provides the EBITDA Notice of Objection to Seller
     within such 30-day period, Purchaser and Seller shall, during the 30-day
     period following Seller's receipt of the EBITDA Notice of Objection,
     attempt in good faith to resolve Purchaser's objections. During such 30-day
     period, Seller and its representatives shall be permitted to review the
     working papers of Purchaser relating to the EBITDA Notice of Objection and
     the basis therefor. If Purchaser and Seller are unable to resolve all such


                                      -11-



     objections within such 30-day period, the matters remaining in dispute
     shall be submitted to a Selected Accounting Firm (and, if Purchaser and
     Seller are unable to so agree on a Selected Accounting Firm within 10 days
     after the end of such 30-day period, then Purchaser and Seller shall each
     select such a firm and such firms shall jointly select a third nationally
     recognized firm to resolve the disputed matters) (such Selected Accounting
     Firm or, if applicable, such selected firm being the "Independent Expert").
     The parties shall instruct the Independent Expert to render its reasoned
     written decision as promptly as practicable but in no
     event later than 30 days after its selection. The resolution of disputed
     items by the Independent Expert shall be final and binding, and the
     determination of the Independent Expert shall constitute an arbitral award
     that is final, binding and non-appealable and upon which a judgment may be
     entered by a court having jurisdiction thereover. The fees and expenses of
     the Independent Expert incurred under this Section 2.04(b) shall be shared
      ratably by Purchaser and Seller in proportion to the
     relative difference between the result obtained by the Independent Expert
     to Purchaser's position, on the one hand, and to Seller's position, on the
     other hand. After the EBITDA Statement shall have become final and binding,
     the Purchase Price shall be adjusted in accordance with Section 2.04(c)
     below.

         (c) Adjustment to Purchase Price. The Purchase Price shall be decreased
     by an amount equal to (i) the amount, if any, by which the 2003 EBITDA is
     less than $218,006,000, multiplied by (ii) 6.1.

         Section 2.05 Post-Closing Purchase Price Adjustment.

         (a) Net Working Capital; Equipment Held for Lease. Within 60 days after
     the Closing Date, Purchaser shall cause to be prepared and delivered to
     Seller a balance sheet for the Purchased Entities as of the Cut-Off Date,
     which shall have been audited at Purchaser's expense by Purchaser's
     auditor, together with a statement (the "Statement") prepared by such
     auditor setting forth (i) the Net Working Capital of the Purchased Entities
     as of the close of business on the Cut-Off Date (including a separate item
     setting forth the amount, if any, of current Taxes payable allocable to
     Straddle Period Taxes), and (ii) the net book value of Equipment Held for
     Lease as of the close of business on the Cut-Off Date. After the Closing
     Date, at Purchaser's reasonable request, Seller shall assist Purchaser and
     its representatives with respect to the preparation of the Statement as may
     be reasonably requested.

         (b) Objections; Resolution of Disputes.

         (i) Unless Seller notifies Purchaser in writing within 30 days after
     Purchaser's delivery to Seller of the Statement of any objection to the
     computation of Net Working Capital or Equipment Held for Lease set forth
     therein (the "Post-Closing Notice of Objection"), the Statement shall
     become final and binding. During such 30-day period Seller and its
     representatives shall be permitted to review the working papers of
     Purchaser relating to the Statement and shall be afforded reasonable
     access, during normal business hours, to Purchaser's employees for purposes
     of reviewing the Statement and related books and records. Any Post-Closing
     Notice of Objection shall specify in reasonable detail the basis for the
     objections set forth therein.

         (ii) If Seller provides the Post-Closing Notice of Objection to
     Purchaser within such 30-day period, Purchaser and Seller shall, during the
     30-day period following Purchaser's receipt of the Post-Closing Notice of
     Objection, attempt in good faith to resolve Seller's objections. During
     such 30-day period, Purchaser and its


                                      -12-



         representatives shall be permitted to review the working papers of
         Seller relating to the Post-Closing Notice of Objection and the basis
         therefor. If Purchaser and Seller are unable to resolve all such
         objections within such 30-day period, the matters remaining in dispute
         shall be submitted to the Independent Expert. The parties shall
         instruct the Independent Expert to render its reasoned written decision
         as promptly as practicable but in no event later than 30 days after its
         selection. The resolution of disputed items by the Independent Expert
         shall be final and binding, and the determination of the Independent
         Expert shall constitute an arbitral award that is final, binding and
         non-appealable and upon which a judgment may be entered by a court
         having jurisdiction thereover. The fees and expenses of the Independent
         Expert incurred under this Section 2.05(b) shall be shared ratably by
         Purchaser and Seller in proportion to the relative difference between
         the result obtained by the Independent Expert to Purchaser's position,
         on the one hand, and to Seller's position, on the other hand. After the
         Statement shall have become final and binding, neither party may have
         any further right to make any claims against the other party in respect
         of (i) any element of Net Working Capital or Equipment Held for Lease,
         as the case may be or (ii) any payment made pursuant to Section
         2.05(c).

         (c) Adjustment Payment. The Purchase Price shall be: (A) decreased by
an amount equal to (i) the amount, if any, by which Net Working Capital as of
Closing is less than $4,919,000; plus (ii) the amount, if any, by which the net
book value of Equipment Held for Lease as of Closing is less than
$1,081,539,000; and (B) increased by an amount equal to the amount, if any, by
which the net book value of Equipment Held for Lease as of Closing is greater
than $1,081,539,000 (the Purchase Price as so increased or decreased being
hereinafter called the "Adjusted Purchase Price"). Within 10 days after the
Statement has become final and binding in accordance with Section 2.05(b), (i)
if the Closing Date Payment is greater than the Adjusted Purchase Price, Seller
shall pay to Purchaser an amount equal to such difference, plus simple interest
thereon at the Applicable Settlement Rate from the Closing Date to the date
payment is made in full, and (ii) if the Closing Date Payment is less than the
Adjusted Purchase Price, Purchaser shall pay to Seller an amount equal to such
difference, plus simple interest thereon at the Applicable Settlement Rate from
the Closing Date to the date payment is made in full (the Closing Date Payment
as so increased or decreased being hereinafter called the "Final Purchase
Price"). Any such payment hereunder shall be made by wire transfer of
immediately available funds to an account designated in writing by Purchaser or
Seller, as the case may be. For purposes of this Section 2.05(c), (x) the
"Applicable Settlement Rate" shall be Closing Date LIBOR plus one percent (1%),
and (y) "Closing Date LIBOR" shall be the London Interbank Offered Rate (LIBOR)
as reported on the Closing Date in The Wall Street Journal for the specified
interval of calendar months (expressed as the 3-month LIBOR rate, 6-month LIBOR
rate, 9-month LIBOR rate and so on, as applicable) that most closely corresponds
to the time period between the Closing Date and the date that payment in full
pursuant to this Section 2.05(c) is made.

         Section 2.06 Tax Adjustment Amount

         (a) In addition to adjustments to the Purchase Price pursuant to
Section 2.05, the Purchase Price shall be increased by an amount equal to
pre-tax income for the period commencing on July 1, 2004 and ending on the
Cut-Off Date prepared in accordance with GAAP, on a consistent basis in
accordance with past practices and without giving any effect to income from
forgiveness of indebtedness, restructuring or other actions taken by Seller or
the Purchased Entities in contemplation of the transaction contemplated hereby,
times .375 (the "Tax Adjustment Amount").


                                      -13-



         (b) Within sixty (60) days after the Closing Date, Purchaser shall
prepare and deliver to Seller a calculation of the Tax Adjustment Amount.
Thereafter, rules similar to those set forth in Section 2.05(b) shall apply to
such calculation.

         (c) Payment of the Tax Adjustment Amount shall be made in accordance
with the procedures set forth in Section 2.05(c).

                                  ARTICLE III

                    REPRESENTATIONS AND WARRANTIES OF SELLER

         Each representation and warranty contained in this Article III is
qualified by the corresponding section of the Disclosure Schedule attached
hereto (each section of which qualifies the correspondingly numbered
representation and warranty to the extent expressly specified therein). This
Article III and the Disclosure Schedule shall be read together as an integrated
provision. Seller hereby represents, covenants and warrants to Purchaser as
follows:

         Section 3.01 Corporate Organization and Good Standing. Seller and each
of the Purchased Entities is duly organized, validly existing and in good
standing under the laws of their respective jurisdiction of incorporation or
organization, with full corporate power and authority to carry on their
respective businesses as such businesses are now conducted, and to own, lease or
operate their assets and properties. Seller and each of the Purchased Entities
is duly qualified to do business and in good standing in every jurisdiction in
which the character of the properties owned or leased by them or the nature of
the business conducted by them makes such qualification necessary, except where
failure to be so qualified would not have a Business Material Adverse Effect.
Complete and accurate copies of the charter documents and bylaws (if applicable)
of Seller and each of the Purchased Entities, with all amendments thereto to the
date hereof, have been made available to Purchaser or its representatives.

         Section 3.02 Ownership of Capital Stock. (a) The authorized Capital
Stock of each of the Purchased Entities consists of the number of shares of
Capital Stock, the par value per share of such Capital Stock, and the number of
shares issued and outstanding as described on Schedule 3.02(a).

         (b) Seller owns all of the outstanding Shares. The Shares are validly
issued, fully paid and nonassessable. Seller has good and valid title to, and
sole record and beneficial ownership of, the Shares. Except as set forth on
Schedule 3.02(b), the Shares are held by Seller free and clear of all Liens. The
Companies own, directly or indirectly, all of the outstanding Subsidiary Shares.
The Subsidiary Shares are validly issued, fully paid and nonassessable. The
Companies have good and valid title to, and sole record and beneficial ownership
of, the Subsidiary Shares. Except as set forth on Schedule 3.02(b), the
Subsidiary Shares are held by the Companies free and clear of all Liens.

         (c) Neither Seller nor the Companies have granted, issued or agreed to
grant or issue any equity interests in the Purchased Entities other than the
Shares and the Subsidiary Shares, there are no outstanding options, warrants,
subscription rights, securities that are convertible into or exchangeable for,
or any other commitments of any character relating to, any equity interests of
the Purchased Entities, and there are no outstanding contractual obligations of
Seller or the Purchased Entities to repurchase, redeem or otherwise acquire any
Shares or Subsidiary Shares, or to provide funds to make any investment (in the
form of a loan, capital contribution or otherwise) in any Purchased Entity or
any other Person.


                                      -14-



         (d) There are no voting trusts or other agreements or understandings to
which Seller or any Purchased Entity is a party with respect to the voting of
the capital stock of any of the Purchased Entities.

         (e) Except for the Subsidiary Shares and as set forth on Schedule
3.02(e), the Companies do not directly or indirectly own, either of record or
beneficially, any equity interest in any other entity.

         Section 3.03 Authorization. Seller has full corporate power and
authority to execute this Agreement and the Ancillary Agreements to which it is,
or is specified to be, a party and to consummate the transactions contemplated
by this Agreement and such Ancillary Agreements. Each Purchased Entity has full
corporate power and authority to execute the Ancillary Agreements, if any, to
which it is, or is specified to be, a party and to consummate the transactions
contemplated by such Ancillary Agreements. Seller has taken all corporate action
required by its certificate of incorporation and bylaws to authorize the
execution and delivery of this Agreement and the Ancillary Agreements to which
it is, or is specified to be, a party and to authorize the consummation of the
transactions contemplated by this Agreement and such Ancillary Agreements. Each
Purchased Entity has taken all corporate action required by its corporate
organizational documents to authorize the execution and delivery of the
Ancillary Agreements, if any, to which it is, or is specified to be, a party and
to authorize the consummation of the transactions contemplated by such Ancillary
Agreements. Seller has duly executed and delivered this Agreement, and this
Agreement and each Ancillary Agreement, when duly executed and delivered by
Purchaser as contemplated by this Agreement, will be duly authorized, executed
and delivered by Seller and will constitute a legal, valid and binding
obligation, enforceable against it in accordance with its terms subject, as to
enforcement, to applicable bankruptcy, insolvency, moratorium, reorganization or
similar laws affecting creditors' rights generally and to general equitable
principles. Each Ancillary Agreement, if any, to which a Purchased Entity is a
party, when duly executed and delivered by Purchaser as contemplated by this
Agreement, will be duly authorized, executed and delivered by such Purchased
Entity and will constitute a legal, valid and binding obligation, enforceable
against it in accordance with its terms subject, as to enforcement, to
applicable bankruptcy, insolvency, moratorium, reorganization or similar laws
affecting creditors' rights generally and to general equitable principles.

         Section 3.04 No Conflicts or Violations; No Consents or Approvals
Required. The execution and delivery by Seller of this Agreement does not, the
execution and delivery by Seller and each of the Purchased Entities of each
Ancillary Agreement to which it is, or is specified to be, a party will not, and
in the case of Seller, the consummation of the transactions contemplated by this
Agreement and such Ancillary Agreements, or, in the case of each of the
Purchased Entities, the transactions contemplated by such Ancillary Agreement to
which such Purchased Entity is a party, will not (i) in the case of Seller,
violate, conflict with or result in any breach of any provision of its
certificate of incorporation or bylaws and, in the case of each of the Purchased
Entities, violate, conflict with or result in any breach of any provision of its
comparable corporate organizational documents, (ii) except as set forth in
Schedule 3.04, violate, result in the termination or the acceleration of, or
conflict with or constitute a default (with or without notice thereof of lapse
of time) under, or result in the creation or imposition of any Lien, other than
Permitted Liens or Liens caused by Purchaser, upon any of the properties or
assets of the Purchased Entities pursuant to, any agreement, contract, mortgage,
indenture, lease, franchise, Permit or other instrument to which Seller or any
of the Purchased Entities is a party or by which any of the properties or assets
of the Purchased Entities is bound, or (iii) violate any judgment, order or
decree ("Judgment") or statute, law, ordinance, rule or


                                      -15-



regulation ("Applicable Law") applicable to Seller or any of the Purchased
Entities or any of the properties or assets of the Purchased Entities, other
than, in the case of clauses (ii) and (iii) above, any such items that would not
reasonably be expected to have a Business Material Adverse Effect. Except as set
forth on Schedule 3.04, no consent, approval or authorization ("Consent") of, or
registration, declaration or filing with, any Federal, state, local or foreign
court of competent jurisdiction, governmental agency, authority, instrumentality
or regulatory body (a "Governmental Entity"), is required to be obtained or made
by or with respect to Seller or any of the Purchased Entities in connection with
the execution, delivery and performance of this Agreement or the consummation of
the Acquisition, other than (A) compliance with and filings under the HSR Act,
and (B) those the failure of which to obtain or make would not reasonably be
expected to have a Business Material Adverse Effect. Except as set forth on
Schedule 3.04, no Consent of any third party that is not a Governmental Entity
is required to be obtained or made by or with respect to Seller or any of the
Purchased Entities in connection with the execution, delivery and performance of
this Agreement or the consummation of the Acquisition, other than those the
failure of which to obtain or make would not reasonably be expected to have a
Business Material Adverse Effect.

         Section 3.05 Financial Statements. (a) Attached as Schedule 3.05(a)
hereto are (i) the unaudited combined balance sheets of the Purchased Entities
as of December 31 in each of the years 2001 through 2003, together with
unaudited combined statements of income, stockholders' equity and cash flows for
each of the years then ended (not including notes thereto), and (ii) an
unaudited combined balance sheet of the Purchased Entities as of March 31, 2004
(the "March 31, 2004 Balance Sheet") and unaudited combined statements of
income, shareholders' equity and cash flows for the quarterly period then ended
(collectively, the "Unaudited Financial Statements"). The Unaudited Financial
Statements have been prepared from, are in accordance with and accurately
reflect, in all material respects, the books and records of the Purchased
Entities, have been prepared in accordance with U.S. GAAP on a consistent basis
during the periods involved, and fairly present, in all material respects, the
combined financial position and the combined results of operations and cash
flows of Purchased Entities as of the times and for the periods referred to
herein.

         (b) The Combined Financial Statements delivered pursuant to Section
2.04 will be prepared from, will be in accordance with and will accurately
reflect, in all material respects, the books and records of the Purchased
Entities, will be prepared in accordance with U.S. GAAP on a consistent basis
during the periods involved and will fairly present, in all material respects,
the combined financial position and the combined results of operations and cash
flows of Purchased Entities as of the times and for the periods referred to
herein.

         Section 3.06 Books and Records. The books of account, minute books,
stock record books and other records of the Purchased Entities are complete and
correct in all material respects and have been maintained in accordance with
sound business practices, including the maintenance of a system of internal
controls that is adequate for the Business as currently conducted. True and
complete copies of all minute books and all stock record books of the Purchased
Entities have heretofore been delivered or will be made available to Purchaser.

         Section 3.07 No Undisclosed Liabilities. Except (a) as disclosed in the
Combined Financial Statements and the March 31, 2004 Balance Sheet and (b) for
liabilities and obligations incurred in the ordinary course of business and
consistent with past practice since the March 31, 2004 Balance Sheet, no
Purchased Entity has any liability or obligation of


                                      -16-



any nature, whether or not accrued, contingent or otherwise, that has, or would
be reasonably likely to have, a Business Material Adverse Effect.

         Section 3.08 Accounts Receivable. All accounts receivable of the
Purchased Entities, whether reflected in the Balance Sheet or otherwise,
represent sales actually made in the ordinary course of business and represent
accounts receivable that have been created pursuant to bona fide transactions.

         Section 3.09 Assets Other than Real Property Interests. The Purchased
Entities have good, valid and marketable title to all material properties or
assets of the Purchased Entities, in each case free and clear of all mortgages,
liens, charges, claims, pledges or other encumbrances of any kind (collectively,
"Liens"), except (i) such Liens as are set forth in Schedule 3.09, (ii)
mechanics', carriers', workmen's, repairmen's or other like Liens arising or
incurred in the ordinary course of business with respect to a liability that is
not yet due or delinquent, (iii) Liens arising under original purchase price
conditional sales Contracts or equipment leases with third parties entered into
in the ordinary course of business, (iv) purchase options granted to lessees
pursuant to Container Leases entered into in the ordinary course of business and
which are set forth on Schedule 3.09, and (v) other minor imperfections of
title, licenses or encumbrances, which, individually or in the aggregate with
such other Liens described in clauses (i) through (iv), could not reasonably be
expected to materially impair the continued use and operation of the assets to
which they relate in the conduct of the Business as presently conducted (the
Liens described in clauses (i) through (v) above are referred to collectively as
"Permitted Liens"). Except as set forth on Schedule 3.09, the rights, properties
and other assets presently owned by the Purchased Entities, together with the
rights, properties and other assets presently leased or licensed by third
parties unaffiliated with the Purchased Entities, include all the rights,
properties and other assets used in, and all the rights, properties and other
assets necessary for, the conduct of the Business as currently conducted by the
Purchased Entities.

         Section 3.10 Real Property. None of the Purchased Entities owns,
directly or indirectly, in whole or in part, any interest in any real property.
Schedule 3.10 sets forth a list of all real property and interests in real
property leased by one of the Purchased Entities and used or held for use in the
operation or conduct of the Business (individually, a "Leased Property"). Each
lease with respect to a Leased Property is a valid and binding obligation of one
of the Purchased Entities and is in full force and effect and neither the
applicable Purchased Entity, nor to the Knowledge of Seller, the landlord, is in
default of its obligations thereunder. With respect to each Leased Property,
except as set forth on Schedule 3.10, (i) the only documents existing with
respect to the Leased Property are those previously delivered and none of such
documents have been amended or modified, and there are no other agreements
(written or oral) with respect to such Leased Property, (ii) there are no tenant
improvements or similar monetary obligations owing to the landlord under the
related lease that have not been paid by the Purchased Entities, (iii) there are
no security deposits held by the landlord with respect to the related lease, and
there is no obligation by the Purchased Entities to restore any security
deposit. The Leased Property constitutes all of the real property used in, and
necessary for the conduct of, the Business as currently conducted by the
Purchased Entities.

         Section 3.11 Intellectual Property. (a) Schedule 3.11(a) sets forth,
for all of the following included in the Owned Intellectual Property, a complete
and accurate list of all United States, state, foreign and international (i)
patents and patent applications, (ii) trademark registrations, applications and
material unregistered trademarks, including, without limitation,


                                      -17-



Internet domain names, (iii) copyright registrations, applications and material
unregistered copyrights and (iv) software.

         (b) Schedule 3.11(b) sets forth a complete and accurate list of (i) all
License Agreements other than end-user licenses of commercially available
"off-the-shelf" software, and (ii) all agreements in which any Purchased Entity
grants to any Person rights in any Owned Intellectual Property. The License
Agreements are valid and binding obligations of the Purchased Entity,
enforceable in accordance with their terms, and, to the Knowledge of Seller,
there exists no event or condition (including the consummation of the
transactions contemplated by this Agreement) which will result in a violation or
breach of, or constitute a default by any Purchased Entity, or the other party
thereto, under any such License Agreement.

         (c) To the Knowledge of Seller, the Owned Intellectual Property and
Intellectual Property licensed under the License Agreements constitute all of
the Intellectual Property necessary for the conduct of the Business by the
Purchased Entities after the Closing in the same manner as currently conducted
by the Purchased Entities.

         (d) All Owned Intellectual Property is owned by a Purchased Entity,
free and clear of all Liens. To the Knowledge of Seller, the Owned Intellectual
Property that is the subject of a License Agreement has been duly maintained, is
valid and subsisting, in full force and effect and has not been cancelled,
expired or abandoned. No Purchased Entity has granted to any third Person any
exclusive right with respect to any of the Owned Intellectual Property.

         (e) There is no pending or, to the Knowledge of Seller, threatened
claim against any Purchased Entity (i) alleging that the Purchased Entity, the
Owned Intellectual Property or the Intellectual Property licensed under any
License Agreements infringes, misappropriates, dilutes or otherwise violates any
Intellectual Property rights of any third Person, or (ii) challenging any
Purchased Entity's ownership or use of, or the validity, enforceability or
registerability of, any Intellectual Property.

         (f) During the two-year period prior to the date hereof, no Purchased
Entity has brought or threatened in writing a claim against any Person (i)
alleging infringement, misappropriation, dilution or any other violation of the
Owned Intellectual Property (other than with respect to Terms 2000 (as defined
below)) or the License Agreements (other than that certain license agreement
between Forte Software Inc. and Transamerica Leasing Inc. (the "Forte License
Agreement")) or (ii) challenging any Person's ownership or use of, or the
validity, enforceability or registerability of, any Intellectual Property. No
Purchased Entity has brought or threatened a claim against any Person alleging
infringement, misappropriation, dilution or any other violation of Terms 2000 or
the Forte License Agreement. As used herein, "Terms 2000" shall refer to the
proprietary equipment tracking and billing system developed for Transamerica
Leasing Inc.

         (g) The Purchased Entities have taken reasonable measures to protect
the confidentiality of the trade secrets included in Terms 2000. No trade
secrets included in Terms 2000 have been disclosed or authorized to be disclosed
to any third Person other than pursuant to a written agreement that adequately
protects the Purchased Entities proprietary interests in such trade secrets. To
the Knowledge of Seller, no third Person that is a party to any non-disclosure
agreement with any Purchased Entity thereof is in breach or default thereof.


                                      -18-



Section 3.12 Litigation. Schedule 3.12 lists (a) each action, suit, claim or
proceeding (including, but not limited to, any arbitration proceeding) pending
or, to the Knowledge of Seller, threatened during the two-year period prior to
the date hereof, and (b) each investigation pending or, to the Knowledge of
Seller, threatened during the two-year period prior to the date hereof, against
any Purchased Entity at law or in equity, or before or by any Governmental
Entity. None of the Purchased Entities is, in any material respect, in default
with respect to any order, writ, injunction or decree known to or served upon
such entity of any Governmental Entity.

         Section 3.13 Contracts. Schedule 3.13 lists:

         (i) each Container Lease with any Major Customer (as defined in Section
     3.22);

         (ii) each management agreement for Managed Containers that provides for
     the management of 500 or more Containers;

         (iii) each contract, legally binding arrangement or agreement or
     purchase order for the purchase of Containers that have not been delivered
     as of the date hereof;

         (iv) each agreement that adversely affects or restricts the freedom of
     any of the Purchased Entities to compete in its lines of business or with
     any Person or in any geographical area or otherwise to conduct the Business
     as presently conducted;

         (v) each depot agency agreement pursuant to which a Purchased Entity
     has made any payment to a depot agent since January 1, 2003, or to which
     there is a payment obligation that is not contingent on actual use of the
     depot; (vi) each contract or agreement with any Employee;

         (vii) each agreement for the disposition of material assets or
     properties of any of the Purchased Entities, except for dispositions in the
     ordinary course of business; and

         (viii) all other material contracts and agreements to which any of the
     Purchased Entities is a party relating to or affecting the operation of the
     Business and which require an annual payment by a Purchased Entity in
     excess of $250,000 (other than the leases for Leased Property set forth on
     Schedule 3.10).

         The contracts set forth in clause (i)-(viii) above, together with the
leases for the Leased Property set forth on Schedule 3.10 are collectively
referred to as the "Contracts." Each Contract is valid, binding and in full
force and effect, and is enforceable by the Purchased Entity, as applicable, in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws affecting
creditors' rights generally and to general equitable principles. Each Purchased
Entity that is a party to a Contract has performed in all material respects the
obligations required to be performed by it under such Contract. There has not
occurred any material breach or material default under any depot agency
agreement or Container Lease by the other party thereto, and to the Knowledge of
Seller there has not occurred any breach or default under any Contract that is
not a depot agency agreement or Container Lease by the other party thereto.
Except as set forth in Schedule 3.10, since January 1, 2003, no Purchased Entity
has received or given any written notice of default under any Contract to which
it is a party.


                                      -19-



         Section 3.14 Permits. The Purchased Entities have obtained and have in
effect all Permits necessary to conduct the Business as it is presently being
conducted in accordance with the ordinances, rules, requirements and regulations
of any Governmental Entity having jurisdiction. Except as set forth in Schedule
3.14, (i) all Permits necessary to conduct the Business as it is presently being
conducted are validly held by one of the Purchased Entities, and the applicable
Purchased Entity has complied in all material respects with the terms and
conditions thereof, (ii) during the past twelve months neither Seller nor any of
the Purchased Entities has received written notice of any suit, action or
proceeding (a "Proceeding") relating to the revocation or material modification
of any such Permits and (iii) none of such Permits would reasonably be expected
to be subject to suspension, modification, revocation or nonrenewal as a result
of the execution and delivery of this Agreement or the consummation of the
Acquisition.

         Section 3.15 Compliance with Applicable Law. The operation of the
Business is, and has been, conducted in accordance with all applicable laws,
regulations, orders and other requirements of all Governmental Entities that
affect the business, properties or assets of the Business, except where the
failure to comply would not, individually or in the aggregate, reasonably be
expected to have a Business Material Adverse Effect. Without limiting the
foregoing, the operations of the Business do not violate or fail to comply with
applicable health, fire, safety, zoning or building codes, laws or ordinances,
rules or regulations, including, without limitation, the International
Convention for Safe Containers or the continuous safety inspection system
overseen by the United States Coast Guard, except where the failure to comply
would not, individually or in the aggregate, reasonably be expected to have a
Business Material Adverse Effect. The Purchased Entities have not received any
written notice of any material violation of any such law, regulation, order or
other legal requirement, and are not in material default with respect to any
order, writ, judgment, award, injunction or decree of any Governmental Entity,
applicable to any Purchased Entity or any of their respective assets, properties
or operations. There are no pending or, to the Knowledge of Seller, threatened
actions or proceedings by any Governmental Entity alleging violations in any
material respect of such codes, laws or ordinances.

         Section 3.16 Benefit Plans. All Benefit Plans are listed in Schedule
3.16, and copies of all material documentation relating to such Benefit Plans
have been delivered or made available to Purchaser (including copies of written
Benefit Plans, written descriptions of Benefit Plans, summary plan descriptions,
trust agreements, the three most recent annual returns on Form 5500, employee
communications and IRS determination letters). Except as set forth on Schedule
3.16:

         (a) each Benefit Plan has at all times been maintained and administered
in all material respects in accordance with its terms and with the requirements
of all applicable law, including ERISA, the Code and any applicable non-United
States Laws, except to the extent that any failure with respect thereto could
not reasonably be expected to result in a material liability to the Purchased
Entities, and each Benefit Plan intended to qualify under section 401(a) of the
Code has received a favorable determination or opinion letter to that effect
and, to the Knowledge of Seller and the Purchased Entities, no event has
occurred since the date of such determination or opinion letter that could
reasonably be expected to result in the loss of the tax qualification of such
Benefit Plan;

         (b) no Benefit Plan is a Multiemployer Plan and there does not now
exist, nor do any circumstances exist that would reasonably be expected to
result in, any liability under Title IV of ERISA, that could be a material
liability of the Purchased Entities following the


                                      -20-



Closing Date, other than for premiums payable to the Pension Benefit Guaranty
Corporation under Title IV of ERISA;

         (c) no benefit under any Benefit Plan, including without limitation any
severance or parachute payment plan or agreement, will be established or become
accelerated, vested or payable by reason of any transaction contemplated under
this Agreement either alone or in conjunction with another event (e.g.,
termination of employment);

         (d) no Benefit Plan provides health or death benefit coverage beyond
the termination of an employee's employment, except as required by Part 6 of
Subtitle B of Title I of ERISA or section 4980B of the Code or any state or
non-United States laws requiring continuation of benefits coverage following
termination of employment;

         (e) no suit, actions or other litigation (excluding claims for benefits
incurred in the ordinary course of plan activities) have been brought or, to the
Knowledge of Seller or the Purchased Entities, threatened against or with
respect to any Benefit Plan that could reasonably be expected to result in a
material liability to the Purchased Entities and to the Knowledge of Seller,
there are no facts or circumstances that could reasonably be expected to give
rise to any such suit, action or other litigation;

         (f) all contributions to Benefit Plans that were required to be made
under such Benefit Plans have been or will be made in accordance with such local
Law and the terms of such Benefit Plans, and all benefits accrued under any
unfunded Benefit Plan have been paid, accrued or otherwise adequately reserved
in accordance with generally accepted accounting principles in the local
jurisdiction, Seller and the Purchased Entities have performed all material
obligations required to be performed under all Benefit Plans; and

         (g) the consummation of the transactions contemplated by this Agreement
will not result in any Purchased Entities having to make or being bound by any
commitment or obligation to make any "excess parachute payment" within the
meaning of Section 280G of the Code.

         Section 3.17 Tax Matters. Except as set forth in Schedule 3.17:

         (a) Each Purchased Entity and each Company Group has filed, and with
respect to Tax Returns the due date for filing of which is after the date hereof
and before the Closing Date, will file, on a timely basis all material Tax
Returns required to be filed. All such Tax Returns are, or in the case of Tax
Returns the due date for filing of which is after the date hereof and before the
Closing Date, will be, true and complete in all material respects.

         (b) With respect to all Taxes imposed on each Purchased Entity and each
Company Group in any taxable period or portion of a period ending on or before
the Closing Date, (i) all applicable Tax laws have been, or with respect to the
period between the date hereof and the Closing Date, will be, complied with in
all material respects, and (ii) all Taxes required to be paid to Taxing
Authorities or others on or before the date hereof have been, or in the case of
such Taxes the due date for payment of which is between the date of this
Agreement and the Closing Date will be, timely paid in full.

         (c) (i) no Tax Return of any Purchased Entity or any Company Group is
currently under examination by the Internal Revenue Service, (ii) no material
Tax Return of any Purchased Entity or any Company Group is under audit or
examination by any other Taxing


                                      -21-



Authority, and (iii) no notice of such an audit or examination has been received
by any Purchased Entity.

         (d) No material adjustment to the Tax liability of any Purchased Entity
has been proposed in writing (or is currently pending) by any Taxing Authority
in connection with any Tax Return of any Purchased Entity. All deficiencies
asserted or assessments made as a result of any examinations have been fully
paid or are fully reflected as a liability in the financial statements of the
applicable Purchased Entity. No extensions or waivers of the statute of
limitations for Federal, foreign or material state and local Tax Returns for any
Purchased Entity are currently in effect for any taxable year.

         (e) There are no liens for Taxes (other than liens for current Taxes
not yet due and payable) on any of the assets of the Purchased Entities.

         (f) The Combined Financial Statements reflect an adequate reserve for
all Taxes payable by the Purchased Entities for all taxable periods and portions
thereof through the date of such financial statements, exclusive of any accruals
established to reflect timing differences and any accruals reflected only in the
notes thereto.

         (g) None of the Purchased Entities or any Company Group is a party to
or is bound by any Tax sharing agreement that will not have been terminated at
or prior to Closing, Tax indemnity obligation, group relief obligation or
similar agreement, arrangement or practice with respect to Taxes (including,
without limitation, any advance pricing agreement, closing agreement or other
agreement relating to Taxes with any Taxing Authority).

         (h) (i) none of the Purchased Entities is a party to any lease made
pursuant to Section 168(f)(8) of the Internal Revenue Code of 1954, (ii) none of
the Purchased Entities is a party to any "disqualified leasebacks or long-term
agreements" within the meaning of Section 467(b)(4) of the Code, and (iii) none
of the assets of the Purchased Entities is subject to a lease under Section
7701(h) of the Code or under any predecessor section thereof.

         (i) With respect to any open taxable year, the Purchased Entities have
employed the alternative depreciation system under Section 168(g)(1)(A) of the
Code for all tangible property used predominantly outside the United States
(within the meaning of Sections 168(g)(1) and (d)(4) of the Code). None of the
Purchased Entities is a party to any lease arrangement that is not characterized
as a true lease for U.S. federal income tax purposes. With respect to any open
taxable year, the Purchased Entities have properly identified, and timely and
properly made an election under Revenue Procedure 90-10 with respect to all
assets that do not constitute "tax-exempt use property" within the meaning of
Section 168(h) of the Code.

         (j) There are no outstanding agreements or waivers extending, or having
the effect of extending, the statutory period of limitation applicable to any
Tax Returns required to be filed with respect to the Purchased Entities and none
of the Purchased Entities or any Company Group has requested any extension of
time within which to file any Tax Return, which return has not yet been filed.
No power of attorney with respect to any Taxes has been executed or filed with
any Taxing Authority by or on behalf of any of the Purchased Entities or any
Company Group.

         (k) Each of the Purchased Entities has complied in all respects with
all applicable laws relating to the payment and withholding of Taxes (including
withholding of Taxes


                                      -22-



pursuant to Sections 1441, 1442, 1446, 3121 and 3402 of the Code or any
comparable provision of any state, local or foreign laws) and have, within the
time and in the manner prescribed by applicable law, withheld from and paid over
to the proper Taxing Authorities all amounts required to be so withheld and paid
over under such laws.

         (l) None of the Purchased Entities has been a party to any distribution
occurring during the last three (3) years that was treated by the parties as a
tax-free distribution under Section 355 of the Code.

         (m) None of the Purchased Entities is a party to any "listed
transaction" as defined in Treasury Regulation Section 1.6011-4(b)(2) or similar
provision under state or foreign law.

         (n) None of the Purchased Entities is a United States real property
holding company within the meaning of Section 897 of the Code.

         (o) The Seller is not a "foreign person" within the meaning of Section
1445 of the Code.

         (p) None of the Purchased Entities has ever (i) made an election under
Section 1362 of the Code to be treated as an S corporation for Federal Income
Tax purposes, or (ii) made any similar election under any comparable provision
of any state, local or foreign tax law.

         (q) Each of the Purchased Entities has complied with the requirements
of, and none of the Purchased Entities have agreed to or are required to make
any adjustments pursuant to, Section 482 (and any related sections) of the Code,
the Treasury regulations promulgated thereunder and any comparable provisions of
state, local, domestic or foreign tax law.

         (r) Each Purchased Entity that is a corporation organized under the
laws of the United States is, and until the Closing Date will be, a member of
Seller's consolidated group for U.S. Federal Income Tax purposes. With respect
to each Purchased Entity that is organized under the laws of a foreign
jurisdiction, stock satisfying the requirements of Section 1504(a)(2) of the
Code is, and until the Closing Date will be, owned by Seller or one of the
Purchased Entities.

Section 3.18 Environmental Matters. Except as set forth in Schedule 3.18, and
except for any matter that would not reasonably be expected to have a Business
Material Adverse Effect, (i) each Purchased Entity is in compliance with, and
has no response, remediation or investigation obligation or liabilities pursuant
to, all United States federal, state, local or, to the Knowledge of Seller,
foreign law, rules, regulations or legal requirements relating to (A) releases,
discharges or emissions, or threatened releases, discharges or emissions, of
Hazardous Substances; (B) the manufacture, handling, transport, use, treatment,
storage or disposal of Hazardous Substances or materials containing Hazardous
Substances; or (C) pollution or protection of the environment or the protection
of human health or safety ("Environmental Laws"), which compliance includes the
possession by the Purchased Entities of all Permits required under applicable
Environmental Laws to operate the Business and compliance with the terms and
conditions thereof; (ii) within the past three (3) years, neither Seller nor the
Purchased Entities have received any communication from a Governmental Entity or
any other Person that alleges Seller or the Purchased Entities are not in such
compliance;


                                      -23-



(iii) there are no pending or, to the Knowledge of Seller, threatened
Proceedings against Seller or any of the Purchased Entities alleging that the
Business is in violation of any Environmental Laws; (iv) to the Knowledge of
Seller, there are no Liens, orders, judgments, settlements or investigations
involving (A) any of the Purchased Entities, (B) any Leased Property or (C) that
certain property located in Romulus, Michigan to be transferred to TBC III, Inc.
on or before the Closing Date, pursuant to Environmental Laws; and (v) no
notices to, or authorizations from, any Governmental Entity pursuant to any
Environmental Laws are required in order to complete the Acquisition or as a
result of entering into this Agreement, including, without limitation, any
obligations triggered by the sales or transfers of businesses or real property
such as by way of example the New Jersey Industrial Site Recovery Act, N.J.S.A.
13:1K-1 et seq.

Section 3.19 Employment Matters; Employees. Except as set forth on Schedule
3.19:

         (a) no Purchased Entity: (i) is party to, or has any obligation under,
any collective bargaining agreement or other Contract with any labor union or
organization, (ii) has any obligation to recognize or deal with any labor union
or organization, (iii) has experienced any strike or material grievance, claim
of unfair labor practice or other collective bargaining dispute within the past
three years. No union organizational campaign is pending or, to the Knowledge of
Seller, threatened with respect to any employees of the Purchased Entities, and
no question concerning representation exists respecting such employees. There
are no pending or, to the Knowledge of Seller, threatened strikes, slowdowns,
work stoppages or lock-outs of any kind by, or with respect to, any employees of
the Purchased Entities.

         (b) there are no pending or, to Knowledge of Seller, threatened
material claims or judgments in connection with, or under, any employment or
labor law against the Purchased Entities.

         (c) Schedule 3.19(c) sets forth an accurate and complete list of each
employee employed by the Purchased Entities as of the date hereof (each, an
"Employee").

Section 3.20 Containers. (a) Schedule 3.20(a) sets forth a list of
all Owned Containers, Leased-In Containers and Managed Containers as of March
31, 2004, and with respect to each Container included thereon, sets forth (i)
the name of manufacturer, the year of manufacture and equipment type, and (ii)
whether the Container is "on-hire" or "off-hire" and, for those that are
"on-hire," sets forth the lessee and associated contract code for such
Container, and, for those that are "off-hire" sets forth the location and status
of such Container.

         (b) Schedule 3.20(b) sets forth a list of each Container Lease that
includes a provision granting the lessee a purchase option with respect to the
Containers subject to such Container Lease.

         (c) Each of the "on-hire" Containers set forth on Schedule 3.20(a) is
subject to Container Leases that require the lessee to maintain the Containers
in good repair and operating condition and in a safe condition pursuant to the
International Convention for Safe Containers. Each of the "off-hire" Containers
set forth on Schedule 3.20(a) (except for Containers held for sale) has been
maintained in good repair and good leaseable operating condition and are
suitable and adequate in all material respects for their current use, or the
Purchased Entities have established adequate reserves for repairs to such
Containers.

                                      -24-



         Section 3.21 Warranty Claims. Except as set forth on Schedule 3.21,
since January 1, 2002, no customer of any Purchased Entity has asserted in
writing or requested in writing that such Purchased Entity assert a warranty
claim with respect to any Container against the manufacturer thereof. Neither
Seller nor any Purchased Entity is asserting a warranty claim, nor is Seller or
any Purchased Entity currently maintaining any legal action against the
manufacturer of any Container or currently alleging any cause of action based on
such manufacturer's breach of warranty, express or implied.

         Section 3.22 Customers and Suppliers. Schedule 3.22 sets forth a list
for the twelve months ended December 31, 2003 of the top 45 revenue producing
lessee customers of the Purchased Entities (collectively, the "Major
Customers"). Except as set forth on Schedule 3.22, since January 1, 2003, there
has not been any material adverse change in the business relationship of any of
the Purchased Entities with any Major Customer, or any manufacturer, depot
agency or supplier from whom all the Purchased Entities in the aggregate
purchased more than 5% of the goods or services purchased from all vendors
during the twelve month period ending December 31, 2003. To the Knowledge of
Seller, there exists no present condition or state of facts or circumstances
involving any Major Customer and their relationships with any Purchased Entity
which would reasonably be expected to have a Business Material Adverse Effect.

         Section 3.23 Absence of Changes or Events. (a) Since March 31, 2004,
(i) there has not been any event, circumstance, condition, development or
occurrence that has, or would reasonably be expected to have, a Business
Material Adverse Effect, and (ii) except as set forth in Schedule 3.23 and
except for such transactions as are contemplated by this Agreement, including
the negotiation thereof, each of the Purchased Entities has conducted in all
material respects its respective businesses in the ordinary course consistent
with past practice.

         (b) Since June 30, 2004, through the date hereof, no Purchased Entity
has taken any action that would constitute a breach of clauses (a) through (o)
of Section 5.03.

         Section 3.24 Brokers and Finders. Neither Seller nor any of its
Affiliates nor any of their officers, directors or employees has incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated by this Agreement which could result in any
liability for such fees being imposed on Purchaser or its Affiliates.

         Section 3.25 Intercompany Agreements. (a) Schedule 3.25(a) contains a
complete and correct list of all contracts, arrangements, understandings,
transfers of assets or liabilities, provision of goods or services or other
commitments or transactions (whether or not reduced to writing), whether or not
entered into in the ordinary course of business, between any Purchased Entity,
on the one hand, and Seller or any of its Affiliates (other than any Purchased
Entity), on the other hand (collectively, "Intercompany Agreements").

         (b) Schedule 3.25(b) sets forth the outstanding Indebtedness owed by a
Purchased Entity to Seller or any of its Affiliates (other than any Purchased
Entity) as of the date hereof. As of the Closing there will be no outstanding
Indebtedness or other obligation owed by any Purchased Entity to Seller or any
of its Affiliates (other than any Purchased Entity).

         Section 3.26 Insurance. (a) Schedule 3.26 lists all insurance policies
pursuant to which any of the Purchased Entities are insured as of the date of
this Agreement. Such


                                      -25-



policies are in full force and effect and, to the Knowledge of Seller,
sufficiently insure against risks and liabilities customary for the Business.
Neither Seller nor any Purchased Entity have received a notice of cancellation
or nonrenewal of any such policy.

         (b) Schedule 3.26 sets forth a true, complete and correct list of all
insurance policies or binders of fire, liability, workmen's compensation, motor
vehicle, directors' and officers' liability, errors and omissions liability,
property, casualty and other forms of insurance owned by, held by, applied for
by, the premiums for which are paid by, or under which any coverage is provided
or available to, any Purchased Entity, but not including life insurance policies
or any other employee benefit-related policies. Except for master policies held
by Seller's Affiliates that name Seller and Purchased Entities as insured
parties, Seller has delivered or made available to Purchaser true, complete and
correct copies of such policies and binders and all pending applications for any
such policies or binders.

         (c) Except as set forth in Schedule 3.26, (i) each Purchased Entity is,
and has been, covered on an uninterrupted basis since January 1, 2000 by valid
and effective insurance policies or binders which are in the aggregate
reasonable or customary in scope and amount (including the deductible or
self-insured amounts) in view of the size of, and risks attendant to, the
Business, (ii) all such policies or binders are in full force and effect, no
written notice of cancellation, termination or non-renewal of any insurance
policy or that the issuer of any policy is not willing or able to perform its
obligations thereunder, has been received with respect to any such policy and
all premiums due and payable thereon have been paid in full on a timely basis,
(iii) there are no pending or, to the Knowledge of Seller, threatened, actions
to revoke, cancel, terminate or limit any material insurance policy or binder,
(iv) there are no pending or, to the Knowledge of Seller, threatened, material
claims against such insurance by any of the Purchased Entities as to which the
insurers have denied liability, (v) to the Knowledge of Seller, the Purchased
Entities have complied with the provisions of such policies, (vi) there exist no
material claims under such insurance policies or binders that have not been
properly and timely submitted by the Purchased Entities to its insurers and
(vii) to the Knowledge of Seller, there is no inaccuracy in any application for
such policies or binders which could render such policies or binders invalid or
unenforceable.

Section 3.27 Foreign Corrupt Practices Act. None of the Purchased Entities, nor
to the Knowledge of Seller, any agent, employee or other Person acting on behalf
of any of the Purchased Entities, has, directly or indirectly, used any
corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity, made any unlawful payment to
foreign or domestic government officials or employees or to foreign or domestic
political parties or campaigns from corporate funds, violated any provision of
the Foreign Corrupt Practices Act of 1977, as amended, or made any bribe,
rebate, payoff, influence payment, kickback or other similar unlawful payment.

         Section 3.28 No Other Representations or Warranties. Except as
otherwise set forth in this Article III and without limiting the representations
and warranties set forth herein and in the Ancillary Agreements, Seller makes no
other representations or warranties, either express or implied, as to Seller,
the Shares, the Purchased Entities or the Business. Without limiting the
generality of the foregoing, Seller makes no representations or warranties to
Purchaser with respect to any projections, financial models, estimates or
budgets heretofore delivered to or made available to Purchaser or with respect
to future revenues, expenses or expenditures, future results of operations (or
any component thereof), future cash flows or future financial condition (or any
component thereof) of the Purchased Entities.


                                      -26-



                                   ARTICLE IV

                   REPRESENTATIONS AND WARRANTIES OF PURCHASER

         Purchaser hereby represents, covenants and warrants to Seller as
follows:

         Section 4.01 Corporate Organization and Good Standing. Purchaser is
duly organized, validly existing and in good standing under the laws of its
country of incorporation, with full power and authority to carry on its business
as such business is now conducted, and to own, lease or operate its assets and
properties, other than such franchises, licenses, permits, authorizations and
approvals the lack of which would not reasonably be expected to have a material
adverse effect on the ability of Purchaser to consummate the Acquisition (a
"Purchaser Material Adverse Effect"). Purchaser is duly qualified to do business
and in good standing in every jurisdiction in which the character of the
properties owned or leased by it or the nature of the business conducted by it
makes such qualification necessary, except where failure to be so qualified
would not reasonably be expected to have a Purchaser Material Adverse Effect.

         Section 4.02 Authorization. Purchaser has full power and authority to
execute this Agreement and the Ancillary Agreements to which it is, or is
specified to be, a party and to consummate the transactions contemplated by this
Agreement and by such Ancillary Agreements. Purchaser has taken all action
required by its organizational documents to authorize the execution and delivery
of this Agreement and the Ancillary Agreements to which it is, or is specified
to be, a party and to authorize the consummation of the Acquisition and the
other transactions contemplated hereby and thereby. Purchaser has duly executed
and delivered this Agreement, and this Agreement and each Ancillary Agreement to
which Purchaser is a party, when duly executed and delivered by Seller and each
Purchased Entity, if any, party to any such Ancillary Agreement, as contemplated
by this Agreement, will be duly authorized, executed and delivered by Purchaser
and will constitute a legal, valid and binding obligation, enforceable against
it in accordance with its terms subject, as to enforcement, to applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws affecting
creditors' rights generally and to general equitable principles.

         Section 4.03 No Conflicts or Violations; No Consents or Approvals
Required. The execution and delivery by Purchaser of this Agreement do not, the
execution and delivery by Purchaser of each Ancillary Agreement to which it is,
or is specified to be, a party will not, and the consummation of the Acquisition
and the other transactions contemplated hereby and thereby will not (i) violate,
conflict with or result in a breach of any provision of the organizational
documents of Purchaser, (ii) violate, result in the termination or the
acceleration of, or conflict with or constitute a default (with or without
notice thereof of lapse of time) under, or result in the creation or imposition
of any Lien, upon any of the properties or assets of Purchaser pursuant to, any
agreement, contract, mortgage, indenture, lease, franchise, permit or other
instrument to which Purchaser is a party or by which any of its properties or
assets is bound or (iii) violate any Judgment or Applicable Law applicable to
Purchaser or its properties or assets, other than, in the case of clauses (ii)
and (iii) above, any such items that would not reasonably be expected to have a
Purchaser Material Adverse Effect. No Consent of, or registration, declaration
or filing with, any Governmental Entity is required to be obtained or made by or
with respect to Purchaser in connection with the


                                      -27-



execution, delivery and performance of this Agreement or the consummation of the
Acquisition other than (A) compliance with and filings under the HSR Act, and
(B) those the failure of which to obtain or make would not reasonably be
expected to have a Purchaser Material Adverse Effect. No Consent of any third
party that is not a Governmental Entity is required to be obtained or made by or
with respect to Purchaser in connection with the execution, delivery and
performance of this Agreement or the consummation of the Acquisition, other than
those the failure of which to obtain or make would not reasonably be expected to
have a Purchaser Material Adverse Effect.

         Section 4.04 Litigation. There are no material claims, actions, suits,
or proceedings (including, but not limited to, any arbitration proceeding) of
any nature, at law or in equity, pending or, to the Knowledge of Purchaser,
threatened by or against Purchaser, the directors, officers, employees, agents
of Purchaser, or any of their respective Affiliates involving, affecting or
relating to the transactions contemplated by this Agreement or Purchaser's
ability to complete the transactions contemplated by this Agreement. Purchaser
is not subject to any order, writ, judgment, award, injunction or decree of any
Governmental Entity involving, affecting or relating to the transactions
contemplated by this Agreement or Purchaser's ability to complete the
transactions contemplated by this Agreement.

         Section 4.05 Review. Purchaser has had the opportunity to conduct due
diligence of Seller, the Purchased Entities and the Business to Purchaser's
satisfaction and has had an opportunity to discuss the Business, the operation
related thereto and any and all other matters related to the Business with
Seller and the Purchased Entities to Purchaser's satisfaction.

         Section 4.06 Securities Matters. The Shares to be received by Purchaser
will be acquired for investment for Purchaser's own account, not with a view to
the distribution of any part thereof, and Purchaser has no present intention of
selling, granting any participation in, or otherwise distributing the same.
Purchaser does not have any contract, undertaking, agreement or arrangement with
any person to sell, transfer or grant participations to such person or to any
third person, with respect to any of the Shares.

         Section 4.07 Brokers and Finders. Neither Purchaser nor any of the
Purchaser's Affiliates nor any of their officers, directors or employees has
incurred any liability for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated by this Agreement which could
result in any liability for such fees being imposed on Seller or its Affiliates.

         Section 4.08 Purchaser Equity Commitment. Purchaser has committed to
provide an aggregate of $75,000,000 in equity funding to consummate the
Acquisition and has, and will have at Closing, available funds in such amount.

                                    ARTICLE V

                                    COVENANTS

         Section 5.01 Confidentiality. All information furnished by Seller or
any of Seller's Affiliates to Purchaser or any of Purchaser's Affiliates,
agents, representatives, advisors or potential finance providers in connection
with this Agreement and the transactions contemplated hereby (i) shall be deemed
to be "Information" (as defined in the Non-Disclosure Agreement) for purposes of
the Non-Disclosure Agreement, and (ii) shall be received in confidence and kept
confidential by Purchaser and Purchaser's Affiliates, agents, representatives,
advisors or finance providers in accordance with the terms and conditions of the
Non-Disclosure Agreement. All obligations of Purchaser under the


                                      -28-



Non-Disclosure Agreement with respect to information relating solely to the
Purchased Entities or the Business shall terminate simultaneously with the
Closing; all other obligations of Purchaser under the Non-Disclosure Agreement
shall survive the Closing. Notwithstanding anything to the contrary contained
herein or in the Non-Disclosure Agreement, the Confidentiality Obligations as
they relate to the transactions contemplated by this Agreement shall not apply
to the purported or claimed Federal Income Tax treatment of the transactions
(the "Tax Treatment") or to any fact that may be relevant to understanding the
purported or claimed Federal Income Tax treatment of the transactions (the "Tax
Structure"), and each party hereto (and any employee, representative, or agent
of any party hereto) may disclose to any and all persons, without limitation of
any kind, the Tax Treatment and Tax Structure of the transactions contemplated
by this Agreement and any materials of any kind (including any tax opinions or
other tax analyses) that relate to the Tax Treatment or Tax Structure. In
addition, each party hereto acknowledges that it has no proprietary or exclusive
rights to any tax matter or tax idea related to the transactions contemplated by
this Agreement. The preceding sentence is intended to ensure that the
transactions contemplated by this Agreement shall not be treated as having been
offered under conditions of confidentiality for purposes of the Confidentiality
Regulations and shall be construed in a manner consistent with such purpose.

         Section 5.02 Access. Upon the reasonable request of Purchaser, Seller
shall afford to Purchaser, its counsel, accountants and other representatives
full access, during normal business hours, prior to the Closing Date (or the
earlier termination of this Agreement) to the depots, offices, facilities,
properties, employees, contracts, books and records of Seller and the Purchased
Entities, to the extent such access or disclosure does not conflict with
Applicable Law or any confidentiality obligations of Seller or any Purchased
Entities; provided, however, that any such investigation shall be conducted in
such a manner as not to interfere unreasonably with the operation of the
Business.

         Section 5.03 Certain Changes and Conduct of Business. From and after
the date of this Agreement and until the Closing (or the earlier termination of
this Agreement), the Purchased Entities shall, and Seller shall cause the
Purchased Entities to, (i) conduct the Business in the ordinary course
consistent with past practices, and (ii) use their commercially reasonable
efforts to preserve the business organization of the Purchased Entities intact,
keep available the services of the current officers and employees of the
Purchased Entities and maintain the material business relationships with
customers, lessees, suppliers, manufacturers, depot agents and others with whom
Seller and the Purchased Entities deal with in connection with the conduct of
the Business. Without limiting the generality of the preceding sentence, except
as expressly authorized pursuant to the terms hereof, the Purchased Entities
shall not, and Seller shall not permit the Purchased Entities to, do any of the
following without obtaining the consent of the Purchaser, which shall not be
unreasonably delayed (or with respect to Section 5.03(n)(ii) which shall not be
unreasonably withheld or delayed; provided, however, that withholding such
consent shall not be deemed unreasonable if, in the Purchaser's reasonable
judgment, providing such consent would have an adverse Tax effect on Purchaser's
Tax position after Closing):

         (a) make any change in the charter documents or bylaws of such
Purchased Entity;

         (b) issue any additional shares of Capital Stock or grant any option,
warrant or right to acquire any Capital Stock or issue any security convertible
into or exchangeable for the Capital Stock of such Purchased Entity, alter any
term of any of the outstanding securities of such Purchased Entity, or make any
change in the outstanding shares of Capital Stock or other ownership interests
or in the capitalization, whether by reason of a reclassification,


                                      -29-



recapitalization, stock split or combination, exchange or readjustment of
shares, stock dividend or otherwise;

         (c) (i) issue any notes, bonds, debentures or other corporate
securities or grant any option, warrant or right to purchase any of the
foregoing, (ii) issue any securities convertible or exchangeable for debt
securities of such Purchased Entity, or (iii) issue any options or other rights
to acquire directly or indirectly any debt securities of such Purchased Entity
or any security convertible into or exchangeable for such debt securities;

         (d) declare, set aside or pay any dividend or other distribution
payable in cash, stock or property with respect to any shares of any class or
series of its Capital Stock, except as set forth on Schedule 5.08;

         (e) organize any new Subsidiary or acquire any Capital Stock or other
equity securities, or equity or ownership interest in the business, of any other
Person;

         (f) modify, amend or terminate in any material respect any of its
Contracts or waive, release or assign any material rights or claims, except in
the ordinary course of business and consistent with past practice;

         (g) (i) incur or assume any long-term or short-term Indebtedness; (ii)
pay or satisfy any inter-company Indebtedness; (iii) assume, guarantee, endorse
or otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other Person, except in the ordinary
course of business and consistent with past practice; (iv) make any loans,
advances or capital contributions to, or investments in, any other Person, other
than finance leases entered into in the ordinary course of business; or (v)
enter into any commitment or transaction (including any capital expenditure or
purchase, sale or lease of assets or real estate) involving payments by any of
the Purchased Entities in excess of $500,000;

         (h) lease, license, mortgage, pledge or encumber any assets other than
in the ordinary course of business and consistent with past practice or
transfer, sell or dispose of any assets other than in the ordinary course of
business consistent with past practice or dispose of or permit to lapse any
rights to any Intellectual Property;

         (i) establish, enter into any new, or amend any existing, employment,
severance, consulting or salary continuation arrangements with or for the
benefit of any officers, directors or employees, or grant any increases in the
compensation, bonuses or benefits to officers, directors and employees, other
than (i) pursuant to and in accordance with the terms of Transamerica Leasing
Corporation 2004 TMC Strategic Incentive Compensation Plan, Effective January 1,
2004, the Transamerica Finance Corporation 2004-2006 Retention and Incentive
Compensation Plan, Effective January 1, 2004, and the Transamerica Finance
Corporation 2004-2006 Executive Retention and Incentive Compensation Plan,
Effective January 1, 2004 (with respect to which Transamerica Finance
Corporation or any one of its Affiliates reimburses the amount of any payment by
any Purchased Entity); and (ii) normal compensation increases to persons who are
not officers or directors in the ordinary course of business and consistent with
past practice and that, in the aggregate, do not result in a material increase
in benefits or compensation expense of the Purchased Entities;

         (j) permit any insurance policy naming it as a beneficiary or a loss
payable payee to be cancelled or terminated, except (i) with respect to
insurance policies obtained in connection with Container Leases or depot
agreements where a Purchased Entity is a named


                                      -30-




beneficiary on a policy obtained by the lessee or depot, or (ii) where the
cancelled or terminated insurance policy is replaced by a policy with comparable
limits and coverage;

         (k) enter into any contract or transaction relating to the purchase of
assets, except in the ordinary course of business and consistent with past
practice or to the extent a Purchased Entity is bound as of the date hereof
under any Contract to make such purchase;

         (l) pay, repurchase, discharge or satisfy any of its claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge or satisfaction of
liabilities or obligations in the ordinary course of business consistent with
past practice;

         (m) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other reorganization,
except for the Restructuring and as otherwise set forth on Schedule 5.08;

         (n) (i) change any of the accounting methods used by it unless required
by Applicable Law or GAAP or (ii) make any election relating to Taxes, change
any election relating to Taxes already made, adopt any accounting method
relating to Taxes, change any accounting method relating to Taxes unless
required by GAAP, enter into any closing agreement relating to Taxes, file any
material amended Tax Return, settle any claim or assessment relating to Taxes or
consent to any claim or assessment relating to Taxes or any waiver of the
statute of limitations for any such claim or assessment; or

         (o) commit itself to do any of the foregoing.

         Section 5.04 Seller's Trademarks and Trade Names. (a) Seller hereby
grants to Purchaser a license, on a nonexclusive basis without charge, and
effective upon the Closing, to use the name "Transamerica" and any derivation
thereof or logo, trademark or tradename owned by Seller or its Affiliates,
including but not limited to, (i) the stylized pyramid logo of Transamerica
Corporation, and (ii) any representation or likeness of the Transamerica
Building located at 600 Montgomery Street, San Francisco, California
(collectively, the "Names" and "Marks"), on the Containers included in the
Acquisition or on any containers that are acquired by Purchaser following the
Closing pursuant to the commitments by the Purchased Entities in existence as of
the Closing Date for purchases of Containers, to the extent the Names and Marks
appear on such Containers as of the date of the Closing or the date of purchase
by Purchaser (with respect to Containers acquired following the Closing pursuant
to the aforementioned commitments for Container purchases), as applicable, but
only for use so long as the Names or Marks remain on such Containers.

         (b) Seller hereby grants to Purchaser a license, on a nonexclusive
basis without charge, and effective upon the Closing for a maximum period of
ninety (90) days from the date of the Closing, to use the name Names and Marks
in connection with operation of the Business; provided that, on and after the
ninetieth (90th) day from the date of Closing, and except as provided in Section
5.04(a), Purchaser shall cause each of the Purchased Entities to cease the use
of the Names and Marks in connection with their respective businesses. Purchaser
shall use its commercially reasonable efforts to cause, within 30 days following
the Closing, each of the Purchased Entities to change its corporate name to a
name that does not include the Names or Marks. Except as set forth in this
Section 5.04, Purchaser acknowledges that any license with respect to the Names
and Marks between Seller, on the one hand, and any Purchased Entity, on the
other hand, shall terminate as of the Closing.


                                      -31-



         Section 5.05 Termination of Intercompany Agreements. Concurrently with
the Closing, Seller will, without cost to Purchaser or any of the Purchased
Entities, cause to be terminated all Intercompany Agreements (other than the
Ancillary Agreements), including, without limitation, all service agreements and
any and all licenses covering the Names or the Marks. The parties acknowledge
that as of the Closing Date, neither Seller nor any of its Affiliates, on the
one hand, nor Purchaser nor any of its Affiliates, on the other hand, shall have
any obligation to provide any support or other services to the other party
relating to the Business other than those services expressly required to be
provided pursuant to the Transition Services Agreement. Seller acknowledges that
prior to 11:59 p.m. on the Closing Date, the Purchased Entities will be released
and discharged without payment from any and all liabilities and obligations to
Seller and any of its Affiliates (other than the Purchased Entities), under or
relating to any Intercompany Agreement (other than the Ancillary Agreements).

         Section 5.06 HSR Act Filings and Other Antitrust Filings. (a) Seller
shall, as promptly as practicable after the date hereof, submit a letter to the
FTC (the "FTC Letter") seeking confirmation that a notification and report form
under the HSR Act is not required to be filed with respect to the Acquisition.

         (b) If the FTC objects to the conclusion set forth in the FTC Letter,
then Seller and the Purchaser shall, as promptly as practicable but in no event
later than ten (10) days following receipt of the FTC Letter, each file with the
Federal Trade Commission ("FTC") and the Department of Justice ("DOJ") the
notification and report form under the HSR Act, if any, required in connection
with the transactions contemplated hereby and as promptly as practicable supply
any additional information, if any, requested in connection herewith pursuant to
the HSR Act. Any such notification and report form and additional information,
if any, submitted to the FTC or the DOJ shall be in substantial compliance with
the requirements of the HSR Act. Each of Purchaser, Seller and the Purchased
Entities shall furnish to the others such information and assistance as the
others may reasonably request in connection with their preparation of any filing
or submission which is necessary under the HSR Act. Each of Purchaser, Seller
and the Purchased Entities shall keep the others apprised in a prompt manner of
the status and substance of any communications with, and inquiries or requests
for additional information from, the FTC and the DOJ and shall comply promptly
with any such inquiry or request. Each of Purchaser, Seller and the Purchased
Entities shall use commercially reasonable efforts to obtain the termination or
expiration of any applicable waiting period required under the HSR Act for the
consummation of the transactions contemplated hereby. The filing fees payable
under the HSR Act in connection with the transactions contemplated hereby shall
be paid equally by Purchaser and Seller, and each of Purchaser and Seller shall
pay its own respective costs incurred in preparation of all reports and
notifications required under the HSR Act.

         (c) Each party shall cooperate with the other party in the preparation
and filing of any applications, notices, registrations and responses to requests
for additional information in connection with any antitrust approvals required
in connection with this Acquisition by Governmental Entities outside the United
States.

         Section 5.07 No Solicitation of Competing Transaction. Until the
earlier to occur of (i) the Closing Date, or (ii) such time, if any, as this
Agreement is terminated pursuant to Article VIII, Seller shall not, and shall
cause the Purchased Entities and its other Affiliates and each of their
respective officers, directors, employees, representatives and agents not to,
directly or indirectly, encourage, solicit, initiate or participate in
discussions or negotiations with, or provide any information to, any Person or
group (other than Purchaser, any of its Affiliates or


                                      -32-



representatives) concerning any Acquisition Proposal. Until the earlier to occur
of (i) the Closing Date, or (ii) such time, if any, as this Agreement is
terminated pursuant to Article VIII, Seller and the Purchased Entities shall
immediately notify Purchaser of the existence of any proposal or inquiry
received by Seller or any of the Purchased Entities, and Seller shall
immediately communicate to Purchaser the terms of any proposal or inquiry which
any of them or any of the Purchased Entities may receive (and shall immediately
provide to Purchaser copies of any written materials received by Seller or any
of the Purchased Entities in connection with such proposal, discussion,
negotiation or inquiry) and the identity of the party making such proposal or
inquiry. Seller and the Purchased Entities shall request (or if any of them has
the contractual right to do so, demand) as of the Closing Date the return of all
documents, analyses, financial statements, projections, descriptions and other
data previously furnished to others in connection with Seller's efforts to sell
the Purchased Entities.

         Section 5.08 Further Assurances; Restructuring. (a) Upon the terms and
subject to the conditions of this Agreement, each of the parties hereto shall
use all its commercially reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper or
advisable consistent with applicable law to cause the fulfillment of the
conditions to Closing set forth herein and to consummate and make effective in
the most expeditious manner practicable the transactions contemplated hereby,
including without limitation, (i) Purchaser shall draw down available funding to
consummate the Acquisition promptly following satisfaction (or waiver) of all of
the conditions to all of the Commitment Letters, Equity Commitments and this
Agreement, and (ii) Seller shall use its commercially reasonable efforts to
obtain the consents identified on Schedule 3.04.

         (b) Seller shall cause the consummation of the Restructuring on the
terms set forth on Schedule 5.08.

         Section 5.09 Notice of Changes. (a) From time to time prior to the
Closing, Seller shall promptly supplement or amend the Disclosure Schedule with
respect to any matter arising after the delivery thereof pursuant hereto that,
if existing at, or occurring on, the date of this Agreement, would have been
required to be set forth or described in the Disclosure Schedule. No supplement
to or amendment of the Disclosure Schedule made after the execution hereof
pursuant to this section or otherwise shall be deemed to cure any breach of any
representation of or warranty made pursuant to this Agreement.

         (b) Seller shall give notice to Purchaser, and Purchaser shall give
notice to Seller, promptly after becoming aware of (i) the occurrence or non
occurrence of any event whose occurrence or non occurrence would be likely to
cause either (A) any representation or warranty contained in this Agreement to
be untrue or inaccurate in any material respect at any time from the date hereof
to the Closing Date or (B) any condition set forth in Article VII to be
unsatisfied in any material respect at any time from the date hereof to the
Closing Date and (ii) any material failure of Seller or Purchaser, respectively,
to comply with or satisfy any covenant, condition or agreement to be complied
with or satisfied by it hereunder; provided, however, that the delivery of any
notice pursuant to this section shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice.

         Section 5.10 Employee Matters.

         (a) Effective as of the Closing Date, the Purchaser or its Affiliates
shall cause the Purchased Entities to continue to employ the Employees and
shall, subject to the provisions of Section 5.10(e), provide employee benefits
which are substantially comparable to the benefits

                                      -33-



they enjoyed immediately prior to the Closing Date, to the extent commercially
reasonable, for a period of no less than 12 months after the Closing Date;
provided, however, that Purchaser will have no obligation to provide any U.S.
defined pension plan benefits or any equity-based compensation. Purchaser and
its Affiliates shall be responsible for, and shall indemnify Seller and its
Affiliates from and against, any Losses related to any severance, termination
indemnity, redundancy, compensation, benefit or other similar payment incurred
by Seller or any of its Affiliates to the extent that any of the Purchased
Entities do not continue to employ the Employees on the same terms and
conditions, including without limitation compensation, position, location,
benefits, severance and bonus as they enjoyed immediately prior to the Closing
Date. No provision in this Section 5.10(a) shall (i) limit the Purchased
Entities' right to terminate any Employee's employment in its discretion, or
(ii) except as otherwise provided in this Agreement, require the Purchased
Entities to maintain any specific employee benefit plan, arrangement or program
or any employment condition.

         (b) In furtherance of its obligations under this Section 5.10, the
Purchaser and its Affiliates shall:

             (i) cause the Purchased Entities to continue to maintain the
     Benefit Plans that transfer with the Purchased Entities by operation of law
     in any applicable jurisdiction; and

             (ii) establish new employee benefit or fringe benefit plans,
     programs, policies or arrangements as deemed appropriate by Purchaser to
     cover the Employees (and, to the extent appropriate, their dependents and
     other beneficiaries); or

             (iii) cover the Employees (and, to the extent appropriate, their
     dependents and other beneficiaries) under its existing employee benefit or
     fringe benefit plans, programs, policies or arrangements as deemed
     appropriate by Purchaser; or

             (iv) any combination of clauses (ii) and (iii) above.

         (c) Notwithstanding Section 5.10(b), immediately prior to the Closing,
Seller shall cause, or shall cause one of its Affiliates to cause, the Purchased
Entities to cease to be adopting employers of all Benefit Plans under which
AEGON USA, Inc. is the Plan Sponsor and the participation by Employees in all
such Benefit Plans shall cease immediately prior to the Closing.

         (d) Following the Closing Date: (i) for purposes of determining
eligibility to participate, vesting and benefits in plans, programs, policies
and arrangements described in Sections 5.10(b)(ii) and (iii) (including
vacation, severance and service awards) maintained by Purchaser or its
Affiliates ("Purchaser's Benefit Plans") for Employees, each Employee will be
credited with all such Employee's years of service with a Purchased Entity, (ii)
the Purchaser shall cause the eligibility of any Employee under Purchaser's
Benefit Plans providing health and welfare benefits not to be subject to any
exclusion for any pre-existing condition or waiting periods if such Employee had
met the participation requirements under a Benefit Plan maintained by a Seller
or an Affiliate of Seller immediately prior to the Closing, (iii) eligible
expenses incurred by any Employee up to and including the Closing Date shall be
taken into account for purposes of satisfying applicable deductible provisions
and/or annual out-of-pocket limits, if any, under Purchaser's Benefit Plans in
which such Employee is eligible to participate.


                                      -34-



         (e) Notwithstanding anything in this Agreement to the contrary, for the
period commencing on the Closing Date and ending on December 31, 2004 (the
"Bonus Period"), Purchaser shall cause the Purchased Entities to provide each
Employee with the opportunity to earn a bonus equal to the bonus that such
Employee could have earned under the Transamerica 2004 TMC Strategic Incentive
Compensation Plan and the Transamerica 2004-2006 TFC Retention and Incentive
Compensation Plan (the "Bonus Plans") during the Bonus Period, had the
transactions contemplated by this Agreement not taken place, using substantially
the same bonus plan metrics and individual bonus targets as in effect for such
Employee immediately prior to the Closing Date under the Bonus Plans. Further,
for the period commencing on the Closing Date and ending one year thereafter,
the Purchased Entities shall cover Employees under a Purchaser severance policy
that is no less favorable than the terms and benefits described in Section 5.03
"Benefits Upon Sale of Assets" in the Transamerica Separation Pay Plan (US) and
Transamerica Special Redundancy Program (International) severance policies set
forth on Schedule 3.16 of the Companies Disclosure Schedule.

         (f) With respect to any Benefit Plan described in Section 5.10(c) which
is "group health plan" under HIPAA, Seller and its Affiliates shall cause their
records as to the length and dates of each group health plan participant's (and
covered dependents') creditable coverage, within the meaning of HIPAA, to be
transferred to the Purchased Entities. For this purpose, "participants" shall
mean Employees and former employees of the Purchased Entities with respect to
whom Seller and its Affiliates have any current or potential HIPAA
responsibilities as of or after the Closing Date. Purchaser shall cause the
Purchased Entities to be responsible for providing timely certificates of
creditable coverage (within the meaning of HIPAA) to all participants (and
covered dependents), with such certificates to include and aggregate each such
employee's (and covered dependents') period of creditable coverage under both
the Benefit Plans described in Section 5.10(f) and Purchaser's Benefit Plans;
provided, however, that the Purchased Entities' obligation with respect to
creditable coverage earned by individuals while they were employed prior to the
Closing Date shall be limited to the data provided to the Purchased Entities by
Seller and its Affiliates.

         (g) Purchaser and its Affiliates shall be responsible for providing the
notices and making available the health care continuation coverage, all as
required by Section 4980B of the Code, for each Employee and his or her
respective covered dependents, whose qualifying event (as defined in Section
4980B of the Code) occurs after the Closing Date.

         (h) Purchaser and its Affiliates shall be responsible for providing any
notice required pursuant to the Workers Adjustment Retraining and Notification
Act of 1988, any successor federal law, and any other applicable plant closing
notification laws or transfer of undertaking laws, including state law, foreign
laws or contractual requirements, with respect to any layoff or plant closing
related to events occurring after the Closing Date and shall be solely liable
for any liabilities associated with any failure to provide any such notice in a
timely manner.

         (i) Immediately prior to Closing, Seller shall cause all Employees to
become fully vested in their benefits, if any, under the AEGON USA, Inc. Pension
Plan, the AEGON USA, Inc. Profit Sharing Plan, the AEGON USA, Inc. Employee
Excess Restoration Plan and the AEGON USA, Inc. Executive Profit Sharing Plan.

         (j) None of Purchaser, its Affiliates or the officers, directors,
employees, agents or representatives of Purchaser or its Affiliates shall
contact or communicate with any Employee other than in furtherance of the
transactions contemplated by this Agreement; provided, that no such persons
shall communicate with any Employee with respect to general


                                      -35-



transaction announcements, future plans for the Business, future positions or
future benefits without the Seller's prior written consent.

         (k) Seller shall undertake to provide to Purchaser within fifteen (15)
days of the date of this Agreement a written statement as to the amount of
unfunded liabilities, determined on a termination basis, under any non-United
States Benefits Plans that are defined benefit-type pension plans.

         Section 5.11 Transaction Financing Obligations. (a) Between the date
hereof and the Closing, Purchaser agrees to use its best efforts to secure all
financing necessary for Purchaser to consummate the Acquisition on or before
September 30, 2004, including, without limitation, using its best efforts to
obtain one or more Commitment Letters and one or more Equity Commitments on or
before August 10, 2004, and to cause any conditions to Commitment Letters,
Equity Commitments or other financing to be satisfied as expeditiously as
practicable; provided, however, that in fulfilling its obligation under this
Section 5.11, Purchaser shall not be obligated to pay any amounts in excess of
$10,000,000 in the aggregate to secure financing necessary to consummate the
Acquisition; provided further, that for any amount Purchaser pays in using best
efforts to secure financing to consummate the Acquisition, Seller shall pay,
dollar for dollar, an equal amount to assist in securing financing, up to a
maximum amount of such Seller payments of $10,000,000; provided further that
Purchaser shall not be obligated to (i) commence any litigation against any
financial institution or other third party unless Purchaser has received advice
of counsel acceptable to both Purchaser and Seller to the effect that the
initiation of any such litigation is reasonably likely to result in Purchaser
securing financing necessary to consummate the Acquisition on or before
September 30, 2004, or (ii) engage or contact any third party financial
institution unless Purchaser reasonably believes that (A) any of the financial
institutions providing the Commitment Letters are not working in good faith to
satisfy the conditions contained in such Commitment Letters; and (B) engaging
any such third party financial institution is reasonably likely to result in
Purchaser securing the financing necessary to consummate the Acquisition on or
prior to September 30, 2004; provided further that, in the event that Purchaser
recovers or receives reimbursement of any amounts paid in fulfilling Purchaser's
obligations under this Section 5.11 (including return of commitment or other
fees) and Seller has paid, dollar for dollar, an equal amount, Purchaser shall
pay to Seller one-half of all such recovered or reimbursed amounts, up to the
amount paid by Seller, after reimbursing Purchaser and Seller on a pro-rata
basis for the costs and expenses in securing such recovery.

         (b) Between the date hereof and the Closing, Seller agrees to cooperate
with Purchaser in connection with Purchaser's efforts to secure such financing,
including (i) cooperating with Purchaser in connection with Purchaser's
obtaining appraisals of the assets of the Purchased Entities and seeking access
to Seller's accountants and their work papers, (ii) making employees of the
Business available upon reasonable notice, and (iii) providing all information
relating to the Business reasonably requested by Purchaser.

         (c) Between the date hereof and the Closing, Purchaser agrees to update
Seller regarding the status of the process of securing financing to consummate
the Acquisition and the satisfaction of any conditions to such financing, and to
provide to Seller, promptly upon reasonable request from Seller, information
regarding Purchaser's financing in connection with the Acquisition and progress
made in securing such financing.

         Section 5.12 Transamerica Corporation Guarantee. In order to induce
Purchaser to execute this Agreement, Transamerica Corporation (the "Guarantor")
hereby


                                      -36-



unconditionally guarantees the full and prompt payment and performance of the
obligations of Seller set forth in this Agreement (the "Guaranty"). This
Guaranty shall be a continuing and irrevocable guaranty of payment and
performance in accordance with the terms of this Agreement, and the Guarantor
shall remain liable on its obligations hereunder until the payment and
performance in full of the obligations of Seller. Guarantor hereby represents
that it has all requisite corporate power and authority to undertake its
obligations set forth in this Section 5.12 and to guarantee the full and prompt
payment and performance of the obligations of Seller set forth in this
Agreement. This Guaranty and the rights, interests or obligations thereunder may
not be assigned by Guarantor or Purchaser without the prior written consent of
the other party; provided, however, that (i) Purchaser may assign its rights and
obligations under the Guaranty to Affiliates of Purchaser in connection with
consummating the transactions contemplated by this Agreement, and (ii) Purchaser
or its permitted assignees in clause (i) above may assign its rights and
obligations under the Guaranty to commercial lenders or institutional investors
(each, a "Financial Institution") as collateral in connection with financing or
refinancing the Acquisition and only to a maximum of five (5) Financial
Institutions. Notwithstanding anything to the contrary, permissible Financial
Institution assignees of Guaranty shall have no rights against Guarantor or with
respect to the Guaranty unless (i) Purchaser is in default of its obligations
under applicable agreements between Purchaser and such Financial Institution and
(ii) such permissible Financial Institution assignees have pursued all available
remedies against Purchaser. Guarantor's liability under the Guaranty shall be
secondary and not that of a principle obligor. Subject to the foregoing, the
Guaranty shall inure to the benefit of and be binding upon Purchaser and
Guarantor and their respective permitted successors and assigns. Except as
provided above, nothing in the Guaranty will confer upon any person or entity
not a party to the Guaranty, or the legal representatives of such person or
entity, any rights or remedies of any nature or kind whatsoever under or by
reason of the Guaranty. Guarantor shall deliver to Purchaser the unaudited
consolidated financial statements of the Guarantor as of December 31 in each of
the years during the term of the Guaranty, and unaudited consolidated statements
of income of the Guarantor for each quarter during the term of the Guaranty;
provided, however, that before the delivery of such financial statements,
Purchaser shall enter a confidentiality agreement with the Guarantor in form and
substance mutually satisfactory to both parties. At the Seller's option (which
option may be exercised only once), Seller may at any time designate a
substitute guarantor, provided such substitute guarantor (i) has publicly
available financial statements; (ii) has a tangible net worth of not less than
$2 billion dollars, calculated in accordance with U.S. GAAP; (iii) executes a
binding agreement, in form and substance reasonably satisfactory to Purchaser,
acknowledging its obligation to be bound by the terms, conditions and
obligations of the Guaranty set forth in this Section 5.12 of the Agreement; and
(v) is an Affiliate of Seller. This paragraph contains the entire agreement of
Guarantor with respect to the Guaranty of the obligations of Seller under this
Agreement. The terms and conditions of this Guaranty may not be waived, altered,
amended or otherwise modified except in writing signed by Guarantor and
Purchaser.

         Section 5.13 Insurance. (a) The parties acknowledge and agree that,
except with respect to those policies set forth on Schedule 5.13, (i) the
Purchased Entities will not continue after the Closing as named insured parties
under existing insurance policies, (ii) existing insurance coverage of the
Purchased Entities will cease on the Closing Date, (iii) from and after the
Closing Date, Purchaser shall be solely responsible for all insurance coverage
for the Purchased Entities and the Business and related risk of loss with
respect to the Business, including the Purchased Entities' portion of any
deductible or self insured retention amount in respect of insurance claims under
existing insurance policies relating to pre-Closing occurrences and (iv)
Purchaser shall be responsible for administering insurance claims under existing
policies that relate to pre-Closing occurrences; provided, that promptly upon
receiving


                                      -37-



notice of such claims, Purchaser shall notify Seller in writing of such claim
(an "Insurance Claim"), and shall provide Seller such information as may be
reasonably requested for purposes of evaluating such Insurance Claim, and shall
afford Seller the opportunity to participate in the administration of such
Insurance Claim if Seller requests in writing within ten (10) Business Days of
receipt of such Insurance Claim.

         (b) The parties acknowledge and agree that the assets of the Purchased
Entities at Closing shall include all proceeds from existing insurance policies
for the Purchased Entities relating to pre-Closing claims or occurrences, any
benefits under such insurance policies and any claims by any Purchased Entity in
respect thereof, to the extent arising out of any insured loss of any Purchased
Entity covered by any such policy whether occurring prior to or after the
Closing Date. In the event Seller or any of its Affiliates (other than a
Purchased Entity) receives any such proceeds or benefits after the Closing Date,
Seller shall, or shall cause such Affiliate, to take such action as may be
required under Section 5.08(a) to transfer such proceeds or benefits to
Purchaser.

                                   ARTICLE VI

                                   TAX MATTERS

         Section 6.01 Tax Returns. Seller shall, or where relevant shall cause
the Purchased Entities to, timely prepare and file with the relevant Taxing
Authorities all Tax Returns of the Purchased Entities with respect to taxable
periods ending on or before the Closing Date. Seller shall provide drafts of
such Tax Returns, and draft copies of the pro forma Tax Returns of the Purchased
Entities that will be included in any Tax Return for any Company Group with
respect to which none of the Purchased Entities is the parent, to Purchaser 60
days prior to the date such Tax Returns are due for Purchaser's review and
comment. Purchaser shall, or shall cause the Purchased Entities to, timely
prepare and file with the relevant Taxing Authorities all Tax Returns for any
taxable periods of the Purchased Entities beginning after the Closing Date and
all Tax Returns with respect to any taxable period that includes (but does not
end on) the Closing Date (a "Straddle Period"). Purchaser shall furnish Seller
with a draft of each Straddle Period Tax Return at least 60 days before such Tax
Return is due, and no such Tax Return shall be filed with any Taxing Authority
without Seller's written consent, which consent shall not be unreasonably
withheld. All Tax Returns to be prepared by Seller pursuant to this Section 6.01
and all Straddle Period Tax Returns shall be prepared on a basis consistent with
applicable law and the past practices of the Purchased Entities. All Tax Returns
for a taxable period including the Closing Date shall be filed on the basis that
the relevant taxable period ended at the end of the day on the Closing Date,
unless the relevant Taxing Authority will not accept such a Tax Return.

         Section 6.02 Indemnification for Taxes. (a) From and after the Closing,
except for Taxes included in the definition of the Tax Adjustment Amount, Seller
shall be liable for and shall indemnify Purchaser Indemnitees against and hold
them harmless on an after-Tax basis from (i) all liability for Taxes of the
Purchased Entities and each Company Group with respect to any Pre-Closing Tax
Period, (ii) all liability (as a result of Treasury Regulation ss. 1.1502-6(a)
or otherwise) for Taxes of Seller or any other corporation which is or has ever
been affiliated with Seller (other than the Purchased Entities) or with whom the
Purchased Entities otherwise joins, has ever joined, or is or has ever been
required to join, in filing any consolidated, combined or unitary Tax Return
prior to the Closing Date, (iii) all liability for Taxes of the Purchased
Entities or any Company Group arising (directly or indirectly) as a result of
the Acquisition or the other


                                      -38-



transactions contemplated hereby (including, but not limited to, the
Restructuring), (iv) any breach of any representation or warranty contained in
Section 3.17, (v) all liability for Seller Taxes resulting from the Section
338(g) election contemplated by Section 6.07(b), (vi) all liability for Taxes
resulting from the Section 338(h)(10) elections (and any comparable elections
under state or local Tax law) contemplated by Section 6.07, and (vii) all
liability for reasonable legal fees and expenses attributable to any item in the
foregoing clauses.

         (b) Straddle Periods. In the case of any Straddle Period (i) real,
personal and intangible property Taxes ("Property Taxes") of the Purchased
Entities for the Pre-Closing Tax Period shall equal the Property Taxes for such
Straddle Period multiplied by a fraction, the numerator of which is the number
of days during the Straddle Period that are in the Pre-Closing Tax Period and
the denominator of which is the number of days in the Straddle Period; and (ii)
the Taxes of the Purchased Entities (other than Property Taxes) for the
Pre-Closing Tax Period shall be computed on a closing of the books method as of
the close of business on the Closing Date. The indemnity obligation under
Section 6.02(a) in respect of Taxes for a Straddle Period shall be effected by
Seller's payment to the Purchaser, or at the Purchaser's direction, to any of
the Purchased Entities, of the excess of (i) such Taxes for the Pre-Closing Tax
Period, over (ii) the amount of such Taxes paid by Seller or any of its
Affiliates (other than the Purchased Entities) at any time plus the amount of
such Taxes paid by the Purchased Entities on or prior to the Closing Date and
plus the amount, if any, accrued for Straddle Period Taxes reflected on the
Statement prepared pursuant to Section 2.05(a) of this Agreement to the extent
such amount accrued for Straddle Period Taxes has not previously been taken into
account in reducing any other indemnity payment under this Section 6.02(b). Such
excess shall be paid no later than 15 Business Days prior to the date on which
the Tax Return with respect to the final liability for such Taxes is required to
be filed. If the amount of such Taxes paid by Seller or any of its Affiliates
(other than the Purchased Entities) at any time plus the amount of such Taxes
paid by the Purchased Entities on or prior to the Closing Date exceeds the
amount payable pursuant to the preceding sentence, the Purchaser shall pay to
Seller the amount of such excess within 15 Business Days after the Tax Return
with respect to the final liability for such Taxes is required to be filed. The
payments to be made pursuant to this Section 6.02(b) with respect to a Straddle
Period shall be appropriately adjusted to reflect any Final Determination with
respect to Straddle Period Taxes.

         (c) From and after the Closing, Purchaser shall be liable for and shall
indemnify Seller, its Affiliates and each of their respective officers,
directors, employees, stockholders, agents and representatives (the "Seller
Indemnitees") against and hold them harmless on an after-Tax basis from (i) all
liability for Taxes of the Purchased Entities and each Company Group with
respect to any Post-Closing Tax Period (other than any Taxes for which Seller is
liable pursuant to Section 6.02(a)(v) of this Agreement), (ii) all liability (as
a result of Treasury Regulation ss. 1.1502-6(a) or otherwise) for Taxes of
Purchaser or any other corporation which is or has ever been affiliated with
Purchaser (other than the Purchased Entities) or with whom Purchaser otherwise
joins, has ever joined, or is or has ever been required to join, in filing any
consolidated, combined or unitary Tax Return and (iii) all liability for
reasonable legal fees and expenses attributable to any item in the foregoing
clauses.

         (d) Any indemnity payment to be made under this Section 6.02, other
than an indemnity payment described in Section 6.02(b), shall be paid within 30
days after the indemnified party makes written demand upon the indemnifying
party, but in no case earlier than 5 business days prior to the date on which
the relevant Taxes are required to be paid to the relevant Taxing Authority
(including as estimated Tax payments).


                                      -39-



         Section 6.03 Cooperation. Purchaser and Seller shall cooperate fully,
and to the extent reasonably requested by the other party, in connection with
the filing of all Tax Returns pursuant to this Agreement and any audit,
litigation, or other proceeding related to such Tax Returns. Such cooperation
shall include the retention and provision of records and information relevant to
any such tax filing, audit, litigation or other matter and making employees
available on a reasonable basis.

         Section 6.04 Refunds and Credits. Any refund or credit of Taxes of the
Purchased Entities for any taxable period ending on or before the Closing Date
shall be for the account of Seller. Notwithstanding the foregoing, however, any
such refund or credit shall be for the account of Purchaser to the extent that
such refunds or credits are attributable (determined on a marginal basis) to the
carryback from a Post-Closing Tax Period (or the portion of a Straddle Period
that begins on the date after the Closing Date) of items of loss, deductions or
other Tax items of the Purchased Entities (or any of their respective
Affiliates, including Purchaser). Any refund or credit of Taxes of the Purchased
Entities for any Post-Closing Tax Period shall be for the account of Purchaser.
Any refund or credit of Taxes of the Purchased Entities for any Straddle Period
shall be equitably apportioned between Seller and Purchaser. Each party shall,
or shall cause its Affiliates to, forward to any other party entitled under this
Section 6.04 to any refund or credit of Taxes any such refund within 10 days
after such refund is received or reimburse such other party for any such credit
within 10 days after the credit is allowed or applied against other Tax
liability; provided, however, that any such amounts shall be net of any Tax Cost
or Tax Benefit to the payor party attributable to the receipt of such refund
and/or the payment of such amounts to the payee party. The parties shall treat
any payments under this section as an adjustment to the Purchase Price, unless,
and then only to the extent, otherwise required by a Final Determination. The
control of the prosecution of a claim for refund of Taxes paid pursuant to a
deficiency assessed subsequent to the Closing Date as a result of an audit shall
be governed by the provisions of Section 6.10.

         Section 6.05 Tax Sharing Agreements. Any tax sharing agreement between
Seller and any of its Affiliates (other than the Purchased Entities) and any of
the Purchased Entities shall terminate as of the Closing Date and will have no
further effect for any taxable year (including the current year, a future year,
or a past year).

         Section 6.06 Transfer Taxes. All Transfer Taxes incurred in connection
with this Agreement and the transactions contemplated hereby shall be borne by
Seller, and Seller will indemnify Purchaser on an after-Tax basis for any such
Transfer Taxes imposed on Purchaser. Seller at its own expense shall file all
necessary Tax Returns and other documentation with respect to such Transfer
Taxes, unless otherwise required by applicable law. Promptly following the
filing thereof, Seller will furnish to Purchaser a copy of such return or other
filing and a copy of a receipt showing payment of any such Transfer Taxes. With
respect to any such returns or filings required to be filed by Purchaser, Seller
will pay to Purchaser, not later than five (5) Business Days before the due date
for payment of such Transfer Taxes, an amount equal to the Transfer Taxes shown
on such return or other filing, and Purchaser will furnish to Seller a copy of
such return or other filing and a copy of a receipt showing payment of any
Transfer Taxes.

         Section 6.07 Section 338(h)(10) Election. (a) Seller and Purchaser
agree to take all actions necessary and appropriate (including timely filing
such forms, Tax Returns), elections, schedules and other documents as may be
required), at each party's cost and expense, to effect and preserve a timely
Section 338(h)(10) election in accordance with the requirements of Section 338
of the Code (and any corresponding elections under state or local


                                      -40-



Tax Law) (collectively, the "Section 338(h)(10) Elections") with respect to the
purchase of the stock of each Purchased Entity that is a corporation organized
under the laws of the U.S. (the "Section 338(h)(10) Companies"), to report the
sale of such entities pursuant to this Agreement consistent with the Section
338(h)(10) Elections and to take no position contrary thereto or inconsistent
therewith in any Tax Return, any discussion with or proceeding before any Taxing
Authority, or otherwise. No later than 20 days prior to the filing date, Seller
shall deposit with the Purchaser five copies of an Internal Revenue Form 8023
(entitled "Election Under Section 338 for Corporations Making Qualified Stock
Purchases") with respect to each Section 338(h)(10) Company completed as
reasonably agreed by the parties and duly executed by the relevant Seller.
Purchaser shall be responsible for the preparation and filing of all forms and
documents required in connection with the Section 338(h)(10) Elections and shall
provide Seller with copies of (A) any necessary corrections, amendments or
supplements to such Form 8023 as reasonably agreed to by the parties or as
necessary to conform the allocation of the Purchase Price to the Final
Allocation, (B) all attachments required to be filed therewith pursuant to the
applicable Treasury Regulations, and (C) any comparable forms and attachments
with respect to any applicable state or local elections being made pursuant to
the Section 338(h)(10) Elections. Seller and Purchaser shall execute (or cause
to be executed) and deliver to each other such documents or forms as are
required by any Tax Laws to complete properly the Section 338(h)(10) Elections.
Seller and the Purchaser shall cooperate fully with each other and make
available to each other such Tax data and other information as may be reasonably
required by Seller and the Purchaser in order to timely file the Section
338(h)(10) Elections and any other required statements or schedules. Seller and
Purchaser shall (A) promptly execute (or cause to be executed) and deliver to
one another, as would be appropriate, any amendments subsequent to the filing of
the Section 338(h)(10) Elections to Form 8023 (and any comparable state and
local forms) and attachments which are required to be filed under applicable Law
and are reasonably requested by the other party, (B) comply with all of the
requirements of Section 338(h)(10) of the Code and the Treasury Regulations
thereunder, and (C) take no action inconsistent with the requirements for filing
the Section 338(h)(10) Elections under the Code and the applicable Treasury
Regulations.

         (b) Purchaser shall be entitled to make an election under Section
338(g) with respect to the stock of any Purchased Entity that is not organized
under the laws of the U.S. (the "Section 338(g) Elections").

         Section 6.08 Allocation of Purchase Price. The parties agree that the
Purchase Price, and the assumed liabilities will be allocated to the assets of
the Section 338(h)(10) Companies in a manner consistent with Sections 338 and
338(h)(10) of the Code and the Treasury Regulations promulgated thereunder.
Purchaser shall determine the value of the assets of the Section 338(h)(10)
Companies and shall at least 60 days prior to the due date for filing any form
with respect to the allocation provide Seller with an allocation of the
Purchaser's (or its Affiliates') "adjusted grossed-up basis" (within the meaning
of the Treasury Regulations under Section 338 of the Code) in the shares of the
Section 338(h)(10) Companies to the assets of the Section 338(h)(10) Companies
(the "Initial Allocation"). The Initial Allocation shall be binding upon
Purchaser and Seller for purposes of allocating the "deemed selling price"
(within the meaning of the Treasury Regulations) among the assets of the
affected entities; provided, however, that if Seller believes that all or a
portion of the Initial Allocation is incorrect and notifies Purchaser in a
writing including a description of the objection and basis supporting Seller's
objections and any calculations or documentation that support the objection,
within 20 days after having received the Initial Allocation, Seller and
Purchaser agree to consult and resolve in good faith any dispute arising as a
result of the review of the Initial Allocation. In the event the parties are
unable to resolve any dispute within 10 days following notice to the


                                      -41-


Purchaser of Seller's objection, the Selected Accounting Firm will be retained
to resolve any issue in dispute within 10 days and the determination of such
Selected Accounting Firm shall be final. The Selected Accounting Firm's review
shall be limited to whether a disputed item has been prepared in accordance with
Sections 338 and 338(h)(10) of the Code and the Treasury regulations promulgated
thereunder. Purchaser and Seller shall then be bound by the Initial Allocation
as adjusted, if necessary, to reflect the determination of the Selected
Accounting Firm (the "Final Allocation"). Notwithstanding anything to the
contrary in this Agreement, the Final Allocation shall be determined no later
than 20 days prior to the filing deadline of the Section 338(h)(10) Forms.
Seller and Purchaser shall bear equally all costs of the Selected Accounting
Firm. Purchaser and Seller shall file, and cause their respective Affiliates to
file, all Section 338(h)(10) Forms in a manner consistent with the Final
Allocation and notwithstanding anything to the contrary in this Agreement, shall
take no position inconsistent therewith unless, and then only to the extent,
otherwise required by a Final Determination. For the avoidance of doubt, nothing
in this Section 6.08 shall limit Purchaser's exclusive control over any
election(s) made pursuant to Section 338(g) of the Code, and any filings and
allocations made with respect thereto.

         Section 6.09 Calculation of Losses. The amount of any loss for which
indemnification is provided under this Article VI shall be net of any amounts
recoverable by the indemnified party under insurance policies with respect to
such loss and shall be (i) increased to take account of any net Tax Cost to the
indemnified party arising from the receipt of indemnity payments hereunder
(grossed up for such increase), and (ii) reduced to take account of any net Tax
Benefit realized by the indemnified party arising from the incurrence or payment
of any such loss. In computing the amount of any such Tax Cost or Tax Benefit,
the indemnified party shall be deemed to recognize all other items of income,
gain, loss deduction or credit before recognizing any item arising from the
receipt of any indemnity payment hereunder or the incurrence or payment of any
indemnified loss. Any indemnity payment under this Agreement shall be treated as
an adjustment to the Purchase Price for Tax purposes, unless, and then only to
the extent, otherwise required by a Final Determination.

         Section 6.10 Procedures Relating to Indemnification of Tax Claims.

         (a) Notice. If a claim shall be made by any Taxing Authority, which, if
successful, might result in an indemnity payment to any Purchaser Indemnitee
pursuant to Section 6.02(a) or to any Seller Indemnitee pursuant to Section
6.02(c), the party receiving the claim shall promptly notify the other party in
writing of such claim (a "Tax Claim"). Failure to give notice of a Tax Claim to
an indemnitor within a sufficient period of time and in reasonably sufficient
detail to allow the indemnitor to effectively contest such Tax Claim shall
affect the liability of the indemnitor to indemnitee only to the extent that the
indemnitor's position is actually and materially prejudiced as a result thereof.

         (b) Control of Proceedings. Seller shall control all proceedings taken
in connection with any Tax Claim relating solely to Taxes of the Purchased
Entities for a Pre-Closing Tax Period, and may make all decisions in connection
with such Tax Claim, provided, however, that (A) Seller shall keep Purchaser
fully informed with respect to the prosecution or defense of such Tax Claim, and
Purchaser shall have the right to participate in all aspects of any Tax Claim
that could be reasonably expected to have a detrimental effect on Purchaser, and
(B) Seller shall not settle any such Tax Claim in a manner that would adversely
affect the liability of Purchaser for any Taxes in a Post-Closing Tax Period
without prior written consent of Purchaser which consent shall not be
unreasonably be withheld. Seller and Purchaser shall jointly control all
proceedings taken in connection with any Tax Claim relating solely to Taxes of


                                      -42-



the Purchased Entities for a Straddle Period, and neither party shall settle any
such Tax Claim without the written consent of the other party which shall not be
unreasonably be withheld. Purchaser shall control all proceedings with respect
to any Tax Claims with respect to taxable periods beginning after the Closing
Date, provided, however, that (A) Purchaser shall keep Seller fully informed
with respect to the prosecution or defense of such Tax Claim, and (B) Purchaser
shall not settle any such Tax Claim in a manner that would adversely affect the
liability of Seller for any Taxes in a Pre-Closing Tax Period without prior
written consent of Seller which consent shall not be unreasonably be withheld.

         Section 6.11 FIRPTA Certificates. Seller shall deliver to Purchaser at
or prior to the Closing a certificate, in form and substance reasonably
satisfactory to Purchaser and consistent with Treasury Regulation Section
1.897-2(h), certifying that the Acquisition is exempt from withholding pursuant
to the Foreign Investment in Real Property Tax Act.

         Section 6.12 Survival. The representations in Section 3.17 shall
survive the Closing and continue in full force and effect for a period beginning
on the Closing Date and ending thirty (30) days following the expiration of the
applicable statute of limitations, and they shall thereafter be of no further
force or effect.

         Section 6.13 Governing Provisions. The provisions of this Article VI,
and not those of Article IX (except for Section 9.08), shall govern all matters
relating to indemnification for Taxes.

                                  ARTICLE VII

                              CONDITIONS TO CLOSING

         Section 7.01 Conditions to Obligations of Each Party. The obligations
of Seller, on the one hand, and Purchaser, on the other hand, to consummate the
transactions contemplated hereby are subject to the fulfillment, on or before
the Closing Date, of the conditions set forth in this Section 7.01, any one or
more of which may be waived in writing by the party entitled to the benefit of
such condition (subject to the provisions of Section 10.01).

         (a) No Action or Proceeding. No preliminary or permanent injunction or
other order issued by any Governmental Entity that declares this Agreement
invalid in any material respect or prevents or would be violated by the
consummation of the transactions contemplated hereby, or which would reasonably
be expected to have a Business Material Adverse Effect, is in effect. No action
or proceeding has been instituted or threatened by any Governmental Entity,
other person, or entity which seeks to prevent or delay the consummation of the
transactions contemplated by this Agreement or which challenges the validity or
enforceability of this Agreement, the result of which would reasonably be
expected to have a Business Material Adverse Effect.

         (b) Government Consents. All Consents from Governmental Entities, if
any, shall have been obtained. All waiting periods under the HSR Act shall have
expired or been properly terminated.

         (c) Ancillary Agreements. Seller shall have executed and delivered to
Purchaser, and Purchaser shall have executed and delivered to Seller, the
Ancillary Agreements, each dated as of the Closing Date.


                                      -43-



         (d) Aegon Approval. Seller shall have received the approval of the
AEGON N.V. supervisory board (the "Aegon Approval") for the consummation of the
transactions contemplated by this Agreement.

         Section 7.02 Conditions to Obligations of Purchaser. The obligations of
Purchaser to consummate the transactions contemplated hereby are subject to the
fulfillment, on or before the Closing Date, of the conditions set forth in this
Section 7.02, any one or more of which may be waived by Purchaser in writing in
its discretion (subject to the provisions of Section 10.01).

         (a) Representations and Warranties; Covenants. The representations and
warranties of Seller contained in this Agreement shall be true and correct in
all respects on the Closing Date as though made on the Closing Date (except to
the extent that any representation and warranty expressly speaks as of an
earlier date, in which case such representation and warranty shall be true and
correct as of such earlier date), except where the failure to be so true and
correct, individually or in the aggregate, would not reasonably be expected to
have a Business Material Adverse Effect (provided, however, if a representation
or warranty is qualified by "materiality" or "Business Material Adverse Effect,"
such qualifiers shall be disregarded for purposes of this Section 7.02(a)), and
Seller shall have performed in all material respects all obligations required to
be performed by it under this Agreement on or before the Closing Date. At the
Closing, Seller shall have delivered to Purchaser a certificate dated as of the
Closing Date to such effect signed by its president, chief executive officer or
chief financial officer.

         (b) Financing. Purchaser shall have available to it the net proceeds of
(i) the financing contemplated by the Commitment Letters and by the Equity
Commitments, or (ii) other debt and equity financing in the same aggregate
amount which is on terms substantially similar to (and no less favorable in the
aggregate to Purchaser than) those set forth in the Commitment Letters and the
Equity Commitments.

         (c) Resignation of Directors; Nominee Shares. Purchaser shall have
received the written resignations, effective as of the Closing, of the directors
of the Purchased Entities. Purchaser shall have received certificates evidencing
all of the Shares and Subsidiary Shares held by nominees on behalf of Seller,
duly endorsed in blank, or accompanied by stock powers duly executed in blank or
such other forms of assignment so as to transfer and assign to Purchaser such
Shares and Subsidiary Shares held by nominees.

         (d) Employment Contracts. Purchaser shall have entered into an
employment contract with the current President of the Business, in form and
substance satisfactory to the Purchaser in the Purchaser's sole discretion.

         (e) Other Consents. Seller shall have received the material Consents
listed on Schedule 7.02(e). Section 7.03 Conditions to Obligations of Seller.
The obligations of Seller to consummate the transactions contemplated hereby are
subject to the fulfillment, on or before the Closing Date, of the conditions set
forth in this Section 7.03, any one or more of which may be waived by Seller in
writing in its discretion (subject to the provisions of Section 10.01).

         (a) Representations and Warranties; Covenants. The representations and
warranties of Purchaser contained in this Agreement shall be true and correct in
all respects on the Closing Date as though made on the Closing Date (except to
the extent that any


                                      -44-



representation and warranty expressly speaks as of an earlier date, in which
case such representation and warranty shall be true and correct as of such
earlier date), except where the failure to be so true and correct, individually
or in the aggregate, would not reasonably be expected to have a Purchaser
Material Adverse Effect, and Purchaser shall have performed in all material
respects all obligations required to be performed by it under this Agreement on
or before the Closing Date. At the Closing, Purchaser shall have delivered to
Seller a certificate dated as of the Closing Date to such effect signed by the
chief executive officer or chief financial officer of Purchaser.

         (b) Purchase Price Payment. Seller shall have received the Purchase
Price in immediately available funds and in accordance with its payment
instructions.

     Section 7.04 Frustration of Closing Conditions. Neither Purchaser nor
Seller may rely on the failure of any condition set forth in this Article VII to
be satisfied if such failure was caused by such party's failure to act in good
faith or to use its efforts to cause the Closing to occur, as required by
Section 5.08. Purchaser may not rely on the failure of the condition set forth
in Section 7.02(b) to be satisfied unless Purchaser has first consulted with
Seller regarding the availability of financing and has given Seller a reasonable
opportunity to assist Purchaser in securing necessary financing.

                                  ARTICLE VIII

                           TERMINATION AND ABANDONMENT

Section 8.01 Termination. (a) Notwithstanding anything to the contrary in this
Agreement, this Agreement may be terminated and the Acquisition and the other
transactions contemplated by this Agreement abandoned at any time prior to the
Closing:

         (i) by mutual written consent of Seller and Purchaser;

         (ii) by Seller, if any of the conditions set forth in Section 7.01 or
7.03 shall have become incapable of fulfillment, and shall not have been waived
by Seller;

         (iii) by Purchaser, if any of the conditions set forth in Section 7.01
or 7.02 shall have become incapable of fulfillment, and shall not have been
waived by Purchaser;

         (iv) by Seller or Purchaser, if the Closing does not occur on or prior
to September 30, 2004;

         (v) by Seller, if Purchaser has not delivered to Seller, on or before
August 10, 2004, the Commitment Letters and the Equity Commitments; or

         (vi) by Purchaser, if the Aegon Approval has not been obtained on or
before August 2, 2004;

provided, however, that the party seeking termination pursuant to clause (ii),
(iii), (iv), (v) or (vi) is not then in material breach of any of its
representations, warranties, covenants or agreements contained in this
Agreement.


                                      -45-




         (b) In the event of termination by Seller or Purchaser pursuant to this
Section 8.01, written notice thereof shall forthwith be given to the other party
and the transactions contemplated by this Agreement shall be terminated, without
further action by any party. If the transactions contemplated by this Agreement
are terminated as provided herein:

         (i) Purchaser shall, and shall cause each of its directors, officers,
     employees, agents, representatives and advisors to, return to Seller all
     documents and other material received from Seller or any of its Affiliates
     relating to the transactions contemplated hereby, whether so obtained
     before or after the execution hereof; and

         (ii) all confidential information received by Purchaser, its directors,
     officers, employees, agents, representatives or advisors with respect to
     the business of Seller and its Affiliates and the Purchased Entities
     (whether or not related to the Business) shall be treated in accordance
     with the Section 5.01, which shall remain in full force and effect
     notwithstanding the termination of this Agreement.

         Section 8.02 Effect of Termination. If this Agreement is terminated and
the transactions contemplated hereby are abandoned as described in Section 8.01,
this Agreement shall become null and void and of no further force and effect,
except for the provisions of (i) Section 5.01 relating to the obligation of
Purchaser to keep confidential certain information and data obtained by it from
Seller or Seller's representatives, (ii) Section 5.07 relating to payment of
fees in connection with HSR Act filings and other foreign antitrust filings,
(iii) Section 10.06 relating to certain expenses, (iv) Section 8.01 and this
Section 8.02 and (v) Section 10.03 relating to publicity. Nothing in this
Section 8.02 shall be deemed to release any party from any liability for any
breach by such party of the terms, conditions, covenants and other provisions of
this Agreement or to impair the right of any party to compel specific
performance by any other party of its obligations under this Agreement.

                                   ARTICLE IX

                                 INDEMNIFICATION

         Section 9.01 Survival of Certain Representations and Warranties. The
representations and warranties set forth in Article III and Article IV shall
generally survive the Closing and continue in full force and effect for a period
of eighteen (18) months after the Closing Date, and they shall thereafter be of
no further force or effect. Notwithstanding the foregoing, the representations
and warranties of Seller contained in Sections 3.02 (Ownership of Capital
Stock), 3.03 (Authorization), 3.17 (Tax Matters) and 3.18 (Environmental
Matters) shall survive the Closing and continue in full force and effect for a
period beginning on the Closing Date and ending thirty (30) days following the
expiration of the applicable statute of limitations, and they shall thereafter
be of no further force or effect. Except with respect to those covenants and
agreements regarding actions contemplated to be taken prior to the Closing set
forth in Sections 5.02 (Access), 5.03 (Certain Changes and Conduct of Business),
5.05 (Termination of Intercompany Agreements), 5.06 (HSR Act Filings and Other
Antitrust Filings), 5.07 (No Solicitation of Competing Transaction), 5.08(b)
(Restructuring), 5.09 (Notice of Changes) and 5.11 (Transaction Financing), each
of which shall survive the Closing for eighteen (18) months after the Closing
Date, all covenants and agreements of the parties contained in this Agreement
shall survive the Closing for their respective periods set forth in this
Agreement.


                                      -46-



         Section 9.02 Indemnification by Seller. Subject to the limitations set
forth in Section 9.05, from and after the Closing, Seller shall indemnify,
defend and hold harmless Purchaser and its Affiliates and each of their
respective officers, directors, employees, agents and representatives (the
"Purchaser Indemnitees") from and against any and all losses, damages,
liabilities, costs or expenses, including reasonable third-party attorneys' fees
and court costs (collectively, "Losses"), to the extent arising or resulting
from any of the following:

         (a) any breach of any representation or warranty of Seller contained in
this Agreement;

         (b) any breach of any covenant of Seller contained in this Agreement;

         (c) the sale by Transamerica Leasing Inc. of its minority interest in
Indian Container Leasing Co. Ltd.;

         (d) the Restructuring or any Reorganized Subsidiary;

         (e) litigation or claims relating to any business of the Seller or its
Affiliates other than the Business;

         (f) any contingent liability described in a note to the Combined
Financial Statements which is not reflected on Schedule 9.02(f); or

         (g) any liability related to the underfunding of the Transamerica UK
Pension Scheme.

         Section 9.03 Indemnification by Purchaser. Subject to the limitations
set forth in Section 9.05, from and after the Closing, Purchaser shall
indemnify, defend and hold harmless Seller and each of its Affiliates and each
of their respective officers, directors, employees, stockholders, agents and
representatives (the "Seller Indemnitees") from and against any and all Losses,
to the extent arising or resulting from any of the following:

         (a) any breach of any representation or warranty of Purchaser contained
in this Agreement;

         (b) any breach of any covenant of Purchaser contained in this
Agreement;

         (c) any claim against Seller or any Affiliate of Seller relating to the
failure by Seller to obtain any Consent set forth on Schedule 7.02(e) that
Purchaser has waived; or

         (d) any claim against Seller or any Affiliate relating to events
occurring after the Closing in connection with Indemnified Guarantees.

         Section 9.04 Indemnification Procedures.

         (a) Procedures Relating to Indemnification of Third Party Claims. If
any party (the "Indemnified Party") receives written notice of the commencement
of any action or proceeding or the assertion of any claim by a third party or
the imposition of any penalty or assessment for which indemnity may be sought
under Section 9.02 or 9.03 (a "Third Party Claim"), and such Indemnified Party
intends to seek indemnity pursuant to this Article IX, the Indemnified Party
shall promptly provide the other party (the "Indemnifying Party") with written


                                      -47-



notice of such Third Party Claim, stating the nature, basis and the amount
thereof, to the extent known, along with copies of the relevant documents
evidencing such Third Party Claim and the basis for indemnification sought.
Failure of the Indemnified Party to give such notice will not relieve the
Indemnifying Party from liability on account of this indemnification, except if
and to the extent that the Indemnifying Party is actually prejudiced thereby.
The Indemnifying Party will have 30 days from receipt of any such notice of a
Third Party Claim to give notice to assume the defense thereof. If notice to the
effect set forth in the immediately preceding sentence is given by the
Indemnifying Party, the Indemnifying Party will have the right to assume the
defense of the Indemnified Party against the Third Party Claim with counsel of
its choice. So long as the Indemnifying Party has assumed the defense of the
Third Party Claim in accordance herewith, (i) the Indemnified Party may retain
separate co-counsel at its sole cost and expense and participate in the defense
of the Third Party Claim, (ii) the Indemnified Party will not file any papers or
consent to the entry of any judgment or enter into any settlement with respect
to the Third Party Claim without the prior written consent of the Indemnifying
Party and (iii) the Indemnifying Party will not (A) admit to any wrongdoing or
(B) consent to the entry of any judgment or enter into any settlement with
respect to the Third Party Claim to the extent such judgment or settlement
provides for equitable relief, in each case, without the prior written consent
of the Indemnified Party (such written consent will not be withheld or delayed
unreasonably). The parties will act in good faith in responding to, defending
against, settling or otherwise dealing with such claims. The parties will also
cooperate in any such defense and give each other reasonable access to all
information relevant thereto. Whether or not the Indemnifying Party has assumed
the defense, such Indemnifying Party will not be obligated to indemnify the
Indemnified Party hereunder for any settlement entered into or any judgment that
was consented to without the Indemnifying Party's prior written consent.

         (b) Procedures for Non-Third Party Claims. The Indemnified Party will
notify the Indemnifying Party in writing promptly of its discovery of any matter
that does not involve a Third Party Claim being asserted against or sought to be
collected from the Indemnified Party, giving rise to the claim of indemnity
pursuant hereto. The failure so to notify the Indemnifying Party shall not
relieve the Indemnifying Party from liability on account of this
indemnification, except only to the extent that the Indemnifying Party is
actually prejudiced thereby. The Indemnifying Party will have 30 days from
receipt of any such notice to give notice of dispute of the claim to the
Indemnified Party. The Indemnified Party will reasonably cooperate and assist
the Indemnifying Party in determining the validity of any claim for indemnity by
the Indemnified Party and in otherwise resolving such matters. Such assistance
and cooperation will include providing reasonable access to and copies of
information, records and documents relating to such matters, furnishing
employees to assist in the investigation, defense and resolution of such matters
and providing legal and business assistance with respect to such matters.

         Section 9.05 Limitations on Indemnification. (a) Notwithstanding the
foregoing provisions of this Article IX,

         (i) Seller shall not be responsible pursuant to Section 9.02(a) (except
     in connection with a breach of representations and warranties contained in
     Sections 3.02 (Ownership of Capital Stock), 3.17 (Tax Matters) and 3.18
     (Environmental Matters)), for (x) any Losses suffered by any Purchaser
     Indemnitee unless the aggregate of all Losses suffered by the Purchaser
     Indemnitees exceeds, on a cumulative basis, an amount equal to Ten Million
     Dollars ($10,000,000) (the "Indemnity Threshold"), and then from the first
     dollar to the full extent of such Losses, or (y) any individual items where
     the Loss relating thereto is less than Two Thousand Five Hundred Dollars
     ($2,500) (provided that any Losses arising out of one or more claims
     involving or arising out of the same or


                                      -48-



     substantially similar facts, events or circumstances shall be
     aggregated as one claim for purposes of determining whether the basket
     set forth in this Section 9.05(a)(i)(y) applies) ("Minor Claims"),
     unless the aggregate of amount of Minor Claims exceeds Fifty Thousand
     ($50,000), and then only to the extent of any such excess (subject to
     the Indemnity Threshold); and

         (ii) the aggregate liability of Seller hereunder, pursuant to Section
     9.02(a) (except in connection with a breach of representations and
     warranties contained in Sections 3.02 (Ownership of Capital Stock), 3.17
     (Tax Matters) and 3.18 (Environmental Matters)), for Losses suffered by the
     Purchaser Indemnitees shall in no event exceed Two Hundred Million Dollars
     ($200,000,000). In no event shall Seller be obligated to indemnify the
     Purchaser Indemnitees or any other person with respect to any matter to the
     extent that such matter was reflected in the calculation of the adjustment
     to the Closing Date Payment, if any, pursuant to Section 2.05.

         (b) Notwithstanding the foregoing provisions of this Article IX,

         (i) Purchaser shall not be responsible, pursuant to Section 9.03(a),
     for (x) any Losses suffered by any Seller Indemnitee unless the aggregate
     of all Losses suffered by the Seller Indemnitees exceeds the Indemnity
     Threshold, and then from the first dollar to the full extent of such
     Losses, or (y) any individual items where the Loss relating thereto is a
     Minor Claim (provided that any Losses arising out of one or more claims
     involving or arising out of the same or substantially similar facts, events
     or circumstances shall be aggregated as one claim for purposes of
     determining whether the basket set forth in this Section 9.05(b)(i)(y)
     applies), unless the aggregate of amount of Minor Claims exceeds Fifty
     Thousand ($50,000), and then only to the extent of any such excess (subject
     to the Indemnity Threshold); and

         (ii) the aggregate liability of Purchaser hereunder, pursuant to
     Section 9.03(a), for Losses suffered by the Seller Indemnitees shall in no
     event exceed Two Hundred Million Dollars ($200,000,000).

         (c) Neither party hereto shall be liable to the other for indirect,
special, incidental, consequential or punitive damages claimed by such other
party resulting from such first party's breach of its representations,
warranties or covenants hereunder.

         Section 9.06 Mitigation. Each Indemnified Party shall use its
commercially reasonable efforts to mitigate any Losses that an Indemnified Party
asserts under this Article IX. In the event that an Indemnified Party shall fail
to make such commercially reasonable efforts to mitigate any such Losses, then
notwithstanding anything else to the contrary contained herein, neither Seller
nor Purchaser, as the case may be, shall be required to indemnify any
Indemnified Party for that portion of any Losses that could reasonably be
expected to have been avoided through the exercise of such commercially
reasonable efforts.

         Section 9.07 Calculation of Indemnity Payments. The amount of any Loss
for which indemnification is provided under this Article IX shall be net of any
amounts recovered or recoverable by the Indemnified Party under insurance
policies with respect to such Loss and shall be (a) increased to take account of
any net Tax cost actually incurred by the Indemnified Party arising from the
receipt of indemnity payments hereunder (grossed up for such increase) and (b)
reduced to take account of any net Tax benefit actually realized by the
Indemnified Party arising from the incurrence or payment of any such indemnified
amount. In computing the


                                      -49-




amount of any such Tax cost or Tax benefit, the Indemnified Party shall be
deemed to recognize all other items of income, gain, loss, deduction or credit
before recognizing any item arising from the receipt of any indemnity payment
hereunder or the incurrence or payment of any indemnified amount.

         Section 9.08 Tax Treatment of Indemnification. For all Tax purposes,
Purchaser and Seller agree to treat (and shall cause each of their respective
Affiliates to treat) any indemnity payment under this Agreement as an adjustment
to the Final Purchase Price unless a final determination provides otherwise.

Section 9.09 Exclusivity of Indemnification. The indemnification provisions of
this Article IX are intended to provide the exclusive remedy as to all Losses
that any party hereunder may incur arising from or relating to the transactions
contemplated by this Agreement. Each party hereby waives, to the extent that it
may do so, any other rights or remedies that may arise under any applicable
statute, rule or regulation; provided, however, that the foregoing shall not be
interpreted to limit the types of remedies, including specific performance or
other equitable remedies, which may be sought by an Indemnitee in connection
with a breach of any covenant or agreement contained herein and shall not limit
any available remedy for fraud or a willful misrepresentation or breach by
another party.

                                    ARTICLE X

                            MISCELLANEOUS PROVISIONS

         Section 10.01 Amendment, Modification and Waiver. This Agreement may be
amended, modified or superseded and any of the terms, covenants,
representations, warranties or conditions hereof may be waived only by an
instrument in writing signed by each of the parties hereto or, in the case of a
waiver, by or on behalf of the party waiving compliance. In the event any party
waives in writing any term or condition or the breach of any provision, term,
covenant, representation or warranty contained in this Agreement, such party
shall be deemed forever to have waived any claim it may have had against the
other party with respect to compliance with such term or condition or the breach
of such provision, term, covenant, representation or warranty contained in this
Agreement.

         Section 10.02 Assignability, Parties in Interest and No Third Party
Beneficiaries. This Agreement and the rights, interests or obligations hereunder
may not be assigned by any of the parties hereto without the prior written
consent of the other party hereto; provided, however, that Purchaser may assign
any of its rights and obligations under this Agreement before Closing to one or
more of its Affiliates, it being agreed and understood that one or more of
Purchaser's Affiliates may be designated to acquire one or more of the Purchased
Entities, provided such Purchaser Affiliate agrees in writing to be bound by the
terms herein applicable to Purchaser and provided Purchaser agrees to remain
liable hereunder and to perform its duties and obligations hereunder; provided
further, that Purchaser or any permissible Affiliate assignee hereunder may also
assign its rights and obligations under this Agreement to a Financial
Institution as collateral in connection with financing or refinancing the
Acquisition and only to a maximum of five (5) Financial Institutions.
Notwithstanding anything to the contrary, permissible Financial Institution
assignees shall have no rights against Seller or its Affiliates unless (i)
Purchaser is in default of its obligations under applicable agreements between
Purchaser and such Financial Institution and (ii) such permissible Financial
Institution assignees have pursued all available remedies against Purchaser.
Subject to the foregoing, this Agreement shall inure to the benefit of and be
binding upon Purchaser and Seller and their respective permitted


                                      -50-



successors and assigns. Except as provided above, nothing in this Agreement will
confer upon any person or entity not a party to this Agreement, or the legal
representatives of such person or entity, any rights or remedies of any nature
or kind whatsoever under or by reason of this Agreement.

         Section 10.03 Publicity. No press release or other public announcement
or disclosure related to this Agreement or the transactions contemplated herein
(including but not limited to the terms and conditions of this Agreement) shall
be issued or made without the prior approval of Purchaser, on the one hand, and
Seller, on the other hand. The foregoing shall not prohibit any disclosure
required by law; provided that such disclosure is made pursuant to Section 5.01
hereof and that the disclosing party consults with the other parties, to the
extent practicable, at least two (2) Business Days in advance of such
disclosure.

         Section 10.04 Notices. All notices, requests, permissions, waivers and
other communications hereunder shall be in writing and shall be deemed to have
been duly given (a) three Business Days following sending by registered or
certified mail, postage prepaid, (b) when sent, if sent by facsimile; provided
that the facsimile transmission is promptly confirmed by telephone, (c) when
delivered, if delivered personally to the intended recipient, and (d) one
Business Day following sending by overnight delivery via a national courier
service and, in each case, addressed to a party at the following address for
such party:

    (a) If to Seller, to:

        Transamerica Finance Corporation
        9399 West Higgins Road, Suite 600
        Rosemont, IL 60018
        Attention:  Rosario A. Perrelli
        Fax Number:  (847) 685-1146

        Transamerica Finance Corporation
        9399 West Higgins Road, Suite 600
        Rosemont, IL 60018
        Attention:  Vincent Hillery, Esq.
        Fax Number:  (847) 685-1143

        (with copies to:)

        Gibson, Dunn & Crutcher LLP
        1050 Connecticut Avenue, N.W.
        Washington, D.C. 20036
        Attention:  Stephanie Tsacoumis, Esq.
        Fax Number:  (202) 530-9613

or to such other person or address as Seller furnishes to Purchaser in writing.


                                      -51-



    (b) if to the Purchaser, to:

        Klesch & Company Limited
        105 Wigmore Street
        London W1U 1QY
        Attention:  David Green
        Fax Number:  011 44 (0)20 7493 2525

        (with copies to:)

        Cadwalader, Wickersham & Taft LLP
        100 Maiden Lane
        New York, NY  10038
        Attention:  Louis J. Bevilacqua, Esq.
        Fax Number:  (212) 504-6666

        or to such other person or address as Purchaser shall furnish to Seller
in writing.

         Section 10.05 Complete Agreement. This Agreement, including the
Schedules (and the Introduction thereto) and Exhibits hereto, any written
amendments to the foregoing satisfying the requirements of Section 10.01 hereof,
the Non-Disclosure Agreement and the Ancillary Agreements, including the
schedules, exhibits and annexes thereto, constitute the entire agreement among
the parties with respect to the subject matter hereof and thereof and supersede
any previous agreements and understandings between the parties with respect to
such matters. All Exhibits and Schedules annexed hereto or referred to herein
are hereby incorporated in and made a part of this Agreement as if set forth in
full herein. Any capitalized terms used in any Schedule or Exhibit but not
otherwise defined therein shall be defined as set forth in this Agreement. There
are no restrictions, promises, representations, warranties, agreements or
undertakings of any party hereto with respect to the transactions contemplated
by this Agreement, the Non-Disclosure Agreement or the Ancillary Agreements
other than those set forth herein or therein or in any other document required
to be executed and delivered hereunder or thereunder. In the event of any
conflict between the provisions of this Agreement (including the Schedules (and
the Introduction thereto) and Exhibits hereto), on the one hand, and the
provisions of the Non-Disclosure Agreement or the Ancillary Agreements
(including the schedules and exhibits thereto), on the other hand, the
provisions of this Agreement shall control.

         Section 10.06 Expenses. Whether or not the transactions contemplated by
this Agreement are consummated, except as otherwise expressly provided herein
each of the parties hereto shall be responsible for the payment of its own
respective costs and expenses incurred in connection with the negotiations
leading up to and the performance of its respective obligations pursuant to this
Agreement and the Ancillary Agreements including the fees of any attorneys,
accountants, brokers or advisors employed or retained by or on behalf of such
party; provided, however, that in the event the Aegon Approval has not been
obtained on or before August 2, 2004, Seller shall reimburse Purchaser for
Purchaser's reasonable out-of-pocket expenses paid to third parties (including
reimbursement of employees for their out-of-pocket expenses) in connection with
the financing of the Acquisition up to an amount not to exceed Five Million
Dollars ($5,000,000).

         Section 10.07 Severability; Enforcement. The invalidity of any portion
hereof shall not affect the validity, force or effect of the remaining portions
hereof. If it is ever held that


                                      -52-



any restriction hereunder is too broad to permit enforcement of such restriction
to its fullest extent, each party agrees that a court of competent jurisdiction
may enforce such restriction to the maximum extent permitted by law, and each
party hereby consents and agrees that such scope may be judicially modified
accordingly in any proceeding brought to enforce such restriction.

         Section 10.08 Governing Law. This Agreement and any disputes arising
under or related thereto (whether for breach of contract, tortious conduct or
otherwise) shall be governed and construed in accordance with the laws of the
State of New York, without reference to its conflicts of law principles.

         Section 10.09 Jurisdiction. Each party irrevocably agrees that any
legal action, suit or proceeding against them arising out of or in connection
with this Agreement or the transactions contemplated hereby or disputes relating
hereto (whether for breach of contract, tortious conduct or otherwise) shall be
brought exclusively in the United States District Court for the Southern
District of New York, or, if such court does not have subject matter
jurisdiction, the state courts of New York located in New York County and hereby
irrevocably accepts and submits to the exclusive jurisdiction and venue of the
aforesaid courts in personam, with respect to any such action, suit or
proceeding.

         Section 10.10 Waiver of Trial by Jury. Each party hereby waives to the
fullest extent permitted by Applicable Law, any right it may have to a trial by
jury in respect of any litigation directly or indirectly arising out of, under
or in connection with this Agreement or the transactions contemplated hereby or
disputes relating hereto. Each party (a) certifies that no representative, agent
or attorney of any other party has represented, expressly or otherwise, that
such other party would not, in the event of litigation, seek to enforce the
foregoing waiver and (b) acknowledges that it and the other parties hereto have
been induced to enter into this Agreement by, among other things, the mutual
waivers and certifications in this Section 10.10.

         Section 10.11 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

              [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]



                                      -53-



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


                                 KLESCH & COMPANY LIMITED



                                By:    /s/ A. Gary Klesch
                                    --------------------------------------------
                                    Name:  A. Gary Klesch
                                    Title: Chairman


                                TA LEASING HOLDING CO, INC.



                                By:    /s/ Ross Perrelli
                                    --------------------------------------------
                                    Name:  Ross Perrelli
                                    Title: CEO


                                TRANSAMERICA CORPORATION,
                                  in its capacity as Guarantor
                                  pursuant to Section 5.12



                                By:    /s/ Vincent Hillery
                                    --------------------------------------------
                                    Name:  Vincent Hillery
                                    Title: Executive Vice President


                                      -54-




                                                                    EXHIBIT 10.1



                                CREDIT AGREEMENT



                          Dated as of November 3, 2004



                                      among



                           TRANSAMERICA LEASING INC.,
                                 as a Borrower,



                                TRANS OCEAN LTD.,
                                 as a Borrower,


                       TRANS OCEAN CONTAINER CORPORATION,
                                 as a Borrower,


                   THE LENDERS FROM TIME TO TIME PARTY HERETO,
                                   as Lenders,


                                       and


                          FORTIS BANK (NEDERLAND) N.V.,
                             as Administrative Agent









                                TABLE OF CONTENTS

                                                                           Page
                                                                           ----




1.       DEFINITIONS AND RULES OF INTERPRETATION...............................1

         1.1.     Definitions..................................................1

         1.2.     Rules of Interpretation.....................................39

2.       THE CLOSING DATE ADVANCE AND NEW CONTAINER ADVANCES..................40

         2.1.     Closing Date Advance........................................40

         2.2.     Post-Closing Loan...........................................40

         2.3.     Requests for Loan...........................................40

         2.4.     The Revolving Credit Notes..................................41

         2.5.     Termination or Reduction of Commitments.....................41

         2.6.     Repayment of Principal of Loans.............................42

         2.7.     Funding by Lenders; Presumption by Administrative Agent.....42

         2.8.     Failure to Satisfy Conditions Precedent.....................42

         2.9.     Obligations of Lenders Several..............................43

         2.10.    Joint and Several Obligation................................43

         2.11.    Revolving Credit Facility...................................45

3.       COLLECTION AND DISBURSEMENTS OF FUNDS................................45

         3.1.     Trust Account...............................................45

         3.2.     Concentration Account.......................................46

         3.3.     Lockbox Accounts............................................47

         3.4.     Investments.................................................48

         3.5.     General Provisions Regarding Lockbox Account, Concentration
                  Account, Accounts Payable Account, Payroll Account and IO
                  Disbursement Account........................................48

         3.6.     IO Disbursement Account.....................................49

4.       Provisions Applicable to All Loans...................................49

         4.1.     Interest on Loans...........................................49

                  4.1.1.   Interest Rates.....................................49

                  4.1.2.   Amounts............................................50

         4.2.     Mandatory Repayments of the Loans...........................50

                  4.2.1.   Repayments in Connection with the Asset Base.......50

                  4.2.2.   Application of Payments............................50


                                                     i




                                TABLE OF CONTENTS
                                -----------------
                                  (continued)

                                                                            Page
                                                                            ----

         4.3.     Optional Prepayment of Loans................................50

         4.4.     Payments by Borrower; Presumptions by Administrative Agent..51

         4.5.     Sharing of Payments by Lenders..............................51

         4.6.     Funding Source..............................................52

5.       CERTAIN GENERAL PROVISIONS...........................................52

         5.1.     Fees........................................................52

                  5.1.1.   Commitment Fee.....................................52

                  5.1.2.   Other Fees.........................................52

         5.2.     Funds for Payments..........................................52

                  5.2.1.   Payments to Administrative Agent...................53

                  5.2.2.   No Offset, etc.....................................53

                  5.2.3.   Non-U.S. Lenders...................................54

         5.3.     Computations................................................56

         5.4.     Inability to Determine LIBOR Rate...........................56

         5.5.     Illegality..................................................57

         5.6.     Additional Costs, etc.......................................57

         5.7.     Capital Adequacy............................................58

         5.8.     Certificate.................................................59

         5.9.     Indemnity...................................................59

         5.10.    Interest After Default......................................59

6.       COLLATERAL SECURITY..................................................60

         6.1.     Security of Borrowers.......................................60

7.       Representations and Warranties.......................................60

         7.1.     Company Status..............................................60

         7.2.     Company Power and Authority.................................60

         7.3.     No Violation................................................61

         7.4.     Litigation..................................................61

         7.5.     Use of Proceeds; Margin Regulations.........................61

         7.6.     Governmental Approvals......................................62

         7.7.     Investment Company Act......................................62

         7.8.     Public Utility Holding Company Act..........................62


                                       ii


                                TABLE OF CONTENTS
                                -----------------
                                  (continued)

                                                                            Page
                                                                            ----

         7.9.     True and Complete Disclosure................................62

         7.10.    Financial Condition; Financial Statements...................63

         7.11.    Security Interests..........................................64

         7.12.    Compliance with ERISA.......................................64

         7.13.    Subsidiaries................................................64

         7.14.    Compliance with Statutes; Agreements, etc...................65

         7.15.    Environmental Matters.......................................65

         7.16.    Labor Relations.............................................66

         7.17.    Tax Returns and Payments....................................66

         7.18.    Scheduled Existing Indebtedness.............................66

         7.19.    Insurance...................................................66

         7.20.    Foreign Assets Control Regulations, etc.....................66

         7.21.    Lockbox Accounts and Payment Instructions...................67

         7.22.    Credit and Collection Policy................................67

         7.23.    Form of Lease Agreement.....................................67

         7.24.    UBS Lease Agreement.........................................67

         7.25.    Depreciation Policy.........................................67

8.       Affirmative Covenants................................................67

         8.1.     Information Covenants.......................................67

         8.2.     Books, Records and Inspections..............................70

         8.3.     Permitted Securitization....................................71

         8.4.     Payment of Taxes............................................71

         8.5.     Existence; Franchises.......................................71

         8.6.     Compliance with Statutes; etc...............................71

         8.7.     End of Fiscal Years; Fiscal Quarters........................72

         8.8.     Further Assurances..........................................72

         8.9.     Use of Proceeds.............................................72

         8.10.    Performance of Obligations..................................72

         8.11.    Maintenance of Containers...................................72

         8.12.    Insurance...................................................73

         8.13.    Interest Rate Hedging Agreements............................74


                                      iii




                                TABLE OF CONTENTS
                                -----------------
                                  (continued)

                                                                            Page
                                                                            ----

         8.14.    UNIDROIT Convention.........................................74

         8.15.    Identification of Gross Lease Revenues and Direct Operating
                  Expense; Transfer of Gross
                  Lease Revenues..............................................74

         8.16.    Compliance with Credit and Collection Policy................74

         8.17.    Payment Instruction to Lessees..............................74

         8.18.    Transfer to Special Purpose Vehicles........................74

         8.19.    Static Storage Containers...................................75


9.       Negative Covenants...................................................75

         9.1.     Changes in Business; etc....................................75

         9.2.     Consolidation; Merger; Sale or Purchase of Assets; etc......75

         9.3.     Liens.......................................................77

         9.4.     Indebtedness................................................79

         9.5.     Advances; Investments; Loans................................81

         9.6.     Dividends...................................................83

         9.7.     Transactions with Affiliates................................83

         9.8.     Limitation on Certain Restrictions on Subsidiaries..........83

         9.9.     Change in Credit and Collection Policy......................84

         9.10.    Change in Payment Instructions to Lessees...................85

         9.11.    Cost Allocation Methodologies...............................85

         9.12.    Amendments to Depreciation Policy...........................85

         9.13.    Limitation on the Creation of Subsidiaries..................85

10.      FINANCIAL COVENANTS..................................................85

         10.1.    Consolidated EBIT to Consolidated Cash Interest Expense
                  Ratio.......................................................85

11.      CLOSING CONDITIONS...................................................86

         11.1.    Execution of Agreement; Notes...............................86

         11.2.    Officer's Certificate.......................................86

         11.3.    Opinions of Counsel.........................................86

         11.4.    Company Documents; Proceedings..............................86

         11.5.    Approvals...................................................87

         11.6.    Consummation of the Transaction.............................87

         11.7.    Intercreditor Agreement with Holder of Seller Loan..........87


                                       iv



                                TABLE OF CONTENTS
                                -----------------
                                  (continued)

                                                                            Page
                                                                            ----

         11.8.    Security Agreement..........................................88

         11.9.    Tax Allocation Agreements...................................88

         11.10.   Solvency Certificate; Insurance Certificates; etc...........89

         11.11.   Financial Statements; Pro Forma Financial Statements........89

         11.12.   Payment of Fees.............................................89

         11.13.   Budgets.....................................................89

         11.14.   Seller Loan.................................................89

         11.15.   Pledge Agreement............................................89

         11.16.   Participation Agreement.....................................90

         11.17.   Intercompany Subordination Agreement........................90

         11.18.   Lockbox Accounts............................................90

12.      CONDITIONS PRECEDENT TO ALL LOANS....................................90

         12.1.    Closing Date................................................90

         12.2.    No Default; Representations and Warranties..................90

         12.3.    Loan Request................................................91

13.      EVENTS OF DEFAULT; ACCELERATION; ETC.................................91

         13.1.    Events of Default and Acceleration..........................91

         13.2.    Termination of Commitments..................................94

         13.3.    Remedies....................................................94

         13.4.    Distribution of Collateral Proceeds.........................94

14.      ADMINISTRATIVE AGENT.................................................95

         14.1.    Appointment and Authority...................................95

         14.2.    Rights as a Lender..........................................95

         14.3.    Exculpatory Provisions......................................96

         14.4.    Reliance by Administrative Agent............................97

         14.5.    Delegation of Duties........................................97

         14.6.    Resignation of Administrative Agent.........................97

         14.7.    Non-Reliance on Administrative Agent and Other Lenders......98

         14.8.    Administrative Agent May File Proofs of Claim...............99

         14.9.    Collateral Matters..........................................99

15.      SUCCESSORS AND ASSIGNS..............................................100


                                       v


                                TABLE OF CONTENTS
                                -----------------
                                  (continued)

                                                                            Page
                                                                            ----

         15.1.    General Conditions.........................................100

         15.2.    Assignments by Lenders.....................................100

         15.3.    Register...................................................102

         15.4.    Participations.............................................102

         15.5.    Limitations upon Participant Rights........................103

         15.6.    Certain Pledges............................................103

         15.7.    Electronic Execution of Assignments........................103



16.      PROVISIONS OF GENERAL APPLICATIONS..................................104

         16.1.    Setoff.....................................................104

         16.2.    Expenses...................................................104

         16.3.    Indemnification............................................105

         16.4.    Treatment of Certain Confidential Information..............106

                  16.4.1.  Confidentiality...................................106

                  16.4.2.  Prior Notification................................107

                  16.4.3.  Other.............................................107

         16.5.    Survival of Covenants, etc.................................107

         16.6.    Notices....................................................108

         16.7.    Governing Law..............................................109

         16.8.    Headings...................................................109

         16.9.    Counterparts...............................................109

         16.10.   Entire Agreement, etc......................................109

         16.11.   Waiver of Jury Trial.......................................110

         16.12.   Consents, Amendments, Waivers, Etc.........................110

         16.13.   Replacement of Lenders.....................................112

         16.14.   Severability...............................................113

         16.15.   USA Patriot Act............................................113




                                       vi






                                    Exhibits
                                    --------

Exhibit A                   Form of Asset Base Report
Exhibit B                   Form of Assignment and Assumption
Exhibit C                   Form of Equipment Report
Exhibit D                   Form of Manager Report
Exhibit E                   Form of Loan Request
Exhibit F                   Form of Revolving Credit Note
Exhibit G                   Credit and Collection Policy
Exhibit H                   Form of Lease Agreement
Exhibit I                   UBS Lease Agreement
Exhibit J                   Depreciation Policy
Exhibit K                   Interest Rate Hedge Policy
Exhibit L                   Form of Opinion of Borrowers' Counsel
Exhibit M                   Form of Officer's Certificate of Borrower
Exhibit N                   Form of Security Agreement
Exhibit O                   Form of Solvency Certificate
Exhibit P                   Form of Pledge Agreement
Exhibit Q                   Intercompany Subordination Agreement
Exhibit R                   Form of Intercompany Note
Exhibit S                   Summary of Agreed Upon Procedures

                                    Schedules
                                    ---------

Schedule 1                  Funding Commitments of Lenders
Schedule 2                  Concentration Limits
Schedule 3                  Rights with Respect to Leases that are Not
                            Assignable Without the Consent of the Related Lessee
                            or Any Other Person
Schedule 4                  Management Fees
Schedule 5                  UBS Lease Termination Payments
Schedule 7.5                Use of Proceeds of Closing Date Advance
Schedule 7.13               Subsidiaries of Borrowers
Schedule 7.18               Existing Indebtedness of Borrowers and Subsidiaries
Schedule 7.19               Insurance Maintained by Borrowers and Subsidiaries
Schedule 7.21               List of Names and Addresses of All Lockboxes and
                            Lockbox Accounts
Schedule 9.3                Liens Existing on the Closing Date
Schedule 9.5                Investments Existing on the Closing Date
Schedule 9.7                Agreements of Borrowers and Subsidiaries with any
                            Affiliate of the Borrowers or the Subsidiaries
Schedule 9.8                Encumbrances or Restrictions on Borrowers and
                            Subsidiaries






                                CREDIT AGREEMENT

         This CREDIT AGREEMENT is made as of November 3, 2004, by and among
TRANSAMERICA LEASING INC., a corporation organized and existing under the laws
of the State of Delaware (together with its successors and permitted assigns,
"TLI"), TRANS OCEAN LTD., a corporation organized and existing under the laws of
the State of Delaware (together with its successors and permitted assigns,
"TOL"), TRANS OCEAN CONTAINER CORPORATION, a corporation organized under the
laws of the State of Delaware (together with its successors and permitted
assigns, "TOCC", each of TLI, TOL and TOCC, a "Borrower" and collectively, the
"Borrowers"), each lender from time to time party hereto (collectively, the
"Lenders" and individually, a "Lender"), and FORTIS BANK (NEDERLAND) N.V.

         WHEREAS, subject to and upon the terms and conditions set forth herein,
the Lenders are willing to make available to the Borrowers the credit facility
provided for herein;

         NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
and agreements set forth herein below, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as provided herein:

1.       DEFINITIONS AND RULES OF INTERPRETATION.

1.1.     DEFINITIONS. The following terms shall have the meanings set forth in
         this Section 1 or elsewhere in the provisions of this Loan Agreement
         referred to below:

                  Acceleration Event. The acceleration of the Revolving Credit
Notes and the other Obligations in accordance with the provisions of Section
13.1 hereof.

                  Accounts Payable Account. Bank account number ____ maintained
by TLI at Citibank N.A. and any replacement for such account established in
accordance with the provisions of this Loan Agreement.

                  Acquisition. The acquisition by Container Holdings of all of
the Capital Stock of Transamerica Leasing Inc. and Trans Ocean Ltd.

                  Acquisition Date. With respect to a Container, the date on
which a Borrower initially acquired such container.

                  Administrative Agent. Fortis acting as agent for the Lenders
and each other Person appointed as the successor Administrative Agent in
accordance with Section 14.6.




                                      -2-


                  Administrative Agent's Office. The Administrative Agent's
office located at 3000 AS Rotterdam, The Netherlands, or at such other location
as the Administrative Agent may designate from time to time.

                  Administrative Agent's Special Counsel. Thacher Proffitt &
Wood LLP or such other counsel as may be approved by the Administrative Agent.

                  Administrative Questionnaire. An Administrative Questionnaire
in a form supplied by the Administrative Agent.

                  Affiliate. With respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

                  Agent Fee. The fee payable to the Administrative Agent on each
Payment Date as set forth in the Fee Letter.

                  Aggregate Commitments. An amount equal to the sum of the
Commitments of all the Lenders.

                  Aggregate Net Book Value. As of any date of determination, an
amount equal to the sum of the Net Book Values (such Net Book Values to be
measured as of the last day of the prior month) of all Eligible Containers.

                  Aggregate Note Principal Balance. As of any date of
determination, an amount equal to the sum of the then unpaid principal balance
of all Revolving Credit Notes.

                  Applicable Margin. With respect to each Loan for each Interest
Period, one of the following amounts:

                  (A) with respect to each Base Rate Loan, one and one-half
        percent (1.50%) per annum; or

                  (B) with respect to each LIBOR Rate Loan, two and three
        quarters percent (2.75%).

Notwithstanding the foregoing, the following modifications to the amounts set
forth in clauses (A) and (B) shall be applicable:

                  (1) all of the amounts set forth in clauses (A) and (B) above
                      shall increase by one half of one percent (0.50%) if the
                      Borrowers have not completed a Refinancing Event by April
                      30, 2006; and

                  (2) notwithstanding the terms of clauses (A) and (B) above, if
                      the Administrative Agent is unable, despite its
                      commercially reasonable efforts, to complete a "successful
                      syndication" of




                                      -3-

                      Commitments and the Loans at such levels, then (x) the
                      amount referred to in clause (A) shall increase to the
                      rate at which the Administrative Agent can complete a
                      "successful syndication" of the Commitments and the Loans
                      using its commercially reasonable efforts (which rate
                      shall, in no event, exceed two and one quarter percent
                      (2.25%) per annum) and (y) the amount referred to in
                      clause (B) shall increase to the rate at which the
                      Administrative Agent can complete a "successful
                      syndication" of the Commitments and the Loans using its
                      commercially reasonable efforts (which rate shall, in no
                      event, exceed three and one half percent (3.50%) per
                      annum). For the purposes of this paragraph, "successful
                      syndication" means that the Administrative Agent shall
                      reduce its participation in the Commitments and the Loans
                      to a final hold of not more than $250,000,000.00.


                  Asset Base. As of any date of determination, an amount equal
to the sum of:

                  (1) the product of (i) the Existing Container Advance Rate
         then in effect and (ii) the sum of (x) the then Net Book Values
         (calculated as of the last day of the immediately preceding month) of
         all Eligible Containers that were either owned by any Borrower or
         subject to a Finance Lease for which any Borrower is the lessor, in
         each case, on the Closing Date, (y) to the extent not included in
         clause (x), the then Net Book Values of all containers then subject to
         the terms of the UBS Lease Agreement and (z) any receivables resulting
         from the sale or other disposition of one or more Eligible Containers
         that were either owned by any Borrower or subject to a Finance Lease
         for which any Borrower is the lessor, in each case, on the Closing
         Date, so long as such receivables were not outstanding for more than 90
         days (measured from the issue date of such receivables); plus

                  (2) the product of (i) the Post-Closing Advance Rate then in
         effect and (ii) the sum of (x) the excess of (A) the sum of the then
         Net Book Values (calculated as of the last day of the immediately
         preceding month) of all Eligible Containers acquired by any Borrower
         after the Closing Date and which are owned by any Borrower on such date
         of determination or which are subject to a Finance Lease for which any
         Borrower is the lessor on such date of determination, over (B) the sum
         of the Net Book Values of any such container included in clause (A) for
         which the manufacturer or other seller thereof has not received payment
         in full of the related purchase price, and (y) all receivables
         resulting from the sale or other disposition of one or more Eligible
         Containers that were acquired by a Borrower after the Closing Date so
         long as such receivables are not outstanding for more than 90 days
         (measured from the issue date of such receivables); minus

                  (3) the sum of all then unpaid UBS Lease Termination Payments.




                                      -4-

                  Asset Base Deficiency. As of any Payment Date, the amount (if
any) by which (i) the Aggregate Note Principal Balance (calculated without
giving effect to any principal payments to be paid on such Payment Date),
exceeds (ii) the Asset Base.

                  Asset Base Report. An Asset Base Report signed by a
responsible officer of the Borrowers and in substantially the form of Exhibit A
hereto.

                  Asset Value Adjustment Date. The date on which the Net Book
Values of all Containers owned by the Borrowers on the Closing Date are adjusted
upward as a result of the consummation of the Acquisition; provided, however,
that the Asset Value Adjustment Date shall not occur unless the Administrative
Agent shall have approved (such approval to not be unreasonably withheld or
delayed) both (i) the amount of any such upward adjustments in the Net Book
Values of such Containers, and (ii) any revision in the Depreciation Policy to
be implemented in connection with such adjustments.

                  Assignment and Assumption. An assignment and assumption
entered into by a Lender and an Eligible Assignee (with the consent of any party
whose consent is required by Section 15.2), and accepted by the Administrative
Agent, in substantially the form of Exhibit B or any other form approved by the
Administrative Agent.

                  Authorized Officer. With respect to (i) delivering Notices of
Borrowing and similar notices, any person or persons that has or have been
authorized by the Board of Directors of a Borrower to deliver such notices
pursuant to this Loan Agreement and that has or have appropriate signature cards
on file with the Administrative Agent, (ii) delivering financial information and
officer's certificates pursuant to this Loan Agreement, any Senior Designated
Officer of any Borrower and (iii) any other matter in connection with this Loan
Agreement or any other Loan Document, any officer (or a person or persons so
designated by any two officers) of the Borrowers.

                  Availability Termination Date. The earlier to occur of (i) the
date of which the Commitments are terminated pursuant to Sections 2.5 or 13.2
hereof and (ii) the two year anniversary of the Closing Date.

                  Base Rate. The higher of (a) the variable annual rate of
interest so designated from time to time by Citibank N.A. as its "prime rate",
such rate being a reference rate and not necessarily representing the lowest or
best rate being charged to any customer, and (b) one-half of one percent (0.50%)
above the Federal Funds Effective Rate. For the purposes of this definition,
"Federal Funds Effective Rate" shall mean for any day, the rate per annum equal
to the weighted average of the rates on overnight federal funds transactions
with members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Administrative
Agent from three funds brokers of recognized standing selected by the
Administrative Agent. Changes in the




                                      -5-

Base Rate resulting from any changes in Citibank N.A.'s "prime rate" shall take
place immediately without notice or demand of any kind.

                  Base Rate Loans. All or any portion of any Loan bearing
interest calculated by reference to the Base Rate.

                  Borrower. Each of TLI, TOL and TOCC.

                  Breakage Cost. With respect to any Lender with respect to any
Breakage Prepayment, an amount equal to the difference (as reasonably determined
by such Lender and set forth in a certificate of such Lender delivered to the
Borrowers) of (a) such Lender's cost of obtaining funds for the LIBOR Rate Loan
that is the subject of such Breakage Prepayment for the period from the date of
such Breakage Prepayment to the last day of the Interest Period in effect (or
that would have been in effect) for such LIBOR Rate Loan, minus (b) the amount
of interest likely to be realized by such Lender in redeploying the funds
released or not utilized by reason of such Breakage Conversion or such Breakage
Prepayment for such period.

                  Breakage Prepayment. This term shall have the meaning set
forth in Section 4.3 hereof.

                  Business Day. One of the following: (i) for all purposes other
than as covered by clause (ii) below, any day excluding Saturday, Sunday and any
day which shall be in New York, New York, London, England or Rotterdam, The
Netherlands a legal holiday or a day on which banking institutions are
authorized by law or other governmental actions to close and (ii) with respect
to all notices and determinations in connection with, and payments of principal
and interest on or with respect to, Eurodollar Loans, any day which is a
Business Day described in clause (i) above and which is also a day for trading
by and between banks in U.S. dollar deposits in the interbank Eurodollar market.

                  Capitalized Leases. Leases under which a Borrower is the
lessee or obligor, the discounted remaining rental payment Obligations under
which are required to be capitalized on the balance sheet of the lessee or
obligor in accordance with GAAP.

                  Capital Stock. Any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.

                  Cash Equivalents. All of the following: (i) securities issued
or directly fully guaranteed or insured by the governments of the United States,
Canada and members of the European Union or any agency or instrumentality
thereof (provided that the full faith and credit of the respective such
government is pledged in support thereof) having maturities of not more than one
year from the date of acquisition, (ii) securities issued by any state of the
United States or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition




                                      -6-


thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either S&P or Moody's, (iii) certificates of deposit and
Eurodollar time deposits with maturities of one year or less from the date of
acquisition, bankers' acceptances with maturities not exceeding one year and
overnight bank deposits, in each case with any domestic commercial bank or
commercial bank of a foreign country recognized by the United States, (x) in the
case of a domestic commercial bank, having capital and surplus in excess of
$500,000,000 and outstanding debt which is rated "A" (or similar equivalent
thereof) or higher by at least one nationally recognized statistical rating
organization (as defined under Rule 436 under the Securities Act) and (y) in the
case of a foreign commercial bank, having capital and surplus in excess of
$250,000,000 (or the foreign currency equivalent thereof), (iv) repurchase
obligations with a term of not more than thirty days for underlying securities
of the types described in clauses (i) and (iii) above entered into with any
financial institution meeting the qualifications specified in clause (iii)
above, (v) commercial paper having a rating of at least A-2 from S&P or at least
P-2 from Moody's, (vi) securities with maturities of six (6) months or less from
the date of acquisition backed by standby letters of credit issued by any Lender
or any commercial bank satisfying the requirements of clause (iii)(x) of this
definition, (vii) Indebtedness or preferred stock issued by Persons with a
rating of A or higher from S&P or A2 or higher from Moody's with maturities of
24 months or less from the date of acquisition and (viii) investments in money
market funds which invest substantially all their assets in securities of the
types described in clauses (i) through (vii) above.

                  Casualty Loss. With respect to any Container as of any date of
determination, any of the following events or conditions:

                  (i)      total loss or destruction thereof;

                  (ii)     theft or disappearance thereof without recovery
                           within sixty (60) days after such theft or
                           disappearance becomes known to any Borrower or any of
                           its Affiliates;

                  (iii)    damage rendering such Container unfit for normal use
                           and, in the judgment of any Borrower, beyond repair
                           at reasonable cost; or

                  (iv)     any condemnation, seizure, forced sale or other
                           taking of title to or use of such Container.

                  Casualty Proceeds. Any payment by, or on behalf of, a Lessee
from any source in connection with a Casualty Loss with respect to a Container.

                  CEU. Cost equivalent units.

                  Change of Control. With respect to any of Container Holdings,
TOCC, TLI or TOL and without the prior consent of the Required Lenders, the
occurrence of any of the following events or conditions: (i) any "person" (as
such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934), other than one or more Permitted Holders, is or becomes the "beneficial
owner" (as defined in Rules 13d-3 and



                                      -7-


13d-5 under the Securities Exchange Act of 1934), directly or indirectly, of
more than 50% of the total voting power of the voting common equity interests of
such Person, or (ii) prior to the first Public Equity Offering, any "person" (as
such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934), other than one or more Permitted Holders, shall have acquired, by
contract or otherwise, the power to exercise, directly or indirectly, a
controlling influence over the composition of the board of directors or other
similar management body of such Person, or (iii) prior to the first Public
Equity Offering, the Permitted Holders cease for any reason to be the beneficial
owner, directly or indirectly, in the aggregate of at least a majority of the
total voting power of the voting Capital Stock of Container Holdings, whether by
virtue of the issuance, sale or other disposition of Capital Stock of Container
Holdings, a merger, consolidation or sale of assets involving Container
Holdings, one of its Subsidiaries, any voting trust or other agreement, or (iv)
subsequent to the first Public Equity Offering, the Permitted Holders
beneficially own, directly or indirectly, in the aggregate a lesser percentage
of the total voting power of the voting Capital Stock of Container Holdings,
TLI, TOL or TOCC than such other "person" (as such term is used in Section 13(d)
and 14(d) of the Securities Exchange Act of 1934) or "group" (as such term is
used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934).

                  Closing Date.  November 3, 2004.

                  Closing Date Advance. The Loan in the maximum aggregate
principal amount equal to the lesser of (A) the Asset Base on the Closing Date,
and (B) Eight Hundred Twenty Million Dollars ($820,000,000), to be made by the
Lenders to the Borrowers on the Closing Date pursuant to the provisions of
Section 2.1 hereof.

                  Closing Date Advance Rate.  One of the following amounts:

                  (1) on the Closing Date and all times thereafter until the
         Asset Value Adjustment Date, seventy-six and one half percent (76.5%);
         and

                  (2) at all times on or after the Asset Value Adjustment Date,
         the amount determined on the Asset Value Adjustment Date in accordance
         with the following formula:



                                    76.5% x A/B

Where            A =       the sum of the Net Book Values of all Eligible
                           Containers owned by any Borrower on the Closing Date
                           calculated immediately prior to any approved increase
                           in such Net Book Values on the Asset Value Adjustment
                           Date; and
                 B =       the sum of the Net Book Values of all Eligible
                           Containers owned by any Borrower on the Closing Date
                           calculated immediately after giving effect to any
                           approved increase in such Net Book Values on the
                           Asset Value Adjustment Date.



                                      -8-


                  Code. The United States Internal Revenue Code of 1986, as
amended from time to time (and any successor statute thereto), and the
regulations promulgated and rulings issued thereunder. Section references to the
Code are to the Code as in effect on the Closing Date, and any subsequent
provisions of the code, amendments thereto or substituted therefrom.

                  Collateral. All of the property, rights and interests of the
Borrowers that are or are intended to be subject to the Liens created by the
Security Documents.

                  Collection Period. Initially, the period commencing on the
Closing Date to and including December 31, 2004, and thereafter each calendar
quarter.

                  Commitment. With respect to each Lender, the amounts set forth
on Schedule 1 hereto as the amounts of such Lender's commitment to make Loans to
the Borrowers pursuant to this Loan Agreement, as the same may be reduced from
time to time; or if such commitments are terminated pursuant to the provisions
hereof, zero.

                  Commitment Fee. This term shall have the meaning set forth in
Section 5.1.1.

                  Commitment Percentage. With respect to any Lender, the
percentage (carried out to the ninth decimal place) of the Aggregate Commitments
represented by such Lender's Commitment at such time. If the commitment of each
Lender to make Loans has been terminated pursuant to this Loan Agreement or if
the Aggregate Commitments have expired, then the Commitment Percentage of each
Lender shall be determined based on the outstanding Loans owing to such Lender
at such time. The initial Commitment Percentage of each Lender is set forth
opposite the name of such Lender on Schedule 1 pursuant to which such Lender
becomes a party hereto, as applicable.

                  Company. Any corporation, limited liability company,
partnership or other business entity (or the adjectival form thereof, where
appropriate).

                  Concentration Account. Bank account number 40523885 maintained
by TLI at Citibank N.A. and any replacement for such account established in
accordance with the terms of this Loan Agreement.

                  Concentration Limits. As of any date of determination, all of
the following:

                  (1)      The sum of the Net Book Values of all Specialized
                           Containers (other than refrigerated Containers) shall
                           not exceed an amount equal to 15% of the then
                           Aggregate Net Book Value;

                  (2)      The sum of the Net Book Values of all 20 foot, 40
                           foot and 40 foot high cube refrigerated Containers
                           shall not exceed an amount equal to 40% of the then
                           Aggregate Net Book Value;


                                      -9-


                  (3)      The sum of the Net Book Values of all Containers then
                           on lease to any three Lessees shall not exceed
                           forty-five percent (45%) of the then Aggregate Net
                           Book Value; provided, however, that if two or more
                           Lessees shall engage in any transaction (whether
                           through merger, consolidation, stock sale, asset sale
                           or otherwise) pursuant to which a Lessee shall become
                           the owner of, or interest holder in, any other
                           Lessee's leasehold interests in one or more
                           Containers and the effect of such transaction is to
                           cause a breach of the foregoing threshold, then the
                           foregoing threshold shall on the effective date of
                           such transaction be increased to an amount equal to
                           the quotient, expressed as a percentage, (x) the
                           numerator of which shall equal the sum of (A) the sum
                           of the Net Book Values of all Containers on lease to
                           such transacting Lessees immediately prior to such
                           transaction, and (B) the sum of the Net Book Values
                           of all Containers then on lease to the two other
                           Lessees having the most Containers then on lease with
                           the Borrowers (measured by Net Book Value) and (y)
                           the denominator of which shall equal the then
                           Aggregate Net Book Value); and provided further that,
                           if the foregoing limitation has been increased above
                           forty-five percent (45%) by operation of the above
                           proviso, then none of the Borrowers shall thereafter
                           originate any additional Leases of Containers to any
                           of such three Lessees until such time as the sum of
                           the Net Book Values of all Containers then on lease
                           to such three Lessees does not exceed an amount equal
                           to forty-five percent (45%) of the then Aggregate Net
                           Book Value.

                  (4)      The sum of the Net Book Values of all Containers then
                           on Lease to any single Lessee shall not exceed an
                           amount equal to (A) with respect to any of the
                           Lessees set forth in Schedule 2 hereto, the
                           percentage of the Aggregate Net Book Value set
                           opposite the name of such Lessee on such schedule,
                           and (B) with respect to any Lessee not covered by
                           clause (A), five percent (5%) of the then Aggregate
                           Net Book Value; provided, however, that if two or
                           more Lessees shall engage in any transaction (whether
                           through merger, consolidation, stock sale, asset sale
                           or otherwise) pursuant to which a Lessee shall become
                           the owner of, or interest holder in, any other
                           Lessee's leasehold interests in one or more
                           Container, the foregoing threshold set forth in
                           clauses (A) and (B) shall on the effective date of
                           such transaction be increased with respect to such
                           acquiring or, in the case of a merger, surviving
                           Lessee to equal the greater of (i) the sum of the
                           applicable percentage limitations for the transacting
                           Lessees as set forth in clauses (A) and (B) above,
                           and (ii) a quotient, expressed as a percentage, (x)
                           the numerator of which shall equal the sum of the Net
                           Book Values of all Containers on Lease to such
                           transacting Lessees immediately prior to such




                                      -10-


                           transaction and (y) the denominator of which shall
                           equal the then Aggregate Net Book Value);

                  (5)      The sum of the Net Book Values of all Containers for
                           which the initial Lease of such Container after its
                           Acquisition Date is a Finance Lease shall not exceed
                           20% of the then Aggregate Net Book Value; and

                  (6)      The sum of the Net Book Values of all Containers
                           acquired during the Revolving Credit Period that have
                           not been put on its initial lease since the
                           applicable Acquisition Date (i.e. speculative leases)
                           shall not exceed 5% of the then Aggregate Net Book
                           Value.

Any Container that does not comply with all of the foregoing will not be
considered to be an Eligible Container.

                  Consolidated or consolidated. With reference to any term
defined herein, shall mean that term as applied to the accounts of the Borrowers
and their Subsidiaries, consolidated in accordance with GAAP.

                  Consolidated Cash Interest Expense. With respect to any Person
for any period, the difference of (i) the aggregate Consolidated Interest
Expense of such Person for such period, minus (ii) to the extent included in
such aggregate Consolidated Interest Expense, and to the extent incurred by
Container Holdings or any of its Consolidated Subsidiaries, (a) amortization or
write off of debt or equity issuance costs, (b) interest expense to the extent
not paid in cash attributable to dividends in respect of all Preferred Equity of
Container Holdings and its Consolidated Subsidiaries that is not Disqualified
Stock pursuant to Statement of Financial Accounting Standards No. 150,
"Accounting for Certain Financial Instruments with Characteristics of Both
Liabilities and Equity", and (c) any non-cash interest expense related to (i)
any interest expense that has not been paid in cash, (ii) accrued interest on
Disqualified Stock to the extent not paid, and (iii) any incremental non-cash
interest expense incurred by Container Holdings or its Subsidiaries as the
result of an accounting change in accordance with GAAP that occurs after the
Closing Date, plus (iii) cash interest payments made in such period (exclusive
of any such cash payment funded with the proceeds of an equity offering or
capital contribution) related to Consolidated Interest Expense that was accrued
in a prior period.

                  Consolidated EBIT. For any period, means the sum of
Consolidated Net Income, plus the following, without duplication, to the extent
deducted in calculating such Consolidated Net Income:

                  (1)      all income tax expense of Container Holdings and its
                           Consolidated Subsidiaries, all taxes incurred by
                           Container Holdings and its Consolidated Subsidiaries
                           in respect of the repatriation of income from
                           jurisdictions outside the United States and all
                           amounts paid by Container Holdings and its
                           Consolidated Subsidiaries pursuant to the terms of
                           any tax sharing or similar agreement;


                                      -11-


                  (2)      the Consolidated Interest Expense of Container
                           Holdings and its Consolidated Subsidiaries;

                  (3)      depreciation and amortization charges of Container
                           Holdings and its Consolidated Subsidiaries relating
                           to any increased depreciation or amortization charges
                           resulting from purchase accounting adjustments or
                           inventory write-ups with respect to acquisitions or
                           the amortization or write-off of deferred debt or
                           equity issuance costs;

                  (4)      all other non-cash charges of Container Holdings and
                           its Consolidated Subsidiaries (other than
                           depreciation expense) (minus, with respect to any
                           such non-cash charge occurring on or after January 1,
                           2005 that was previously added in a prior period to
                           calculate Consolidated EBIT and that represents an
                           accrual of or reserve for cash expenditures in any
                           future period, any cash payments made during such
                           period);

                  (5)      any non-capitalized costs incurred in connection with
                           financings, the Acquisition, acquisitions of
                           Containers occurring after the Closing Date or
                           dispositions (including financing and refinancing
                           fees and any premium or penalty paid in connection
                           with redeeming or retiring Indebtedness prior to the
                           stated maturity thereof pursuant to the agreements
                           governing such Indebtedness);

                  (6)      UBS equipment rental expense to the extent that
                           assets related to such expense have been repurchased
                           by the Borrowers and their Consolidated Subsidiaries;

                  (7)      all non-cash expenses attributable to Incentive
                           Arrangements; and

                  (8)      to the extent that any portion of the Management Fee
                           payable during such period was accrued and not paid
                           during such period, the aggregate amount of expenses
                           attributable to all payments or accruals of
                           Management Fee during such period;


in each case, for such period and as determined on a consolidated basis in
accordance with GAAP.

                  Consolidated EBIT to Consolidated Cash Interest Expense Ratio.
As of any date of determination, means the ratio of (a) the aggregate amount of
Consolidated EBIT for Container Holdings and its Consolidated Subsidiaries for
the period of the most recent four consecutive fiscal quarters ending on or
prior to the date of such determination to (b) Consolidated Cash Interest
Expense for Container Holdings and its Consolidated Subsidiaries for such four
fiscal quarters.



                                      -12-


                  Consolidated Interest Expense. With respect to any Person for
any period, the aggregate of the interest expense of such Person and its
Consolidated Subsidiaries for such period, on a Consolidated basis, as
determined in accordance with GAAP, and including, without duplication, (a) all
amortization or accretion of original issue discount; (b) the interest component
of payments on Capitalized Leases paid, accrued and/or scheduled to be paid or
accrued by such Person and its Consolidated Subsidiaries during such period; and
(c) net cash costs under all Interest Rate Hedging Agreements (including
amortization of fees).

                  Consolidated Net Income. For any period, the aggregate net
income (or loss) of Container Holdings and its Consolidated Subsidiaries for
such period on a consolidated basis, determined in accordance with GAAP;
provided, however, that there shall be not be included in such Consolidated Net
Income:

                  (1)      any gain (or loss) realized upon the sale or other
                           disposition of assets (other than Containers and
                           Related Assets) of Container Holdings, any Borrower,
                           any Consolidated Subsidiary or any other Person
                           (including pursuant to any sale-and-leaseback
                           arrangement) which is not sold or otherwise disposed
                           of in the ordinary course of business and any gain
                           (or loss) realized upon the sale or other disposition
                           of any Capital Stock of any Person;

                  (2)      extraordinary gains or losses, as determined in
                           accordance with GAAP;

                  (3)      income or loss attributable to discontinued
                           operations (including, without limitation, operations
                           disposed of during such period whether or not such
                           operations were classified as discontinued);

                  (4)      the cumulative effect of a change in accounting
                           principles, as determined in accordance with GAAP;

                  (5)      any adjustments, restructuring costs, non-recurring
                           expenses, non-recurring fees, non-operating expenses,
                           charges or other expenses (including bonus and
                           retention payments and non-cash compensation charges)
                           (a) made or incurred in connection with the
                           Acquisition or the financing thereof or (b) incurred
                           in connection with acquisitions of Containers
                           consummated after the Closing Date; and

                  (6)      Systems/Organizational Establishment Expenses;

in each case, for such period.

                  Container. Any marine and maritime container (including dry
cargo containers, refrigerated containers (including the associated generator
sets) and



                                      -13-


Specialized Containers) to which any Borrower either (i) has good title and that
is held for lease or sale or (ii) is lessor under any Finance Lease.

                  Container Holdings. TAL International Group, Inc., a
corporation organized under the laws of the State of Delaware and its successors
and permitted assigns.

                  Container Representations and Warranties. All of the
following:

                  (1)      Specifications. The container conforms to the
                           Borrowers' standard specifications for that category
                           of container and to any applicable industry
                           standards;

                  (2)      Rights to Leases. Except as set forth on Schedule 3
                           hereto, the rights with respect to each Lease
                           included in the Related Assets for such Container are
                           assignable without the consent of the related Lessee
                           or any other Person other than consents that will
                           have been obtained on or before the related transfer
                           date;

                  (3)      Lessee Acceptance. With respect to each container
                           that is subject to a Lease on the Closing Date or
                           Funding Date, as the case may be, the related Lessee
                           has, to the best of TLI's knowledge, received and
                           taken possession of such container;

                  (4)      Lease Files. Each Lease is stored in TLI's offices
                           located in Purchase, New York and is subject to its
                           customary security and safekeeping procedures;

                  (5)      Master Lease Arrangements. In the case of each Lease
                           which consists of a master lease and one or more
                           addenda or schedules thereto, such addenda or
                           schedules each constitute a separate contractual
                           lease obligation of the related Lessee;

                  (6)      Chattel Paper. With respect to each Lease, aside from
                           any originally executed counterpart of each Lease in
                           the possession of the Lessee, all other originally
                           executed counterpart(s) of such Lease are in the
                           possession of the Borrowers;

                  (7)      Lessees. No Lessee is an affiliate of the Borrowers;

                  (8)      Registration. Each container's registration mark
                           (four letter prefix) has been registered in the name
                           of one of the Borrowers in the official register of
                           the Bureau International des Containers (Paris);

                  (9)      Non-cancelable and Assignable. Each Finance Lease
                           provides that (i) the Lessee's obligations thereunder
                           are non-cancelable,



                                      -14-


                           unconditional and not subject to any right of
                           set-off, rescission, counterclaim, offset, reduction
                           or recoupment, (ii) such finance lease is fully
                           assignable and (iii) the Lessee is responsible for
                           all taxes, maintenance and insurance and assumes all
                           risk of Casualty Loss;

                  (10)     Compliance with Law. The Lease complied in all
                           material respects at the time they were originated
                           with all legal requirements of the jurisdiction in
                           which they were originated; and

                  (11)     Return of Container. Each Lease provides for the
                           return of the related containers upon its expiration
                           or earlier termination (unless the Lessee complies
                           with the terms of any purchase option contained
                           therein).

                  Contingent Obligation. As to any Person, means any obligation
of such Person as a result of such Person being a general partner of any other
Person, unless the underlying obligation is expressly made non-recourse as to
such general partner, and any obligation of such Person guaranteeing or intended
to guarantee any Indebtedness, leases, dividends or other obligations ("primary
obligations") of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of such
Person, whether or not contingent, (i) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (x) for the purchase or payment of any such primary
obligation or (y) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor, (iii) to purchase property, securities or services 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 (iv) otherwise
to assure or hold harmless the holder of such primary obligation against loss in
respect thereof; provided, however, that the term Contingent Obligation shall
not include endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Contingent Obligation shall be
deemed to be an amount equal to the lesser of (x) the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder) as determined by such Person in good faith and (y) the stated amount
of such Contingent Obligation.

                  Control. The possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.

                  Credit and Collection Policy. This term shall have the meaning
set forth in Section 7.22.


                                      -15-


                  Default. Any event, act or condition, which with the giving of
notice or lapse of time or both would constitute an Event of Default.

                  Defaulting Lender. Any Lender that (a) has failed to fund any
portion of the Loans required to be funded by it hereunder within one Business
Day of the date required to be funded by it hereunder, (b) has otherwise failed
to pay over to the Administrative Agent or any other Lender any other amount
required to be paid by it hereunder within one Business Day of the date when
due, unless the subject of a good faith dispute, or (c) has been deemed
insolvent or become the subject of a bankruptcy or insolvency proceeding.

                  Depreciation Policy. The depreciation policy utilized by the
Borrowers with respect to the Containers, which policy as of the Closing Date is
attached as Exhibit H hereto.

                  Designated Event of Default. The occurrence of an Event of
Default of the types set forth in Sections 13.1(a), 13.1(b), 13.1(c), 13.1(e),
13.1(h), 13.1(i)(i)(x), 13.1(i)(ii)(x) or 13.1(j) hereof.

                  Determination Date. Initially, January 24, 2005 and thereafter
the fifteenth Business Day of each calendar quarter.

                  Direct Operating Expenses. All direct expenses and costs,
calculated on an accrual basis in accordance with GAAP, incurred in connection
with the ownership, use and/or operation of a container, including but not
limited to: (i) agency costs and expenses; (ii) depot fees, handling, and
storage costs and expenses; (iii) survey, maintenance and repair expenses
(including the actual or estimated cost of repairs to be made pursuant to a
damage protection plan); (iv) repositioning expense; (v) the cost of inspecting,
marking and remarking such Container; (vi) third-party fees for bankruptcy
recovery; (vii) legal fees incurred in connection with enforcing rights under
the leases of such Container or repossessing such Container; (viii) insurance
expense; (ix) federal, state, local and foreign taxes, levies, duties, charges,
assessments, fees, penalties, deductions or withholdings assessed, charged or
imposed upon or against such Container, including but limited to ad valorem,
gross receipts and/or other property taxes imposed against such Container or
against the revenues generated by such Container; (x) expenses, liabilities,
claims and costs (including without limitation reasonable attorneys fees)
incurred by a Borrower or any Subsidiary or made against a Borrower or any
Subsidiary by any third party arising directly or indirectly (whether wholly or
in part) out of the state, condition, operation, use, storage, possession,
repair, maintenance or transportation of such Container; (xi) expenses and costs
(including legal fees) of pursuing claims against manufacturers or sellers of
such Container; and (xii) non-recoverable sales and value-added taxes on such
expenses and costs; provided, however, that in no event shall either of the
following be considered a Direct Operating Expense: (a) any selling, general and
administrative expenses of Container Holdings, the Borrowers or any of their
Subsidiaries, or (b) the Management Fees.




                                      -16-


                  Disqualified Stock. With respect to any Person means that
portion of any Capital Stock of such Person which, by its terms (or by the terms
of any security into which it is convertible or for which it is exchangeable at
the option of the holder thereof), or upon the happening of any event (other
than an event that would constitute a Change of Control), matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the sole option of the holder thereof (except in each case,
upon the occurrence of a Change of Control) on or prior to the first anniversary
of the final maturity date of the Loans for cash or is convertible into or
exchangeable for debt securities of Container Holdings or its Consolidated
Subsidiaries at any time prior to such anniversary.

                  Distributable Cash Flow. This term shall have the meaning set
forth in Section 3.1(c).

                  Dividend. With respect to any Person, (i) the declaration or
payment by such Person of a dividend or distribution (other than dividends or
distributions payable in Capital Stock of such Person (other than Disqualified
Stock)) on or in respect of shares of the Capital Stock of such Person or (ii)
the purchase, redemption or other acquisition or retirement for value of any
Capital Stock of such Person.

                  Dollars or $. Dollars in lawful currency of the United States
of America.

                  Eligible Assignee. Any of the following: (i) a Lender; (ii) an
Affiliate of a Lender; and (iii) any other Person (other than a natural person)
approved by the Borrowers and the Administrative Agent (each such approval not
to be unreasonably withheld or delayed); provided that notwithstanding the
foregoing, "Eligible Assignee" shall not include any Borrower nor any of their
respective Affiliates.

                  Eligible Container. Each Container which, when considered with
all other Containers, shall comply with each of the following requirements:

                  (1)      Such Container substantially conforms to the standard
                           specifications used by the Borrowers for containers
                           purchased for its own account, for that category of
                           container and to any commonly applied standards
                           promulgated by the International Organization for
                           Standardization;

                  (2)      Such Container shall comply with all of (i) the
                           Concentration Limits and (ii) the Container
                           Representations and Warranties;

                  (3)      Such Container shall not have suffered a Casualty
                           Loss;

                  (4)      Either (i) one of the Borrowers shall have good and
                           marketable title to such Container and the
                           Administrative Agent has a perfected security
                           interest therein or (ii) such Container is subject to
                           a Finance Lease for which any Borrower is the lessor;


                                      -17-


                  (5)      Such Container shall be free and clear of all Liens
                           except for Permitted Liens;

                  (6)      Either (i) the lease rights with respect to such
                           Container are assignable without consent or for which
                           consents have been obtained, or (ii) the
                           Administrative Agent shall have been granted a one
                           hundred percent (100%) participation interest in the
                           lease rights with respect to such Container;
                           provided, however, that the sum of the Net Book
                           Values of all Containers that have been classified as
                           an Eligible Container pursuant to clause (ii) above
                           shall not exceed two and one half percent (2.5%) of
                           the Asset Base;

                  (7)      Each lease for such Container shall substantially
                           contain the general trading terms the Borrowers use
                           in the normal course of their business;

provided, however, that (i) in addition to any Container that complies with all
of the foregoing, the containers owned by ICS Terminals (UK) Limited shall also
be considered an Eligible Container for purposes of calculating the Asset Base
so long as (x) ICS Terminals (UK) Limited remains a Wholly-Owned Subsidiary of
any Borrower and such containers do not become subject to a Lien (other than
Permitted Liens) in favor of any Person (other than the Administrative Agent)
and (y) solely for the purposes of calculating the Asset Base, the sum of the
Net Book Values of all such containers owned by ICS Terminals (UK) London) shall
not at any one time exceed Five Million Dollars ($5,000,000), and (ii) the net
book value of refrigeration equipment owned by the Borrowers to be utilized with
one or more refrigerated Containers owned by the Borrowers shall also be
considered an Eligible Container for purposes of calculating the Asset Base
subject to a maximum limit at any one time of Seven Million Five Hundred
Thousand Dollars ($7,500,000).

                  Eligible Investments. Book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form, in which the Administrative Agent has a perfected security interest
pursuant to Section 3.4(c), which evidence:

                  (a) direct obligations of, and obligations fully guaranteed as
to the full and timely payment by, the United States of America;

                  (b) demand deposits, time deposits or certificates of deposit
of any depository institution or trust company incorporated under the laws of
the United States of America or any State thereof and subject to supervision and
examination by Federal or State banking or depository institution authorities;
provided, however, that at the time of the investment or contractual commitment
to invest therein, the commercial paper or other short-term unsecured debt
obligations (other than such obligations the rating of



                                      -18-


which is based on the credit of a Person other than such depository institution
or trust company) thereof shall be rated "A-1+" by S&P and "Prime-1" by Moody's;

                  (c) commercial paper that, at the time of the investment or
contractual commitment to invest therein, is rated "A-1+" by S&P and "Prime-1"
by Moody's;

                  (d) bankers' acceptances issued by any depository institution
or trust company referred to in clause (b) above;

                  (e) repurchase obligations with respect to any security
pursuant to a written agreement that is a direct obligation of, or fully
guaranteed as to the full and timely payment by, the United States of America or
any agency or instrumentality thereof the obligations of which are backed by the
full faith and credit of the United States of America, in either case entered
into with (i) a depository institution or trust company (acting as principal)
described in clause (b) or (ii) a depository institution or trust company the
deposits of which are insured by the Federal Deposit Insurance Corporation and
whose commercial paper or other short-term unsecured debt obligations are rated
"A-1+" by S&P and "Prime-1" by Moody's and long-term unsecured debt obligations
are rated "AAA" by S&P and "Aaa" by Moody's;

                  (f) with the prior written consent of the Administrative
Agent, money market mutual funds registered under the Investment Company Act
having a rating, at the time of such investment, from each of the Rating
Agencies in the highest investment category granted thereby; and

                  (g) any other investment as may be acceptable to the
Administrative Agent, as evidenced by the Administrative Agent's prior written
consent to that effect.

                  Environmental Law. Any applicable local, state, federal, or
other laws in the United States of America, or any other laws relating to the
environment or natural resources or the regulation of releases or threatened
releases of Hazardous Substances into ambient air, water, or land, or otherwise
relating to the manufacture, processing, generation, distribution, use,
treatment, storage, disposal, cleanup, transport or handling of Hazardous
Substances, and all rules, orders and regulations currently promulgated
thereunder.

                  Environmental Claim. Any and all administrative, regulatory or
judicial actions, suits, orders, claims or proceedings against any Borrower or
any of its Subsidiaries under any Environmental Law or any permit issued to any
Borrower or any of its Subsidiaries under any such Environmental Law (for
purposes of this definition, "Claims"), including, without limitation, (a) any
and all Claims by governmental or regulatory authorities for enforcement,
cleanup, removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law, and (b) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment.



                                      -19-


                  Equipment Report. An Equipment Report signed by a responsible
officer of the Borrowers and in substantially the form of Exhibit C hereto.

                  ERISA. The Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of this Loan Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.

                  ERISA Affiliate. Each trade or business, whether or not
incorporated, which together with any Borrower or a Subsidiary of any Borrower
would be deemed to be a "single employer" within the meaning of Section 414(b)
or (c) of the Code.

                  ERISA Event. Means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder, with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA, whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by any Borrower or any of their
respective ERISA Affiliates of any liability under Title IV of ERISA with
respect to the termination of any Plan or the withdrawal or partial withdrawal
of any Borrower or any of their respective ERISA Affiliates from any Plan or
Multiemployer Plan; (e) the receipt by any Borrower or any of their respective
ERISA Affiliates from the PBGC or a plan administrator of any notice relating to
the intention to terminate any Plan or Plans or to appoint a trustee to
administer any Plan; (f) the adoption of any amendment to a Plan that would
require the provision of security pursuant to Section 401(a)(29) of the Code or
Section 307 of ERISA; (g) the receipt by any Borrower or any of their respective
ERISA Affiliates of any notice, or the receipt by any Multiempoyer Plan from any
Borrower or any of their respective ERISA Affiliates of any notice, concerning
the imposition of Withdrawal Liability or a determination that a Multiemployer
Plan is, or is expected to be, insolvent or in reorganization, within the
meaning of Title IV of ERISA; or (h) the occurrence of a "prohibited
transaction" with respect to which any Borrower or any of their respective
Subsidiaries is a "disqualified person" (within the meaning of Section 4975 of
the Code) or with respect to which any Borrower or any of their respective
Subsidiaries could otherwise be liable.

                  Eurocurrency Reserve Rate. For any day with respect to a LIBOR
Rate Loan, the maximum rate (expressed as a decimal) at which any bank subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.



                                      -20-


                  Event of Default. The occurrence or existence of any of the
events or conditions set forth in Section 13.1 hereof.

                  Existing Container Advance Rate. One of the following amounts:
(1) on the Closing Date and the initial Payment Date, the Closing Date Advance
Rate, or (2) for each Payment Date thereafter commencing April 20, 2005, an
amount equal to the difference between (i) the Closing Date Advance Rate minus
(ii) the product of (x) the Existing Container Advance Decrease Rate and (y) the
number of full calendar quarters that have elapsed since the Closing Date.

                  Existing Container Advance Decrease Rate. One of the following
amounts:

                  (1) on the Closing Date and all times thereafter until the
         Asset Value Adjustment Date, one percent (1%); and

                  (2) at all times on or after the Asset Value Adjustment Date,
         the amount determined on the Asset Value Adjustment Date in accordance
         with the following formula:



                                    1% x A/B

Where            A =       the sum of the Net Book Values of all Eligible
                           Containers owned by any Borrower on the Closing Date
                           calculated immediately prior to any approved increase
                           in such Net Book Values on the Asset Value Adjustment
                           Date; and
                 B =       the sum of the Net Book Values of all Eligible
                           Containers owned by any Borrower on the Closing Date
                           calculated immediately after giving effect to any
                           approved increase in such Net Book Values on the
                           Asset Value Adjustment Date.


                  Fair Market Value. With respect to any asset (including a
Container), shall mean the price at which a willing buyer, not an Affiliate of
the seller, and a willing seller who does not have to sell, would agree to
purchase and sell such asset, as determined in good faith by the board of
directors or other governing body or, pursuant to a specific delegation of
authority by such board of directors or governing body, a designated senior
executive officer of any Borrower or their Subsidiaries selling such asset.

                  Federal Bankruptcy Code. Title 11, United States Code as in
effect from time to time (and any successor thereto).

                  Fee Letter. That certain fee letter, dated as of November 3,
2004, by and among the Borrowers and the Administrative Agent.

                  Fees. Collectively, the Commitment Fee and the fees detailed
in the Fee Letter.



                                      -21-


                  Finance Lease. Any lease that is classified as a "direct
financing lease" pursuant to GAAP.

                  Financial Affiliate. A Subsidiary of the bank holding company
controlling any Lender, which Subsidiary is engaging in any of the activities
permitted by Section 4(e) of the Bank Holding Company Act of 1956 (12 U.S.C.
Section 1843).

                  Fortis. Fortis Bank (Nederland) N.V., a naamloze vennootschap
organized under the laws of the Kingdom of The Netherlands, and its successors.

                  Funding Date. Each date on which a Loan is made to the
Borrowers pursuant to the terms of the Loan Agreement.

                  GAAP or Generally Accepted Accounting Principles. Accounting
principles which are consistent with the principles promulgated or adopted from
time to time by the Financial Accounting Standards Board, its committees and its
predecessors, including applicable statements and interpretations issued by the
American Institute of Certified Public Accounting or its committees.

                  Governmental Authority. Any foreign, federal, state, regional,
local, municipal or other government, or any department, commission, board,
bureau, agency, public authority or instrumentality thereof, or any court or
arbitrator.

                  Greybox Account. Bank account number 4074-8291 maintained by
TLI at Citibank N.A. and any replacement for such account established in
accordance with the provisions of this Loan Agreement.

                  Gross Lease Revenues. All of the following: (i) all income
(without reduction for expenses or costs), calculated on a cash basis in
accordance with GAAP, earned in connection with the ownership, use and/or
operation of a Container, including, but not limited to, rental, handling,
location, revenue, damage protection, interchange fees and other rental-related
charges arising from leasing of such Container, and (ii) all Casualty Proceeds,
indemnification proceeds and Sales Proceeds specifically relating to such
container.

                  Hazardous Substances. Those substances or materials that are
prohibited, limited or regulated by any Environmental Law.

                  Hedging Agreement. Any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement, interest rate futures
contract, interest rate option agreement, interest rate exchange agreement,
forward currency exchange agreement, forward rate currency agreement, forward
commodity contract, commodity swap, commodity option or other similar agreement
or arrangement to which one or more of the Borrowers (or any of their
Subsidiaries) at that time is a party, designed to protect the Borrowers (or
such Subsidiary) against fluctuations in those interest rates, exchange rates,
forward rates or commodity prices that normally arise in connection with the
Borrowers' ordinary course of business or as otherwise required to be entered
into by one



                                      -22-


or more of the Borrowers (or any of their Subsidiaries) pursuant to, and in
accordance with, the terms of any Loan Document.

                  High Yield Bonds. Any issuance by Container Holdings after the
Closing Date of notes or other debt securities in a private placement or public
offering (including a Rule 144A offering or similar transaction) the proceeds of
which are used by Container Holdings to refinance, in whole or in part, the
Seller Loan.

                  IO Disbursement Account. An account designated as such and
established by the Borrowers pursuant to the terms of this Loan Agreement.

                  IO Distributable Amount. For any Payment Date, one or more of
the following amounts, as adjusted in accordance with Section 3.1(c) hereof:

                  (A) if the Seller Loan is then outstanding, the amount of
         interest accrued and unpaid interest, and liquidated damages, on the
         then unpaid principal balance of such Seller Loan less any such amounts
         related to the Seller Loan that are then on deposit in the IO
         Disbursement Account; provided, however, that in calculating the amount
         payable pursuant to this clause (A), the unpaid principal balance of
         the Seller Loan used in such calculation shall not exceed Two Hundred
         Seventy Five Million Dollars ($275,000,000) and the interest rate per
         annum used in such calculation shall not exceed the lesser of (i)
         eleven and one half percent (11.5%) per annum and (ii) the sum of (x)
         eight and three-fourths percent (8-3/4%), plus (y) the product of (a)
         one-quarter percent (1/4%) times (b) the number of full three month
         periods that shall have elapsed since the Closing Date (calculated as
         of the next scheduled interest payment date under the Seller Loan); and

                  (B) if the High Yield Bonds are outstanding, the amount of
         interest accrued and unpaid interest, and liquidated damages, on the
         then unpaid principal balance of the High Yield Bonds; provided,
         however, that in calculating the amount payable pursuant to this clause
         (B), the unpaid principal balance of the High Yield Bonds used in such
         calculation shall not exceed Three Hundred Million Dollars
         ($300,000,000) and the interest rate per annum used in such calculation
         shall not exceed the greater of (i) ten percent (10%) per annum and
         (ii) such higher interest rate per annum as shall be acceptable to the
         Administrative Agent and the Required Lenders;

provided, however, that the IO Distributable Amount payable on any two
consecutive Payment Dates shall in no event exceed, without the prior consent of
the Administrative Agent, Fifteen Million Eight Hundred Twelve Thousand, Five
Hundred Dollars ($15,812,500).

                  Incentive Arrangements. Any (a) earn-out agreements, (b) stock
appreciation rights, (c) "phantom" stock plans, (d) employment agreements, (e)
non-competition agreements and (f) incentive and bonus plans entered into by any
Borrower



                                      -23-


or any Consolidated Subsidiary for the benefit of, and in order to retain,
executives, officers or employees of Persons or businesses in connection with
the Acquisition.

                  Indebtedness. As to any Person, without duplication, means (i)
all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money, (ii) all obligations of such Person in respect of
letters of credit, bankers' acceptances, and bank guaranties issued for the
account of such Person, (iii) all indebtedness of the types described in clause
(i), (ii), (iv), (v) or (vi) of this definition secured by any Lien on any
property owned by such Person, whether or not such indebtedness has been assumed
by such Person (provided that, if the Person has not assumed or otherwise become
liable in respect of such indebtedness, such indebtedness shall be deemed to be
in an amount equal to the lesser of (A) the outstanding amount of such
Indebtedness and (B) the fair market value of the property to which such Lien
relates as determined in good faith by such Person), (iv) the aggregate amount
of all capitalized lease obligations of such Person, (v) all Contingent
Obligations of such Person, (vi) as of any date of determination, all
obligations under any interest rate hedging or under any similar type of
agreement to the extent of the amount due if such agreement were to be
terminated on such date of determination, and (vii) all obligations of such
Person issued or assumed as the deferred purchase price of property or services,
all conditional sale obligations and all obligations under any title retention
agreement (but excluding trade accounts payable and other accrued liabilities
arising in the ordinary course of business that are not overdue by 90 days or
more or are being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted).

                  Independent Accountant. Any "Big 4" or other nationally
recognized accounting firm that is reasonably acceptable to the Administrative
Agent and that is independent with respect to the Borrowers and their
Subsidiaries within the meaning of the Securities Act of 1933, as amended, and
the applicable published rules and regulations thereunder.

                  Intercompany Note. A promissory note evidencing intercompany
loans made pursuant to Section 9.4(iv), substantially in the form of Exhibit R
hereto.

                  Intercompany Subordination Agreement. This term shall have the
meaning set forth in Section 11.17 hereof.

                  Interest Rate Hedging Agreement. A Hedging Agreement that
protects a Borrower against fluctuations in interest rates.

                  Interest Period. With respect to all or any relevant portion
of any Loan, (a) initially, the period commencing on the Funding Date of such
Loan and ending on the close of business on the day preceding the immediately
following Payment Date, and (b) thereafter, each period commencing on a Payment
Date and ending (i) for any Base Rate Loan, the day immediately preceding the
next succeeding Payment Date; and (ii) for any LIBOR Rate Loan, the day
preceding the 1, 3 or 6 month anniversary of such Payment Date, as selected by
the Borrowers and available to the Administrative Agent; provided



                                      -24-


that all of the foregoing provisions relating to Interest Periods are subject to
the following:

                  (A) if any Interest Period with respect to a LIBOR Rate Loan
         would otherwise end on a day that is not a LIBOR Business Day, that
         Interest Period shall be extended to the next succeeding LIBOR Business
         Day unless the result of such extension would be to carry such Interest
         Period into another calendar month, in which event such Interest Period
         shall end on the immediately preceding LIBOR Business Day;

                  (B) if any Interest Period with respect to a Base Rate Loan
         would end on a day that is not a Business Day, that Interest Period
         shall end on the next succeeding Business Day;

                  (C) any Interest Period relating to any LIBOR Rate Loan that
         begins on the last LIBOR Business Day of a calendar month (or on a day
         for which there is no numerically corresponding day in the calendar
         month at the end of such Interest Period) shall end on the last LIBOR
         Business Day of a calendar month; and

                  (D) any Interest Period that would otherwise extend beyond the
         Legal Final Payment Date shall end on the Legal Final Payment Date.

                  Investments. Any direct or indirect advance, loan (other than
advances to customers in the ordinary course of business that are recorded as
accounts receivable on the balance sheet of the lender) or other extensions of
credit (including by way of guarantee or similar arrangement) or capital
contribution to (by means of any transfer of cash or other property to others or
any payment for property or services for the account or use of others), or any
purchase or acquisition for value of Capital Stock, Indebtedness or other
similar instruments issued by 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 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); (c) there shall not be deducted in respect of any
Investment any amounts received as earnings on such Investment, whether as
dividends, interest or otherwise; and (d) there shall not be deducted from the
aggregate amount of Investments any decrease in the value thereof.

                  Lease. All leases or contracts for use or hire of a Container
by a Lessee and a Borrower, as lessor, but only to the extent such lease or
contract relates to a Container.

                  Legal Final Payment Date. The Payment Date occurring in
January 2012.

                  Lender Affiliate. With respect to any Lender, an Affiliate of
such Lender.



                                      -25-


                  Lenders. Fortis and the other lending institutions listed on
Schedule 1 hereto and any other Person who becomes an assignee of any rights and
obligations of a Lender pursuant to Section 15.

                  Lessee. Any obligor under a Lease.

                  LIBOR Business Day. Any day on which commercial banks are open
for international business (including dealings in Dollar deposits) in London or
such other eurodollar interbank market as may be selected by the Administrative
Agent in its sole discretion acting in good faith.

                  LIBOR Rate. For any Interest Period with respect to a LIBOR
Rate Loan, the rate of interest equal to (i) the rate determined by the
Administrative Agent at which Dollar deposits for such Interest Period are
offered based on information presented on Page 3750 of the Dow Jones Market
Service (formerly known as the Telerate Service) as of 11:00 a.m. London time on
the second LIBOR Business Day prior to the first day of such Interest Period,
divided by (ii) a number equal to 1.00 minus the Eurocurrency Reserve Rate. If
the rate described above does not appear on the Dow Jones Market Service on any
applicable interest determination date, the LIBOR Rate shall be the rate
(rounded upward, if necessary, to the nearest one hundred-thousandth of a
percentage point), determined on the basis of the offered rates for deposits in
Dollars for a period of time comparable to such LIBOR Rate Loan which are
offered by four major banks in the London interbank market at approximately
11:00 a.m. London time, on the second LIBOR Business Day prior to the first day
of such Interest Period as selected by the Administrative Agent. The principal
London office of each of the four major London banks will be requested to
provide a quotation of its Dollar deposit offered rate. If at least two such
quotations are provided, the rate for that date will be the arithmetic mean of
the quotations. If fewer than two quotations are provided as requested, the rate
for that date will be determined on the basis of the rates quoted for loans in
Dollars to leading European banks for a period of time comparable to such
Interest Period offered by major banks in New York City at approximately 11:00
a.m. New York City time, on the second LIBOR Business Day prior to the first day
of such Interest Period. In the event that the Administrative Agent is unable to
obtain any such quotation as provided above, it will be considered that the
LIBOR Rate pursuant to a LIBOR Rate Loan cannot be determined.

                  LIBOR Rate Loan. A Loan bearing interest calculated by
reference to the LIBOR Rate.

                  Lien. Any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or other), charge,
preference, priority or other security agreement of any kind or nature
whatsoever (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any financing or similar
statement or notice filed under the UCC or any similar recording or notice
statute (other than any unauthorized notice filing for which there is not
otherwise any underlying Lien or obligation), and any lease having substantially
the same effect as the foregoing).


                                      -26-


                  Loan Agreement. This Credit Agreement, including the Schedules
and Exhibits hereto.

                  Loan Documents. This Loan Agreement, any Hedging Agreement,
the Revolving Credit Notes, the Intercreditor Agreement, the Intercompany
Subordination Agreement, the Participation Agreement and the Security Documents.

                  Loan Request. This term shall have the meaning set forth in
Section 2.3.

                  Loans. The Closing Date Advance and the Post-Closing Advances.

                  Lockbox. A lockbox or post office box covered by a Lockbox
Agreement.

                  Lockbox Accounts. Bank accounts into which Gross Lease Revenue
are deposited, and any bank account that is hereafter created in accordance
with, and to perform the functions contemplated for "Lockbox Accounts" in
accordance with the terms of this Loan Agreement.

                  Lockbox Agreement. Any letter agreement, in form and substance
satisfactory to the Administrative Agent among a Lockbox Bank, TLI and the
Administrative Agent, as any such letter agreement may be amended, supplemented
or modified from time to time in accordance with its terms.

                  Lockbox Bank. Any of the banks at which one or more Lockbox
Accounts are maintained.

                  Managed Fleet. Collectively, all of the containers managed by
the Borrowers, including the Containers.

                  Management Fee. Collectively, the management fee and all other
amounts payable to Container Holdings, pursuant to the terms of that certain
intercompany management consulting agreement, dated November 3, 2004 by and
among TLI, TOL and Container Holdings, as in effect on the date hereof.

                  Manager Report. A Manager Report signed by a responsible
officer of the Borrowers and in substantially the form of Exhibit D hereto.

                  Margin Stock. The term shall have the meaning provided in
Regulation U.

                  Material Adverse Effect. With respect to any event or
occurrence of whatever nature (including any adverse determination in any
litigation, arbitration or governmental investigation or proceeding):

                  (a) a material adverse effect on the business, financial
         condition or operations of the Borrowers taken as a whole; or



                                      -27-


                  (b) a material adverse effect on the ability of any Borrower
         to perform any of its monetary Obligations under any of the Loan
         Documents to which it is a party.

                  Moody's. Moody's Investor Service, Inc., or any successor
         thereto.

                  Multiemployer Plan. Any multiemployer plan, as defined in
Section 4001(a)(3) of ERISA with respect to which any Borrower or any of their
respective ERISA Affiliates shall have any liability.

                  Net Book Value. With respect to any Container as of any date
of determination, the difference of (x) an amount equal to the sum of (i) the
Original Equipment Cost of such Container, plus (ii) any increase in the Net
Book Value of such Container to be made on the Asset Value Adjustment Date,
minus (y) the accumulated depreciation on such Container calculated in
accordance with the Depreciation Policy in effect from time to time.

                  Non-Excluded Taxes.  Any taxes other than:

                  (i)      income taxes, branch profits taxes, franchise taxes
                           or any other tax imposed on the net income of the
                           Lender or the Administrative Agent under the laws of
                           the jurisdiction (or any political subdivision of
                           taxing authority thereof or therein) in which such
                           Lender or the Administrative Agent is organized or in
                           which the principal office or funding office of such
                           Lender or the Administrative Agent is located;

                  (ii)     any deduction, withholding or other imposition of
                           taxes that arises as a result of a present or former
                           connection between such Lender or the Administrative
                           Agent and the relevant jurisdiction imposing such
                           tax, including carrying on business in, having a
                           branch, agency or permanent establishment in, or
                           being resident in such jurisdiction but excluding any
                           such connection which arises solely as a result of
                           such Lender or the Administrative Agent having
                           executed, performed its obligations under or received
                           payment under any of the Loan Documents or otherwise
                           solely by virtue of the Loan Documents.

                  Non-U.S. Lender. This term shall have the meaning set forth in
Section 5.2.3.

                  Non-Wholly-Owned Subsidiary. As to any Person, each Subsidiary
of such Person which is not a Wholly-Owned Subsidiary of such Person.

                  Notes. The Revolving Credit Notes.



                                      -28-


                  Obligations. All indebtedness, obligations and liabilities of
any of the Borrowers to any of the Lenders and the Administrative Agent,
individually or collectively, existing on the date of this Loan Agreement or
arising thereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, arising or
incurred under this Loan Agreement or any of the other Loan Documents or in
respect of any Loan or any of the Revolving Credit Notes.

                  Original Equipment Cost. With respect to any Container, an
amount equal to the sum of (i) the greater of (A) the vendor's or manufacturer's
invoice price of such Container and (B) with respect to those Containers owned
by the Borrowers on the Closing Date that were previously acquired by a Borrower
through an asset purchase or other acquisition, the purchase price allocated to
a Container by such Borrower in the acquisition of such Container, plus (ii)
reasonable and customary inspection, transport and initial positioning costs
necessary to put such Container in service.

                  Outstanding. The aggregate outstanding principal amount of the
Loans as of any date of determination.

                  Participant. This term shall have the meaning set forth in
Section 15.4 hereof.

                  Participation Agreement. The participation agreement, dated as
of November 3, 2004, among the Borrowers and the Administrative Agent, as such
agreement may be amended, modified or supplemented from time to time in
accordance with its terms.

                  Payment Date. The third Business Day following a Determination
Date, commencing January 27, 2005.

                  Payroll Account. Bank account number ____ maintained by TLI at
Citibank N.A. and any replacement for such account established in accordance
with the provisions of this Loan Agreement.

                  PBGC. The Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.

                  Permitted Business. The marine container leasing business and
any business that is the same as or similar, reasonably related, complementary,
ancillary or incidental to the marine container leasing business, including, but
not limited to, the leasing of chassis. The container logistics business, the
container purchase and resale business, and the static storage business, all as
currently engaged in by Borrowers or their Subsidiaries on the Closing Date are
also deemed to be a Permitted Business.

                  Permitted Disbursements. Any of the following, subject to the
conditions and limitations set forth below:



                                      -29-


         (i)      to pay Direct Operating Expenses then due and owing including
                  with respect to all containers included in the Managed Fleet;

         (ii)     to pay any Third Party Lease Payment Amount then due and
                  owing;

         (iii)    to pay Tier One Permitted Dividends;

         (iv)     to pay, or to pay a management fee equal to, selling, general
                  and administrative expenses incurred by the Borrowers during
                  such Collection Period; provided, that the aggregate amount of
                  permissible payments be made in any Collection Period pursuant
                  to this clause (iv) shall not exceed an amount equal to the
                  budgeted selling, general and administrative expenses for such
                  Collection Period (which budgeted amount shall be (x)
                  increased by the amount by which the selling, general and
                  administrative expenses incurred by the Borrowers during the
                  immediately prior Collection Period exceeded the estimate of
                  the amount of the payment, or the management fee paid, to the
                  Borrowers for such Collection Period, and (y) decreased by the
                  amount by which the selling, general and administrative
                  expenses incurred by the Borrowers during the immediately
                  prior Collection Period was less than the estimate of the
                  amount of the payment, or the management fee paid, to the
                  Borrowers for prior Collection Period; provided, that any
                  adjustment in the amount distributed for any Collection Period
                  pursuant to this clause (iv) by reason of the operation of
                  either subclause (x) or (y) above shall not affect the
                  calculation of any adjustment pursuant to either subclause (x)
                  or (y) above with respect to any future Collection Period);

         (v)      to fund capital expenditures to acquire additional Containers;
                  provided, however, that such capital expenditures shall not be
                  a Permitted Disbursement (i) upon the expiration or
                  termination of the Revolving Credit Period, (ii) if a
                  Designated Event of Default is then continuing, or (iii) if
                  after including the Eligible Containers to be acquired with
                  such expenditure, the Aggregate Note Principal Balance exceeds
                  the Asset Base;

         (vi)     to pay any post closing increase to the Purchase Price (as
                  defined in the Stock Purchase Agreement) pursuant to either
                  Section 2.05 or 2.06 of the Stock Purchase Agreement; and

         (vii)    to pay any UBS Lease Termination Payments then due and
                  payable.

                  Permitted Dividend. Any of (i) any Tier One Permitted
Dividend, (ii) any Tier Two Permitted Dividend, (iii) any Tier Three Permitted
Dividend or (iv) the dividend contemplated in Section 3.6(b) hereof.

                  Permitted Holders. The Resolute Fund L.P., The Jordan Company,
L.P., Klesch & Company Limited, Edgewater Private



                                      -30-


Equity Fund III, L.P., Edgewater Private Equity Fund IV, L.P., Fairholme
Partners, L.P., Fairholme Ventures II, LLC, Fairholme Holdings, Ltd., JZ Equity
Partners plc and their respective Affiliates.

                  Permitted Liens. This term shall have the meaning set forth in
Section 9.3 hereof.

                  Permitted Securitization. A transaction pursuant to which (i)
one or more of the Borrowers and/or their respective Subsidiaries sells, conveys
or otherwise transfers, or grants a security interest in, containers, leases and
other related assets to a Special Purpose Vehicle or any other Person (other
than the Borrowers or any of their respective Subsidiaries), (ii) such Special
Purpose Vehicle or such other Person issues Indebtedness (or interests therein)
that is secured by such containers, leases and other related assets, (iii) none
of the Borrowers or any of their respective Subsidiaries has any obligation to
maintain such entity's financial condition or cause such entity to achieve
certain levels of operating results (other than those related to or incidental
to the relevant Permitted Securitization), (iv) none of the holders of the
Indebtedness shall have recourse to the Borrowers or any of their Subsidiaries
for credit losses on leases or the inability of the containers, in each case
subject to the Permitted Securitization, to generate sufficient cash flow to
repay the Indebtedness issued by such entity and (v) in consideration for the
sales or transfers referred to in clause (i) above, when aggregated with the
proceeds of all substantially concurrent financings, the Borrowers receive a
sufficient amount of cash proceeds to repay in full all of the Obligations or
such lesser amount as shall be acceptable to the Administrative Agent and the
Required Lenders.

                  Person. An individual, any partnership, a corporation, a joint
venture, a trust, an unincorporated organization, or a government or any agency
or political subdivision thereof.

                  Plan. Any employee pension plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 307 of ERISA, and in respect of which any Borrower or any of their
respective ERISA Affiliates is an "employer" as defined in Section 3(5) of
ERISA.

                  Pledge Agreement. This term shall have the meaning provided in
Section 11.15.

                  Pledge Agreement Collateral. This term shall mean all of the
"Collateral" as defined in the Pledge Agreement.

                  Post-Closing Advance Rate. One of the following amount: (1)
for the period commencing on the Closing Date and ending on the last day of the
Revolving Credit Period, eighty percent (80%); or (2) for each Payment Date
thereafter, an amount equal to the difference between (i) eighty percent (80%),
minus (ii) the product of (x) one percent (1%), and (y) the number of full
calendar quarters that have elapsed since the last day of the Revolving Credit
Period; provided, however, that (i) if any Container to be acquired with the
proceeds of a Post-Closing Advance is not acquired by a Borrower either directly
from the manufacturer thereof or from a Lessee in connection with a
sale-



                                      -31-


leaseback transaction (so long as the average age of all containers included in
such sale-leaseback does not exceed eighteen months), (ii) such Container is not
being acquired by a Borrower in a transaction (or a series of related
transactions) involving containers having a purchase price in excess of Ten
Million Dollars ($10,000,000), and (iii) the sum of all Containers then owned by
all of the Borrowers collectively that were not acquired by a Borrower directly
from the manufacturer thereof does not exceed Twenty Five Million Dollars
($25,000,000), then the Post-Closing Advance Rate applicable to such Containers
shall be the Existing Container Advance Rate; and provided further, that the
advance rate applicable to any Container in excess of the limitations set forth
in clauses (ii) or (iii) that were not acquired by a Borrower directly from the
manufacturer thereof or from a Lessee in connection with a sale-leaseback
transaction (so long as the average age of all containers included in such
sale-leaseback does not exceed eighteen months) and that does not comply with
the provisions of either clause (ii) or (iii) in the above proviso shall be
determined by the Administrative Agent.

                  Post-Closing Advances. Loans made or to be made by the Lenders
to the Borrowers pursuant to Section 2.2 hereof.

                  Preferred Equity. With respect to the Capital Stock of any
Person means Capital Stock of such Person (other than common stock of such
Person) of any class or classes (however designated) that ranks prior, as to the
payment of dividends or as to the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of such Person, to Capital
Stock of any other class of such Person.

                  Public Equity Offering. An underwritten public offering of
common stock of Container Holdings, any holding company of Container Holdings,
TLI, TOL or TOCC pursuant to a registration statement filed with the Securities
and Exchange Commission (other than on Form S-8).

                  Purchased Entities. Transamerica Leasing Inc., Trans Ocean
Ltd., Transamerica Leasing do Brasil Ltda., Trans Ocean Container Corporation,
Spacewise Inc., Transamerica Leasing N.V., Transamerica Leasing SRL, ICS
Terminals (UK) Limited, Trans Ocean Regional Corporate Holdings, Transamerica
Leasing Pty. Ltd., Transamerica Leasing GmbH, Transamerica Leasing (HK) Ltd.,
Greybox Logistics Services Inc., Intermodal Equipment Inc., Greybox Services
Ltd. and Transamerica Leasing Limited.

                  Record. The grid attached to a Revolving Credit Note, or the
continuation of such grid, or any other similar record, including computer
records, maintained by the Administrative Agent with respect to any Loan
referred to in such Note.

                  Refinance. In respect of any security or Indebtedness, means
to refinance, extend, renew, refund, repay, prepay, redeem, defease or retire,
or to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. Refinanced and Refinancing shall
have correlative meanings.



                                      -32-


                  Refinancing Event. Either of the following: (i) placement into
the asset backed securities term market of notes sufficient to repay in full all
of the Obligations (or such lesser amount as shall be acceptable to the
Administrative Agent), or (ii) a repayment in full from an alternate source of
funds all of the Obligations (or such lesser amount as shall be acceptable to
the Administrative Agent).

                  Refinancing Indebtedness. Any Refinancing by a Borrower or any
Subsidiary of Indebtedness incurred in accordance with clause (i), (vi), (vii),
(viii) or (xi) of Section 9.4, in each case that does not:

         (1)      have an aggregate principal amount (or, if such Indebtedness
                  is issued with original issue discount, an aggregate offering
                  price) greater than the sum of (x) the aggregate principal
                  amount of the Indebtedness being Refinanced (or, if such
                  Indebtedness being Refinanced is issued with original issue
                  discount, the aggregate accreted value) as of the date of such
                  proposed Refinancing plus (y) the amount of fees, expenses,
                  premium, defeasance costs and accrued but unpaid interest
                  relating to the Refinancing of such Indebtedness being
                  Refinanced; or

         (2)      create Indebtedness with: (a) a Weighted Average Life to
                  Maturity that is less than the Weighted Average Life to
                  Maturity of the Indebtedness being Refinanced; or (b) a final
                  maturity earlier than the final maturity of the Indebtedness
                  being Refinanced.

                  Register. This term shall have the meaning set forth in
Section 15.3.

                  Regulation T. Regulation T of the Board of Governors of the
Federal Reserve System as from to time in effect and any successor to all or any
portion thereof.

                  Regulation U. Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.

                  Regulation X. Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or any portion thereof.

                  Related Assets. With respect to any Container, all of the
following: (i) all of a Borrower's right, title and interest in and to, but none
of its obligations under, any agreement between such Borrower and the
manufacturer of each such container pursuant to which such Borrower acquired a
container from such manufacturer, and all amendments, additions and supplements
hereafter made with respect thereto, (ii) all of a Borrower's right, title and
interest in and to any Lease which such container is subject to from time to
time, including all lease revenues accrued on or after the date specified in the
Stock Purchase Agreement, (iii) all right, title and interest of such Borrower
in and to all payments, proceeds and other amounts which have accrued but have
not been paid and (iv) all payments, proceeds and income of the foregoing or
related thereto.




                                      -33-


                  Related Parties. With respect to any Person, such Person's
Affiliates and the partners, directors, officers, employees, agents and advisors
of such Person and of such Person's Affiliates.

                  Required Lenders. As of any date of determination, any single
Lender or multiple Lenders having more than 50% of the sum of the portion of the
Aggregate Commitments unfunded at such date plus the aggregate outstanding
principal amount of the Loans or, if the commitment of each Lender to make Loans
has been terminated pursuant to Section 13.2, any single or multiple Lenders
holding in the aggregate more than 50% of the outstanding principal amount of
the Loans; provided that the Commitment of, and the portion of the outstanding
principal amount of the Loans held or deemed held by, any Defaulting Lender
shall be excluded for purposes of making a determination of Required Lenders.

                  Revolving Credit Note. This term shall have the meaning set
forth in Section 2.4.

                  Revolving Credit Note Record. A Record with respect to a
Revolving Credit Note.

                  Revolving Credit Period. The period commencing on the Closing
Date and ending on the earlier to occur of (i) the date on which the Commitments
are terminated pursuant to Sections 2.5 or 13.2 hereof, and (ii) the two year
anniversary of the Closing Date.

                  Sales Proceeds. The net cash sale proceeds of a Container or
other asset sold by a Borrower in accordance with the terms of this Loan
Agreement less:


                  (i) reasonable out-of-pocket expenses and fees relating to
         such sale (including, without limitation, legal, accounting and
         investment banking and other fees and sales commissions); provided,
         however, that no such investment banking fee shall be payable with
         respect to sales of Containers by a Borrower or any of its Subsidiaries
         made in the ordinary course of such Person's business;

                  (ii) repayment of, or any other payments made in respect of,
         Indebtedness that is secured by the property or assets that are the
         subject of such sale which (a) is required to be repaid in connection
         with such sale or (b) is paid in order to obtain a necessary consent to
         such sale;

                  (iii) appropriate amounts to be provided by a Borrower or any
         of its Subsidiaries, as the case may be, as a reserve, in accordance
         with GAAP, against any liabilities associated with such sale and
         retained by such Borrower or such Subsidiary, as the case may be, after
         such sale, including, without limitation, pension and other
         post-employment benefit liabilities, liabilities related to
         environmental matters and liabilities under any indemnification
         obligations associated with such sale; and



                                      -34-


                  (iv) any portion of the purchase price from such sale placed
         in escrow, whether as a reserve for adjustment of the purchase price,
         for satisfaction of indemnities in respect of such sale or otherwise in
         connection with such sale; provided, that upon the termination of such
         escrow, Sales Proceeds will be increased by any portion of funds in
         such escrow that are released to a Borrower or any of its Subsidiaries.

                  Security Agreement. This term shall have the meaning set forth
in Section 11.8.

                  Security Documents. The Security Agreement, the Pledge
Agreement, the Lockbox Agreements and other instruments and documents,
including, without limitation, Uniform Commercial Code financing statements (or
documents of similar import) and filings made with the United States Patent and
Trademark Office and United States Copyright Office, required to be executed or
delivered pursuant to any Security Document.

                  Seller Loan. The loan (including any Exchange Notes issued
pursuant to the terms of such agreement) to Container Holdings evidenced by the
senior subordinated credit agreement, dated as of November 3, 2004, among
Container Holding, Transamerica Accounts Holding Corporation, as agent, and the
lenders named therein, as such agreement may be amended, modified or
supplemented from time to time in accordance with the provisions of such
agreement and the Loan Documents.

                  Senior Designated Officer. With respect to a Borrower, the
Chief Executive Officer, the President, the Chief Financial Officer or any Vice
President of such Borrower.

                  Special Purpose Vehicle. A corporation, partnership, trust,
limited liability company or other entity that is formed by one or more of the
Borrowers or one of their Subsidiaries for the purpose of purchasing or
financing assets of the Borrowers and/or its Subsidiaries pursuant to any
Permitted Securitization and that is designated as a "Special Purpose Vehicle"
in a written notice delivered to the Administrative Agent by the Borrowers.

                  Specialized Containers. All refrigerated containers, tank
containers, special purposes containers, open top containers, flat rack
containers, bulk containers, high cube containers (other than 40' high cube dry
containers), cellular palletwide containers and all other types of containers
other than standard dry cargo containers.

                  S&P. Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., or any successor thereto.

                  State. Any state of the United States of America.

                  Stock Purchase Agreement. That certain Stock Purchase
Agreement, dated as of July 10, 2004, by and between TA Leasing Holding Co, Inc.
and Klesch &



                                      -35-


Company Limited, as such agreement may be amended, modified or supplemented from
time to time in accordance with its terms.

                  Subsidiary. With respect to any Person shall mean and include
(i) any corporation more than 50% of whose stock of any class or classes having
by the terms thereof ordinary voting power to elect a majority of the directors
of such corporation (irrespective of whether or not 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) is at the time owned by such Person
directly or indirectly through one or more Subsidiaries of such Person and (ii)
any partnership, association, limited liability company, joint venture or other
entity (other than a corporation) in which such Person directly or indirectly
through one or more Subsidiaries of such Person, has more than a 50 Capital
Stock at the time.

                  Systems/Organizational Establishment Expenses. The aggregate
of all expenditures (whether paid in cash or accrued as liabilities) by
Container Holdings and the Consolidated Subsidiaries in financial, information
technology and other similar systems of Container Holdings and its Consolidated
Subsidiaries.

                  TEU. The abbreviation used for twenty foot equivalent units.

                  Term Lease. A lease having an initial term of 36 months or
greater.

                  Third Party Lease Payment Amount. As of any date of
determination, all amounts then owning to third party owners of containers
included in the Managed Fleet (other than the Borrowers) in accordance with the
terms of their respective management agreements.

                  Tier One Permitted Dividend.  Any of:

                  (i)   the payment of any dividend or other distribution or
         redemption within 60 days after the date of declaration of such
         dividend or call for redemption if such payment would have been
         permitted on the date of declaration or call for redemption;

                  (ii)  items described in clauses (i), (iv), (v), (vi),
         (viii),  (ix) and (xiv) of Section 9.5 hereof;

                  (iii) payments, advances or dividends to any direct or
         indirect parent entity of a Borrower to be used by such entity solely
         to pay its franchise taxes, directors fees, registration and reporting
         fees, fees and expenses associated with state qualifications and other
         state, federal or regulatory compliance matters, fees and expenses of
         accountants and other fees, costs and expenses owing by it in the
         ordinary course of business; provided, that all such payments, advances
         or dividends are in an aggregate amount not to exceed $2.0 million in
         any fiscal year, and shall actually be used by such entity to pay such
         amounts;




                                      -36-


                 (iv) payments, advances or dividends to any direct or indirect
         parent entity of a Borrower to be used by such entity solely to pay
         indemnification payments to one or more of its officers and directors;

                  (v) dividends or distributions to any Borrower or any
         Subsidiary of any Borrower;

                  (vi) advances to any direct or indirect parent entity of a
         Borrower to be used by such entity solely to pay federal, state and
         local income taxes made no earlier than five days prior to the date on
         which such entity is required to make such payment in an amount not to
         exceed the aggregate tax liability of the Borrowers and their
         Subsidiaries for such calendar year determined as if the Borrowers and
         their Subsidiaries were a separate affiliated group (as defined in
         Section 1504 of the Internal Revenue Code of 1986, as amended) filing a
         consolidated return, or, to the extent applicable, a separate group
         filing combined or unitary returns, and then only to the extent that
         any such payments are actually paid by such entity to governmental
         entities and any payments made in connection with any tax-sharing
         agreement; and

                  (vii) cash payments in lieu of the issuance of fractional
         shares in connection with the exercise of warrants, options or other
         securities convertible into or exchangeable for Capital Stock (other
         than Disqualified Stock) of a Borrower; provided, that any such cash
         payment shall not (A) be for the purpose of evading the limitations of
         Section 9.6 (as determined in good faith by the Board of Directors of
         the applicable Borrower), and (B) exceed one hundred thousand dollars
         ($100,000) in any fiscal year.

                  Tier Three Permitted Dividend.  Any of:

                  (i) the acquisition of any shares of Capital Stock (other than
         Disqualified Stock) of any Borrower, solely in exchange for other
         shares of Capital Stock (other than Disqualified Stock) of any
         Borrower;

                  (ii) an Investment either (i) solely in exchange for shares of
         Capital Stock (other than Disqualified Stock) of any Borrower or (ii)
         through the application of the net proceeds of a sale for cash (other
         than to a Subsidiary of a Borrower) of shares of Capital Stock (other
         than Disqualified Stock) of any Borrower within 60 days after such
         sale;

                  (iii) repurchases of Capital Stock deemed to occur upon
         exercise of stock options, warrants or other similar rights if such
         Capital Stock represents a portion of the exercise price of such
         options, warrants or other similar rights;

                  (iv) the purchase, redemption or other acquisition or
         retirement for value of any Capital Stock of such Person owned by a
         Borrower or any Subsidiary of a Borrower;



                                      -37-


                  (v) Dividends made to effect a Permitted Securitization;
         provided, however, that no such distribution shall be made to Container
         Holdings pursuant to this clause (v); and

                  (vi) any Dividend made out of the net cash proceeds or the
         fair market value of other assets received by a Borrower from any
         Person (other than a Subsidiary of a Borrower) from the substantially
         concurrent sale of, or made by exchange for, Capital Stock (other than
         Disqualified Stock) of such Borrower or a substantially concurrent
         capital contribution received by a Borrower from its stockholders.

                  Tier Two Permitted Dividend.  Any of:

                  (i) the purchase, repurchase, retirement, redemption or other
         acquisition of shares of Capital Stock of a Borrower, any Subsidiary of
         a Borrower or any direct or indirect parent of a Borrower from
         employees, former employees, directors, former directors or consultants
         of a Borrower, any Subsidiary of a Borrower or any direct or indirect
         parent of a Borrower (or permitted transferees of such employees,
         former employees, directors or former directors), pursuant to the terms
         of the agreements (including employment agreements) or plans (or
         amendments thereto) approved by the Board of Directors of a Borrower or
         of any direct or indirect parent of a Borrower under which such
         individuals purchase or sell or are granted the option to purchase or
         sell, shares of such Capital Stock; provided, that the aggregate amount
         of such repurchases and other acquisitions in any calendar year shall
         not exceed the lesser of (i) the sum of (x) $5 million and (y) the
         aggregate amount of Tier Two Permitted Dividends permitted (but not
         made) pursuant to this clause (i) in prior calendar years and (ii)
         $10.0 million; provided further, that such amount in any calendar year
         may be increased by an amount not to exceed the net cash proceeds of
         key man life insurance policies received by a Borrower or any direct or
         indirect parent of a Borrower after the Closing Date;

                  (ii) the payment of the Management Fee or payments, advances
         or dividends to any direct or indirect parent entity of a Borrower to
         be used by such entity solely to pay the Management Fee.

                  TLI. Transamerica Leasing Inc., a corporation organized under
the laws of the State of Delaware, and its successors and permitted assigns.
After the closing of the Transactions, the name of Transamerica Leasing Inc.
will be changed to TAL International Container Corporation.

                  TOCC. Trans Ocean Container Corporation, a corporation
organized under the laws of the State of Delaware, and its successors and
permitted assigns.

                  TOL. Trans Ocean Ltd., a corporation organized under the laws
of the State of Delaware, and its successors and permitted assigns.



                                      -38-


                  Transaction. All of the following, collectively: (i) the
consummation of the acquisitions set forth in the Stock Purchase Agreement, and
(ii) the entering into of the Loan Documents and the incurrence of the Closing
Date Advance.

                  Trust Account. A bank account established by the Borrowers in
accordance with the provisions of Section 3.1 hereof.

                  Type. As to all or any portion of any Loan, its nature as a
Base Rate Loan or a LIBOR Rate Loan.

                  UBS Lease Agreement. The Equipment Lease Agreement
(Transamerica Loan Trust No. 1996-A) (L-2), dated December 30, 1996, between
State Street Bank and Trust Company of Connecticut, National Association, in its
capacity as owner trustee, as lessor, and Trans Ocean Container Corporation, as
lessee. A true, complete and correct copy of such lease as in effect on the
Closing Date is attached as Exhibit I hereto.

                  UBS Lease Termination Payment. The early termination option
payment(s) to be made by TOCC pursuant to the terms of the UBS Lease Agreement,
which payouts as of the Closing Date are set forth on Schedule 5 hereto.

                  UCC. The Uniform Commercial Code as in effect from time to
time in the applicable jurisdiction.

                  Unfunded Current Liability. With respect to a Plan shall mean
the amount, if any, by which the value of the accumulated plan benefits under
the Plan determined on a plan termination basis in accordance with actuarial
assumptions at such time consistent with those prescribed by the PBGC for
purposes of Section 4044 of ERISA, exceeds the fair market value of all plan
assets allocable to such liabilities under Title IV of ERISA (excluding any
accrued but unpaid contributions).

                  Voting Stock. Stock or similar interests, of any class or
classes (however designated), the holders of which are at the time entitled, as
such holders, to vote for the election of a majority of the directors (or
persons performing similar functions) of the corporation, association, trust or
other business entity involved, whether or not the right so to vote exists by
reason of the happening of a contingency.

                  Weighted Average Life to Maturity. When applied to any
Indebtedness at any date, means the number of years obtained by dividing (1) the
then outstanding aggregate principal amount of such Indebtedness into (2) the
sum of the total of the products obtained by multiplying:

                  (A) the amount of each then remaining installment, sinking
         fund, serial maturity or other required payment of principal, including
         payment at final maturity, in respect thereof, by

                  (B) the number of years (calculated to the nearest
         one-twelfth) which will elapse between such date and the making of such
         payment.



                                      -39-


                  Wholly-Owned Subsidiary. As to any Person, (i) any corporation
100% of whose Capital Stock (other than director's qualifying shares and/or
other nominal amounts of shares required by applicable law to be held by Persons
other than such Person) is at the time owned by such Person and/or one or more
Wholly-Owned Subsidiaries of such Person and (ii) any partnership, limited
liability company, association, joint venture or other entity in which such
Person and/or one or more Wholly-Owned Subsidiaries of such Person owns 100% of
the Capital Stock at such time (other than director's qualifying shares and/or
other nominal amounts of interests required by applicable law to be held by
Persons other than such Person).

                  Withdrawal Liability. Liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.

                  1.2. RULES OF INTERPRETATION.

                  (a) A reference to any document or agreement shall include
         such document or agreement as amended, modified or supplemented from
         time to time in accordance with its terms and the terms of this Loan
         Agreement.

                  (b) The singular includes the plural and the plural includes
         the singular.

                  (c) A reference to any law includes any amendment or
         modification to such law.

                  (d) A reference to any Person includes its permitted
         successors and permitted assigns.

                  (e) Accounting terms not otherwise defined herein have the
         meanings assigned to them by GAAP applied on a consistent basis by the
         accounting entity to which they refer.

                  (f) The words "include", "includes", and "including" are not
         limiting.

                  (g) All terms not specifically defined herein or by GAAP,
         which terms are defined in the Uniform Commercial Code as in effect in
         the State of New York, have the meanings assigned to them therein, with
         the terms "instrument" and "chattel paper" being that defined under
         Article 9 of the Uniform Commercial Code.

                  (h) Reference to a particular "ss." or Section refers to that
         section of this Loan Agreement unless otherwise indicated.

                  (i) The words "herein", "hereof", "hereunder" and words of
         like import shall refer to this Loan Agreement as a whole and not to
         any particular section or subdivision of this Loan Agreement.



                                      -40-


                  (j) Unless otherwise expressly indicated, in the computation
         of periods of time from a specified date to a later specified date, the
         word "from" means "from and including," the words "to" and "until" each
         mean "to but excluding," and the word "through" means "to and
         including."

                  (k) This Loan Agreement and the other Loan Documents may use
         several different limitations, tests or measurements to regulate the
         same or similar matters. All such limitations, tests and measurements
         are, however, cumulative and are to be performed in accordance with the
         terms thereof.

                  (l) This Loan Agreement and the other Loan Documents are the
         result of negotiation among, and have been reviewed by counsel to,
         among others, the Administrative Agent, the Lenders and the Borrowers
         and are the product of discussions and negotiations among all parties.
         Accordingly, this Loan Agreement and the other Loan Documents are not
         intended to be construed against the Administrative Agent or any of the
         Lenders merely on account of the Administrative Agent's or any Lender's
         involvement in the preparation of such documents.

                  2. THE CLOSING DATE ADVANCE AND NEW CONTAINER ADVANCES.

                  2.1. CLOSING DATE ADVANCE. Subject to the terms and conditions
         set forth in this Loan Agreement, each Lender severally agrees to make
         a Loan to the Borrowers collectively on the Closing Date in an amount
         equal to its Commitment Percentage of an amount equal to the lesser of
         (A) Eight Hundred Twenty Million Dollars ($820,000,000), and (B) the
         Asset Base on the Closing Date.

                  2.2. POST-CLOSING LOAN. Subject to the terms and conditions
         set forth herein, each Lender severally agrees to make loans (each such
         loan, a "Post-Closing Advance") to the Borrowers from time to time, on
         any Business Day during the Revolving Credit Period; provided, however,
         that after giving effect to all amounts requested, the Aggregate Note
         Principal Balance shall not exceed the lesser of (i) Aggregate
         Commitments and (ii) the Asset Base, calculated after giving effect to
         the Eligible Containers, if any, to be acquired with the proceeds of
         such Post-Closing Advance. Post-Closing Advances shall be LIBOR Rate
         Loans or under the circumstances set forth in Section 5.4 or Section
         5.5 hereof, a Base Rate Loan.

                  2.3. REQUESTS FOR LOAN. The Borrowers shall give to the
         Administrative Agent written notice in the form of Exhibit E hereto (or
         telephonic notice confirmed in a writing in the form of Exhibit E
         hereto) of each Loan requested hereunder (a "Loan Request") no later
         than 3:00 p.m. (Amsterdam time) three (3) LIBOR Business Days prior to
         any proposed Funding Date. Each such Loan Request shall specify (i) the
         principal amount of the Loan requested, (ii) the proposed Funding Date
         of such Loan and (iii) the Interest Period for such




                                      -41-


         Loan Advance. Each Loan Request shall be irrevocable and binding on the
         Borrowers and shall obligate the Borrowers to accept the Closing Date
         Advance or Post-Closing Advance, as the case may be, requested from the
         Lenders on the proposed Funding Date. Each Loan Request shall be in a
         minimum aggregate amount of $2,500,000. No Loan Request shall be
         permitted to request any Loan on or after the Availability Termination
         Date, on which date any unfunded portion of the Commitments shall
         terminate, automatically and without notice or action of any kind.

                  2.4. THE REVOLVING CREDIT NOTES. The Loans shall be evidenced
         by separate promissory notes of the Borrowers in substantially the form
         of Exhibit F hereto (each a "Revolving Credit Note"), dated as of the
         Closing Date (or such other date on which a Lender may become a party
         hereto in accordance with Section 15 hereof) and completed with
         appropriate insertions. One Revolving Credit Note shall be payable to
         the order of each Lender in a principal amount equal to such Lender's
         Commitment to make Loans or, if less, the outstanding amount of all
         Closing Date Advances and Post-Closing Advances made by such Lender,
         plus interest accrued thereon, as set forth below. The Borrowers
         irrevocably authorizes each Lender to make or cause to be made, at or
         about the time of the Funding Date of any Loan or at the time of
         receipt of any payment of principal on such Lender's Revolving Credit
         Note, an appropriate notation on such Lender's Revolving Credit Note
         Record reflecting the making of such Loan or (as the case may be) the
         receipt of such payment. The outstanding amount of the Loans set forth
         on such Lender's Revolving Credit Note Record shall be prima facie
         evidence absent manifest error of the principal amount thereof owing
         and unpaid to such Lender, but the failure to record, or any error in
         so recording, any such amount on such Lender's Revolving Credit Note
         Record shall not limit or otherwise affect the obligations of the
         Borrowers hereunder or under any Revolving Credit Note to make payments
         of principal of or interest on any Revolving Credit Note when due.

                  2.5. TERMINATION OR REDUCTION OF COMMITMENTS. The Borrowers
         may, upon notice to the Administrative Agent, terminate the Aggregate
         Commitments, or from time to time permanently reduce the Aggregate
         Commitments; provided that (i) any such notice shall be received by the
         Administrative Agent not later than 3:00 p.m. (Amsterdam time) three
         (3) Business Days prior to the date of termination or reduction, (ii)
         any such partial reduction shall be in an aggregate amount of
         $5,000,000 or any whole multiple of $1,000,000 in excess thereof, and
         (iii) the Borrowers shall not terminate or reduce the Aggregate
         Commitments prior to the Availability Termination Date if, after giving
         effect thereto and to any concurrent prepayments hereunder, the
         Aggregate Note Principal Balance would exceed the Aggregate
         Commitments. The Administrative Agent will promptly notify the Lenders
         of any such notice of termination or reduction of the Aggregate
         Commitments. Any reduction of the Aggregate Commitments shall be
         applied to the Commitment of each Lender according to its Commitment
         Percentage. All fees accrued until the effective date



                                      -42-


         of any termination or reduction of the Aggregate Commitments shall be
         paid on the effective date of such termination or reduction.

                  2.6. REPAYMENT OF PRINCIPAL OF LOANS. (a) Subject to the
         provisions of Section 13.1 hereof relating to the acceleration of the
         Revolving Credit Notes and the other Obligations hereunder, the
         Borrowers shall pay to each Lender on each Payment Date, solely from
         funds released from the Trust Account on such Payment Date in
         accordance with the priority of payments set forth in Section 3.1(c)
         hereof and solely to the extent payable thereunder pursuant to Section
         3.1(c), as a principal payment on its Revolving Credit Note in an
         amount equal to its pro rata share of (i) the Asset Base Deficiency (if
         any) for such Payment Date and (ii) any amount required to be repaid in
         accordance with the provisions of Section 4.2.1 hereof. The unpaid
         principal balance of, and all accrued interest and other amounts owing
         on, or with respect to, the Revolving Credit Notes shall be payable in
         full on the earlier to occur of (x) the Legal Final Maturity Date and
         (y) the date on which the Revolving Credit Notes and the other
         Obligations have been declared due and payable in accordance with the
         provisions of Section 13.1 hereof.

                  2.7. FUNDING BY LENDERS; PRESUMPTION BY ADMINISTRATIVE AGENT.
         Unless the Administrative Agent shall have received notice from a
         Lender prior to the proposed Funding Date that such Lender will not
         make available to the Administrative Agent such Lender's share of such
         requested Loan, the Administrative Agent may assume that such Lender
         has made such share available on such date in accordance with Sections
         2.1 or 2.2, as the case may be, and may, in reliance upon such
         assumption, make available to the Borrowers a corresponding amount. In
         such event, if a Lender has not in fact made its share of the
         applicable requested Loan available to the Administrative Agent, then
         the applicable Lender agrees to pay to the Administrative Agent
         forthwith on demand such corresponding amount in immediately available
         funds with interest thereon, for each day from and including the date
         such amount is made available to the Borrowers to, but excluding, the
         date of payment to the Administrative Agent, at, in the case of a
         payment to be made by such Lender, the greater of the Federal Funds
         Rate and a rate determined by the Administrative Agent in accordance
         with banking industry rules on interbank compensation. If such Lender
         pays its share of the applicable Loan to the Administrative Agent, then
         the amount so paid shall constitute such Lender's portion of the
         requested Loan.

                  2.8. FAILURE TO SATISFY CONDITIONS PRECEDENT. If any Lender
         makes available to the Administrative Agent funds for any Loan to be
         made by such Lender as provided in the provisions of this Loan
         Agreement, and such funds are not made available to the Borrowers by
         the Administrative Agent because the conditions to the applicable Loan
         set forth in Sections 11 and 12 are not satisfied or waived in
         accordance with the terms hereof, the Administrative Agent shall return
         such funds (in like funds as received from such Lender) to such Lender,
         without interest.



                                      -43-


                  2.9. OBLIGATIONS OF LENDERS SEVERAL. The obligations of the
         Lenders hereunder to make Loans and to make payments pursuant to this
         Loan Agreement are several and not joint. The failure of any Lender to
         make any Loan or to make any payment under this Loan Agreement on any
         date required hereunder shall not relieve any other Lender of its
         corresponding obligation to do so on such date, and no Lender shall be
         responsible for the failure of any other Lender to so make its Loan or
         to make its payment under this Loan Agreement.

                  2.10. JOINT AND SEVERAL OBLIGATION. Each of the Borrowers
         hereby agrees that it is jointly and severally liable for all of the
         Obligations, regardless of the actual allocation of the proceeds of the
         Loans among the Borrowers. Each of the Borrowers accepts joint and
         several liability for all Obligations hereunder in consideration of the
         financial accommodation to be provided by the Lenders to each of the
         Borrowers under this Loan Agreement, for the mutual benefit, directly
         and indirectly, of each Borrower and in consideration of the
         undertakings by each other Borrower to accept joint and several
         liability for the Obligations.

                  Each Borrower jointly and severally hereby irrevocably and
         unconditionally accepts, not merely as a surety but also as a
         co-debtor, joint and several liability with each Borrower with respect
         to the payment and performance of all of the Obligations, it being the
         intention of the parties hereto that all of the Obligations shall be
         the joint and several obligations of each of the Borrowers without
         preferences or distinction among them.

                  If and to the extent that any Borrower shall fail to make any
         payment with respect to any of the Obligations as and when due or to
         perform any of the Obligations in accordance with the terms thereof,
         then in each such event, the other Borrowers will make such payment
         with respect to, or perform, such Obligations.

                  The obligations of each Borrower under the provisions of this
         Section 2.10 constitute full recourse obligations of such Borrower,
         enforceable against it to the full extent of its properties and assets,
         irrespective of the validity, regularity or enforceability of this Loan
         Agreement or any other Loan Document against any other Borrower or any
         other circumstances whatsoever that under applicable law might
         constitute a defense to the joint and several Obligations of such other
         Borrower.

                  Except as otherwise expressly provided herein, each Borrower
         hereby waives notice of acceptance of its joint and several liability,
         notice of any and all Obligations incurred hereunder or under any other
         Loan Document, notice of the occurrence of any Default or Event of
         Default, or of any demand for any payment hereunder or any other Loan
         Document, notice of any action at any time taken or omitted by the
         Administrative Agent or any Lender under or in respect of any of the
         Obligations, any requirement of diligence and,



                                      -44-


         generally, all demands, notices and other formalities of every kind in
         connection with the Obligations, this Loan Agreement or any other Loan
         Document. Each Borrower hereby assents to, and waives notice of, any
         extension or postponement of the time for the payment of any of the
         Obligations, the acceptance of any partial payment thereon, any waiver,
         consent or other action or acquiescence by the Administrative Agent or
         any Lender at any time or times in respect of any default by any
         Borrower in the performance or satisfaction of any term, covenant,
         condition or provision hereunder or under this Loan Agreement or any
         other Loan Document, any and all other indulgences whatsoever by the
         Administrative Agent or any Lender in respect of any of the
         Obligations, and the taking, addition, substitution or release, in
         whole or in part, at any time or times, of any security for any of the
         Obligations or the addition, substitution or release, in whole or in
         part, of any Borrower. Without limiting the generality of the
         foregoing, each Borrower assents to any other action or delay in acting
         or failure to act on the part of the Administrative Agent or any
         Lender, including, without limitation, any failure strictly or
         diligently to assert any right or to pursue any remedy or to comply
         fully with applicable laws or regulations thereunder which might, but
         for the provisions of this Section 2.10, afford grounds for
         terminating, discharging or relieving such Borrower, in whole or in
         part, from any of its obligations under this Section 2.10, it being the
         intention of each Borrower that, so long as any of the Obligations
         remain unsatisfied, the obligations of such Borrower shall not be
         discharged except by performance and then only to the extent of such
         performance. The Obligations of each Borrower shall not be diminished
         or rendered unenforceable by any winding up, reorganization,
         arrangement, liquidation, reconstruction or similar proceeding with
         respect to any other Borrower or the other Lender. The joint and
         several liability of each Borrower hereunder shall continue in full
         force and effect notwithstanding any absorption, merger, amalgamation
         or any other change whatsoever in the name, membership, constitution or
         place of formation of any other Borrower.

                  The provisions of this Section 2.10 are made for the benefit
         of the Administrative Agent and each Lender and their successors and
         assigns, and may be enforced by such party from time to time against
         any Borrower as often as occasion therefore may arise and without
         requirement on the part of the Administrative Agent or any Lender first
         to marshal any of its claims or to exercise any of its rights against
         any other Borrower or to exhaust any remedies available to it against
         any other Borrower or to resort to any other source or means of
         obtaining payment of any of the Obligations or to elect any other
         remedy. The provisions of this Section 2.10 shall remain in effect
         until all the Obligations shall have been paid in full or otherwise
         fully satisfied. If at any time, any payment, or any part thereof, made
         in respect of any of the Obligations, is rescinded or must otherwise be
         restored or returned by the




                                      -45-


         Administrative Agent or any Lender upon the insolvency, bankruptcy or
         reorganization of any Borrower, or otherwise, the provisions of this
         Section 2.10 will forthwith be reinstated in effect, as though such
         payment had not been made.

                  2.11. REVOLVING CREDIT FACILITY. The credit facility evidenced
         by this Loan Agreement is a revolving credit facility. Accordingly, the
         Borrowers will, subject to compliance with the terms of this Loan
         Agreement, have the right during the Revolving Credit Period to
         reborrow any amounts repaid to the Lenders in accordance with the terms
         of this Loan Agreement.

                  3. COLLECTION AND DISBURSEMENTS OF FUNDS.

                  3.1. TRUST ACCOUNT.

                  (a) Within thirty (30) days after the Closing Date, the
         Borrowers will establish and maintain the Trust Account with a bank or
         trust company acceptable to the Administrative Agent, which account
         shall be under the "control" (as defined in the UCC) of the
         Administrative Agent for the benefit of the Lenders.

                  (b) The Borrowers shall not change the location of the Trust
         Account without the prior written consent of the Administrative Agent
         in each instance.

                  (c) On each Payment Date, the Administrative Agent, based on
         the Manager Report, shall distribute an amount equal to the sum of: (1)
         all amounts transferred to the Trust Account from the Concentration
         Account on the immediately preceding Business Day in accordance with
         the provisions of Section 3.2 hereof, and (2) any earnings on
         investments in the Trust Account that were credited to the Trust
         Account during the related Collection Period (the sum of (1) and (2),
         the "Distributable Cash Flow"), shall be distributed to the following
         Persons in the following order of priority, with no payment being made
         toward any item unless and until all prior items have been fully
         satisfied:

                      (i) An amount equal to the sum of (A) interest payments
                  then due and owing on the Revolving Credit Notes, (B) all
                  Commitment Fees then due and owing, (C) the Agent Fee then due
                  and owing, and (D) all regularly scheduled payments (excluding
                  termination payments) on any Hedging Agreement(s) then due and
                  owing, all such payments to be paid on a pari passu basis;

                      (ii) One of the following amounts:

                           (A) If no Acceleration Event has occurred and is
                      continuing to pay, on a pari passu basis, (i) termination
                      payments (if any) on any Interest Rate Hedging Agreement
                      maintained by the Borrowers in accordance with the terms
                      of the Loan Documents, and (ii) the principal balance of
                      the Revolving Credit




                                      -46-


                      Notes in an amount sufficient to ensure that, after giving
                      effect to such payment, no Asset Base Deficiency is then
                      continuing; or

                           (B) If an Acceleration Event has occurred and is
                      continuing to pay, on a pari passu basis, (i) termination
                      payments (if any) on any Interest Rate Hedging Agreements
                      maintained by the Borrowers in accordance with the terms
                      of the Loan Documents, and (ii) the then Aggregate Note
                      Principal Balance until such balance is reduced to zero.

                      (iii) To the extent that no Designated Event of Default is
                  then continuing or would result from such payment, to the IO
                  Disbursement Account the amount of the IO Distributable Amount
                  for such Payment Date and, if the due date for the next
                  succeeding interest payment on the Seller Loan and/or the High
                  Yield Bonds will occur prior to the next succeeding Payment
                  Date, the amount of the IO Distributable Amount will be
                  increased by the interest to be accrued from the current
                  Payment Date to the due date of such interest payment on the
                  Seller Loan and/or the High Yield Bonds, as the case may be;

                      (iv) To the extent that no Designated Event of Default is
                  then continuing or would result from such payment, (A) in
                  payment of the Management Fee then due and payable, and (B)
                  without duplication of the amount set forth in clause (A), the
                  aggregate amount of Tier Two Permitted Dividends that are to
                  be paid during the period commencing on such Payment Date and
                  terminating on the next following Payment Date;

                      (v) To the Administrative Agent and the Lenders, to pay
                  any increased cost, indemnities, taxes and other amounts then
                  due and owing pursuant to the terms of the Loan Documents,
                  including Sections 5.6, 5.7, 5.9 or 16.3 hereof;

                      (vi) All remaining Distributable Cash Flow to be used to
                  repay the unpaid principal balance of the Revolving Credit
                  Notes until the Aggregate Note Principal Balance has been
                  reduced to zero; and

                      (vii) To the Borrowers in equal amounts, any remaining
                  Distributable Cash Flow.

If the amounts to be distributed on any Payment Date are not sufficient to make
payment in full to the Lenders with respect to any of the clauses described in
Section 3.1(c) above, then payments to Lenders pursuant to any such clause will
be allocated among such Lenders on a pro rata basis based on the amount payable
to each such Lender pursuant to each such clause.

3.2.              CONCENTRATION ACCOUNT.



                                      -47-


                  (a) On or prior to the Closing Date, TLI shall establish the
         Concentration Account with Citibank N.A. for the purpose of (i)
         receiving periodic transfers of funds from the Lockbox Account and all
         other cash remittances received by the Borrowers in the ordinary course
         of business, (ii) funding disbursements to be made from each of the
         Accounts Payable Account and the Payroll Account and (iii) receiving
         and/or transferring funds to the Greybox Account. Each of the
         Concentration Account, the Accounts Payable Account and the Payroll
         Account shall be titled exclusively in the name of TLI and, at all
         times during the term of this Loan Agreement, TLI will cause each such
         account to be under the "control" (as defined in the UCC) of the
         Administrative Agent.

                  (b) TLI shall be permitted to withdraw, from time to time,
         funds from the Concentration Account in order to fund Permitted
         Disbursements, which Permitted Disbursements may be paid directly from
         the Concentration Account or paid from either the Accounts Payable
         Account or the Payroll Account with funds transferred from the
         Concentration Account.

                  (c) On the Business Day preceding each Payment Date, TLI shall
         transfer from the Concentration Account to the Trust Account funds in
         an amount equal to the excess of (i) all funds received in, and
         investment earnings credited to, the Concentration Account during the
         immediately preceding Collection Period, over (ii) the sum of (x) all
         Permitted Disbursements made from the Concentration Account during such
         Collection Period, and (y) Five Million Dollars ($5,000,000).

                  3.3. LOCKBOX ACCOUNTS.

                  (a) Each Lockbox Bank shall be instructed by TLI to transfer
         to the related Lockbox Account, on a daily basis, all items received in
         the applicable Lockbox and to remit to the Concentration Account, on a
         daily basis (but subject to the Lockbox Bank's customary funds
         availability schedule), all amounts deposited in the Lockbox Accounts
         maintained with such Lockbox Bank. Upon the occurrence and continuation
         of a Designated Event of Default, the Administrative Agent is hereby
         authorized and empowered, as the TLI's attorney-in-fact, to endorse any
         item deposited in a Lockbox or presented for deposit in any Lockbox
         Account requiring the endorsement of TLI, which authorization is
         coupled with an interest. Each Lockbox Account shall be subject to the
         "control" of the Administrative Agent within the meaning of the UCC.

                  (b) TLI may, from time to time after the Closing Date,
         designate a new account as a Lockbox Account (and a new lockbox or post
         office box relating thereto as a Lockbox), and such account shall
         become a Lockbox Account (and the bank at which such account is
         maintained shall become a Lockbox Bank, and such lockbox or post office
         box shall become a Lockbox for purposes of this Loan Agreement);
         provided that the Administrative Agent shall have received not less
         than ten (10) Business Days' prior written notice of the account (and
         related lockbox or post office box) and/or the bank that are proposed
         to be added and, not less




                                      -48-


         than five (5) Business Days prior to the effective date of any such
         proposed addition, the Administrative Agent shall have received (i) an
         executed acknowledgment from such bank in form and substance to the
         Administrative Agent establishing the "control" of the Administrative
         Agent over such post office box and/or lockbox account and (ii) copies
         of all other agreements and documents signed by the new bank or such
         other parties with respect to such Lockbox.

                      (i) TLI may, from time to time after the Closing Date,
                  terminate an account as a Lockbox Account; provided that no
                  such termination shall occur unless the Administrative Agent
                  shall have received not less than five (5) Business Days'
                  prior written notice of the account and/or the bank that are
                  proposed to be terminated, and prior to the effective date of
                  any such proposed termination, the Administrative Agent shall
                  have received counterparts of an agreement, duly executed by
                  the applicable bank and reasonably satisfactory in form and
                  substance to the Administrative Agent; establishing the
                  "control" of the Administrative Agent over such post office
                  box and/or lockbox account.

                  3.4.   INVESTMENTS.

                  (a) Funds which may at any time be held in the Concentration
         Account, the IO Disbursement Account or the Trust Account may be
         invested and reinvested by TLI in one or more Eligible Investments in
         the manner specified in Section 3.4(c) hereof.

                  (b) Each investment made pursuant to this Section 3.4 on any
         date shall mature not later than the Business Day immediately preceding
         the Payment Date next succeeding the day such investment is made,
         except that any investment made on the day preceding a Payment Date
         shall mature on such Payment Date.

                  (c) Subject to the other provisions hereof, the Administrative
         Agent shall have sole "control" (as defined in the UCC) over each such
         investment and the income thereon, and any certificate or other
         instrument evidencing any such investment, if any, shall be delivered
         directly to the Administrative Agent or its agent, together with each
         document of transfer, if any, necessary to transfer title to such
         investment to the Administrative Agent.

                  (d) All monies on deposit in the Concentration Account, the IO
         Disbursement Account and the Trust Account, together with any deposits
         or securities in which such moneys may be invested or reinvested, and
         any gains from such investments, shall constitute Collateral.



                                      -49-


                  3.5. GENERAL PROVISIONS REGARDING LOCKBOX ACCOUNT,
                       CONCENTRATION ACCOUNT, ACCOUNTS PAYABLE ACCOUNT, PAYROLL
                       ACCOUNT AND IO DISBURSEMENT ACCOUNT.

                  (a) TLI shall cause each such depository institution or trust
         company maintaining any of the Lockbox Account, the Concentration
         Account, the Accounts Payable Account, the IO Disbursement Account and
         the Payroll Account to execute a written agreement, in form and
         substance satisfactory to the Administrative Agent. TLI shall give the
         Administrative Agent at least five (5) Business Days' prior written
         notice of any change in the location of any Lockbox Account,
         Concentration Account, Accounts Payable Account, the IO Disbursement
         Account and Payroll Account or in any related account information.
         Anything herein to the contrary notwithstanding, unless otherwise
         consented to by the Administrative Agent in writing, TLI shall have no
         right to change the location of any such account.

                  (b) Upon the written request of the Administrative Agent, TLI
         shall cause, at the expense of the Administrative Agent, the depository
         institution at which any account is located to forward to the
         Administrative Agent copies of all monthly account statements for each
         of the Lockbox Account, Concentration Account, Accounts Payable
         Account, the IO Disbursement Account and Payroll Account.

                  (c) If at any time TLI wishes to transfer an existing account
         or establishes a new account, TLI shall notify the Administrative Agent
         of such fact and shall establish within five (5) Business Days of such
         determination, in accordance with paragraph (a) of this Section 3.5, a
         successor account thereto at another depository institution or trust
         company acceptable to the Administrative Agent and shall establish
         successor accounts. TLI shall cause such depository institution to
         execute a written agreement under terms provided for in paragraph (a)
         of this Section.

                  3.6. IO DISBURSEMENT ACCOUNT.

                  (a) Within thirty (30) days after the Closing Date, the
         Borrowers will establish and maintain the IO Disbursement Account with
         a bank or trust company acceptable to the Administrative Agent, which
         account shall be under the "control" (as defined in the UCC) of the
         Administrative Agent for the benefit of the Lenders.

                  (b) On each Payment Date, amounts will be deposited into the
         IO Disbursement Account in accordance with priority of payments set
         forth in Section 3.1(c) hereof. All amounts on deposit in the IO
         Disbursement Account shall be made available to the Borrowers on the
         due date of each interest payment on the Seller Loan and /or the High
         Yield Bonds, as the case may be, to be used as a permitted dividend to
         Container Holdings.



                                      -50-


                  4. PROVISIONS APPLICABLE TO ALL LOANS.

                  4.1. INTEREST ON LOANS.

                  4.1.1. INTEREST RATES. (a) Except as otherwise provided in
         Section 5.10, the Loans shall bear interest during each Interest Period
         relating to all or any portion of the Loans at the following rates:

                         (i) To the extent that all or any portion of a Loan
                  bears interest during such Interest Period at the Base Rate,
                  such Loan or such portion shall bear interest during such
                  Interest Period at the rate per annum equal to the sum of (i)
                  the Applicable Margin and (ii) the Base Rate in effect from
                  time to time.

                         (ii) To the extent that all or any portion of a Loan
                  bears interest during such Interest Period based on the LIBOR
                  Rate, such Loan or such portion shall bear interest during
                  such Interest Period at a rate per annum equal to the sum of
                  (i) the LIBOR Rate and (ii) the Applicable Margin.


         The Borrowers promise to pay interest on the Loans or any portion
         thereof outstanding during each Interest Period in arrears on each
         Payment Date.

                  (b) In no event shall the interest charged with respect to a
         Loan exceed the maximum amount permitted by applicable law. If at any
         time the interest rate charged with respect to a Loan exceeds the
         maximum rate permitted by applicable law, the rate of interest to
         accrue pursuant to such Loan shall be limited to the maximum rate
         permitted by applicable law.

                  4.1.2. AMOUNTS. Any portion of the Loans bearing interest
         based on the LIBOR Rate relating to any Interest Period shall be in the
         amount of $500,000 or an integral multiple thereof. No Interest Period
         relating to a Loan or any portion thereof bearing interest at the LIBOR
         Rate shall extend beyond the date on which a regularly scheduled
         installment payment of the principal of such Loan is to be made.

                  4.2. MANDATORY REPAYMENTS OF THE LOANS.

                  4.2.1. REPAYMENTS IN CONNECTION WITH THE ASSET BASE. On each
         Payment Date, the Borrowers shall, out of the funds released from the
         Trust Account on such Payment Date pursuant to Section 3.1(c), repay
         the Loans to the extent of remaining Distributable Cash Flow available
         for such purposes pursuant to clause (vi) of Section 3.1(c) hereof. Any
         such repayment pursuant to the provisions of this Section 4.2.1 shall
         not be subject to the provisions of Section 4.3 hereof.

                  4.2.2. APPLICATION OF PAYMENTS. All payments made pursuant to
         Section 4.2.1 or Section 4.3, and all applications of funds released
         from the Trust Account




                                      -51-


         on any Payment Date and applied pursuant to Section 3.1(c)(iii) and
         3.1(c)(vii), shall be applied pro rata among the Existing Container
         Advance and the Post-Closing Advances.

                  4.3. OPTIONAL PREPAYMENT OF LOANS. The Borrowers shall have
         the right at any time to prepay one or more of the Loans on or before
         the Legal Final Payment Date, as a whole, or in part, upon delivery of
         written notice to the Administrative Agent not later than 1:00 p.m.
         (New York City time) on the Business Day prior to such prepayment,
         without premium or penalty, provided that (a) each partial prepayment
         shall be in the principal amount of $2,500,000 or multiples of $500,000
         in excess thereof and (b) in the event that any LIBOR Rate Loan is
         prepaid at any time other than the end of an Interest Period applicable
         thereto (a "Breakage Prepayment"), the Borrowers shall pay, upon
         demand, to each Lender an amount equal to such Lender's Breakage Cost.
         The Administrative Agent will promptly notify each Lender of its
         receipt of each such notice, and of the amount of such Lender's
         Commitment Percentage of such prepayment. Any prepayment of principal
         of a Loan shall include all interest accrued to the date of prepayment.
         Each such prepayment shall be applied to the Loans of the Lenders in
         accordance with their respective Commitment Percentages.

                  4.4. PAYMENTS BY BORROWER; PRESUMPTIONS BY ADMINISTRATIVE
         AGENT. Unless the Administrative Agent shall have received notice from
         the Borrowers prior to the date on which any payment is due to the
         Administrative Agent for the account of the Lenders hereunder that the
         Borrowers will not make such payment, the Administrative Agent may
         assume that the Borrowers have made such payment on such date in
         accordance herewith and may, in reliance upon such assumption,
         distribute to the Lenders the amount due. In such event, if the
         Borrowers have not in fact made such payment, then each of the Lenders
         severally agrees to repay to the Administrative Agent forthwith on
         demand the amount so distributed to such Lender, in immediately
         available funds with interest thereon, for each day from and including
         the date such amount is distributed to it to but excluding the date of
         payment to the Administrative Agent, at the greater of the Federal
         Funds Rate and a rate determined by the Administrative Agent in
         accordance with banking industry rules on interbank compensation. A
         notice of the Administrative Agent to any Lender or the Borrowers with
         respect to any amount owing under this Section 4.5 shall be conclusive,
         absent manifest error.

                  4.5. SHARING OF PAYMENTS BY LENDERS. If any Lender shall, by
         exercising any right of setoff or counterclaim or otherwise, obtain
         payment in respect of any principal of or interest on any of the Loans
         made by it resulting in such Lender's receiving payment of a proportion
         of the aggregate amount of such Loans or and accrued interest thereon
         greater than its pro rata share thereof as provided herein, then the
         Lender receiving such greater proportion shall (a) notify the
         Administrative Agent of such fact, and (b) purchase (for cash at face
         value) participations in the Loans of the other Lenders, or make such
         other adjustments




                                      -52-


         as shall be equitable, so that the benefit of all such payments shall
         be shared by the Lenders ratably in accordance with the aggregate
         amount of principal of and accrued interest on their respective Loans
         and other amounts owing them, provided that:

                  (i) if any such participations are purchased and all or any
         portion of the payment giving rise thereto is recovered, such
         participations shall be rescinded and the purchase price restored to
         the extent of such recovery, without interest; and

                  (ii) the provisions of this Section shall not be construed to
         apply to (x) any payment made by the Borrowers pursuant to and in
         accordance with the express terms of this Loan Agreement or (y) any
         payment obtained by a Lender as consideration for the assignment of or
         sale of a participation in any of its Loans to any assignee or
         participant, other than to the Borrowers or any of their Affiliates (as
         to which the provisions of this Section shall apply).

                  The Borrowers consent to the foregoing and agree, to the
         extent they may effectively do so under applicable law, that any Lender
         acquiring a participation pursuant to the foregoing arrangements may
         exercise against the Borrowers rights of setoff and counterclaim with
         respect to such participation as fully as if such Lender were a direct
         creditor of the Borrowers in the amount of such participation.

                  4.6. FUNDING SOURCE. Nothing herein shall be deemed to
         obligate any Lender to obtain the funds for any Loan in any particular
         place or manner or to constitute a representation by any Lender that it
         has obtained or will obtain the funds for any Loan in any particular
         place or manner.

                  5. CERTAIN GENERAL PROVISIONS.

                  5.1. FEES.

                  5.1.1. COMMITMENT FEE. The Borrowers agrees to pay on each
         Payment Date during the Revolving Credit Period to the Administrative
         Agent for the accounts of the Lenders in accordance with their
         respective Commitment Percentages a commitment fee (the "Commitment
         Fee") calculated at the rate of one half of one percent (0.50%) per
         annum on the average daily amount during the related Collection Period
         by which the Aggregate Commitment in respect of the Loan exceeds the
         Aggregate Note Principal Balance during such calendar quarter. The
         Commitment Fee shall be payable in arrears on each Payment Date for the
         immediately preceding Collection Period commencing on the first such
         date following the date hereof, with a final payment on the expiration
         or termination of the Revolving Credit Period.

                  5.1.2. OTHER FEES. The Borrowers shall pay to the
         Administrative Agent for its own account fees in the amount and at the
         times specified in the Fee Letter.




                                      -53-


         Such fees shall be fully earned when paid and shall not be refundable
         for any reason whatsoever. The Borrowers shall also pay to the Lenders
         such fees as shall have been separately agreed upon in writing in the
         amounts and at the times so specified. Such fees shall be fully earned
         when paid and shall not be refundable for any reason whatsoever.

                  5.2. FUNDS FOR PAYMENTS.

                  5.2.1. PAYMENTS TO ADMINISTRATIVE AGENT. All payments of
         principal, interest, Fees and any other amounts due hereunder or under
         any of the other Loan Documents shall be made on the due date thereof
         to the Administrative Agent in Dollars, for the accounts of the Lenders
         and the Administrative Agent, at the Administrative Agent's Office or
         at such other place that the Administrative Agent may from time to time
         designate, in each case at or about 11:00 a.m. (Rotterdam, The
         Netherlands time or other local time at the place of payment) and in
         immediately available funds. The Borrowers hereby authorize the
         Administrative Agent to effect all payments due hereunder or under any
         of the other Loan Documents when due by directly withdrawing such funds
         from the Trust Account or any other accounts as the Borrowers shall
         maintain with the Administrative Agent, without any prior notice from
         the Administrative Agent to the Borrowers. The Administrative Agent
         agrees to notify the Borrowers following any such payment.

                  5.2.2. NO OFFSET, ETC.

                  (a) Subject to Section 5.2.3, all payments by the Borrowers
         hereunder and under any of the other Loan Documents shall be made
         without recoupment, setoff or counterclaim and free and clear of and
         without deduction for any taxes (including interest, penalties and
         additions to tax), levies, imposts, duties, charges, fees, deductions,
         withholdings, compulsory loans, restrictions or conditions of any
         nature now or hereafter imposed or levied by any jurisdiction or any
         political subdivision thereof or taxing or other authority therein
         unless the Borrowers are compelled by law to make such deduction or
         withholding. If any Non-Excluded Taxes are imposed upon the Borrowers
         with respect to any amount payable by it hereunder or under any of the
         other Loan Documents, the Borrowers will pay to the Administrative
         Agent, for the account of the Lenders or (as the case may be) the
         Administrative Agent, on the date on which such amount is due and
         payable hereunder or under such other Loan Document, such additional
         amount in Dollars as shall be necessary to enable the Lenders or the
         Administrative Agent to receive the same net amount which the Lenders
         or the Administrative Agent would have received on such due date had no
         such Non-Excluded Taxes been imposed upon the Borrowers. The Borrowers
         will deliver promptly to the Administrative Agent certificates or other
         valid vouchers for all taxes or other charges deducted from or paid
         with respect to payments made by the Borrowers under such other Loan
         Document.



                                      -54-


                  (b) In addition, the Borrowers agree to pay to the relevant
         Governmental Authority in accordance with applicable law any current or
         future stamp or documentary taxes or any other excise or property
         taxes, charges or similar levies (including, without limitation,
         mortgage recording taxes, transfer taxes and similar fees) imposed by
         the United States or any taxing authority thereof or therein that arise
         from any payment made hereunder ("Other Taxes").

                  (c) Subject to Section 5.2.3, the Borrowers agree to indemnify
         the Lenders and the Administrative Agent for the full amount of
         Non-Excluded Taxes (including additional amounts with respect thereto)
         and Other Taxes, and any liability (including penalties, interest and
         expenses) arising therefrom or with respect thereto, provided that the
         Lenders or the Administrative Agent, as the case may be, shall have
         provided the Borrowers with evidence, reasonably satisfactory to the
         Borrowers, of payment of Non-Excluded Taxes or Other Taxes, as the case
         may be.

                  (d) Any Lender or the Administrative Agent that becomes
         entitled to the payment of additional amounts pursuant to Section
         5.2.2(a) shall use reasonable efforts (consistent with applicable law)
         to file any document reasonably requested by the relevant Borrower or,
         if a Lender, to change the jurisdiction of its applicable lending
         office if the making of such a filing or change of office, as the case
         may be, would avoid the need for or reduce the amount of any payment of
         such additional amounts that may thereafter accrue and would not, in
         the good faith determination of such Lender or the Administrative
         Agent, as applicable, be disadvantageous to it.

                  (e) If a Lender or the Administrative Agent receives any
         refund with respect to taxes for which the Borrowers have paid any
         additional amounts pursuant to Section 5.2.2(a)U, then such Lender or
         the Administrative Agent, as applicable, shall promptly pay to the
         Borrowers the portion of the sum of such refund and any interest
         received with respect thereto as it determines, in its reasonable, good
         faith judgment, will leave it, after such payment, in no better or
         worse financial position than it would have been absent the imposition
         of such taxes and the payment of such additional amounts pursuant to
         Section 5.2.2(a)U; provided, however, that (i) the Borrowers agree to
         promptly return any amount paid to the Borrowers pursuant to this
         Section 5.2.2(d)U upon notice from such Lender or the Administrative
         Agent, as applicable, that such refund or any portion thereof is
         required to be repaid to the relevant taxing authority, (ii) nothing in
         this Section 5.2.2(e) shall require a Lender to disclose any
         confidential information to the Borrowers (including, without
         limitation, its tax returns), and (iii) no Lender shall be required to
         pay any amounts pursuant to this Section 5.2.2(e) at any time which a
         Default or Event of Default exists.

                  (f) If the Borrowers determine in good faith that a reasonable
         basis exists for contesting any Non-Excluded Taxes for which additional
         amounts have been paid pursuant to Section 5.2.2(a), the relevant
         Lender or Administrative




                                      -55-


         Agent (to the extent such Person reasonably determines in good faith
         that it will not suffer any adverse effect as a result thereof) shall
         cooperate with the Borrowers in challenging such Non-Excluded Taxes, at
         the Borrowers' expense, if so requested by the Borrowers in writing.

                  5.2.3. NON-U.S. LENDERS. Each Lender and the Administrative
         Agent that is not a U.S. Person as defined in Section 7701(a)(30) of
         the Code for U.S. federal income tax purposes (a "Non-U.S. Lender")
         hereby agrees that it shall, prior to the date of the first payment by
         the Borrowers hereunder to be made to such Lender or the Administrative
         Agent or for such Lender's or the Administrative Agent's account (and
         thereafter when required to the extent it is legally entitled to do
         so), deliver to the Borrowers and the Administrative Agent, as
         applicable, such certificates, documents or other evidence, as and when
         required by the Code, including (a) two (2) duly completed copies of
         Internal Revenue Service Form W-8BEN or Form W-8ECI and any other
         certificate or statement of exemption required by the Code, or any
         subsequent versions thereof or successors thereto, properly completed
         and duly executed by such Lender or the Administrative Agent
         establishing that with respect to payments of principal, interest or
         fees hereunder it is (i) not subject to United States federal
         withholding tax under the Code because such payment is effectively
         connected with the conduct by such Lender or Administrative Agent of a
         trade or business in the United States or (ii) totally exempt from
         United States federal withholding tax under a provision of an
         applicable tax treaty or (b) in the case of a Non-U.S. Lender that is
         not legally entitled to deliver the forms specified in clause (a) and
         that is not a "bank" for purposes of Section 881(c)(3)(A) of the Code,
         a certificate in form and substance reasonably satisfactory to the
         Administrative Agent and the Borrower and to the effect that (i) such
         Non-U.S. Lender is not a "bank" for purposes of Section 881(c)(3)(A) of
         the Code, is not subject to regulatory or other legal requirements as a
         bank in any jurisdiction, and has not been treated as a bank for
         purposes of any tax, securities law or other filing or submission made
         to any governmental authority, any application made to a rating agency
         or qualification for any exemption from any tax, securities law or
         other legal requirements, (ii) is not a ten (10) percent shareholder
         for purposes of Section 881(c)(3)(B) of the Code and (iii) is not a
         controlled foreign corporation receiving interest from a related person
         for purposes of Section 881(c)(3)(C) of the Code, together with a
         properly completed Internal Revenue Service Form W-8BEN; provided, that
         an Administrative Agent that delivers the forms and certificate
         provided in clause (b) above must also deliver to the Borrowers two
         accurate, complete and signed copies of either Internal Revenue Service
         Form W-8BEN or W-8ECI, or, in each case, an applicable successor form,
         establishing a complete exemption from withholding of U.S. federal
         income tax imposed on the payment of any fees to such Administrative
         Agent. Each Lender agrees that it shall, promptly upon a change of its
         lending office or the selection of any additional lending office, to
         the extent the forms previously delivered by it pursuant to this
         section are no longer effective, and promptly upon the Borrower's or
         the Administrative Agent's reasonable request after the occurrence of
         any other event




                                      -56-


         (including the passage of time) requiring the delivery of a Form W-8BEN
         or Form W-8ECI in addition to or in replacement of the forms previously
         delivered, deliver to the Borrower and the Administrative Agent, as
         applicable, if and to the extent it is properly entitled to do so, a
         properly completed and executed Form W-8BEN or Form W-8ECI, as
         applicable (or any successor forms thereto). For any period with
         respect to which such Lender or Administrative Agent has failed to
         provide the Borrowers with the appropriate form or other relevant
         document pursuant to this Section 5.2.3 establishing a complete
         exemption from U.S. federal withholding tax (unless such failure is due
         to a change in treaty, law, or regulation occurring subsequent to the
         date on which a form originally was required to be provided), such
         Lender or Administrative Agent shall not be entitled to any "gross-up"
         of Taxes or indemnification under Section 5.2.2 with respect to
         Non-Excluded Taxes or Other Taxes imposed by the United States;
         provided, however, that should such a Lender or Administrative Agent,
         which is otherwise exempt from a withholding tax, become subject to
         Non-Excluded Taxes or Other Taxes because of its failure to deliver a
         form required hereunder, the Borrowers shall take such steps as such
         Lender or Administrative Agent shall reasonably request, at such
         Lender's or Administrative Agent's expense, to assist such Lender or
         Administrative Agent to recover such Non-Excluded Taxes or Other Taxes.

                  5.3. COMPUTATIONS. All computations of interest on the Loans
         and of Fees shall be based on a 360-day year (or 365 day year with
         respect to interest calculations on Base Rate Loans) and paid for the
         actual number of days elapsed. Except as otherwise provided in the
         definition of the term "Interest Period" with respect to LIBOR Rate
         Loans, whenever a payment hereunder or under any of the other Loan
         Documents becomes due on a day that is not a Business Day, the due date
         for such payment shall be extended to the next succeeding Business Day,
         and interest shall accrue during such extension. The outstanding amount
         of any Revolving Credit Note as reflected on its Record from time to
         time shall, absent manifest error, be considered correct and binding on
         the Borrowers unless within five (5) Business Days after receipt of any
         notice by the Administrative Agent or any of the Lenders of such
         outstanding amount, the Administrative Agent or such Lender shall
         notify the Borrowers to the contrary.

                  5.4. INABILITY TO DETERMINE LIBOR RATE. In the event, prior to
         the commencement of any Interest Period relating to any LIBOR Rate
         Loan, any Lender shall determine that (a) adequate and reasonable
         methods do not exist for ascertaining the LIBOR Rate that would
         otherwise determine the rate of interest to be applicable to any LIBOR
         Rate Loan during any Interest Period or (b) the LIBOR Rate determined
         or to be determined for such Interest Period will not adequately and
         fairly reflect the cost to such Lender of making or maintaining their
         LIBOR Rate Loans during such period, such Lender shall forthwith give
         notice of such determination (which shall be conclusive and binding on
         the Borrower) to the Borrower and the Administrative Agent. In such
         event (i) any Loan Request with respect to LIBOR Rate Loans shall be
         automatically




                                      -57-


         withdrawn and shall be deemed a request for Base Rate Loans, (ii) each
         LIBOR Rate Loan will automatically, on the last day of the then current
         Interest Period relating thereto, become a Base Rate Loan, and (iii)
         the obligations of the Lenders to make LIBOR Rate Loans shall be
         suspended until the Administrative Agent determines that the
         circumstances giving rise to such suspension no longer exist, whereupon
         the Administrative Agent shall so notify the Borrowers and the Lenders
         and each Base Rate Loan shall automatically convert to a LIBOR Rate
         Loan on the last day of the then current Interest Period.

                  5.5. ILLEGALITY. Notwithstanding any other provisions herein,
         if any present or future law, regulation, treaty or directive or the
         interpretation or application thereof shall make it unlawful for any
         Lender to make or maintain LIBOR Rate Loans, such Lender shall
         forthwith give notice of such circumstances to the Borrowers, the
         Administrative Agent and the other Lenders and thereupon (a) the
         commitment of such Lender to make LIBOR Rate Loans shall forthwith be
         suspended until such time as the condition giving rise to such
         illegality no longer exists and (b) such Lender's Loans then
         outstanding as LIBOR Rate Loans, if any, shall be converted
         automatically to Base Rate Loans on the last day of each Interest
         Period applicable to such LIBOR Rate Loans or within such earlier
         period as may be required by law. The Borrowers hereby agrees promptly
         to pay the Administrative Agent for the account of such Lender, upon
         demand by such Lender, any additional amounts necessary to compensate
         such Lender for any costs incurred by such Lender in making any
         conversion in accordance with this Section 5.5, including any interest
         or fees payable by such Lender to lenders of funds obtained by it in
         order to make or maintain its LIBOR Rate Loans hereunder. If the
         Administrative Agent determines that the condition giving rise to such
         illegality no longer exists, the Administrative Agent shall promptly
         notify the Borrowers and the Lender, and each Base Rate Loan shall
         automatically convert to a Libor Rate Loan on the last day of the
         current Interest Period.

                  5.6. ADDITIONAL COSTS, ETC. If any present or future
         applicable law, which expression, as used herein, includes statutes,
         rules and regulations thereunder and interpretations thereof by any
         competent court or by any governmental or other regulatory body or
         official charged with the administration or the interpretation thereof
         and requests, directives, instructions and notices at any time or from
         time to time hereafter made upon or otherwise issued to any Lender or
         the Administrative Agent by any central bank or other fiscal, monetary
         or other authority (whether or not having the force of law), shall:

                  (a) impose or increase or render applicable (other than to the
         extent specifically provided for elsewhere in this Loan Agreement) any
         special deposit, reserve, assessment, liquidity, capital adequacy or
         other similar requirements (whether or not having the force of law)
         against assets held by, or deposits in or for the account of, or loans
         by, or letters of credit issued by, or commitments of an office of any
         Lender, or



                                      -58-


                  (b) impose on any Lender or the Administrative Agent any other
         conditions or requirements with respect to this Loan Agreement, the
         other Loan Documents, the Loans, such Lender's Commitment or any class
         of loans or commitments of which any of the Loans form a part, and the
         result of any of the foregoing is

                        (i) to increase the cost to any Lender of making,
                  funding, issuing, renewing, extending or maintaining any of
                  the Loans, or

                        (ii) to reduce the amount of principal, interest, or
                  other amount payable such Lender or the Administrative Agent
                  hereunder on account of such Lender's Commitment or any of the
                  Loans, or

                        (iii) to require such Lender or the Administrative Agent
                  to make any payment or to forego any interest or other sum
                  payable hereunder, the amount of which payment or foregone
                  interest or other sum is calculated by reference to the gross
                  amount of any sum receivable or deemed received by such Lender
                  or the Administrative Agent from the Borrowers hereunder,


         then, and in each such case, the Borrowers will, upon demand made by
         such Lender or (as the case may be) the Administrative Agent at any
         time and from time to time and as often as the occasion therefor may
         arise, pay to such Lender or the Administrative Agent such additional
         amounts as will be sufficient to compensate such Lender or the
         Administrative Agent for such additional cost, reduction, payment or
         foregone interest or other sum (other than taxes which shall be treated
         exclusively pursuant to Section 5.2.2).

                  The failure or delay on the part of any Lender to demand
         compensation for any increased costs shall not constitute a waiver of
         such Lender's right to demand such compensation; provided, that no
         Borrower shall be under any obligation to compensate any Lender under
         this Section 5.6 for any increased costs with respect to any period
         prior to the date that is 120 days prior to such request if such Lender
         knew of the circumstances giving rise to such increased costs and of
         the fact that such circumstances would result in a claim for increased
         compensation by reason of such increased costs.

                  5.7. CAPITAL ADEQUACY. If after the date hereof any Lender or
         the Administrative Agent determines that (a) the adoption of or change
         in any law, governmental rule, regulation, policy, guideline or
         directive (whether or not having the force of law) regarding capital
         requirements for banks or bank holding companies or any change in the
         interpretation or application thereof by a Governmental Authority with
         appropriate jurisdiction, or (b) compliance by such Lender or the
         Administrative Agent or any corporation controlling such Lender or the
         Administrative Agent with any law, governmental rule, regulation,
         policy, guideline or directive (whether or not having the force of law)
         of any such entity




                                      -59-


         regarding capital adequacy, has the effect of reducing the return on
         such Lender's or the Administrative Agent's commitment with respect to
         any Loans to a level below that which such Lender or the Administrative
         Agent could have achieved but for such adoption, change or compliance
         (taking into consideration such Lender's or the Administrative Agent's
         then existing policies with respect to capital adequacy and assuming
         full utilization of such entity's capital) by any amount deemed by such
         Lender or (as the case may be) the Administrative Agent to be material,
         then such Lender or the Administrative Agent may notify the Borrowers
         of such fact. To the extent that the amount of such reduction in the
         return on capital is not reflected in the Base Rate, the Borrowers
         agree to pay such Lender or (as the case may be) the Administrative
         Agent for the amount of such reduction in the return on capital as and
         when such reduction is determined upon presentation by such Lender or
         (as the case may be) the Administrative Agent of a certificate in
         accordance with Section 5.8 hereof. Such Lender or (as the case may be)
         the Administrative Agent shall allocate such cost increases among its
         customers in good faith and on an equitable basis.

                  The failure or delay on the part of any Lender to demand
         compensation for any reduction in amounts received or receivable or
         reduction in return on capital shall not constitute a waiver of such
         Lender's right to demand such compensation; provided, that no Borrower
         shall be under any obligation to compensate any Lender under this
         Section 5.7 for any reductions with respect to any period prior to the
         date that is 120 days prior to such request if such Lender knew of the
         circumstances giving rise to such reductions and of the fact that such
         circumstances would result in a claim for increased compensation by
         reason of such reductions.

                  5.8. CERTIFICATE. A certificate setting forth any additional
         amounts payable pursuant to Sections 5.6 or 5.7 and a brief explanation
         of such amounts which are due, submitted by any Lender or the
         Administrative Agent to the Borrowers, shall be conclusive, absent
         manifest error, that such amounts are due and owing.

                  5.9. INDEMNITY. The Borrowers agree to indemnify each Lender
         and to hold each Lender harmless from and against any loss, cost or
         expense (including loss of anticipated profits) that such Lender may
         sustain or incur as a consequence of (a) default by the Borrowers in
         payment of the principal amount of or any interest on any LIBOR Rate
         Loans as and when due and payable, including any such loss or expense
         arising from interest or fees payable by such Lender to lenders of
         funds obtained by it in order to maintain its LIBOR Rate Loans, (b)
         default by the Borrowers in making a borrowing after the Borrower has
         given (or is deemed to have given) a Loan Request relating thereto in
         accordance with Section 2.3, or (c) the making of any payment of a
         LIBOR Rate Loan that is not the last day of the applicable Interest
         Period with respect thereto, including interest or fees payable by such
         Lender to lenders of funds obtained by it in order to maintain any such
         Loans.




                                      -60-


                  5.10. INTEREST AFTER DEFAULT. Overdue principal and (to the
         extent permitted by applicable law) overdue interest on the Loans and
         all other overdue amounts payable hereunder or under any of the other
         Loan Documents shall bear interest compounded monthly and payable on
         demand at a rate per annum equal to two percent (2%) above the then
         applicable rate of interest under this Loan Agreement or the other Loan
         Documents until such amount shall be paid in full (after as well as
         before judgment).

                  6. COLLATERAL SECURITY.

                  6.1. SECURITY OF BORROWERS. Subject to the Security Documents,
         the Obligations are and shall continue to be secured by a perfected
         first priority security interest (subject only to Permitted Liens
         entitled to priority under applicable law) in the Collateral specified
         in the Security Documents, whether now owned or hereafter acquired,
         pursuant to the terms of the Security Documents to which the Borrowers
         are a party.

                  7. REPRESENTATIONS AND WARRANTIES.

                  In order to induce the Lenders to enter into this Loan
         Agreement and to make the Loans as provided for herein, each Borrower
         makes, on a joint and several basis, the following representations,
         warranties and agreements with the Administrative Agent and Lenders, in
         each case after giving effect to the Transaction, all of which shall
         survive the execution and delivery of this Loan Agreement and the
         making of the Loans (with the occurrence of the Closing Date and each
         Funding Date on or after the Closing Date being deemed to constitute a
         representation and warranty that the matters specified in this Section
         7 are true and correct in all material respects on and as of the
         Closing Date and on and as of such Funding Date unless stated to relate
         to a specific earlier date in which case such representations and
         warranties shall be true and correct in all material respects as of
         such earlier date):

                  7.1. COMPANY STATUS. Each Borrower and each of their
         respective Subsidiaries (i) is a duly organized and validly existing
         Company in good standing (or its equivalent) under the laws of the
         jurisdiction of its organization except where the failure to be so duly
         organized, validly existing and in good standing, either individually
         or in the aggregate, would not reasonably be expected to have a
         Material Adverse Effect, (ii) has the Company power and authority to
         own its property and assets and to transact the business in which it is
         presently engaged, except where the failure to have such power and
         authority, either individually or in the aggregate, would not
         reasonably be expected to have a Material Adverse Effect and (iii) is
         duly qualified and is authorized to do business and is in good standing
         (or its equivalent) in all jurisdictions where it is required to be so
         qualified (or its equivalent) and where the failure to be so qualified,
         either individually or in the aggregate, would reasonably be expected
         to have a Material Adverse Effect.



                                      -61-


                  7.2. COMPANY POWER AND AUTHORITY. Each Borrower has the
         Company power and authority to execute, deliver and carry out the terms
         and provisions of the Loan Documents to which it is a party and has
         taken all necessary Company action to authorize the execution, delivery
         and performance of the Loan Documents to which it is a party. Each
         Borrower has duly executed and delivered each Loan Document to which it
         is a party and each such Loan Document constitutes the legal, valid and
         binding obligation of such Borrower enforceable in accordance with its
         terms, except to the extent that the enforceability thereof may be
         limited by applicable bankruptcy, insolvency, reorganization,
         moratorium or similar laws generally affecting creditors' rights and by
         equitable principles (regardless of whether enforcement is sought in
         equity or at law).

                  7.3. NO VIOLATION. Neither the execution, delivery or
         performance by any Borrower of the Loan Documents to which it is a
         party, nor compliance by such Borrower with the terms and provisions
         thereof, nor the consummation of the transactions contemplated herein
         or therein, (i) will contravene any material provision of any
         applicable law, statute, rule or regulation, or any order, writ,
         injunction or decree of any court or governmental instrumentality, (ii)
         will conflict or be inconsistent with or result in any breach of, any
         of the terms, covenants, conditions or provisions of, or constitute a
         default under, or (other than pursuant to the Security Documents)
         result in the creation or imposition of (or the obligation to create or
         impose) any Lien upon any of the property or assets of such Borrower or
         any of its Subsidiaries pursuant to the terms of any indenture,
         mortgage, deed of trust, loan agreement, credit agreement or any other
         agreement, contract or instrument to which such Borrower or any of its
         Subsidiaries is a party or by which it or any of its material property
         or assets are bound or to which it may be subject, or (iii) will
         violate any provision of the certificate of incorporation, by-laws,
         certificate of partnership, partnership agreement, certificate of
         limited liability company, limited liability company agreement or
         equivalent organizational document, as the case may be, of such
         Borrower or any of its Subsidiaries.

                  7.4. LITIGATION. There are no actions, suits, proceedings or
         investigations pending or, to the knowledge of the Borrower, threatened
         in writing (i) with respect to any Loan Document or (ii) with respect
         to any other matter, as to which there is a reasonable possibility of
         an adverse determination and that, if adversely determined, either
         individually or in the aggregate, would reasonably be expected to have
         a Material Adverse Effect.

                  7.5. USE OF PROCEEDS; MARGIN REGULATIONS. (a) The proceeds of
         the Closing Date Advance shall not be used for any purpose other than
         as set forth on Schedule 7.5. The proceeds of all Post-Closing Advances
         shall be used solely for (i) the acquisition of additional Eligible
         Containers, (ii) payment of the UBS Lease Termination Payments, (iii)
         in the event that the Purchase Price (as defined in the Stock Purchase
         Agreement) is subject to a post closing increase pursuant to




                                      -62-


         either Section 2.05 or 2.06 of the Stock Purchase Agreement, to pay the
         amount of such increase, and (iv) for general corporate purposes,
         including the making of any Permitted Disbursement.

                  (b) No part of any Loan (or the proceeds thereof) will be used
         to purchase or carry any Margin Stock or to extend credit for the
         purpose of purchasing or carrying any Margin Stock. Neither the making
         of any Loan nor the use of the proceeds thereof nor the occurrence of
         any other Loan will violate or be inconsistent with the provisions of
         Regulation T, Regulation U or Regulation X.

                  7.6. GOVERNMENTAL APPROVALS. Except as may have been obtained
         or made on or prior to the Closing Date (and which remain in full force
         and effect on the Closing Date), no order, consent, approval, license,
         authorization or validation of, or filing, recording or registration
         with, or exemption by, any domestic or foreign governmental or public
         body or authority, or any subdivision thereof, is required to authorize
         or is required in connection with (i) the execution, delivery and
         performance of any Loan Document or (ii) the legality, validity,
         binding effect or enforceability of any Loan Document, in each case,
         except for (A) the filing of any Security Documents and (B) such the
         failure of which to make or obtain, individually or in the aggregate,
         would not reasonably be expected to result in a Material Adverse
         Effect.

                  7.7. INVESTMENT COMPANY ACT. None of the Borrower nor any of
         their respective Subsidiaries is an "investment company" or a company
         "controlled" by an "investment company," within the meaning of the
         Investment Company Act of 1940, as amended.

                  7.8. PUBLIC UTILITY HOLDING COMPANY ACT. None of the Borrower
         nor any of their respective Subsidiaries is a "holding company" or a
         "subsidiary company" of a "holding company," or an "affiliate" of a
         "holding company" or of a "subsidiary company" of a "holding company,"
         within the meaning of the Public Utility Holding Company Act of 1935,
         as amended.

                  7.9. TRUE AND COMPLETE DISCLOSURE. All factual information
         (taken as a whole) furnished by or on behalf of the Borrowers or any of
         their respective Subsidiaries in writing to the Administrative Agent or
         any Lender (including, without limitation, all information contained in
         the Loan Documents) for purposes of or in connection with this Loan
         Agreement and the Transaction is, and all other such factual
         information (taken as a whole) hereafter furnished by, or on behalf of,
         the Borrowers or any of their respective Subsidiaries in writing to the
         Administrative Agent or any Lender in connection with this Loan
         Agreement will be, true and accurate in all material respects on the
         date as of which such information is dated or certified and not
         incomplete by omitting to state any material fact necessary to make
         such information (taken as a whole) not misleading in any material
         respect at such time in light of the circumstances under




                                      -63-


         which such information was provided; provided, however, that to the
         extent that any such information was based upon or constitutes a
         forecast or projection, each Borrower represents only that it acted in
         good faith and utilized assumptions believed by the management of such
         Borrower to be reasonable at the time made in the preparation of such
         information (it being understood by the Administrative Agent and the
         Lenders that any financial information as it relates to future events
         is not to be viewed as fact and that actual results during the period
         or periods covered thereby may differ from the projected results set
         forth therein).

                  7.10. FINANCIAL CONDITION; FINANCIAL STATEMENTS. (a) On and as
         of the Closing Date, on a pro forma basis after giving effect to the
         Acquisition and to all Indebtedness (including the Loans) incurred, and
         to be incurred, and Liens created, and to be created, by each Borrower
         in connection therewith, with respect the Borrowers and their
         respective Subsidiaries (on a consolidated basis) (x) the sum of the
         assets, at a fair valuation, of the Borrowers and their respective
         Subsidiaries (on a consolidated basis) will exceed its or their debts,
         (y) they have not incurred nor intended to, nor believe that they will,
         incur debts beyond their ability to pay such debts as such debts mature
         and (z) they will not have unreasonably small capital with which to
         conduct their business in the manner such business is now conducted.
         For purposes of this Section 7.10(a), "debt" means any liability on a
         claim, and "claim" means (i) right to payment, whether or not such a
         right is reduced to judgment, liquidated, unliquidated, fixed,
         contingent, matured, unmatured, disputed, undisputed, legal, equitable,
         secured or unsecured or (ii) right to an equitable remedy for breach of
         performance if such breach gives rise to a payment, whether or not such
         right to an equitable remedy is reduced to judgment, fixed, contingent,
         matured, unmatured, disputed, undisputed, secured or unsecured. The
         amount of contingent liabilities at any time shall be computed as the
         amount that, in the light of all facts and circumstances existing at
         such time, represents the amount that can reasonably be expected to
         become an actual or matured liability.

                  (b) (i) The consolidated balance sheets of the Borrowers and
         their Consolidated Subsidiaries for its fiscal year ended December 31,
         2003 and its fiscal quarter ended September 30, 2004 and the related
         consolidated statements of income and cash flows and changes in
         shareholders' equity of the Borrower for the fiscal year and fiscal
         quarter ended on such dates, in each case furnished to the
         Administrative Agent and Lenders prior to the Closing Date, present
         fairly in all material respects the consolidated financial position of
         the Borrower and its Subsidiaries at the date of said balance sheets
         and the consolidated results of their operations for the respective
         periods covered thereby. All of the foregoing financial statements have
         been prepared in accordance with GAAP consistently applied (except, in
         the case of the aforementioned quarterly financial statements, for
         normal year-end audit adjustments and the absence of footnotes).

                           (ii) The pro forma consolidated balance sheet of the
                  Borrowers as of September 30, 2004 (after giving effect to the
                  Transaction and the




                                      -64-


                  financing therefor), a copy of which has been furnished to the
                  Administrative Agent and the Lenders prior to the Closing
                  Date, present fairly in all material respects the pro forma
                  consolidated financial position of the Borrowers and their
                  Subsidiaries as of September 30, 2004 (it being understood
                  that estimates, by their nature, are inherently uncertain and
                  that no assurances are being made that such results will be
                  achieved.

                  (c) Since September 30, 2004, there has been no change in the
         business, financial condition or operations of the Borrowers taken as a
         whole (other than the Acquisition, the incurrence of Indebtedness under
         the Loan Documents and the Seller Loan and the consummation of the
         transactions contemplated thereby) that would reasonably be expected to
         have, either individually or in the aggregate, a Material Adverse
         Effect.

                  7.11. SECURITY INTERESTS. On and after the Closing Date, each
         of the Security Documents creates as security for the Obligations
         covered thereby, a valid and enforceable security interest in and Lien
         on all of the Collateral subject thereto, without prejudice to any
         statutory priority rights, superior to and prior to the rights of all
         third Persons, and subject to no other Liens except Permitted Liens.
         The Borrowers have filed or caused to be filed all UCC financing
         statements in the appropriate offices therefor (or has authenticated
         and delivered to the Administrative Agent UCC financing statements
         suitable for filing in such offices) and has taken all of the actions
         necessary to create perfected security interests in the Collateral
         which the Security Documents require the Borrowers to create perfected
         security interests.

                  7.12. COMPLIANCE WITH ERISA. Each of the Borrowers and each of
         their respective ERISA Affiliates is in compliance in all material
         respects with the applicable provisions of ERISA and the regulations
         and published interpretations thereunder. No ERISA Event has occurred
         or is reasonably expected to occur that, when taken together with all
         other such ERISA Events, could reasonably be expected to result in any
         liability of any Borrower or any of their respective ERISA Affiliates
         in excess of $20,000,000. The present value of all benefit liabilities
         under each Plan (based on the assumptions used for purposes of
         Statement of Financial Accounting Standards No. 87) did not, as of the
         last annual valuation date applicable thereto, exceed by more than
         $15,000,000 the fair market value of the assets of such Plan, and the
         present value of all benefit liabilities of all underfunded Plans
         (based on the assumptions used for purposes of Statement of Financial
         Accounting Standards No. 87) did not, as of the last annual valuation
         date applicable thereto, exceed by more than $20,000,000 the fair
         market value of the assets of all such underfunded Plans.

                  7.13. SUBSIDIARIES. On and as of the Closing Date, the
         Borrowers have no Subsidiaries other than those Subsidiaries listed on
         Schedule 7.13. Schedule 7.13 sets forth, as of the Closing Date, (i)
         the percentage ownership (direct and indirect) of each Borrower in each
         class of Capital Stock of each of its




                                      -65-


         Subsidiaries and also identifies the direct owner thereof and (ii) the
         jurisdiction of organization of each such Subsidiary. All outstanding
         shares of Capital Stock of each Subsidiary of each Borrower have been
         duly and validly issued, are fully paid and non-assessable (to the
         extent applicable in the jurisdiction of organization of such
         Subsidiary). No Subsidiary of any Borrower has outstanding any
         securities convertible into or exchangeable for its Capital Stock or
         outstanding any right to subscribe for or to purchase, or any options
         or warrants for the purchase of, or any agreement providing for the
         issuance (contingent or otherwise) of or any calls, commitments or
         claims of any character relating to, its Capital Stock or any stock
         appreciation or similar rights. Except for the existing investments
         described on Schedule 7.13, as of the Closing Date, none of the
         Borrowers nor any of their Subsidiaries owns or holds, directly or
         indirectly, any Capital Stock of any Person other than its Subsidiaries
         indicated on Schedule 7.13.

                  7.14. COMPLIANCE WITH STATUTES; AGREEMENTS, ETC. Each Borrower
         and each of their respective Subsidiaries is in compliance with (i) all
         applicable statutes, regulations, rules and orders of, and all
         applicable restrictions imposed by, all governmental bodies, domestic
         or foreign, in respect of the conduct of its business (including the
         origination of Leases) and the ownership of its property (excluding
         applicable statutes, regulations, orders and restrictions relating to
         environmental standards and controls, which matters are covered under
         Section 7.15) and (ii) all contracts and agreements to which it is a
         party, except, in each case, such non-compliances as would not
         reasonably be expected to have, either individually or in the
         aggregate, a Material Adverse Effect.

                  7.15. ENVIRONMENTAL MATTERS. Except as would not reasonably be
         expected to result in, either individually or in the aggregate, a
         Material Adverse Effect: (i) each of the Borrower and their respective
         Subsidiaries has complied with all applicable Environmental Laws and
         the requirements of any permits issued under such Environmental Laws
         and none of the Borrowers nor any of their respective Subsidiaries is
         liable for any penalties, fines or forfeitures for failure to comply
         with any of the foregoing; (ii) there are no pending Environmental
         Claims or, to the knowledge of any Senior Designated Officer of the
         Borrower, Environmental Claims threatened in writing against any
         Borrower or any of their Subsidiaries or any property (real or
         personal) owned, leased or operated by any Borrower or any of their
         Subsidiaries (including, to the knowledge of any Senior Designated
         Officer of any Borrower, any such claim arising out of the ownership,
         lease or operation by any Borrower or any of its Subsidiaries of any
         property (real or personal) formerly owned, leased or operated by any
         Borrower or any of their Subsidiaries but no longer owned, leased or
         operated by such Borrower or any of its Subsidiaries); and (iii) to the
         knowledge of any Senior Designated Officer of the Borrower, there are
         no facts, circumstances, conditions or occurrences on or arising from
         any property (real or personal) owned, leased or operated by any
         Borrower or any of their Subsidiaries (including any property (real or
         personal) formerly owned, leased or operated by




                                      -66-


         any Borrower or any of their Subsidiaries but no longer owned, leased
         or operated by such Borrower or any of its Subsidiaries) or relating to
         the past or present operations of any Borrower or any of its
         Subsidiaries that could reasonably be expected to form the basis of an
         Environmental Claim against such Borrower or any of its Subsidiaries or
         any such property (real or personal).

                  7.16. LABOR RELATIONS. As of the Closing Date, there are no
         strikes, lockouts or slowdowns against any Borrower or any of their
         respective Subsidiaries pending, or to the knowledge of the Borrowers,
         threatened. The hours worked by and payments made to employees of the
         Borrowers and their respective Subsidiaries have not been in violation
         of the Fair Labor Standards Act or and other applicable federal, state
         or local law dealing with such matters, except for such violations that
         would not reasonably be expected, individually or in the aggregate, to
         result in a Material Adverse Effect.

                  7.17. TAX RETURNS AND PAYMENTS. Each of the Borrowers and each
         of their respective Subsidiaries has timely filed (including applicable
         extensions) with the appropriate taxing authority, all federal and
         other material returns, statements, forms and reports for taxes (the
         "Returns") required to be filed by or with respect to the income,
         properties or operations of the Borrower and each of its Subsidiaries.
         The Returns accurately reflect in all material respects all liability
         for taxes of the Borrowers and each of their Subsidiaries as a whole
         for the periods covered thereby. The Borrowers and each of their
         Subsidiaries have paid all material taxes payable by them other than
         those contested in good faith and for which adequate reserves have been
         established in accordance with GAAP.

                  7.18. SCHEDULED EXISTING INDEBTEDNESS. Schedule 7.18 sets
         forth all material Indebtedness of the Borrowers and their Subsidiaries
         as of the Closing Date and which is to remain outstanding immediately
         after giving effect to the Transaction and the incurrence of Loans on
         such date (exclusive of Indebtedness pursuant to this Loan Agreement
         and the other Loan Documents), in each case showing the aggregate
         principal amount thereof (and the aggregate amount of any undrawn
         commitments with respect thereto) and the name of the respective
         borrower and any other entity which directly or indirectly guarantees
         such debt.

                  7.19. INSURANCE. Schedule 7.19 sets forth a summary of all
         insurance maintained by the Borrowers and their Subsidiaries on and as
         of the Closing Date and after giving effect to the Transaction, with
         the amounts insured (and any deductibles) set forth therein.

                  7.20. FOREIGN ASSETS CONTROL REGULATIONS, ETC. None of the
         requesting or borrowing of any Loan or the use of the proceeds of such
         will violate the Trading With the Enemy Act (50 U.S.C. ss. 1 et seq.,
         as amended) (the "Trading With the Enemy Act") or any of the foreign
         assets control regulations of the United States Treasury Department (31
         CFR, Subtitle B, Chapter V, as amended) (the "Foreign Assets Control
         Regulations") or any enabling legislation or




                                      -67-


         executive order relating thereto (which for the avoidance of doubt
         shall include, but shall not be limited to (a) Executive Order 13224 of
         September 21, 2001 Blocking Property and Prohibiting Transactions With
         Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed.
         Reg. 49079 (2001)) (the "Executive Order") and (b) the Uniting and
         Strengthening America by Providing Appropriate Tools Required to
         Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56)).
         Furthermore, none of the Borrowers or their Affiliates (a) is or will
         become a "blocked person" as described in the Executive Order, the
         Trading With the Enemy Act or the Foreign Assets Control Regulations or
         (b) engages or will engage in any dealings or transactions, or be
         otherwise associated, with any such "blocked person".

                  7.21. LOCKBOX ACCOUNTS AND PAYMENT INSTRUCTIONS. The names and
         addresses of all Lockboxes and Lockbox Accounts in effect on the
         Closing Date are set forth on Schedule 7.21 hereof. As of the Closing
         Date, the Borrowers have instructed all Lessees to submit all payments
         on the Leases directly to one of the Lockbox Accounts. As of the
         Closing Date, the Borrowers have not granted any interest in any
         Lockbox Account to any Person other than the Administrative Agent.

                  7.22. CREDIT AND COLLECTION POLICY. The credit and collection
         policy used by the Borrowers as in effect on the Closing Date (which
         policy also addressed the criteria under which a lessee is allowed to
         self-insure for property and liability risks) is attached as Exhibit G
         hereto (the "Credit and Collection Policy").

                  7.23. FORM OF LEASE AGREEMENT. The standard form(s) of Lease
         Agreement used by the Borrowers in the ordinary course of their
         business as in effect on the Closing Date is attached as Exhibit H
         hereto.

                  7.24. UBS LEASE AGREEMENT. A true, complete and correct copy
         of the UBS Lease Agreement as in effect on the Closing Date is attached
         as Exhibit I hereto.

                  7.25. DEPRECIATION POLICY. The Depreciation Policy used in the
         calculation of the Asset Base as in effect on the Closing Date is
         attached as Exhibit J hereto.

                  8. AFFIRMATIVE COVENANTS.

                  Each Borrower hereby covenants and agrees that as of the
         Closing Date and thereafter for so long as this Loan Agreement is in
         effect and until the Loan Commitment has been terminated, and the Loans
         and Notes, together with interest, Fees and all other Obligations
         incurred hereunder, are paid in full:

                  8.1. INFORMATION COVENANTS. Each Borrower will furnish, or
         will cause to be furnished, to the Administrative Agent for
         distribution to each Lender:



                                      -68-


                  (a) Quarterly Financial Statements. Within 45 days after the
         close of the first three fiscal quarters in each fiscal year of
         Container Holdings (commencing with the fiscal quarter ending March 31,
         2005), the consolidated balance sheet of Container Holdings and its
         Subsidiaries as at the end of such fiscal quarter, the related
         consolidated statements of income for such fiscal quarter and for the
         elapsed portion of the fiscal year ended with the last day of such
         fiscal quarter and the related consolidated statements of shareholder's
         equity and cash flows for the elapsed portion of the fiscal year ended
         with the last day of such fiscal quarter and (in each case, with
         respect to each fiscal quarter commencing after the completion of the
         fourth full fiscal quarter following the Closing Date), all of which
         shall be certified by the chief financial officer or other Authorized
         Officer of Container Holdings that they fairly present in all material
         respects in accordance with GAAP the consolidated financial condition
         of Container Holdings and its Subsidiaries as of the dates indicated
         and the consolidated results of their operations and/or changes in
         their cash flows for the periods indicated, subject to normal year-end
         audit adjustments and the absence of footnotes.

                  (b) Annual Financial Statements. Within 120 days after the
         close of each fiscal year of Container Holdings, the consolidated
         balance sheet of the Container Holdings and its Subsidiaries as at the
         end of such fiscal year and the related consolidated statements of
         income and shareholder's equity and statement of cash flows for such
         fiscal year and, with respect to each fiscal year commencing after the
         completion of the first full fiscal year following the Closing Date,
         setting forth comparative consolidated figures for the preceding fiscal
         year (or, if shorter since inception), together with a certification by
         an Independent Accountant reasonably acceptable to the Administrative
         Agent, in each case to the effect that such statements fairly present
         in all material respects the consolidated financial condition of
         Container Holdings and its Subsidiaries as of the dates indicated and
         the results of their consolidated operations and changes in financial
         position for the periods indicated in conformity with GAAP applied on a
         basis consistent with prior years except as disclosed therein (which
         report shall be without a "going concern" or like qualification or
         exception and without any qualification or exception as to the scope of
         such audit); provided, however that any such "going concern"
         qualification that is specifically related to the status or terms of
         the loans evidenced by this Loan Agreement shall not cause a breach
         under the provisions of this section (b).

                  (c) Budgets, etc. On or prior to March 31 of each fiscal year
         commencing after the Closing Date, a budget in form reasonably
         satisfactory to the Administrative Agent (including (i) budgeted
         statements of income, sources and uses of cash and balance sheets and
         (ii) budgeted statements of Directing Operating Expenses, selling,
         general and administrative expenses, lease payments owing by the
         Borrowers and third party management fees payable to the Borrowers)
         prepared by Container Holdings on a consolidated basis for Container
         Holdings and their Subsidiaries for such fiscal year prepared in detail
         and setting




                                      -69-


         forth, with appropriate discussion, the principal assumptions upon
         which such financial projections are based.

                  (d) Business Plan. On or prior to March 31 of each fiscal year
         commencing after the Closing Date, a consolidated business plan for the
         Borrowers (or updates to the existing business plans of such entities)
         for such fiscal year. At the time of the delivery of the financial
         statements provided for in Section 8.1(b), the Borrowers will deliver
         to the Administrative Agent a comparison of such actual financial
         results to the budgeted results for such year. Such comparison shall be
         in the form which the Borrowers use in their ordinary course of
         business.

                  (e) Officer's Certificates. At the time of the delivery of the
         financial statements provided for in Sections 8.1(a) and (b), a
         certificate of the chief financial officer or other Authorized Officer
         of the Borrower to the effect that no Default or Event of Default
         exists or, if any Default or Event of Default does exist, specifying
         the nature and extent thereof, and which certificate shall, if
         delivered with respect to any fiscal quarter or fiscal year terminating
         on or after the first anniversary of the Closing Date, set forth in
         reasonable detail the calculations required to establish whether the
         Borrower and its Subsidiaries were in compliance with the provisions of
         Section 10.1 hereof as at the end of such fiscal quarter or fiscal
         year, as the case may be.

                  (f) Notice of Default or Litigation. Promptly, and in any
         event within five Business Days after any Senior Designated Officer of
         any Borrower or any of its Subsidiaries thereof obtains knowledge
         thereof, notice of (i) the occurrence of any event which constitutes a
         Default or an Event of Default, which notice shall specify the nature
         and period of existence thereof and what action the Borrower or such
         Subsidiary proposes to take with respect thereto, (ii) any litigation
         or proceeding pending or, to the knowledge of Senior Designated Officer
         of any Borrower, threatened in writing against any Borrower or any of
         their Subsidiaries which, either individually or in the aggregate,
         would reasonably be expected to have, a Material Adverse Effect or
         (iii) any governmental investigation pending or, to the knowledge of
         Senior Designated Officer of any Borrower, threatened in writing
         against any Borrower or any of their Subsidiaries which, either
         individually or in the aggregate, would reasonably be expected to have
         a Material Adverse Effect.

                  (g) Management Letters. At the request of the Administrative
         Agent, a copy of any "management letter" submitted to the Borrowers or
         any of their Subsidiaries by its independent accountants in connection
         with any annual, interim or special audit made by them of the financial
         statements of the Borrower or any of its Subsidiaries and management's
         responses thereto.

                  (h) Container Performance Reports. On each Determination Date
         with respect to the reports set forth in clauses (i) and (ii), or
         within 45 days after the




                                      -70-


         end of each Collection Period with respect to all other reports, each
         of the following: (i) Manager Reports, substantially in the form of
         Exhibit D hereto, (ii) Asset Base Reports, substantially in the form of
         Exhibit A hereto, (iii) utilization reports and receivable aging, (iv)
         quarterly comparison and analysis of actual versus budgeted levels of
         Direct Operating Expenses, Selling, General and Administrative
         expenses, lease out payments and third party management fees, (v) fleet
         performance reports, including utilization, lease rates, disposal
         rates, purchase amounts and prices and (vi) an Equipment Report,
         substantially in the form of Exhibit C hereto, setting forth the number
         and type of containers then owned by the Borrowers, their aggregate Net
         Book Value and their aggregate Original Equipment Cost.

                  (i) Reports. Within 5 Business Days following transmission
         thereof, copies of any public filings and registrations with, and
         reports to, the SEC by any Borrower or any of their Subsidiaries.

                  (j) Independent Certified Public Accountant's Report. The
         Borrowers shall cause an Independent Accountant who may also render
         other services to the Borrowers to deliver to the Administrative Agent
         on or before June 30, 2005 (and each subsequent anniversary thereof),
         with respect to the twelve months ended on the preceding December 31
         (or such other period as shall have elapsed from the Closing Date to
         the date of such statement), an agreed upon procedures report with
         respect to the procedures set forth in Exhibit S hereto.

                  (k) Copies of Purchase Documentation, Invoices, Bills of Sale
         and Other Title Documents. Upon the reasonable request of the
         Administrative Agent, the Borrowers shall provide to the Administrative
         Agent (A) copies of purchase documentation, invoices, bills of sale
         and/or releases with respect to the Containers purchased with the
         proceeds of the Loans, and (B) such other documentation as the
         Administrative Agent may reasonably request to establish the Net Book
         Value of each such Container.

                  (l) Other Information. From time to time, such other
         information or documents (financial or otherwise) in the form utilized
         by the Borrowers in their own operations with respect to the Borrowers,
         any of their Subsidiaries or the Administrative Agent as the
         Administrative Agent or any Lender may reasonably request and which is
         reasonably available to the Borrowers.

                  8.2. BOOKS, RECORDS AND INSPECTIONS. Each Borrower will, and
         will cause each of its Subsidiaries to, keep proper books of record and
         accounts in which full, true and correct entries which permit the
         preparation of financial statements in accordance with GAAP and which
         conform in all material respects to all requirements of law, shall be
         made of all dealings and transactions in relation to its business and
         activities. Each Borrower will, and will cause each of its Subsidiaries
         to, permit officers and designated representatives of the
         Administrative Agent to visit and inspect, under guidance of officers
         of such




                                      -71-


         Borrower or Subsidiary, any of the properties of the Borrowers or their
         Subsidiaries, and to examine the books of account of the Borrowers or
         their Subsidiaries and discuss the affairs, finances and accounts of
         the Borrowers or their Subsidiaries with, and be advised as to the same
         by, its and their officers and independent accountants, all upon
         reasonable prior notice and at such reasonable times and intervals
         (during regular working hours) and to such reasonable extent as the
         Administrative Agent may reasonably request; provided, however, that
         unless an Event of Default shall have occurred and then be continuing,
         the Administrative Agent may request only one inspection under this
         Section 8.2 during any twelve month period.

                  8.3. PERMITTED SECURITIZATION. In addition to any transfer
         requested by the Administrative Agent pursuant to Section 8.17 hereof,
         the Borrowers will, subject to market conditions, use commercially
         reasonable efforts to effect a Permitted Securitization in order to
         repay in full all of the Loans and other Obligations evidenced by this
         Loan Agreement by not later than the end of the eighteenth month
         following the Closing Date; provided, however, that the sole remedy for
         a breach of this Section 8.3 shall be the increase in the Applicable
         Margin set forth in this Loan Agreement.

                  8.4. PAYMENT OF TAXES. Each Borrower will pay and discharge,
         and will cause each of its Subsidiaries to pay and discharge, all
         taxes, assessments and governmental charges or levies imposed upon it
         or upon its income or profits, or upon any properties belonging to it,
         in each case on a timely basis, and all lawful claims which, if unpaid,
         could reasonably be expected to become a lien or charge upon any
         properties of such Borrower or any of its Subsidiaries not otherwise
         permitted under Section 9.3; provided that none of the Borrowers nor
         any of their Subsidiaries shall be required to pay any such tax,
         assessment, charge, levy or claim which is immaterial or is being
         contested in good faith and by proper proceedings if it has maintained
         adequate reserves with respect thereto in accordance with GAAP.

                  8.5. EXISTENCE; FRANCHISES. Except as otherwise permitted by
         Section 9.2, each Borrower will do, and will cause each of its
         Subsidiaries to do, or cause to be done, all things necessary to
         preserve and keep in full force and effect its Company existence and
         its rights, franchises, authorities to do business, licenses,
         certifications, accreditations and patents; provided, however, that
         nothing in this Section 8.5 shall (x) prevent the withdrawal by a
         Borrower or any of its Subsidiaries of its qualification as a foreign
         Company in any jurisdiction where such withdrawal would not, either
         individually or in the aggregate, reasonably be expected to have a
         Material Adverse Effect or (y) require the preservation of any such
         right, franchise, authorities to do business, license, certification,
         accreditation or patent to the extent that the lapse thereof, either
         individually or in the aggregate, would not reasonably be expected to
         have a Material Adverse Effect.



                                      -72-


                  8.6. COMPLIANCE WITH STATUTES; ETC. Each Borrower will, and
         will cause each of its Subsidiaries to, comply with all applicable
         statutes, regulations and orders of, and all applicable restrictions
         imposed by, all governmental bodies, domestic or foreign, in respect of
         the conduct of its business and the ownership of its property, except
         for such noncompliances as, either individually or in the aggregate,
         would not reasonably be expected to have a Material Adverse Effect.

                  8.7. END OF FISCAL YEARS; FISCAL QUARTERS. Each Borrower will
         cause (i) each of its fiscal years to end on December 31 of each
         calendar year and (ii) each of its fiscal quarters to end on March 31,
         June 30, September 30 and December 31 of each year.

                  8.8. FURTHER ASSURANCES. Each Borrower will, and will cause
         each of its Subsidiaries to, at its own expense, make, execute,
         endorse, acknowledge, file and/or deliver to the Administrative Agent
         from time to time such vouchers, invoices, schedules, confirmatory
         assignments, confirmatory conveyances, financing statements, transfer
         endorsements, confirmatory powers of attorney, certificates, reports
         and other assurances or confirmatory instruments and take such further
         steps relating to the Collateral covered by any of the Security
         Documents as the Administrative Agent may reasonably require pursuant
         to this Section 8.8.

                  8.9. USE OF PROCEEDS. The Borrowers will, and will cause each
         of its Subsidiaries to, use the proceeds of the Loans for the purposes
         specified in Section 7.5.

                  8.10. PERFORMANCE OF OBLIGATIONS. The Borrowers will, and will
         cause each of their Subsidiaries to, perform all of its obligations
         under the terms of each mortgage, deed of trust, indenture, loan
         agreement or credit agreement and each other agreement, contract or
         instrument by which it is bound (other than any such obligations under,
         or mortgages, deeds of trust, indentures, loan agreements, credit
         agreements or other material agreements, contracts or instruments
         entered into in connection with, a Permitted Securitization), except
         such non-performances as, either individually or in the aggregate,
         would not reasonably be expected to cause a Material Adverse Effect.

                  8.11. MAINTENANCE OF CONTAINERS. The Borrowers will:

                  (a) keep, or cause to be kept, its Containers in good repair
         and working order in a manner consistent with past practices, and make,
         or cause to be made, all needful and proper repairs, replacements,
         additions and improvements thereto as are necessary for the conduct of
         its business, and in order to maintain the Containers in accordance
         with manufacturer's instructions and in as good an operating condition
         as when originally delivered, reasonable wear and tear and causes
         beyond the Borrowers' control excepted;



                                      -73-


                  (b) at all times use the Containers, and require the related
         Lessee to use the Containers, in accordance with good operating
         practices and shall at all times comply with all loading limitations,
         handling procedures and operating instructions prescribed by the
         manufacturer which include but are not limited to the latest applicable
         regulations and recommendations of the International Organization of
         Standardization as well as any applicable local regulations;

                  (c) not knowingly use (or knowingly permit the Lessees to use)
         the Containers for storage of transportation of contraband in violation
         of applicable United States law;

                  (d) comply with the International Convention for Safe
         Containers (CSC) in all respects including, without limitation,
         plating, maintenance, examination, re-examination and marking with
         re-examination dates of such Container, such examination, or
         re-examination, shall be performed in accordance with the rules and
         regulations for the Safety Approval of Cargo Containers of the United
         States Department of Transportation.

                  8.12. INSURANCE. The Borrowers will, in a manner consistent
         with the practices of the Borrowers as of the Closing Date, (i) effect
         and maintain, with financially sound and reputable companies reasonably
         satisfactory to the Administrative Agent (which the Administrative
         Agent acknowledges to be true on the Closing Date) a general liability
         insurance, insuring the Borrowers, the Administrative Agent and each
         Lender against liability for personal injury and property damage
         liability, caused by, or relating to, the Containers then off-lease,
         with such levels of coverage and deductibles that are consistent with
         the levels in effect as of the Closing Date, and (ii) have a standard
         form of lease agreement that requires each Lessee to maintain (1)
         physical damage insurance in an amount equal to the value of the
         Containers on lease to it and to name TLI as a loss payee, and (2)
         comprehensive general liability insurance, including contractual
         liability, against claims for bodily injury or death and property
         damage and to name TLI as an additional insured. The Administrative
         Agent and the Lenders reserve the right (but shall not have the
         obligation) to obtain (i) at Borrowers' expense, insurance with respect
         to any or all of the foregoing risks if the Borrowers shall fail to
         obtain such coverage in the specified amounts, and (ii) at the Lender's
         expense, additional insurance on its own behalf with respect to any or
         all of the foregoing risks (or any other risk). However, the
         Administrative Agent and the Lenders will notify the Borrowers prior to
         obtaining and such insurance. All insurance maintained by the Borrowers
         for loss or damage of the Containers shall provide that losses, if any,
         shall be payable to the Administrative Agent or its designee as sole
         loss payee and the Borrower shall utilize its reasonable efforts to
         have all checks relating to any such losses delivered promptly to
         Administrative Agent or such other person designated by the
         Administrative Agent. The Administrative Agent and each Lender shall be
         named as an additional insured with respect to all such liability
         insurance maintained by, or on behalf of, the Borrowers. The Borrowers
         shall pay the premiums with respect to all such insurance and deliver




                                      -74-


         to Administrative Agent evidence reasonably satisfactory to
         Administrative Agent of such insurance coverage. The Borrowers shall
         cause to be provided to Administrative Agent, not less than fifteen
         (15) days prior to the scheduled expiration or lapse of such insurance
         coverage, evidence reasonably satisfactory to Administrative Agent of
         renewal or replacement coverage. The Borrowers shall use their
         commercially reasonable efforts to have each insurer agree, by
         endorsement upon the policy or policies issued by it or by independent
         instrument furnished to Administrative Agent, that (i) it will give
         each additional insured and the loss payee thirty (30) days' prior
         written notice of the effective date of any material alteration,
         cancellation or non-renewal of such policy and (ii) in the event that
         the cancellation of such coverage would result in a breach of this
         Section 8.12 by the Borrowers, it will permit the Administrative Agent
         and/or the Lender(s) to make payments to effect the continuation of
         coverage upon notice of cancellation due to nonpayment of premium.

                  8.13. INTEREST RATE HEDGING AGREEMENTS. (a) Within ninety (90)
         days after the Closing Date and within thirty (30) days after each
         calendar quarter thereafter, the Borrowers will enter into, and
         maintain for so long as any Obligations remain unpaid, one or more
         Hedging Agreements with respect to that portion of the Aggregate Note
         Principal Balance attributable to (i) those Eligible Containers that
         are then subject to a Lease that has a then remaining term of more than
         three years and (ii) without duplication of the Leases referred to in
         clause (i), those Eligible Containers that are then subject to a
         Finance Lease, all of which Hedging Agreements shall have an aggregate
         notional principal amount required by the formula set forth in Exhibit
         K hereto and have a projected amortization schedule as set forth in
         such Exhibit.

                  8.14. UNIDROIT CONVENTION. The Borrowers will comply with the
         terms and provisions of the UNIDROIT Convention on International
         Interests in Mobile Goods or any other internationally recognized
         system for recording interests in or liens against shipping containers
         at the time that such convention is adopted.

                  8.15. IDENTIFICATION OF GROSS LEASE REVENUES AND DIRECT
         OPERATING EXPENSE; TRANSFER OF GROSS LEASE REVENUES. The Borrowers will
         establish and maintain such procedures as are necessary for determining
         and for identifying Gross Lease Revenues and Direct Operating Expenses
         to a specific Container.

                  8.16. COMPLIANCE WITH CREDIT AND COLLECTION POLICY. The
         Borrowers will comply in all material respects with the Credit and
         Collection Policy in regard to the origination of, and amendments and
         modifications to, Leases.

                  8.17. PAYMENT INSTRUCTION TO LESSEES. The standard form of
         Lease utilized by the Borrowers will instruct all Lessees to submit
         directly to the Lockbox Accounts all payments owing to the Borrowers
         with respect to the Leases.



                                      -75-


                  8.18. TRANSFER TO SPECIAL PURPOSE VEHICLES. The Borrowers
         will, at the reasonable request of the Administrative Agent, use
         commercially reasonable efforts to transfer all of the Container and
         Leases encumbered by the Loan Documents to one or more special purpose
         vehicles in a transaction that otherwise qualifies as a Permitted
         Securitization and would not have a material and adverse tax effect on
         the Borrowers and their Subsidiaries; provided that, after giving
         effect to such transfer, the terms and conditions of the Loan Documents
         will be not materially more disadvantageous to the Borrowers.

                  8.19. STATIC STORAGE CONTAINERS. The Borrowers will cause all
         of the static storage containers owned by ICS Terminals (UK) Limited
         and included in the calculation of the Asset Base to be free from Liens
         (other than Permitted Liens) in favor of any Person (other than the
         Administrative Agent).

                  9. NEGATIVE COVENANTS.

                  Each Borrower hereby covenants and agrees that as of the
         Closing Date and thereafter for so long as this Loan Agreement is in
         effect and until the Commitment has been terminated, and the Loans and
         Revolving Credit Notes, together with interest, Fees and all other
         Obligations incurred hereunder, are paid in full:

                  9.1. CHANGES IN BUSINESS; ETC. The Borrowers will not, and
         will not permit any of their Subsidiaries to, engage in any business
         other than a Permitted Business.

                  9.2. CONSOLIDATION; MERGER; SALE OR PURCHASE OF ASSETS; ETC.
         Each Borrower will not, and will not permit any of its Subsidiaries to,
         wind up, liquidate or dissolve its affairs or enter into any
         transaction of merger or consolidation, or convey, sell, lease or
         otherwise dispose of all or any part of its property or assets, or
         enter into any sale-leaseback transactions, or purchase or otherwise
         acquire (in one or a series of related transactions) all or
         substantially all of the property or assets of any Person (or any
         division or line of business of another Person) or agree to do any of
         the foregoing at any future time, except that the following shall be
         permitted:

                      (i) the Borrowers and their Subsidiaries may lease (as
                  lessor) or license (as licensee) real or personal property,
                  all in the ordinary course of business;

                      (ii) the acquisition of additional Eligible Containers by
                  the Borrowers or any Subsidiary that has (a) become a borrower
                  hereunder and (b) pledged to the Administrative Agent, on
                  behalf of the Lenders, a Lien on its assets; provided,
                  however, that any Special Purpose Vehicle formed in connection
                  with a Permitted Securitization shall not be required to
                  comply with the provisions of this clause (ii);



                                      -76-


                      (iii) Investments permitted pursuant to Section 9.5;

                      (iv) the Borrowers and their Subsidiaries may sell assets,
                  so long as (A) the proceeds of each such sale is payable in
                  (i) cash on the closing of such sale or (ii) receivables that
                  are payable within 90 days after the date of issuance, or
                  (iii) some combination of clauses (i) and (ii); (B) each such
                  sale incurs in the ordinary course of business of such
                  Borrower or Subsidiary as the case may be; (C) no single sale
                  (or series of related sales) shall involve Containers
                  representing in aggregate more than ten thousand (10,000)
                  TEU's unless the Sales Proceeds to be received from such sale
                  exceeds an amount equal to eighty-one and one half percent
                  (81.5%) of the then Net Book Values of the Containers subject
                  to such sale; (D) the composition of the Containers included
                  in any single sale will not materially and adversely alter the
                  profile of the remaining containers owned by the Borrowers,
                  after giving effect to such sale, in terms of lessee, on-hire
                  status and type, and (E) the Sales Proceeds from any such
                  sales are promptly deposited into the Lockbox Accounts or
                  Concentration Account;

                      (v) the Borrowers and their Subsidiaries may sell or
                  discount, in each case without recourse, accounts receivable
                  arising in the ordinary course of business, so long as such
                  sale or discount does not result in an Asset Base Deficiency;

                      (vi) the Borrowers and their Subsidiaries may grant leases
                  or subleases (including Leases) to other Persons in the
                  ordinary course of business;

                      (vii) (x) any Borrower may be merged, consolidated,
                  dissolved or liquidated with or into another Borrower, and (y)
                  any Subsidiary of the Borrower may be merged, consolidated,
                  dissolved or liquidated with or into a Borrower (so long as
                  the Borrower is the surviving corporation of such merger,
                  consolidation, dissolution or liquidation); provided that any
                  such merger, consolidation, dissolution or liquidation
                  involving a Borrower pursuant to this clause (y) shall be
                  permitted so long as (I) no Default or Event of Default then
                  exists or would exist immediately after giving effect thereto,
                  and (II) any security interests granted to the Administrative
                  Agent in the assets (and Capital Stock) of any such Person
                  subject to any such transaction shall remain in full force and
                  effect and perfected and enforceable (to at least the same
                  extent as in effect immediately prior to such merger,
                  consolidation, dissolution or liquidation);

                      (viii) each of the Borrowers and their respective
                  Subsidiaries may sell or liquidate Cash Equivalents;



                                      -77-


                      (ix) the Borrowers and their respective Subsidiaries may
                  sell Containers to their respective Lessees in the ordinary
                  course of business pursuant to (A) a Finance Lease (so long as
                  such Finance Lease complies with all applicable Concentration
                  Limits and Container Representations and Warranties) and (B)
                  purchase option contained in any Lease with such Lessee that
                  was originated in the ordinary course of business;

                      (x) the Borrowers and their Subsidiaries may (i) sell all
                  of its Containers and Related Assets to a Special Purpose
                  Vehicle in connection with a Permitted Securitization and (ii)
                  transfer its assets to a Special Purpose Entity in accordance
                  with the provisions of Section 8.19 of this Loan Agreement;
                  and

                      (xi) the Borrowers and their Subsidiaries may dispose of
                  used, obsolete, uneconomic, worn-out or surplus assets (other
                  than Containers) in the ordinary course of its business.

         To the extent the Required Lenders waive the provisions of this Section
         9.2 with respect to the sale or other disposition of any Collateral, or
         any Collateral is sold or otherwise disposed of as permitted by this
         Section 9.2, such Collateral (unless transferred to another Credit
         Party) shall be sold or otherwise disposed of free and clear of the
         Liens created by the Security Documents and the Administrative Agent
         shall take such actions (including, without limitation, directing the
         Administrative Agent to take such actions) as are appropriate in
         connection therewith.

                  9.3. LIENS. The Borrowers will not, and will not permit any of
         their Subsidiaries to, create, incur, assume or suffer to exist any
         Lien upon or with respect to any Collateral; provided that the
         provisions of this Section 9.3 shall not prevent the creation,
         incurrence, assumption or existence of the following (Liens described
         below are herein referred to as "Permitted Liens"):

                      (i) Liens for taxes, assessments or governmental charges
                  or levies not yet delinquent or Liens for taxes, assessments
                  or governmental charges or levies being contested in good
                  faith and by appropriate proceedings for which adequate cash
                  reserves have been established in accordance with GAAP;

                      (ii) Liens in respect of property or assets of the
                  Borrowers or any of its Subsidiaries imposed by law which have
                  not arisen to secure Indebtedness for borrowed money, such as
                  carriers', seamen's, stevedores', wharfinger's,
                  warehousemens', mechanics', landlord's, suppliers',
                  repairmen's or other like Liens, and relating to amounts not
                  yet due or which shall not have been overdue for a period of
                  more than thirty (30) days or which are being contested in
                  good faith by appropriate




                                      -78-


                  proceedings for which adequate cash reserves have been
                  established in accordance with GAAP;

                      (iii) Liens created by or pursuant to this Loan Agreement
                  and the Security Documents;

                      (iv) Liens arising from judgments, decrees or attachments
                  in respect of which the Borrower or any of its Subsidiaries
                  shall in good faith be prosecuting an appeal or proceedings
                  for review and in respect of which there shall have been
                  secured a subsisting stay of execution pending such appeal or
                  proceedings (including in connection with the deposit of cash
                  or other property in connection with the issuance of stay and
                  appeal bonds);

                      (v) Liens (other than any Lien imposed by ERISA) (x)
                  incurred or deposits made in the ordinary course of business
                  of the Borrowers and their Subsidiaries in connection with
                  workers' compensation, unemployment insurance, social security
                  benefits and other similar forms of governmental insurance
                  benefits, (y) to secure the performance by the Borrowers and
                  their Subsidiaries of tenders, statutory obligations, surety
                  and customs bonds, statutory bonds, bids, leases, government
                  contracts, trade contracts, performance bonds and other
                  similar obligations incurred in the ordinary course of
                  business (exclusive of (I) obligations for the payment of
                  Indebtedness and (II) stay and appeal bonds and other
                  obligations in respect of litigation, arbitration or similar
                  claims or otherwise of the types described in Section 9.3(iv)
                  above) or (z) to secure the performance by the Borrowers and
                  their Subsidiaries of leases of Real Property, to the extent
                  incurred or made in the ordinary course of business consistent
                  with past practices;

                      (vi) licenses, sublicenses, leases or subleases (including
                  Leases) granted to third Persons in the ordinary course of
                  business;

                      (vii) Liens arising from or related to precautionary UCC
                  or like personal property security financing statements
                  regarding operating leases (if any) entered into by the
                  Borrowers and their Subsidiaries in the ordinary course of
                  business;

                      (viii) Liens arising pursuant to purchase money mortgages
                  or security interests securing Indebtedness representing the
                  purchase price (or financing of the purchase price within 120
                  days after the respective purchase) of Containers acquired
                  after the Closing Date by the Borrowers and subject to
                  compliance with Section 9.2(ii) hereof, their Subsidiaries,
                  provided that (x) any such Liens attach only to the assets so
                  purchased and (y) the Indebtedness secured by any such Lien
                  does not exceed 100% of




                                      -79-


                  the purchase price of the property being purchased at the time
                  of the incurrence of such Indebtedness;

                      (ix) Liens in favor of customs or revenue authorities
                  arising as a matter of law to secure payment of customs duties
                  in connection with the importation of goods;

                      (x) Liens of any lessee under any Finance Lease;

                      (xi) Liens securing Hedging Agreements that either (A) are
                  required to be incurred pursuant to the terms of the Loan
                  Documents or (B) relate to Indebtedness that is permitted to
                  be incurred under the terms of the Loan Documents;

                      (xii) Liens existing on the Closing Date and set forth on
                  Schedule 9.3;

                      (xiii) Liens arising solely by virtue of any statutory or
                  common law provision relating to bankers' liens, rights of set
                  off or similar rights and remedies as to deposit accounts or
                  other funds maintained with a creditor depository institution;
                  and

                      (xiv) Liens incurred in connection with a Permitted
                  Securitization;

                  9.4. INDEBTEDNESS. The Borrowers will not, and will not permit
         any of their Subsidiaries to, contract, create, incur, assume or suffer
         to exist any Indebtedness, except:

                      (i) Indebtedness incurred pursuant to this Loan Agreement
                  and the other Loan Documents;

                      (ii) Indebtedness of the Borrowers or any of their
                  Subsidiaries under Hedging Agreements entered into to protect
                  them against fluctuations in interest rates in respect of
                  Indebtedness otherwise permitted under this Loan Agreement, so
                  long as the entering into of such Hedging Agreements are bona
                  fide hedging activities and are not for speculative purposes;

                      (iii) Indebtedness of the Borrowers or any of their
                  Subsidiaries which may be deemed to exist in connection with
                  agreements providing for indemnification, purchase price
                  adjustments and similar obligations in connection with the
                  acquisition or disposition of any business, Subsidiary or
                  assets prior to the Closing Date or in accordance with the
                  requirements of this Loan Agreement, or from letters of
                  credit, surety bonds or performance bonds securing any
                  obligation of the Borrowers or any such Subsidiary, pursuant
                  to such agreement;



                                      -80-


                      (iv) Intercompany Indebtedness of a Borrower or a
                  Subsidiary for so long as such Indebtedness is held by a
                  Borrower or a Wholly-Owned Subsidiary of a Borrower; provided,
                  that (I) unless the respective obligor under such intercompany
                  loan reasonably determines that the execution, delivery and
                  performance of an Intercompany Note is prohibited by, or that
                  such Intercompany Note would not be enforceable against such
                  obligor under, applicable local law, any such intercompany
                  loan made pursuant to this clause (iv) shall be evidenced by
                  an Intercompany Note or by such other documentation as may be
                  acceptable to the Administrative Agent, (II) the proceeds of
                  any such Intercompany Indebtedness funded by any Borrower to
                  any Wholly-Owned Subsidiary shall be used by such Wholly-Owned
                  Subsidiary solely to pay Permitted Disbursements, and (III)
                  each intercompany loan made pursuant to this clause (iv) shall
                  be subject to an Intercompany Subordination Agreement;

                      (v) Indebtedness of a Borrower or of a Subsidiary
                  represented by letters of credit for the account of such
                  Borrower or such Subsidiary, as the case may be, (i) in order
                  to provide security for workers' compensation claims, payment
                  obligations in connection with self-insurance or similar
                  requirements in the ordinary course of business, (ii) in order
                  to provide security for any trade, contractual or payment
                  obligations of such Borrower or Subsidiary, or (iii) issued or
                  incurred for such other purposes as are related to the
                  ordinary course of business of such Borrower or such
                  Subsidiary; provided, however, that the aggregate amount of
                  outstanding Indebtedness permitted pursuant to the provisions
                  of this clause (v) shall not exceed $25 Million Dollars;

                      (vi) Purchase money indebtedness or obligations in
                  connection with the acquisition of Containers by a Borrower
                  or, subject to compliance with Section 9.2(ii) hereof, its
                  Subsidiaries after the Closing Date; provided that (A) such
                  indebtedness or obligations represents the purchase price (or
                  financing of the purchase price within 120 days after the
                  respective purchase) of such Container and (B) such
                  indebtedness or obligations do not exceed 100% of the purchase
                  price of the property being purchased at the time of the
                  incurrence of such indebtedness or obligations;

                      (vii) Indebtedness of a Borrower or of a Subsidiary set
                  forth on Schedule 7.18 hereto or otherwise outstanding as of
                  the Closing Date;

                      (viii) Refinancing Indebtedness;

                      (ix) obligations in respect of performance, bid, surety
                  and appeal bonds and completion guarantees or obligations of a
                  similar nature provided by a Borrower or any Subsidiary in the
                  ordinary course of business;



                                      -81-


                      (x) Indebtedness arising from the honoring by a bank or
                  other financial institution of a check, draft or similar
                  instrument inadvertently (except in the case of daylight
                  overdrafts) drawn against insufficient funds in the ordinary
                  course of business, so long as such Indebtedness is
                  extinguished within five Business Days of the incurrence
                  thereof;

                      (xi) Indebtedness incurred in connection with a Permitted
                  Securitization;

                      (xii) Endorsements for collection, deposit or negotiation
                  and warranties of products and services, in each case,
                  incurred in the ordinary course of business; and

                      (xiii) Unsecured Indebtedness of any of the Borrowers
                  issued in lieu of making a cash Dividend permitted pursuant to
                  Section 9.6; provided, however, that no unsecured Indebtedness
                  of the type described in this clause (xiii) shall be issued
                  with respect to the IO Distributable Amount.

                  9.5. ADVANCES; INVESTMENTS; LOANS. The Borrowers will not, and
         will not permit any of their Subsidiaries to, directly or indirectly,
         lend money or extend credit or make advances to any Person, or purchase
         or acquire any stock, obligations or securities of, or any other
         Capital Stock of, or make any capital contribution to, any Person (each
         of the foregoing an "Investment" and, collectively, "Investments"),
         except:

                      (i) the Borrowers and their Subsidiaries may acquire and
                  hold cash and Cash Equivalents;

                      (ii) the Borrowers and their Subsidiaries may acquire and
                  hold receivables owing to it, if created or acquired in the
                  ordinary course of its business and payable or dischargeable
                  in accordance with customary trade terms of such Borrower or
                  such Subsidiary;

                      (iii) the Borrowers and their Subsidiaries may acquire and
                  own investments (including debt obligations) received in
                  connection with the bankruptcy or reorganization of Lessees,
                  suppliers, trade creditors, licensees, licensors and customers
                  and in good faith settlement of delinquent obligations of, and
                  other disputes with, Lessees, suppliers, trade creditors,
                  licensees, licensors and customers arising in the ordinary
                  course of business;

                      (iv) Hedging Agreements entered into in the ordinary
                  course of business or otherwise in compliance with Section
                  9.4(ii) shall be permitted;



                                      -82-


                      (v) Both of (x) loans by the Borrowers and their
                  Subsidiaries to officers, employees and directors of the
                  Borrowers and their Subsidiaries for bona fide business
                  purposes, in each case incurred in the ordinary course of
                  business shall be permitted, and (y) advances of reimbursable
                  expenses, including advances for travel and moving expenses,
                  by the Borrowers and their Subsidiaries to officers, employees
                  and directors of the Borrowers and their Subsidiaries for bona
                  fide purposes, in each case incurred in the ordinary course of
                  business shall be permitted;

                      (vi) Investments in any Borrower or any Subsidiary of any
                  Borrower shall be permitted; provided, that in order for any
                  Intercompany Indebtedness to be permitted pursuant to this
                  clause (vi), such Intercompany Indebtedness must additionally
                  be permitted to be incurred under Section 9.4(iv);

                      (vii) Investments as lessor under arm's-length capital
                  leases (determined in accordance with GAAP) of maritime
                  containers entered into in the ordinary course of business
                  with unaffiliated third parties shall be permitted;

                      (viii) Investments in any Person to the extent such
                  Investments consist of prepaid expenses, negotiable
                  instruments held for collection and lease, utility and
                  workers' compensation, performance and other similar deposits
                  made in the ordinary course of business shall be permitted;

                      (ix) Investments by one or more Borrowers in one or more
                  Subsidiaries, or by a Subsidiary in any other Subsidiary, may
                  be incurred in connection with a Permitted Securitization
                  shall be permitted;

                      (x) the Borrowers and their Subsidiaries may own the
                  Capital Stock of, their respective Subsidiaries created or
                  acquired in accordance with the terms of this Loan Agreement;

                      (xi) the Borrowers and their Subsidiaries may acquire and
                  hold Investments issued by the purchaser of assets in
                  connection with a sale of such assets to the extent permitted
                  by Section 9.2;

                      (xii) Investments in existence as of the Closing Date as
                  set forth on Schedule 9.5 hereto and any extension,
                  modification or renewal of and such Investments existing on
                  the Closing Date, shall be permitted;

                      (xiii) the Borrowers may acquire and hold obligations of
                  one or more officers, directors or other employees of such
                  Borrowers or any of its Subsidiaries in connection with such
                  officers', directors' or employees' acquisition of shares of
                  capital stock of the Borrowers, so long as no cash is paid by
                  the Borrowers or any of its Subsidiaries to such officers,




                                      -83-


                  directors or employees in connection with the acquisition of
                  any such obligations; and

                      (xiv) Investments in Eligible Investments made in
                  accordance with Section 3.4 shall be permitted.

                  9.6. DIVIDENDS. The Borrowers will not, and will not permit
         any of their Subsidiaries to, declare or pay any Dividends other than a
         Permitted Dividend.

                  9.7. TRANSACTIONS WITH AFFILIATES. The Borrowers will not, and
         will not permit any of their Subsidiaries to, enter into any
         transaction or series of transactions with any Affiliate of the
         Borrowers or any of their Subsidiaries other than in the ordinary
         course of business and on terms and conditions substantially as
         favorable to such Borrower or such Subsidiary as would be reasonably
         expected to be obtainable by such Borrower or such Subsidiary at the
         time in a comparable arm's-length transaction with a Person other than
         an Affiliate; provided that the following shall in any event be
         permitted: (i) the payment of consulting or other fees to the Borrowers
         by any of their Subsidiaries in the ordinary course of business; (ii)
         reasonable fees and compensation paid to, and indemnity provided on
         behalf of, officers, directors, employees or consultants of any
         Borrower or any of their respective Subsidiaries; (iii) transactions
         exclusively between or among the Borrowers, exclusively between or
         among a Borrower and any Subsidiary of any Borrower, exclusively
         between Subsidiaries of any of the Borrowers, or exclusively between
         any of the Borrowers or any of their respective Subsidiaries and any of
         their respective joint ventures; (iv) any agreement as in effect as of
         the Closing Date as set forth on Schedule 9.7 hereto or any transaction
         contemplated thereby and any amendment thereto or any replacement
         agreement thereto, so long as any such amendment or replacement
         agreement is not more disadvantageous to any Borrower or any of their
         respective Subsidiaries in any material respect than the original
         agreement as in effect on the Closing Date; (v) any reasonable
         employment, stock option, stock repurchase, employee benefit
         compensation, business expense reimbursement, severance, termination,
         or other employment-related agreements, arrangements or plans entered
         into in good faith by any Borrower or any of their respective
         Subsidiaries in the ordinary course of business; (vi) any issuance of
         Capital Stock of any of the Borrowers; (vii) any transaction
         consummated in connection with or to facilitate a Permitted
         Securitization, (viii) the Borrowers and their Subsidiaries may enter
         into employment and severance arrangements with respect to the
         procurement of services with their respective officers and employees in
         the ordinary course of business; and (ix) transactions to the extent
         permitted by Section 9.6.

                  9.8. LIMITATION ON CERTAIN RESTRICTIONS ON SUBSIDIARIES. The
         Borrowers will not, and will not permit any of their Subsidiaries
         (other than a Special Purchase Vehicle) to, directly or indirectly,
         create or otherwise cause or suffer to exist or become effective, any
         encumbrance or restriction on the ability




                                      -84-


         of any such Subsidiary to (x) pay dividends or make any other
         distributions on its capital stock or any other Capital Stock or
         participation in its profits owned by a Borrower or any of its
         Subsidiaries, or pay any Indebtedness owed to a Borrower or any of its
         Subsidiaries, (y) make loans or advances to a Borrower or any of its
         Subsidiaries or (z) transfer any of its properties or assets to the
         Borrowers or any of their Subsidiaries, except for such encumbrances or
         restrictions existing under or by reason of (i) applicable law, rule,
         regulation or order, (ii) this Loan Agreement and the other Loan
         Documents, (iii) customary provisions restricting subletting or
         assignment of any lease governing a leasehold interest of a Borrower or
         a Subsidiary of a Borrower, (iv) customary provisions restricting
         assignment of any licensing agreement (in which the Borrower or any of
         its Subsidiaries is the licensee) or any other contract entered into by
         a Borrower or any of its Subsidiaries in the ordinary course of
         business, (v) any encumbrance or restriction pursuant to an agreement
         in effect or entered into on the Closing Date as set forth on Schedule
         9.8 hereto (and all replacements or substitutions thereof on terms not
         materially more adverse to the Lenders and not materially less
         favorable or materially more onerous to the Borrowers and their
         respective Subsidiaries than those contained the any such agreement on
         the Closing Date), (vi) customary agreements relating to the transfer
         of, or the granting of licenses in licenses related to, copyrights,
         patents or other intellectual property, (vii) provisions in joint
         venture agreements and other similar agreements (in each case relating
         solely to the respective joint venture or similar entity or the equity
         interests therein), (viii) purchase money indebtedness permitted to be
         incurred under this Loan Agreement, (ix) restrictions on cash or other
         deposits under bona fide arrangements with customers entered into in
         the ordinary course of business, (x) Refinancing Indebtedness
         (provided, that the restrictions contained in the agreements governing
         such Refinancing Indebtedness are not materially more restrictive, take
         as a whole, than those contained in the agreements governing the
         Indebtedness being refinanced); (xi) agreements or instruments that
         prohibit the payment of dividends or the making of other distributions
         with respect to Capital Stock other than on a pro rata basis, (xii)
         with respect to any Subsidiary, any encumbrance or restriction
         contained in the terms of any Indebtedness, or any agreement pursuant
         to which such Indebtedness was issued, if (1) the encumbrance or
         restriction applies only in the event of a payment default or a default
         with respect to a financial covenant contained in such Indebtedness or
         agreement, (2) the encumbrance or restriction is not materially more
         disadvantageous to the Lenders than is customary in comparable
         financings, and (3) such encumbrance or restriction will not materially
         affect the Borrowers' ability to make principal or interest payments on
         the Loans, (xiii) restrictions on the transfer of any asset pending the
         close of the sale of such asset and (xiv) any restriction or
         encumbrance or the transfer of any assets subject to Liens permitted by
         Section 9.3 hereof.

                  9.9. CHANGE IN CREDIT AND COLLECTION POLICY. The Borrowers
         will not change the terms and provisions of the Credit and Collection
         Policy in any




                                      -85-


         material respect without the prior written consent of the
         Administrative Agent in each instance, such consent not to be
         unreasonably withheld or delayed.

                  9.10. CHANGE IN PAYMENT INSTRUCTIONS TO LESSEES. The Borrowers
         will not (i) add or terminate any Trust Account, Concentration Account,
         Lockbox Account, Accounts Payable Account or IO Disbursement Account
         except in accordance with the provisions of Section 3.5 hereof, or (ii)
         make any change in its instructions to Lessees, regarding payments to
         be made by Lessees, other than changes in the instructions that Lessees
         make payments to another Lockbox Account that in each case is subject
         to an account agreement.

                  9.11. COST ALLOCATION METHODOLOGIES. The Borrowers will not
         change, in any material respect, without the prior written consent of
         the Administrative Agent in each instance, its methodologies in effect
         on the Closing Date for (i) classifying an expense as a Direct
         Operating Expense or corporate overhead, (ii) classifying an item of
         revenue as a Gross Lease Revenues, or (iii) allocating Gross Lease
         Revenues or Direct Operating Expenses to a specific Container.

                  9.12. AMENDMENTS TO DEPRECIATION POLICY. The Borrower will not
         change its Depreciation Policy used in calculating the Asset Base
         without the prior written consent of the Administrative Agent in each
         instance.

                  9.13. LIMITATION ON THE CREATION OF SUBSIDIARIES. The
         Borrowers will not, and will not permit any of their Subsidiaries to,
         establish, create or acquire after the Closing Date any Subsidiary,
         provided that, notwithstanding the foregoing, the Borrowers and any of
         their respective Wholly-Owned Subsidiaries shall be permitted to
         establish, create and, to the extent permitted hereunder, acquire
         Wholly-Owned Subsidiaries so long as (A) written notice thereof is
         given to the Administrative Agent on or prior to the 10th Business Day
         following such establishment, creation or acquisition written notice
         thereof and (B) the Capital Stock of each such new Wholly-Owned
         Subsidiary that is a direct Wholly-Owned Subsidiary of a Borrower is
         pledged pursuant to, and to the extent required by, the Pledge
         Agreement and, if such Capital Stock constitutes certificated Capital
         Stock, the certificates representing such Capital Stock, together with
         stock or other powers duly executed in blank, are delivered to the
         Administrative Agent.

                  10. FINANCIAL COVENANTS.

                  The Borrowers covenant and agree that, at all times subsequent
         to the first anniversary of the Closing Date and for so long as any
         Loan or Revolving Credit Note is outstanding or any Lender has any
         obligation to make any Loans:

                  10.1. CONSOLIDATED EBIT TO CONSOLIDATED CASH INTEREST EXPENSE
         RATIO. The Borrowers will not permit the Consolidated EBIT to
         Consolidated Cash Interest Expense Ratio to be less than 1.00 to 1.00,
         such calculation to be made at the end of each fiscal quarter of the
         Borrowers commencing with the fiscal quarter ending December 31, 2005.



                                      -86-


                  11. CLOSING CONDITIONS.

                  The obligation of each Lender to make a Loan hereunder on the
         Closing Date, is subject, at the time of the making of such Loans to
         the satisfaction of the following conditions (or the written waiver of
         such conditions by the Administrative Agent):

                  11.1. EXECUTION OF AGREEMENT; NOTES. On or prior to the
         Closing Date, (i) this Loan Agreement and the other Loan Documents
         shall have been executed and delivered and (ii) there shall have been
         delivered to the Administrative Agent for the account of each Lender
         which has requested the same the appropriate Note, in each case
         executed by the Borrowers and in the amount, maturity and as otherwise
         provided herein.

                  11.2. OFFICER'S CERTIFICATE. On the Closing Date, the
         Administrative Agent shall have received a certificate from the
         Borrowers, dated the Closing Date and signed by an Authorized Officer
         of the Borrowers, certifying that all of the applicable conditions set
         forth in Section 12.2 (other than such conditions to the extent that
         such conditions are expressly subject to the satisfaction of the
         Administrative Agent and/or the Required Lenders), have been satisfied
         on such date.

                  11.3. OPINIONS OF COUNSEL. On the Closing Date, the
         Administrative Agent shall have received from Mayer Brown Rowe & Maw
         LLP, counsel to the Borrower, an opinion addressed to the
         Administrative Agent and each of the Lenders and dated the Closing Date
         substantially in the form of Exhibit L, which opinion shall (x) be
         addressed to the Administrative Agent and each of the Lenders and be
         dated the Closing Date, (y) cover the creation and perfection of the
         security interests and/or liens granted pursuant to the relevant
         Security Documents and such other matters incident to the transactions
         contemplated herein as the Administrative Agent may reasonably request
         and (z) be in form and substance reasonably satisfactory to the
         Administrative Agent.

                  11.4. COMPANY DOCUMENTS; PROCEEDINGS.

                  (a) On the Closing Date, the Administrative Agent shall have
         received from each Borrower a certificate, dated the Closing Date,
         signed by the chairman, a vice-chairman, the president, any
         vice-president or any other Authorized person of such Borrower, and
         attested to by the secretary, any assistant secretary or other senior
         officer of such Borrower, in the form of Exhibit M with appropriate
         insertions, together with copies of the certificate of incorporation,
         by-laws or equivalent organizational documents of such Borrower and the
         resolutions of such Borrower referred to in such certificate, and all
         of the foregoing shall be reasonably satisfactory to the Administrative
         Agent.

                  (b) On the Closing Date, all instruments and agreements in
         connection with the transactions contemplated by this Loan Agreement
         and the other




                                      -87-


         Documents shall be reasonably satisfactory in form and substance to the
         Administrative Agent, and the Administrative Agent shall have received
         all information and copies of all certificates, documents and papers,
         including good standing certificates, bring-down certificates and any
         other records of Company proceedings and governmental approvals, if
         any, which the Administrative Agent reasonably may have requested in
         connection therewith, such documents and papers, where appropriate, to
         be certified by proper Company or governmental authorities.

                  11.5. APPROVALS. On or prior to the Closing Date, (i) all
         necessary governmental (domestic and foreign), regulatory and material
         third party approvals and/or consents in connection with the
         Transaction and the Stock Purchase Agreement and otherwise referred to
         herein or therein shall have been obtained and remain in full force and
         effect and evidence thereof shall have been provided to the
         Administrative Agent; except for any such approval or consent the
         failure to obtain would not reasonably be expected to have a Material
         Adverse Effect, and (ii) all applicable waiting periods shall have
         expired without any action being taken by any competent authority which
         restrains, prevents or imposes materially adverse conditions upon the
         consummation of the Transaction, the making of the Loans and the
         transactions contemplated by the Loan Documents or otherwise referred
         to herein or therein. Additionally, on the Closing Date, there shall
         not exist any judgment, order, injunction or other restraint issued or
         filed or a hearing seeking injunctive relief or other restraint pending
         or notified prohibiting or imposing materially adverse conditions upon,
         or materially delaying, or making economically unfeasible, the
         consummation of the Transaction or the making of the Loans or the other
         transactions contemplated by the Documents or otherwise referred to
         herein or therein.

                  11.6. CONSUMMATION OF THE TRANSACTION. On or prior to the
         Closing Date, the transaction described in the Stock Purchase Agreement
         shall have been consummated and the Administrative Agent and the
         Lenders shall have received evidence to its satisfaction that all of
         the conditions precedent set forth thereon shall have been satisfied or
         waived.

                  11.7. INTERCREDITOR AGREEMENT WITH HOLDER OF SELLER LOAN. The
         holder of the Seller Loan will enter into a written agreement with the
         Administrative Agent to the effect that (i) it will not institute, and
         will not join with others in instituting a bankruptcy against any of
         the Borrowers until at least one year and one day (or the longest
         performance period under federal or state insolvency laws then in
         effect) after all indebtedness under the Loan Documents have been
         repaid in full; (ii) distributions to the holder of the Seller Loan are
         to be made only at the times and only in such amounts as funds are
         available to the Borrowers in accordance with the terms of the priority
         of payments contained in the Loan Documents; (iii) it shall take no
         action that would cause any of the Borrowers to breach any of its
         respective covenants in its organizational documents or the Loan
         Documents; (iv) it shall not amend, or agree to the




                                      -88-


         amendment of, the organizational documents of any of the Borrowers
         without the prior written consent of the Administrative Agent in each
         instance; and (v) it shall take no action, or join with others to take
         any action (x) challenging the validity or enforceability of any of the
         security interests set forth in the Loan Documents or (y) seeking the
         consolidation of any of the Borrowers with any other Person.

                  11.8. SECURITY AGREEMENT. On the Closing Date, each of the
         Borrowers shall have duly authorized, executed and delivered the
         security agreement in the form of Exhibit N hereto (as amended,
         modified, restated and/or supplemented from time to time, the "Security
         Agreement") covering all of such Borrower's present and future
         collateral referred to therein, together with:

                      (i) proper financing statements (Form UCC-1 or the
                  equivalent) authenticated for filing under the UCC or other
                  appropriate filing offices of each jurisdiction as may be
                  necessary or, in the reasonable opinion of the Administrative
                  Agent desirable, to perfect the security interests purported
                  to be created by the Security Agreement;

                      (ii) certified copies of Requests for Information or
                  Copies (Form UCC-11), or equivalent reports, each of a recent
                  date, listing all effective financing statements that name a
                  Borrower as debtor and that are filed in the jurisdictions
                  referred to in clause (i) above, together with copies of such
                  other financing statements that name a Borrower as debtor
                  (none of which shall cover any of the Collateral, except to
                  the extent evidencing Permitted Liens or in respect of which
                  the Administrative Agent shall have received termination
                  statements (Form UCC-3) or such other termination statements
                  as shall be required by local law fully executed (where
                  required) for filing);

                      (iii) evidence of the completion of (or adequate provision
                  for) all other recordings and filings of, or with respect to,
                  the Security Agreement as may be necessary or, in the
                  reasonable opinion of the Administrative Agent desirable, to
                  perfect the security interests intended to be created by the
                  Security Agreement; and

                      (iv) evidence that all other actions necessary or, in the
                  reasonable opinion of the Administrative Agent desirable, to
                  create, maintain, effect, perfect, preserve, maintain and
                  protect the security interests purported to be created by the
                  Security Agreement have been taken;

         and the Security Agreement shall be in full force and effect.

                  11.9. TAX ALLOCATION AGREEMENTS. On or prior to the Closing
         Date, there shall have been delivered to the Administrative Agent by
         the Borrowers true and correct copies of all tax sharing and other tax
         allocation agreements entered into by a Borrower or any of its
         Subsidiaries, all agreements shall be in form and




                                      -89-


         substance reasonably satisfactory to the Administrative Agent and shall
         be in full force and effect on the Closing Date.

                  11.10. SOLVENCY CERTIFICATE; INSURANCE CERTIFICATES; ETC.. On
         the Closing Date, the Administrative Agent shall have received:

                      (i) a solvency certificate in the form of Exhibit O from
                  the chief financial officer of the Borrowers, dated the
                  Closing Date, and supporting the conclusion that, after giving
                  effect to the Transaction and the incurrence of all financings
                  contemplated herein, the Borrowers and their Subsidiaries (on
                  a consolidated basis) are not insolvent and will not be
                  rendered insolvent by the indebtedness incurred in connection
                  herewith, will not be left with unreasonably small capital
                  with which to engage in its or their respective businesses and
                  will not have incurred debts beyond its or their ability to
                  pay such debts as they mature and become due; and

                      (ii) evidence of insurance complying with the requirements
                  of Section 8.12 for the business and properties of the
                  Borrowers, in scope, form and substance reasonably
                  satisfactory to the Administrative Agent and naming the
                  Administrative Agent as an additional insured and/or loss
                  payee, and stating that such insurance shall not be canceled
                  or materially revised without at least 30 days' prior written
                  notice by the respective insurer to the Administrative Agent.

                  11.11. FINANCIAL STATEMENTS; PRO FORMA FINANCIAL STATEMENTS.
         On or prior to the Closing Date, there shall have been delivered to the
         Administrative Agent and the Lenders true and correct copies of the
         historical and pro forma financial statements referred to in Section
         7.10(b).

                  11.12. PAYMENT OF FEES. On the Closing Date, all costs, fees
         and expenses, and all other compensation due to the Administrative
         Agent and the Lenders (including, without limitation, reasonable and
         documented legal fees and expenses) shall have been paid to the extent
         then due.

                  11.13. BUDGETS. On or prior to the Closing Date, there shall
         have been delivered to the Administrative Agent and the Lenders,
         separate detailed budgets of selling, general and administrative
         expenses and capital expenditures for the Borrowers for the fiscal
         years ended December 31, 2004 and December 31, 2005, each of which
         shall be reasonably satisfactory to the Administrative Agent.

                  11.14. SELLER LOAN. On or prior to the Closing Date, there
         shall have been delivered to the Administrative Agent and the Lender
         all of the executed documentation evidencing the Seller Loan, all of
         which shall be reasonably satisfactory to the Administrative Agent.

                  11.15. PLEDGE AGREEMENT. On the Closing Date, each Borrower
         shall have duly authorized, executed and delivered the pledge agreement
         in the form of




                                      -90-


         Exhibit P (as amended, modified, restated and/or supplemented from time
         to time, the "Pledge Agreement") and shall have delivered to the
         Administrative Agent, as pledgee thereunder, all of the Pledge
         Agreement Collateral, if any, referred to therein and then owned by
         such Borrower, (x) endorsed in blank in the case of promissory notes
         constituting Pledge Agreement Collateral and (y) together with executed
         and undated transfer powers in the case of certificated Capital Stock
         constituting Pledge Agreement Collateral, and the Pledge Agreement
         shall be in full force and effect.

                  11.16. PARTICIPATION AGREEMENT. On the Closing Date, the
         Borrowers shall have duly authorized, executed and delivered the
         Participation Agreement, and the Participation Agreement shall be in
         full force and effect.

                  11.17. INTERCOMPANY SUBORDINATION AGREEMENT. On the Closing
         Date, the Borrowers and any Subsidiary of a Borrower which is an
         obligee with respect to any intercompany debt owed by a Borrower shall
         have duly authorized, executed and delivered an intercompany
         subordination agreement in the form of Exhibit Q (as amended, modified,
         restated and/or supplemented from time to time, the "Intercompany
         Subordination Agreement"), and the Intercompany Subordination Agreement
         shall be in full force and effect.

                  11.18. CONTROL AGREEMENT. On the Closing Date, the Borrowers
         shall have delivered to the Administrative Agent, a fully executed
         control agreement, in form and substance satisfactory to the
         Administrative Agent, with respect to each of the Lockbox Account, the
         Concentration Account, the Accounts Payable Account and the Payroll
         Account.

                  12. CONDITIONS PRECEDENT TO ALL LOANS.

                  The obligation of each Lender to make Loans (including Loans
         made on the Closing Date) is subject, at the time of each such Loan
         (except as hereinafter indicated), to the satisfaction of the following
         conditions:

                  12.1. CLOSING DATE. The Closing Date shall have occurred and
         the Revolving Credit Period shall not have expired or been terminated.

                  12.2. NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the time
         of each such Loan and immediately after giving effect thereto (i) there
         shall exist no Designated Event of Default and (ii) all representations
         and warranties contained herein and in each other Loan Document shall
         be true and correct in all material respects with the same effect as
         though such representations and warranties had been made on the date of
         such Loan (it being understood and agreed that any representation or
         warranty which by its terms is made as of a specified date shall be
         required to be true and correct in all material respects only as of
         such specified date).




                                      -91-


                 12.3. LOAN REQUEST. Prior to the making of each Loan, the
         Administrative Agent shall have received a Loan Request meeting the
         requirements of Section 2.3 and showing in reasonable detail that the
         Aggregate Note Principal Balance (calculated after giving effect to the
         requesting Loan) shall not exceed the Asset Base (calculated as of the
         last day of the most recent month for which internal financial
         statements are available and after giving effect to the addition of the
         Eligible Containers to be acquired with the proceeds of the Loan).

                  13. EVENTS OF DEFAULT; ACCELERATION; ETC.

                  13.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the
         following events ("Events of Default" or, if the giving of notice or
         the lapse of time or both is required, then, prior to such notice or
         lapse of time, "Defaults") shall occur:

                  (a) the Borrowers shall fail to pay (i) on any Payment Date
         any principal payment to the extent that funds are available for such
         purpose in accordance with the priority of payment set forth in Section
         3.1, or (ii) on the earlier to occur of (x) the date on which the
         principal balance of the Revolving Credit Notes have been accelerated
         in accordance with Section 13.1 hereof, and (y) the Legal Final Payment
         Date, the then Aggregate Note Principal Balance;

                  (b) the Borrowers shall fail to pay on any Payment Date any
         interest payment, Commitment Fees or Agent Fee then due and payable on
         the Revolving Credit Notes and the continuation of such default for
         more than five (5) Business Days after such amounts shall have become
         due and payable;

                  (c) on any Payment Date, the Aggregate Note Principal Balance
         (after giving effect to any payments of principal made on such Payment
         Date) exceeds an amount equal to the product of (i) one hundred five
         percent (105%) and (ii) the Asset Base then in effect;

                  (d) default in the payment of any amounts due and owing to the
         Lenders of any Revolving Credit Notes other than the amounts described
         in clauses (a) and (b) above, and the continuation of such default for
         more than fifteen (15) Business Days after the date on which a Senior
         Designated Officer of the Borrowers received written notice of
         non-payment;

                  (e) any Borrower shall fail to comply with any of its
         covenants contained in Sections 9.1, 9.2, 9.3, 9.4, 9.5, 9.6, 9.7, 9.8,
         9.10 or 9.12 or Section 10;

                  (f) any Borrower shall fail to perform any term, covenant or
         agreement contained herein or in any of the other Loan Documents (which
         is not otherwise addressed in this Section 13) which failure materially
         and adversely affects the interests of the Administrative Agent or the
         Lenders and continues for




                                      -92-


         thirty days after written notice of such failure has been given to a
         Senior Designated Officer of the Borrower;

                  (g) any representation or warranty of any Borrower made in any
         Loan Document shall prove incorrect in any material respect when made
         which materially and adversely affects the interest of the
         Administrative Agent or any Lender and which (if curable) remains
         unremedied for a period of 30 days after the first date on which a
         Senior Designated Officer of such Borrower has received written notice
         thereof;

                  (h) a Borrower or any of its Subsidiaries (other than a
         Special Purpose Vehicle) shall commence a voluntary case concerning
         itself under the Federal Bankruptcy Code; or an involuntary case is
         commenced against a Borrower or any of its Subsidiaries (other than a
         Special Purpose Vehicle) and the petition is not controverted within 10
         days, or is not dismissed within 60 days, after commencement of the
         case; or a custodian (as defined in the Bankruptcy Code) is appointed
         for, or takes charge of, all or substantially all of the property of a
         Borrower or any of its Subsidiaries (other than a Special Purpose
         Vehicle); or a Borrower or any of its Subsidiaries (other than a
         Special Purpose Vehicle) commences any other proceeding under any
         reorganization, arrangement, adjustment of debt, relief of debtors,
         dissolution, insolvency or liquidation or similar law of any
         jurisdiction whether now or hereafter in effect relating to a Borrower
         or any of its Subsidiaries (other than a Special Purpose Vehicle) any
         such proceeding which remains undismissed for a period of 60 days; or a
         Borrower or any of its Subsidiaries (other than a Special Purpose
         Vehicle) is adjudicated insolvent or bankrupt; or any order of relief
         or other order approving any such case or proceeding is entered; or a
         Borrower or any of its Subsidiaries (other than a Special Purpose
         Vehicle) suffers any appointment of any custodian or the like for it or
         any substantial part of its property to continue undischarged or
         unstayed for a period of 60 days; or a Borrower or any of its
         Subsidiaries (other than a Special Purpose Vehicle) makes a general
         assignment for the benefit of creditors; or any Company action is taken
         by a Borrower or any of its Subsidiaries (other than a Special Purpose
         Vehicle) for the purpose of effecting any of the foregoing;

                  (i) the occurrence of either of the following:

                      (i) Container Holdings or any of its Subsidiaries fails to
                  make any payment when due (beyond the applicable grace or cure
                  period with respect thereto, if any) with respect to the
                  Seller Loan or the High Yield Bonds and either (x) the
                  holder(s) of such Indebtedness have accelerated such
                  Indebtedness or (y) such default shall not have been
                  permanently waived by the applicable holder(s) of such
                  Indebtedness within thirty (30) Business Days after the later
                  of such default or the expiration of any applicable grace or
                  cure period; or



                                      -93-


                      (ii) Container Holdings or any of its Subsidiaries
                  defaults in the observance or performance (beyond the
                  applicable grace or cure period with respect thereto, if any)
                  of any agreement or covenant relating to the Seller Loan or
                  the High Yield Bonds or contained in any instrument or
                  agreement evidencing, securing or relating thereto or any
                  other event or condition shall occur or condition exist, the
                  effect of which default or other event or condition is to
                  cause, or permit, the holder or holders of such Indebtedness
                  (or trustee or agent on behalf of such holders) to cause such
                  Indebtedness to become due prior to its stated maturity, and
                  either (x) the holder(s) of such Indebtedness have accelerated
                  such Indebtedness, or (y) such default shall not have been
                  permanently waived by the applicable holder(s) of such
                  Indebtedness within ninety (90) days after the later of such
                  default or the expiration of any applicable grace or cure
                  period ;

                  (j) a Change of Control, other than as the result of a public
         offering of the stock of Container Holdings, TLI, TOL or TOCC or any of
         their respective direct or indirect parents, occurs without the prior
         consent of the Administrative Agent and the Required Lenders;

                  (k) the Security Agreement or the Lien purported to be created
         thereby shall become or be adjudged by a court of competent
         jurisdiction to be invalid or enforceable against any Borrower for any
         reason other than any action taken by the Administrative Agent or any
         Lender or the failure of the Administrative Agent or any Lender to take
         any action within its control;

                  (l) one or more judgments or decrees shall be entered against
         a Borrower or any of its respective Subsidiaries (other than a Special
         Purpose Vehicle) involving a liability (to the extent not paid when due
         or covered by a reputable and solvent insurance company (with any
         portion of any judgment or decree not so covered to be included in any
         determination hereunder)) equal to or in excess of $20 million for all
         such judgments and decrees and all such judgments or decrees shall
         either be final and non-appealable or shall not have been vacated,
         discharged or stayed or bonded pending appeal for any period of 30
         consecutive days; or

                  (m) any law, rule or regulation shall render invalid, or
         preclude enforcement of, any material provision of this Loan Agreement
         or any other Loan Document or impair performance of the Borrowers
         obligations under this Loan Agreement or under any other Loan Document,
         in each case, for any reason other than any action taken by the
         Administrative Agent or any Lender or the failure of the Administrative
         Agent or any Lender to take any action within its control.

         then, and in any such event, so long as the same may be continuing, the
         Administrative Agent may, and upon the request of the Required Lenders
         shall, by notice in writing to the Borrowers declare all amounts owing
         with respect to this Loan Agreement, the Revolving Credit Notes and the
         other Loan Documents




                                      -94-


         to be, and they shall thereupon forthwith become, immediately due and
         payable without presentment, demand, protest or other notice of any
         kind, all of which are hereby expressly waived by the Borrowers;
         provided that in the event of any Event of Default specified in
         Sections 13.1(h), all such amounts shall become immediately due and
         payable automatically and without any requirement of notice from the
         Administrative Agent.

                  13.2. TERMINATION OF COMMITMENTS. If an Event of Default
         specified in Sections 13.1(h) shall occur, any unused portion of the
         credit hereunder shall forthwith terminate and each of the Lenders
         shall be relieved of all further obligations to make Loans to the
         Borrower. If any other Event of Default shall have occurred and be
         continuing, the Administrative Agent may and upon the request of the
         Required Lenders shall, by notice to the Borrower, terminate the unused
         portion of the Commitments hereunder, and upon such notice being given
         such unused portion of the Commitments hereunder shall terminate
         immediately and each of the Lenders shall be relieved of all further
         obligations to make Loans. No termination of the Commitments hereunder
         shall relieve the Borrowers of any of the Obligations.

                  13.3. REMEDIES. In case any one or more of the Events of
         Default shall have occurred and be continuing, and whether or not the
         Administrative Agent shall have accelerated the maturity of the Loans
         pursuant to Section 13.1, each Lender, if owed any amount with respect
         to the Loans may, with the consent of the Required Lenders but not
         otherwise, proceed to protect and enforce its rights by suit in equity,
         action at law or other appropriate proceeding, whether for the specific
         performance of any covenant or agreement contained in this Loan
         Agreement and the other Loan Documents or any instrument pursuant to
         which the Obligations to such Lender are evidenced, including as
         permitted by applicable law the obtaining of the ex parte appointment
         of a receiver, and, if such amount shall have become due, by
         declaration or otherwise, proceed to enforce the payment thereof or any
         other legal or equitable right of such Lender. No remedy herein
         conferred upon any Lender or the Administrative Agent or the holder of
         any Note is intended to be exclusive of any other remedy and each and
         every remedy shall be cumulative and shall be in addition to every
         other remedy given hereunder or now or hereafter existing at law or in
         equity or by statute or any other provision of law.

                  13.4. DISTRIBUTION OF COLLATERAL PROCEEDS. In the event that,
         following the occurrence or during the continuance of any Default or
         Event of Default, the Administrative Agent or any Lender, as the case
         may be, receives any monies in connection with the enforcement of any
         of the Security Documents, or otherwise with respect to the realization
         upon any of the Collateral, such monies shall be distributed for
         application as follows:

                  (a) First, to the payment of, or (as the case may be) the
         reimbursement of the Administrative Agent for, or in respect of, all
         reasonable costs, expenses,




                                      -95-


         disbursements and losses which shall have been incurred or sustained by
         the Administrative Agent in connection with the collection of such
         monies by the Administrative Agent, for the exercise, protection or
         enforcement by the Administrative Agent of all or any of the rights,
         remedies, powers and privileges of the Administrative Agent under this
         Loan Agreement or any of the other Loan Documents or in respect of the
         Collateral or in support of any provision of adequate indemnity to the
         Administrative Agent against any taxes or liens which by law shall
         have, or may have, priority over the rights of the Administrative Agent
         to such monies;

                  (b) Second, in accordance with the applicable provisions of
         the priority of payments set forth in clauses (i) through (ix)
         inclusive of Section 3.1(b);

                  (c) Third, upon payment and satisfaction in full or other
         provisions for payment in full satisfactory to the Lenders and the
         Administrative Agent of all of the Obligations, to the payment of any
         obligations required to be paid pursuant to Section 9-608(a)(1)(C) or
         9-615(a)(3) of the Uniform Commercial Code of the State of New York;
         and

                  (d) Fourth, the excess, if any, shall be returned to the
         Borrowers or to such other Persons as are entitled thereto.

                  14. ADMINISTRATIVE AGENT.

                  14.1. APPOINTMENT AND AUTHORITY. Each of the Lenders hereby
         irrevocably appoints Fortis to act on its behalf as the Administrative
         Agent hereunder and under the other Loan Documents and authorizes the
         Administrative Agent to take such actions on its behalf and to exercise
         such powers as are delegated to the Administrative Agent by the terms
         hereof or thereof, together with such actions and powers as are
         reasonably incidental thereto. The provisions of this Section are
         solely for the benefit of the Administrative Agent, and the Lenders,
         and none of the Borrowers shall have rights as a third party
         beneficiary of any of such provisions.

                  14.2. RIGHTS AS A LENDER. The Person serving as the
         Administrative Agent hereunder shall have the same rights and powers in
         its capacity as a Lender as any other Lender and may exercise the same
         as though it were not the Administrative Agent and the term "Lender" or
         "Lenders" shall, unless otherwise expressly indicated or unless the
         context otherwise requires, include the Person serving as the
         Administrative Agent hereunder in its individual capacity. Such Person
         and its Affiliates may accept deposits from, lend money to, act as the
         financial advisor or in any other advisory capacity for and generally
         engage in any kind of business with the Borrowers or any of their
         Affiliates as if such Person were not the Administrative Agent
         hereunder and without any duty to account therefor to the Lenders.




                                      -96-


                  14.3. EXCULPATORY PROVISIONS. The Administrative Agent shall
         not have any duties or obligations except those expressly set forth
         herein and in the other Loan Documents. Without limiting the generality
         of the foregoing, the Administrative Agent:

                  (a) shall not be subject to any fiduciary or other implied
         duties, regardless of whether a Default or an Event of Default has
         occurred and is continuing;

                  (b) shall not have any duty to take any discretionary action
         or exercise any discretionary powers, except discretionary rights and
         powers expressly contemplated hereby or by the other Loan Documents
         that the Administrative Agent is required to exercise as directed in
         writing by the Required Lenders (or such other number or percentage of
         the Lenders as shall be expressly provided for herein or in the other
         Loan Documents), provided that the Administrative Agent shall not be
         required to take any action that, in its opinion or the opinion of its
         counsel, may expose the Administrative Agent to liability or that is
         contrary to any Loan Document or applicable law; and

                  (c) shall not, except as expressly set forth herein and in the
         other Loan Documents, have any duty to disclose, and shall not be
         liable for the failure to disclose, any information relating to the
         Borrowers or any of their Affiliates that is communicated to or
         obtained by the Person serving as the Administrative Agent or any of
         its Affiliates in any capacity.

                  The Administrative Agent shall not be liable for any action
         taken or not taken by it (i) with the consent or at the request of the
         Required Lenders (or such other number or percentage of the Lenders as
         shall be necessary, or as the Administrative Agent shall believe in
         good faith shall be necessary, under the circumstances as provided in
         Sections 16.12 and 13.2) or (ii) in the absence of its own gross
         negligence or willful misconduct. The Administrative Agent shall be
         deemed not to have knowledge of any Default or Event of Default unless
         and until notice describing such Default or Event of Default is given
         to the Administrative Agent by any Borrower or a Lender.

                  The Administrative Agent shall not be responsible for or have
         any duty to ascertain or inquire into (i) any statement, warranty or
         representation made in or in connection with this Loan Agreement or any
         other Loan Document, (ii) the contents of any certificate, report or
         other document delivered hereunder or thereunder or in connection
         herewith or therewith, (iii) the performance or observance of any of
         the covenants, agreements or other terms or conditions set forth herein
         or therein or the occurrence of any Default or Event of Default, (iv)
         the validity, enforceability, effectiveness or genuineness of this Loan
         Agreement, any other Loan Document or any other agreement, instrument
         or document or (v) the satisfaction of any condition set forth in
         Sections 11 or 12 or elsewhere herein,




                                      -97-


         other than to confirm receipt of items expressly required to be
         delivered to the Administrative Agent.

                  14.4. RELIANCE BY ADMINISTRATIVE AGENT. The Administrative
         Agent shall be entitled to rely upon, and shall not incur any liability
         for relying upon, any notice, request, certificate, consent, statement,
         instrument, document or other writing (including any electronic
         message, Internet or intranet website posting or other distribution)
         believed by it to be genuine and to have been signed, sent or otherwise
         authenticated by the proper Person. The Administrative Agent also may
         rely upon any statement made to it orally or by telephone and believed
         by it to have been made by the proper Person, and shall not incur any
         liability for relying thereon. In determining compliance with any
         condition hereunder to the making of a Loan that by its terms must be
         fulfilled to the satisfaction of a Lender, the Administrative Agent may
         presume that such condition is satisfactory to such Lender unless the
         Administrative Agent shall have received notice to the contrary from
         such Lender prior to the making of such Loan. The Administrative Agent
         may consult with legal counsel (who may be counsel for the Borrowers),
         independent accountants and other experts selected by it, and shall not
         be liable for any action taken or not taken by it in accordance with
         the advice of any such counsel, accountants or experts.

                  14.5. DELEGATION OF DUTIES. The Administrative Agent may
         perform any and all of its duties and exercise its rights and powers
         hereunder or under any other Loan Document by or through any one or
         more sub-agents appointed by the Administrative Agent. The
         Administrative Agent and any such sub-agent may perform any and all of
         its duties and exercise its rights and powers by or through their
         respective Related Parties. The exculpatory provisions of this Section
         14 shall apply to any such sub-agent and to the Related Parties of the
         Administrative Agent and any such sub-agent, and shall apply to their
         respective activities in connection with the syndication of the credit
         facilities provided for herein as well as activities as Administrative
         Agent.

                  14.6. RESIGNATION OF ADMINISTRATIVE AGENT. The Administrative
         Agent may at any time give notice of its resignation to the Lenders and
         the Borrowers. Upon receipt of any such notice of resignation, the
         Required Lenders shall have the right, with the consent of the
         Borrowers, to appoint a successor. If no such successor shall have been
         so appointed by the Required Lenders and shall have accepted such
         appointment within 30 days after the retiring Administrative Agent
         gives notice of its resignation, then the retiring Administrative Agent
         may on behalf of the Lenders, appoint a successor Administrative Agent
         meeting the qualifications set forth above; provided that if the
         Administrative Agent shall notify the Borrowers and the Lenders that no
         qualifying Person has accepted such appointment, then such resignation
         shall nonetheless become effective in accordance with such notice and
         (1) the retiring Administrative Agent shall be discharged from its
         duties and obligations hereunder and under the other Loan Documents
         (except that in the case of any collateral security held by the





                                      -98-


         Administrative Agent on behalf of the Lenders under any of the Loan
         Documents, the retiring Administrative Agent shall continue to hold
         such collateral security until such time as a successor Administrative
         Agent is appointed) and (2) all payments, communications and
         determinations provided to be made by, to or through the Administrative
         Agent shall instead be made by or to each Lender directly, until such
         time as the Required Lenders appoint a successor Administrative Agent
         as provided for above in this Section. Upon the acceptance of a
         successor's appointment as Administrative Agent hereunder, such
         successor shall succeed to and become vested with all of the rights,
         powers, privileges and duties of the retiring (or retired)
         Administrative Agent, and the retiring Administrative Agent shall be
         discharged from all of its duties and obligations hereunder or under
         the other Loan Documents (if not already discharged therefrom as
         provided above in this Section). The fees payable by the Borrowers to a
         successor Administrative Agent shall be the same as those payable to
         its predecessor unless otherwise agreed between the Borrowers and such
         successor. After the retiring Administrative Agent's resignation
         hereunder and under the other Loan Documents, the provisions of this
         Section and Section 16.3 shall continue in effect for the benefit of
         such retiring Administrative Agent, its sub-agents and their respective
         Related Parties in respect of any actions taken or omitted to be taken
         by any of them while the retiring Administrative Agent was acting as
         Administrative Agent.

                  In the event that (i) the Administrative Agent, whether in its
         capacity as the Administrative Agent or a Lender, does not consent (or
         fails to respond) to a proposed amendment, modification or waiver to
         any provision of this Loan Agreement or any other Loan Document
         requested by any Borrower and (ii) such proposed amendment,
         modification or waiver has been approved by the Required Lenders, any
         Borrower may, upon (x) delivery of written notice thereof to the
         Administrative Agent, and (y) receipt by the Administrative Agent of
         the amount calculated in accordance with Section 16.13 hereof in
         connection with a transfer of the Loans by the Administrative Agent,
         require that the Administrative Agent promptly resign from such
         position, such resignation, and the appointment of a successor
         Administrative Agent to be consummated in accordance with the first
         paragraph of this Section 14.6.

                  14.7. NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.
         Each Lender acknowledges that it has, independently and without
         reliance upon the Administrative Agent or any other Lender or any of
         their Related Parties and based on such documents and information as it
         has deemed appropriate, made its own credit analysis and decision to
         enter into this Loan Agreement. Each Lender also acknowledges that it
         will, independently and without reliance upon the Administrative Agent
         or any other Lender or any of their Related Parties and based on such
         documents and information as it shall from time to time deem
         appropriate, continue to make its own decisions in taking or not taking
         action under or based upon this Loan Agreement, any other Loan Document
         or any related agreement or any document furnished hereunder or
         thereunder.





                                      -99-


                  14.8. ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM. In case
         of the pendency of any receivership, insolvency, liquidation,
         bankruptcy, reorganization, arrangement, adjustment, composition or
         other judicial proceeding relative to a Borrower, the Administrative
         Agent (irrespective of whether the principal of any Loan shall then be
         due and payable as herein expressed or by declaration or otherwise and
         irrespective of whether the Administrative Agent shall have made any
         demand on such Borrower) shall be entitled and empowered, by
         intervention in such proceeding or otherwise

                  (a) to file and prove a claim for the whole amount of the
         principal and interest owing and unpaid in respect of the Loans and all
         other Obligations that are owing and unpaid and to file such other
         documents as may be necessary or advisable in order to have the claims
         of the Lenders and the Administrative Agent (including any claim for
         the reasonable compensation, expenses, disbursements and advances of
         the Lenders and the Administrative Agent and their respective agents
         and counsel) and all other amounts due the Lenders and the
         Administrative Agent under Sections 5.1 and 16.3 allowed in such
         judicial proceeding; and

                  (b) to collect and receive any monies or other property
         payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 5.1 and 16.3.

                  Nothing contained herein shall be deemed to authorize the
         Administrative Agent to authorize or consent to or accept or adopt on
         behalf of any Lender any plan of reorganization, arrangement,
         adjustment or composition affecting the Obligations or the rights of
         any Lender or to authorize the Administrative Agent to vote in respect
         of the claim of any Lender in any such proceeding.

                  14.9. COLLATERAL MATTERS. The Lenders irrevocably authorize
         the Administrative Agent, at its option and in its discretion,

                  (a) to release any Lien on any property granted to or held by
         the Administrative Agent under any Loan Document (i) upon termination
         of the Aggregate Commitments and payment in full of all Obligations
         (other than contingent indemnification obligations), (ii) that is sold
         or to be sold as part of or in connection with any sale permitted
         hereunder or under any other Loan Document, or (iii) subject to Section
         16.12, if approved, authorized or ratified in writing by the Required
         Lenders;




                                     -100-


                  (b) to subordinate any Lien on any property granted to or held
         by the Administrative Agent under any Loan Document to the holder of
         any Lien on such property that is permitted by Section 9.3(viii); and

                  (c) to take the actions with respect to the Collateral as are
         set forth in the Security Documents.

                  The Lenders hereby agree that the Security Documents may be
         enforced only by the action of the Administrative Agent, in each case,
         acting upon the instructions of the Required Lenders, and that no
         Lender shall have any right individually to seek to enforce or to
         enforce the Security Documents to realize upon the security to be
         granted hereby, it being understood and agreed that such rights and
         remedies may be exercised by the Administrative Agent for the benefit
         of the Lender upon the terms of this Agreement and the Security
         Documents.

                  Upon request by the Administrative Agent at any time, the
         Required Lenders will confirm in writing the Administrative Agent's
         authority to release or subordinate its interest in particular types or
         items of property.

                  15. SUCCESSORS AND ASSIGNS.

                  15.1. GENERAL CONDITIONS. The provisions of this Loan
         Agreement shall be binding upon and inure to the benefit of the parties
         hereto and their respective successors and assigns permitted hereby,
         except that none of the Borrowers may assign or otherwise transfer any
         of its rights or Obligations hereunder without the prior written
         consent of each Lender and no Lender may assign or otherwise transfer
         any of its rights or obligations hereunder except (a) to an Eligible
         Assignee in accordance with the provisions of Section 15.2, (b) by way
         of participation in accordance with the provisions of Section 15.4 or
         (c) by way of pledge or assignment of a security interest subject to
         the restrictions of Section 15.6 (and any other attempted assignment or
         transfer by any party hereto shall be null and void). Nothing in this
         Loan Agreement, expressed or implied, shall be construed to confer upon
         any Person (other than the parties hereto, their respective successors
         and assigns permitted hereby, Participants to the extent provided in
         Section 15.4, and, to the extent expressly contemplated hereby, the
         Related Parties of each of the Administrative Agent and the Lenders)
         any legal or equitable right, remedy or claim under or by reason of
         this Loan Agreement or any of the other Loan Documents.

                  15.2. ASSIGNMENTS BY LENDERS. Any Lender may at any time
         assign to one or more Eligible Assignees all or a portion of its rights
         and obligations under this Loan Agreement (including all or a portion
         of its Commitment and the Loans at the time owing to it); provided that

                      (i) except in the case of an assignment of the entire
                  remaining amount of the assigning Lender's Commitment and the
                  Loans at the time owing to it or in the case of an assignment
                  to a Lender or an Affiliate of a




                                     -101-


                  Lender, the aggregate amount of the Commitment (which for this
                  purpose includes Loans outstanding thereunder) or, if the
                  Commitment is not then in effect, the principal outstanding
                  balance of the Loans of the assigning Lender subject to each
                  such assignment, determined as of the date the Assignment and
                  Assumption with respect to such assignment is delivered to the
                  Administrative Agent or, if a "Trade Date" is specified in the
                  Assignment and Assumption, as of the Trade Date, shall not be
                  less than $15,000,000 unless each of the Administrative Agent
                  and, so long as no Designated Event of Default has occurred
                  and is continuing, the Borrowers otherwise consent (each such
                  consent not to be unreasonably withheld or delayed);

                      (ii) each partial assignment shall be made as an
                  assignment of a proportionate part of all the assigning
                  Lender's rights and obligations under this Loan Agreement with
                  respect to the Loans or the Commitment assigned, it being
                  understood that non-pro rata assignments of or among any of
                  the Commitments and Loans are not permitted;

                      (iii) any assignment of a Commitment or Loan must be
                  approved by the Administrative Agent and, so long as no
                  Designated Event of Default has occurred and is continuing,
                  the Borrowers (each such consent not to be unreasonably
                  withheld or delayed) unless the Person that is the proposed
                  assignee is itself a Lender (whether or not the proposed
                  assignee would otherwise qualify as an Eligible Assignee);

                      (iv) so long as Fortis is the Administrative Agent, any
                  assignment by Fortis or any of its Affiliates of all or a
                  portion of its Commitments or Loans that would result in
                  Fortis and its Affiliates holding in aggregate less than
                  twenty percent (20%) of the Aggregate Commitments, or, if the
                  Commitments are not then in effect, the aggregate Loan
                  outstanding, shall require, so long as no Designated Event of
                  Default has occurred and is continuing, the consent of the
                  Borrowers (each such consent not to be unreasonably withheld
                  or delayed; and

                      (v) the parties to each assignment shall execute and
                  deliver to the Administrative Agent an Assignment and
                  Assumption, together with a processing and recordation fee of
                  $3,500, and the Eligible Assignee, if it shall not be a
                  Lender, shall deliver to the Administrative Agent an
                  Administrative Questionnaire.

                  Subject to acceptance and recording thereof by the
         Administrative Agent pursuant to Section 15.3, from and after the
         effective date specified in each Assignment and Assumption, the
         Eligible Assignee thereunder shall be a party to this Loan Agreement
         and, to the extent of the interest assigned by such Assignment and
         Assumption, have the rights and obligations of a Lender under this Loan
         Agreement, and the assigning Lender thereunder shall, to the extent of





                                     -102-


         the interest assigned by such Assignment and Assumption, be released
         from its obligations under this Loan Agreement (and, in the case of an
         Assignment and Assumption covering all of the assigning Lender's rights
         and obligations under this Loan Agreement, such Lender shall cease to
         be a party hereto) but shall continue to be entitled to the benefits of
         Sections 5.2.2, 5.6 and 16.3 with respect to facts and circumstances
         occurring prior to the effective date of such assignment. Upon request,
         the Borrowers (at their expense) shall execute and deliver a Revolving
         Credit Note to the assignee Lender. Any assignment or transfer by a
         Lender of rights or obligations under this Loan Agreement that does not
         comply with this subsection shall be treated for purposes of this Loan
         Agreement as a sale by such Lender of a participation in such rights
         and obligations in accordance with Section 15.4. Notwithstanding
         anything to the contrary contained herein, the Borrowers shall not be
         obligated to pay to the Eligible Assignee any amount under Section
         5.2.2(a)U that is greater than the amount that the Borrowers would have
         been obligated to pay such Eligible Assignee's assignor if such
         assigning Lender had not assigned to such Eligible Assignee any of its
         rights under this Agreement, unless (1) the circumstances giving rise
         to such greater payments did not exist at the time of such assignment,
         or (2) the Borrowers consented to the assignment to such Eligible
         Assignee.

                  15.3. REGISTER. The Administrative Agent, acting solely for
         this purpose as an agent of the Borrowers, shall maintain at the
         Administrative Agent's Office a copy of each Assignment and Assumption
         delivered to it and a register for the recordation of the names and
         addresses of the Lenders, and the Commitments of, and principal amounts
         of the Loans owing to, each Lender pursuant to the terms hereof from
         time to time (the "Register"). The entries in the Register shall be
         conclusive absent manifest error, and the Borrowers, the Administrative
         Agent and the Lenders may treat each Person whose name is recorded in
         the Register pursuant to the terms hereof as a Lender hereunder for all
         purposes of this Loan Agreement, notwithstanding notice to the
         contrary. The Register shall be available for inspection by any
         Borrower or any Lender at any reasonable time and from time to time
         upon reasonable prior notice. In addition, at any time that a request
         for a consent for a material or substantive change to the Loan
         Documents is pending, any Lender wishing to consult with other Lenders
         in connection therewith may request and receive from the Administrative
         Agent a copy of the Register.

                  15.4. PARTICIPATIONS. Any Lender may at any time, without the
         consent of, or notice to, the Borrowers or the Administrative Agent,
         sell participations to any Person (other than a natural person or any
         Borrower or any of their Affiliates) (each, a "Participant") in all or
         a portion of such Lender's rights and/or obligations under this Loan
         Agreement (including all or a portion of its Commitment and/or the
         Loans owing to it); provided that (i) such Lender's obligations under
         this Loan Agreement shall remain unchanged, (ii) such Lender shall
         remain solely responsible to the other parties hereto for the
         performance of such obligations and (iii) the Borrowers, the
         Administrative Agent and the




                                     -103-


         Lenders shall continue to deal solely and directly with such Lender in
         connection with such Lender's rights and obligations under this Loan
         Agreement. Any agreement or instrument pursuant to which a Lender sells
         such a participation shall provide that such Lender shall retain the
         sole right to enforce this Loan Agreement and to approve any amendment,
         modification or waiver of any provision of this Loan Agreement;
         provided that such agreement or instrument may provide that such Lender
         will not, without the consent of the Participant, agree to any
         amendment, modification or waiver that would reduce the principal of or
         the interest rate on any Loan, extend the term or increase the amount
         of the Commitment of such Lender as it relates to such Participant,
         reduce the amount of any Commitment Fee to which such Participant is
         entitled or extend any regularly scheduled payment date for principal
         or interest. Subject to Section 15.5, the Borrowers agree that each
         Participant shall be entitled to the benefits of Sections 5.2.2, 5.6,
         5.7 and 5.9 to the same extent as if it were a Lender and had acquired
         its interest by assignment pursuant to Section 15.2. To the extent
         permitted by law, each Participant also shall be entitled to the
         benefits of Section 16.1 as though it were a Lender, provided such
         Participant agrees to be subject to Section 15.1 as though it were a
         Lender.

                  15.5. LIMITATIONS UPON PARTICIPANT RIGHTS. A Participant shall
         not be entitled to receive any greater payment under Sections 5.2.2,
         5.6 or 5.7 than the applicable Lender would have been entitled to
         receive with respect to the participation sold to such Participant,
         unless the sale of the participation to such Participant is made with
         the Borrowers' prior written consent. A Participant that would be a
         Non-U.S. Lender if it were a Lender shall not be entitled to the
         benefits of Section 5.2.2 unless the Borrower is notified of the
         participation sold to such Participant and such Participant agrees, for
         the benefit of the Borrowers, to comply with Section 5.2.3 as though it
         were a Lender.

                  15.6. CERTAIN PLEDGES. Any Lender may at any time pledge or
         assign a security interest in all or any portion of its rights under
         this Loan Agreement (including under its Revolving Credit Note) to
         secure obligations of such Lender, including any pledge or assignment
         to secure obligations to a Federal Reserve Bank; provided that no such
         pledge or assignment shall release such Lender from any of its
         obligations hereunder or substitute any such pledgee or assignee for
         such Lender as a party hereto.

                  15.7. ELECTRONIC EXECUTION OF ASSIGNMENTS. The words
         "execution," "signed," "signature," and words of like import in any
         Assignment and Assumption shall be deemed to include electronic
         signatures or the keeping of records in electronic form, each of which
         shall be of the same legal effect, validity or enforceability as a
         manually executed signature or the use of a paper-based recordkeeping
         system, as the case may be, to the extent and as provided for in any
         applicable law, including the Federal Electronic Signatures in Global
         and National Commerce Act, the New York State Electronic Signatures and
         Records




                                     -104-


         Act, or any other similar state laws based on the Uniform Electronic
         Transactions Act.

                  16. PROVISIONS OF GENERAL APPLICATIONS.

                  16.1. SETOFF. Each Borrower hereby grants to the
         Administrative Agent and each of the Lenders a continuing lien,
         security interest and right of setoff as security for all liabilities
         and Obligations to the Administrative Agent and each Lender, whether
         now existing or hereafter arising, upon and against all deposits,
         credits, collateral and property, now or hereafter in the possession,
         custody, safekeeping or control of the Administrative Agent or such
         Lender or any Lender Affiliate and their successors and assigns or in
         transit to any of them. Regardless of the adequacy of any collateral,
         if any of the Obligations are due and payable and have not been paid or
         any Event of Default shall have occurred, any deposits or other sums
         credited by or due from any of the Lenders to any Borrower and any
         securities or other property of any Borrower in the possession of such
         Lender may be applied to or set off by the Administrative Agent against
         the payment of Obligations and any and all other liabilities, direct,
         or indirect, absolute or contingent, due or to become due, now existing
         or hereafter arising, of the Borrowers to such Lender. ANY AND ALL
         RIGHTS TO REQUIRE ANY LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH
         RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO
         EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS
         OR OTHER PROPERTY OF THE BORROWERS ARE HEREBY KNOWINGLY, VOLUNTARILY
         AND IRREVOCABLY WAIVED. Each of the Lenders agree with each other
         Lender that (a) if an amount to be set off is to be applied to
         Indebtedness of the Borrowers to such Lender, other than Indebtedness
         evidenced by the Revolving Credit Notes held by such Lender, such
         amount shall be applied ratably to such other Indebtedness and to the
         Indebtedness evidenced by all such Notes held by such Lender, and (b)
         if such Lender shall receive from the Borrowers, whether by voluntary
         payment, exercise of the right of setoff, counterclaim, cross action,
         enforcement of the claim evidenced by the Revolving Credit Notes held
         by such Lender by proceedings against the Borrowers at law or in equity
         or by proof thereof in bankruptcy, reorganization, liquidation,
         receivership or similar proceedings, or otherwise, any amount in excess
         of its ratable portion of the payments received by all of the Lenders
         with respect to the Revolving Credit Notes held by all of the Lenders,
         such Lender will make arrangements with the Administrative Agent and
         the other Lenders with respect to such excess in accordance with the
         provisions of Section 4.6.

                  16.2. EXPENSES. The Borrowers agree to pay, on a joint and
         several basis, (a) the reasonable and documented costs of producing and
         reproducing this Loan Agreement, the other Loan Documents and the other
         agreements and instruments mentioned herein, (b) the reasonable and
         documented fees, expenses and disbursements of the Administrative
         Agent's Special Counsel and any local




                                     -105-


         counsel to the Administrative Agent incurred in connection with the
         preparation, syndication, administration or interpretation of the Loan
         Documents and other instruments mentioned herein, each closing
         hereunder, any amendments, modifications, approvals, consents or
         waivers hereto or hereunder, or the cancellation of any Loan Document
         upon payment in full in cash of all of the Obligations or pursuant to
         any terms of such Loan Document providing for such cancellation, (c)
         the reasonable and documented fees, expenses and disbursements of the
         Administrative Agent or any of its Affiliates incurred by the
         Administrative Agent or such Affiliate in connection with the
         preparation, syndication, administration or interpretation of the Loan
         Documents and other instruments mentioned herein, (d) any reasonable
         and documented fees, costs, expenses and bank charges, including bank
         charges for returned checks, incurred the Administrative Agent in
         establishing, maintaining or handling agency accounts, lock box
         accounts and other accounts for the collection of any of the
         Collateral, (e) all reasonable and documented out-of-pocket expenses
         (including without limitation reasonable attorneys' fees and costs, and
         reasonable consulting, accounting, appraisal, investment banking and
         similar professional fees and charges) incurred by the Administrative
         Agent in connection with (i) the enforcement of or preservation of
         rights under any of the Loan Documents against the Borrowers or the
         administration thereof after the occurrence of a Default or Event of
         Default and (ii) any litigation, proceeding or dispute whether arising
         hereunder or otherwise, in any way related to the Administrative
         Agent's relationship with the Borrowers and (f) all reasonable and
         documented fees, expenses and disbursements of any Lender or the
         Administrative Agent incurred in connection with UCC searches, UCC
         filings, or mortgage recordings. The covenants contained in this
         Section 16.2 shall survive payment or satisfaction in full of all other
         Obligations.

                  16.3. INDEMNIFICATION. Each Borrower agrees to indemnify and
         hold harmless, on a joint and several basis, the Administrative Agent,
         each of the Lenders and each of their Affiliates ("Indemnitees") from
         and against any and all claims, actions and suits whether groundless or
         otherwise, and from and against any and all liabilities, losses,
         damages and expenses of every nature and character arising out of this
         Loan Agreement or any of the other Loan Documents or the transactions
         contemplated hereby (the "Indemnified Liabilities") including, without
         limitation, (a) any actual or proposed use by the Borrowers of the
         proceeds of any of the Loans, (b) the reversal or withdrawal of any
         provisional credits granted by the Administrative Agent or any Lender
         upon the transfer of funds from lock box, bank agency, concentration
         accounts or otherwise under any cash management arrangements with the
         Borrowers or in connection with the provisional honoring of funds
         transfers, checks or other items, (c) the Borrowers entering into or
         performing this Loan Agreement or any of the other Loan Documents, (d)
         any such liability, loss, damage or expense in any way relating to, or
         arising out of, the manufacture, ownership, leasing or operation of the
         Containers and the other Collateral incurred prior to any foreclosure
         on the Collateral, or (e) with respect to the Borrowers and their
         respective properties and




                                     -106-


         assets, the violation of any Environmental Law, the presence, disposal,
         escape, seepage, leakage, spillage, discharge, emission, release or
         threatened release of any Hazardous Substances or any action, suit,
         proceeding or investigation brought or threatened with respect to any
         Hazardous Substances (including, but not limited to, claims with
         respect to wrongful death, personal injury or damage to property), in
         each case including, without limitation, the reasonable fees and
         disbursements of one counsel incurred in connection with any such
         investigation, litigation or other proceeding; provided, however, that
         the Borrowers shall have no obligation to any Indemnitee hereunder with
         respect to Indemnified Liabilities and related costs and expenses (i)
         to the extent that such Indemnified Liabilities constitute special,
         indirect, consequential or punitive damages or damages or liabilities
         based upon any theory of lost profits, or (ii) to the extent that such
         Indemnified Liabilities are finally judicially determined to have
         resulted from the gross negligence, bad faith, willful misconduct or
         recklessness of such Indemnitee (and, upon any such determination, any
         indemnification payments with respect to such Indemnified Liabilities
         or related costs and expenses previously received by such Indemnitee
         shall be promptly reimbursed by such Indemnitee). In litigation, or the
         preparation therefor, each Indemnitee shall be entitled to select its
         own counsel and, in addition to the foregoing indemnity; provided, that
         the Borrowers shall only be obligated under this Section 16.3 to pay
         the reasonable and documented fees and expenses of one counsel on
         behalf of all Indemnitees. If, and to the extent that the Obligations
         of the Borrowers under this Section 16.3 are unenforceable for any
         reason, the Borrowers hereby agree to make the maximum contribution to
         the payment in satisfaction of such Obligations which is permissible
         under applicable law. The covenants contained in this Section 16.3
         shall survive payment or satisfaction in full of all other Obligations.

                  16.4. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.

                  16.4.1. CONFIDENTIALITY. Each of the Lenders and the
         Administrative Agent agrees, on behalf of itself and each of its
         Affiliates, directors, officers, employees and representatives, to use
         reasonable precautions to keep confidential, in accordance with their
         customary procedures for handling confidential information of the same
         nature and in accordance with safe and sound banking practices, any
         information supplied to it by, or on behalf of, the Borrowers pursuant
         to this Loan Agreement, provided that nothing herein shall limit the
         disclosure of any such information (a) after such information shall
         have become public other than through a violation of this Section 16.4,
         or becomes available to any of the Lenders or the Administrative Agent
         on a nonconfidential basis from a source other than the Borrowers, (b)
         to the extent required by statute, rule, regulation or judicial
         process, (c) to counsel for any of the Lenders or the Administrative
         Agent, (d) to bank examiners or any other regulatory authority having
         jurisdiction over any Lender or the Administrative Agent, or to
         auditors or accountants, (e) to the Administrative Agent, any Lender or
         any Financial Affiliate, (f) in connection with any litigation to which
         any one or more of the Lenders, the Administrative Agent or any
         Financial Affiliate is a party, or in




                                     -107-


         connection with the enforcement of rights or remedies hereunder or
         under any other Loan Document, (g) to a Lender Affiliate or a
         Subsidiary or affiliate of the Administrative Agent, (h) to any actual
         or prospective assignee or participant or any actual or prospective
         counterparty (or its advisors) to any swap or derivative transactions
         referenced to credit or other risks or events arising under this Loan
         Agreement or any other Loan Document so long as such assignee,
         participant or counterparty, as the case may be, agrees to be bound by
         the provisions of this Section 16.4 or (i) with the prior written
         consent of the Borrowers. Each of the Administrative Agent, the Lenders
         and the Financial Affiliates agrees not to use any information supplied
         to it by, or on behalf, of the Borrowers pursuant to this Loan
         Agreement for any purpose or in any manner other that evaluating the
         performance of the Borrowers and their Subsidiaries hereunder and
         enforcing the rights, remedies and obligations hereunder and under the
         other Loan Documents. Without the prior written consent of the
         Borrowers, none of the Administrative Agent, any Lender or any
         Financial Affiliate shall be permitted to refer to any of the Borrowers
         in connection with any advertising, promotion or marketing undertaken
         by the Administrative Agent, such Lenders or such Financial Affiliate.

                  16.4.2. PRIOR NOTIFICATION. Unless specifically prohibited by
         applicable law or court order, each of the Lenders and the
         Administrative Agent shall, prior to disclosure thereof, notify the
         Borrowers of any request for disclosure of any such information by any
         governmental agency or representative thereof (other than any such
         request in connection with an examination of the financial condition of
         such Lender by such governmental agency) or pursuant to legal process.

                  16.4.3. OTHER. In no event shall any Lender or the
         Administrative Agent be obligated or required to return any materials
         furnished to it or any Financial Affiliate by the Borrowers. The
         obligations of each Lender under this Section 16.4 shall supersede and
         replace the obligations of such Lender under any confidentiality letter
         in respect of this financing signed and delivered by such Lender to the
         Borrowers prior to the date hereof and shall be binding upon any
         assignee of, or purchaser of any participation in, any interest in any
         of the Loans from any Lender.

                  16.5. SURVIVAL OF COVENANTS, ETC. All covenants, agreements,
         representations and warranties made herein, in the Revolving Credit
         Notes, in any of the other Loan Documents or in any documents or other
         papers delivered by or on behalf of the Borrowers pursuant hereto shall
         be deemed to have been relied upon by the Lenders and the
         Administrative Agent, notwithstanding any investigation heretofore or
         hereafter made by any of them, and shall survive the making by the
         Lenders of any Loans as herein contemplated, and shall continue in full
         force and effect so long as any amount due under this Loan Agreement or
         the Revolving Credit Notes or any of the other Loan Documents remains
         outstanding or any Lender has any obligation to make any Loans and for
         such further time as may be otherwise expressly specified in this Loan
         Agreement. All statements



                                     -108-


         contained in any certificate or other paper delivered to any Lender or
         the Administrative Agent at any time by or on behalf of the Borrowers
         pursuant hereto or in connection with the transactions contemplated
         hereby shall constitute representations and warranties by the Borrowers
         hereunder.

                  16.6. NOTICES. Except as otherwise expressly provided in this
         Loan Agreement, all notices and other communications made or required
         to be given pursuant to this Loan Agreement or the Revolving Credit
         Notes shall be in writing and shall be delivered in hand, mailed by
         United States registered or certified first class mail, postage
         prepaid, sent by overnight courier, or sent by telegraph, telecopy,
         facsimile or telex and confirmed by delivery via courier or postal
         service, addressed as follows:

                  (a) if to TOL, at: c/o TAL International Container
         Corporation, 100 Manhattanville Road, Purchase, New York 10577-2135, or
         at such other addresses for notice as TOL shall last have furnished in
         writing to the Person giving the notice;

                  (b) if to TLI at: c/o TAL International Container Corporation,
         100 Manhattanville Road, Purchase, New York 10577-2135, or at such
         other addresses for notice as TLI shall last have furnished in writing
         to the Person giving the notice;

                  (c) if to TOCC, at: c/o TAL International Container
         Corporation, 100 Manhattanville Road, Purchase, New York 10577-2135, or
         at such other addresses for notice as TOCC shall last have furnished in
         writing to the Person giving the notice;

                  (d) if to the Administrative Agent, at 3000 AS Rotterdam, The
         Netherlands - RO1.16.02, Attention: Aviation and Intermodal Finance
         Group, or such other address for notice as the Administrative Agent
         shall last have furnished in writing to the Person giving the notice;
         and

                  (e) if to any Lender, at such Lender's address set forth on
         Schedule 1 hereto, or such other address for notice as such Lender
         shall have last furnished in writing to the Person giving the notice.

                  Any such notice or demand shall be deemed to have been duly
         given or made and to have become effective (i) if delivered by hand,
         overnight courier or facsimile to a responsible officer of the party to
         which it is directed, at the time of the receipt thereof by such
         officer or the sending of such facsimile and (ii) if sent by registered
         or certified first-class mail, postage prepaid, on the sixth Business
         Day following the mailing thereof. Any notice or other communication to
         be made hereunder or under the Revolving Credit Notes, even if
         otherwise required to be in writing under other provisions of this Loan
         Agreement or the Revolving Credit Notes may alternatively be made in an
         electronic record transmitted electronically under such authentication
         and other procedures as the parties hereto




                                     -109-


         may from time to time agree in writing (but not an electronic record),
         and such electronic transmission shall be effective at the time set
         forth in such procedures. Unless otherwise expressly provided in such
         procedures, such an electronic record shall be equivalent to a writing
         under the other provisions of this Loan Agreement or the Revolving
         Credit Notes and such authentication, if made in compliance with the
         procedures so agreed by the parties hereto in writing (but not an
         electronic record), shall be equivalent to a signature under the other
         provisions of this Loan Agreement or the Revolving Credit Notes.

                  16.7. GOVERNING LAW. THIS LOAN AGREEMENT AND, EXCEPT AS
         OTHERWISE SPECIFICALLY PROVIDED THEREIN, EACH OF THE OTHER LOAN
         DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE STATE OF NEW YORK AND
         SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
         THE LAWS OF SAID STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND
         5-1402 OF THE GENERAL OBLIGATIONS LAW BUT OTHERWISE EXCLUDING THE LAWS
         APPLICABLE TO CONFLICTS OR CHOICE OF LAW). EACH BORROWER AGREES THAT
         ANY SUIT FOR THE ENFORCEMENT OF THIS LOAN AGREEMENT OR ANY OF THE OTHER
         LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR
         ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE
         JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT
         BEING MADE UPON THE BORROWERS BY MAIL AT THE ADDRESS SPECIFIED IN
         SECTION 16.6. THE BORROWERS HEREBY WAIVE ANY OBJECTION THAT THEY MAY
         NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT
         OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.

                  16.8. HEADINGS. The captions in this Loan Agreement are for
         convenience of reference only and shall not define or limit the
         provisions hereof.

                  16.9. COUNTERPARTS. This Loan Agreement and any amendment
         hereof may be executed in several counterparts and by each party on a
         separate counterpart, each of which when executed and delivered shall
         be an original, and all of which together shall constitute one
         instrument. In proving this Loan Agreement it shall not be necessary to
         produce or account for more than one such counterpart signed by the
         party against whom enforcement is sought. Delivery by facsimile by any
         of the parties hereto of an executed counterpart hereof or of any
         amendment or waiver hereto shall be as effective as an original
         executed counterpart hereof or of such amendment or waiver and shall be
         considered a representation that an original executed counterpart
         hereof or such amendment or waiver, as the case may be, will be
         delivered.

                  16.10. ENTIRE AGREEMENT, ETC. The Loan Documents and any other
         documents executed in connection herewith or therewith express the
         entire




                                     -110-


         understanding of the parties with respect to the transactions
         contemplated hereby. Neither this Loan Agreement nor any term hereof
         may be changed, waived, discharged or terminated, except as provided in
         Section 16.12.

                  16.11. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
         WAIVES ITS RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM
         ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS LOAN AGREEMENT, THE
         REVOLVING CREDIT NOTES OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS
         OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH
         RIGHTS AND OBLIGATIONS OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
         STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY,
         INCLUDING ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR
         ACTIONS OF THE ADMINISTRATIVE AGENT OR ANY LENDER RELATING TO THE
         ADMINISTRATION OF THE LOANS OR ENFORCEMENT OF THE LOAN DOCUMENTS AND
         AGREES THAT IT WILL NOT SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY
         OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.
         Except as prohibited by law, each Borrower hereby waives any right it
         may have to claim or recover in any litigation referred to in the
         preceding sentence any special, exemplary, punitive or consequential
         damages or any damages other than, or in addition to, actual damages.
         Each Borrower (a) certifies that no representative, agent or attorney
         of any Lender or the Administrative Agent has represented, expressly or
         otherwise, that the Administrative Agent would not, in the event of
         litigation, seek to enforce the foregoing waivers and (b) acknowledges
         that the Administrative Agent and the Lenders have been induced to
         enter into this Loan Agreement and the other Loan Documents to which it
         is a party by, among other things, the waivers and certifications
         contained herein.

                  16.12. CONSENTS, AMENDMENTS, WAIVERS, ETC. Any consent or
         approval required or permitted by this Loan Agreement to be given by
         the Lenders may be given, and any term of this Loan Agreement, the
         other Loan Documents or any other instrument related hereto or
         mentioned herein may be amended, and the performance or observance by
         the Borrowers of any terms of this Loan Agreement, the other Loan
         Documents or such other instrument or the continuance of any Default or
         Event of Default may be waived (either generally or in a particular
         instance and either retroactively or prospectively) with, but only
         with, the written consent of the Borrowers and the written consent of
         the Required Lenders. Notwithstanding the foregoing, no amendment,
         modification or waiver shall:

                  (a) without the written consent of the Borrowers and each
         Lender directly affected thereby:



                                     -111-


                      (i) reduce, delay or forgive the principal amount of any
                  Loans or reduce the rate of interest on the Loans or the
                  priority thereof or the amount of any Fees (other than
                  interest on the Revolving Credit Notes accruing pursuant to
                  Section 5.10 following the effective date of any waiver by the
                  Required Lenders of the Event of Default relating thereto);

                      (ii) increase the amount of such Lender's Commitment or
                  extend the expiration date of such Lender's Commitment;

                      (iii) postpone or extend the Legal Final Payment Date or
                  any other regularly scheduled dates for payments of principal
                  of, or interest on, the Loans or any Fees or other amounts
                  payable to such Lender (it being understood that (A) a waiver
                  of the application of the default rate of interest pursuant to
                  Section 5.10, and (B) any vote to rescind any acceleration
                  made pursuant to Section 13.1 of amounts owing with respect to
                  the Loans and other Obligations shall require only the
                  approval of the Required Lenders); and

                      (iv) other than pursuant to a Permitted Securitization or
                  any other transaction permitted by the terms of this Loan
                  Agreement, release all or substantially all of the Collateral
                  (excluding, if the Borrowers or any Subsidiary of a Borrower
                  becomes a debtor under the Federal Bankruptcy Code or other
                  applicable insolvency laws, the release of "cash collateral",
                  as defined in Section 363(a) of the federal Bankruptcy Code or
                  any analogous provision of any applicable insolvency law
                  pursuant to a cash collateral stipulation with the debtor
                  approved by the Required Lenders);

                  (b) without the written consent of all of the Lenders, amend
         or waive this Section 16.12 or the definition of "Required Lenders";

                  (c) without the written consent of the Administrative Agent,
         amend or waive Section 14, the amount or time of payment of any Agent
         Fee payable for the Administrative Agent's account or any other
         provision applicable to the Administrative Agent;

                  (d) without the consent of the holder of the Seller Loan or
         the trustee of the High Yield Bonds, as the case may be, reduce, delay
         or forgive the IO Distributable Amount otherwise payable to the holder
         of the Seller Loan or the trustee of the High Yield Bonds; or

                  (e) without the consent of any affected counterparty (other
         than any Borrower or any of its Affiliates) to any Hedging Agreement,
         reduce, delay, forgive or change the relative priority of any amounts
         owing to such Person in accordance with the terms hereof.

                  No waiver shall extend to or affect any obligation not
         expressly waived or impair any right consequent thereon. No course of
         dealing or delay or omission




                                     -112-


         on the part of the Administrative Agent or any Lender in exercising any
         right shall operate as a waiver thereof or otherwise be prejudicial
         thereto. No notice to or demand upon the Borrowers shall entitle the
         Borrowers to other or further notice or demand in similar or other
         circumstances.

                  16.13. REPLACEMENT OF LENDERS.

                  (a) In the event (i) any Lender delivers a certificate
         requesting compensation pursuant to Section 5.6 or 5.7, (ii) any Lender
         delivers a notice described in Section 5.4 or 5.5, (iii) any Borrower
         is required to pay any additional amount to any Lender or any
         Governmental Authority on account of any Lender pursuant to Section
         5.2.2 or (iv) any Lender does not consent (or fails to respond) to a
         proposed amendment, modification or waiver to any provision of this
         Loan Agreement or any other Loan Document requested by any Borrower,
         any Borrower may, at its sole expense and effort, upon notice to such
         Lender and the Administrative Agent, require such Lender to transfer
         and assign, without recourse (in accordance with and subject to the
         restrictions contained in Section 15.2), all of its interests, rights
         and obligations under this Loan Agreement to an assignee that shall
         assume such assigned obligations (which assignee may be another Lender,
         if a Lender accepts such assignment); provided that:

                      (i) the Borrowers shall have paid to the Administrative
                  Agent the assignment fee specified in Section 15.2;

                      (ii) such Lender shall have received payment of an amount
                  equal to the outstanding principal of its Loans, accrued
                  interest thereon, accrued fees and all other amounts payable
                  to it hereunder and under the other Loan Documents (including
                  any amounts under Section 5.9) from the assignee (to the
                  extent of such outstanding principal and accrued interest and
                  fees) or the Borrowers (in the case of all other amounts);

                      (iii) in the case of any such assignment resulting from a
                  claim for compensation under Section 5.6 or 5.7 or payments
                  required to be made pursuant to Section 5.2.2, such assignment
                  will result in a reduction in such compensation or payments
                  thereafter; and

                      (iv) such assignment does not conflict with applicable
                  laws.

         In connection with any such replacement, if the replaced Lender does
         not execute and deliver to the Administrative Agent a duly completed
         Assignment and Assumption reflecting such replacement within five
         Business Days of the date on which the replacement Lender executes and
         delivers such Assignment and Assumption to the replaced Lender, then
         such replaced Lender shall be deemed to have executed and delivered
         such Assignment and Assumption. A Lender shall not be required to make
         any such assignment or delegation if, prior thereto, as a




                                     -113-


         result of a waiver by such Lender or otherwise, the circumstances
         entitling the Borrowers to require such assignment and delegation cease
         to apply.

                  (b) If (i) any Lender shall request compensation under Section
         5.6 or 5.7, (ii) any Lender delivers a notice described in Section 5.4
         or 5.5, or (iii) any Borrower is required to pay any additional amount
         to any Lender or any Governmental Authority on account of any Lender
         pursuant to Section 5.2.2, then such Lender shall use reasonable
         efforts (which shall not require such Lender to incur an unreimbursed
         loss or unreimbursed cost or expense or otherwise take any action
         inconsistent with its internal policies or legal or regulatory
         restrictions or suffer any disadvantage or burden deemed by it to be
         significant) (x) to file any certificate or document reasonably
         requested in writing by any Borrower or (y) to assign its rights and
         delegate and transfer its obligations hereunder to another of its
         offices, branches or affiliates, if such filing or assignment would
         reduce its claims for compensation under Section 5.6 or 5.7, enable it
         to withdraw its notice pursuant to Section 5.4 or 5.5, or would reduce
         amounts payable pursuant to Section 5.2.2, as the case may be, in the
         future. The Borrowers hereby agree to pay all reasonable costs and
         expenses incurred by any Lender in connection with any such filing or
         assignment, delegation and transfer.

                  16.14. SEVERABILITY. The provisions of this Loan Agreement are
         severable and if any one clause or provision hereof shall be held
         invalid or unenforceable in whole or in part in any jurisdiction, then
         such invalidity or unenforceability shall affect only such clause or
         provision, or part thereof, in such jurisdiction, and shall not in any
         manner affect such clause or provision in any other jurisdiction, or
         any other clause or provision of this Loan Agreement in any
         jurisdiction.

                  16.15. USA PATRIOT ACT. Each Lender hereby notifies the
         Borrowers that pursuant to the requirements of the USA PATRIOT Act
         (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the
         "Patriot Act"), it is required to obtain, verify and record information
         that identifies the Borrowers, which information includes the name and
         address of the Borrowers and other information that will allow such
         Lender to identify the Borrowers in accordance with the Patriot Act.


                  [Remainder of page intentionally left blank]


                                     -114-


                  IN WITNESS WHEREOF, the undersigned have duly executed this
Loan Agreement as of the date first set forth above.


                                            TRANSAMERICA LEASING INC.



                                            By: ________________________
                                                   Name:
                                                   Title:





                                            TRANS OCEAN LTD.



                                            By: ________________________
                                                   Name:
                                                   Title:




                                            TRANS OCEAN CONTAINER CORPORATION



                                            By: ________________________
                                                   Name:
                                                   Title:




                                            FORTIS BANK (NEDERLAND), N.V., as
                                            Administrative Agent



                                            By: ________________________
                                                   Name:
                                                   Title:






                                            By: ________________________
                                                   Name:
                                                   Title:


                                     -115-








                                                                    EXHIBIT 10.2


                       AMENDMENT NO. 1 TO CREDIT AGREEMENT

         THIS AMENDMENT NO. 1 TO CREDIT AGREEMENT (this "Amendment") is
effective as of November 3, 2004, by and among TAL INTERNATIONAL CONTAINER
CORPORATION (f/k/a Transamerica Leasing Inc.) ("TAL"), TRANS OCEAN LTD. ("TOL"),
TRANS OCEAN CONTAINER CORPORATION ("TOCC", each of TAL, TOL and TOCC, a
"Borrower" and collectively, the "Borrowers"), and FORTIS BANK (NEDERLAND) N.V.
(the "Administrative Agent" and the "Lender"). Capitalized terms used but not
otherwise defined herein shall have the respective meanings ascribed thereto in
the Credit Agreement (as defined below).

                                 R E C I T A L S
                                 ---------------

         WHEREAS, the Borrowers, the Administrative Agent and the Lender have
heretofore entered into that certain Credit Agreement, dated as of November 3,
2004 (the "Credit Agreement") pursuant to which the Lender has heretofore made
certain Loans, and has agreed to make future Loans, to the Borrowers;

         WHEREAS, the Borrowers, the Administrative Agent and the Lender desire
to make certain amendments to the Credit Agreement as more fully set forth
herein;

         WHEREAS, pursuant to Section 16.12 of the Credit Agreement, the Credit
Agreement may only be amended or modified pursuant to a written agreement
executed by the Borrowers and each of the Lenders; and

         WHEREAS, the undersigned constitute each of the Borrowers and each of
the Lenders;

         NOW, THEREFORE, in consideration of the mutual terms and conditions
contained herein and for other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:

                                    ARTICLE I
                                   AMENDMENTS
                                   ----------

         SECTION 1.1   Amendment to Definition of Permitted Disbursements.
Effective as of November 3, 2004, clause (vii) of the definition of "Permitted
Disbursements" set forth in Section 1.1 of the Credit Agreement is hereby
amended by inserting the phrase "or any regularly scheduled payments (excluding
termination payments) on any Hedging Agreement, in each case," immediately
following the phrase "UBS Lease Termination Payments" in the first line thereof.

         SECTION 1.2   Amendment to Section 2.6. Effective as of November 3,
2004, Section 2.6 of the Credit Agreement is hereby amended by inserting the
phrase "or the






Concentration Account, as applicable," immediately following the phrase "Trust
Account" in fourth line thereof.

         SECTION 1.3     Amendment to Section 3.1(a). Effective as of
November 3, 2004, Section 3.1(a) of the Credit Agreement is hereby amended by
deleting the phrase "thirty (30) days" in the first line thereof and inserting
the phrase "sixty (60) days" in replacement thereof.

         SECTION 1.4     Amendment to Section 3.1(c). Effective as of
November 3, 2004, the introductory paragraph of Section 3.1(c) of the Credit
Agreement is hereby amended and restated to read in its entirety as follows:

                 " (c) On each Payment Date, based on the Manager Report, an
         amount equal to (A) with respect to any Payment Date prior to July 1,
         2005, the sum of (x) the sum of (1) all amounts transferred to the
         Trust Account from the Concentration Account on the immediately
         preceding Business Day in accordance with the provisions of Section
         3.2 hereof, and (2) any earnings on investments in the Trust Account
         that were credited to the Trust Account during the related Collection
         Period, and (y) all amounts released from the Concentration Account on
         such Payment Date in accordance with the provisions of Section 3.2
         hereof, or (B) with respect to any Payment Date on or after July 1,
         2005, the sum of (1) all amounts transferred to the Trust Account from
         the Concentration Account on the immediately preceding Business Day in
         accordance with the provisions of Section 3.2 hereof, and (2) any
         earnings on investments in the Trust Account that were credited to the
         Trust Account during the related Collection Period (the applicable
         amount referenced in clause (A) or (B) above, the "Distributable Cash
         Flow"), shall be distributed to the following Persons in the following
         order of priority, with no payment being made toward any item unless
         and until all prior items have been fully satisfied:"


         SECTION 1.5   Amendment to Section 3.1(c)(iii). Effective as of
November 3, 2004, Section 3.1(c)(iii) of the Credit Agreement is hereby amended
by deleting the word "To" in the first line thereof and inserting the phrase
"With respect to any Payment Date on or after July 1, 2005, to" in replacement
thereof.


         SECTION 1.6   Amendment to Section 3.1(c)(vi). Effective as of November
3, 2004, Section 3.1(c)(vi) of the Credit Agreement is hereby amended by
deleting the word "All" in the first line thereof and inserting the phrase "With
respect to any Payment Date on or after July 1, 2005, all" in replacement
thereof.

         SECTION 1.7   Amendment to Section 3.2(c). Effective as of November 3,
2004, Section 3.2(c) of the Credit Agreement is hereby amended and restated to
read in its entirety as follows:

         " (c)   With respect to any Payment Date occurring prior to July 1,
         2005, (i) TLI shall have the right, but not the obligation, to, on the
         Business Day preceding each such Payment Date, transfer any amount of
         funds then contained in the Concentration Account to the Trust Account
         for the purpose of making any




         of the payments required to be made on such Payment Date pursuant to
         Section 3.1(c) and (ii) on such Payment Date, TLI shall cause to be
         released from the Concentration Account funds in an amount equal to
         the excess of (A) all funds received in, and investment earnings
         credited to, the Concentration Account during the immediately
         preceding Collection Period, over (B) the sum of (x) all Permitted
         Disbursements made from the Concentration Account during such
         Collection Period, (y) Five Million Dollars ($5,000,000) and (z) the
         amount of any funds transferred from the Concentration Account to the
         Trust Account in respect of such Payment Date pursuant to clause (i)
         above (provided, however, that, the amount to be released on any
         Payment Date from the Concentration Account pursuant to this clause
         (ii) shall be reduced on such Payment Date by an amount, if any,
         necessary such that the amount to be distributed to the Borrowers
         under Section 3.1(c)(vii) in respect of such Payment Date shall equal
         zero), and all such transferred and/or released funds shall thereupon
         be distributed on such Payment Date in accordance with Section 3.1(c).
         With respect to any Payment Date occurring on or after July 1, 2005,
         on the Business Day preceding each such Payment Date, TLI shall
         transfer from the Concentration Account to the Trust Account funds in
         an amount equal to the excess of (I) all funds received in, and
         investment earnings credited to, the Concentration Account during the
         immediately preceding Collection Period, over (II) the sum of (x) all
         Permitted Disbursements made from the Concentration Account during
         such Collection Period, and (y) Five Million Dollars ($5,000,000)."

         SECTION 1.8   Amendment to Section 3.6(a). Effective as of November 3,
2004, Section 3.6(a) of the Credit Agreement is hereby amended by deleting the
phrase "Within thirty (30) days after the Closing Date" in the first line
thereof and inserting the phrase "On or prior to July 1, 2005" in replacement
thereof.

         SECTION 1.9   Amendment to Section 3.6(b). Effective as of November 3,
2004, Section 3.6(b) of the Credit Agreement is hereby amended by inserting the
phrase "occurring on or after July 1, 2005" immediately following the phrase
"Payment Date" in the first line thereof.

         SECTION 1.10  Insertion of a new Section 3.6(c). Effective as of
November 3, 2004, Section 3.6 of the Credit Agreement is hereby amended by
inserting a new clause (c) thereto to read in its entirety as follows:

         " (c)   Notwithstanding anything to the contrary set forth herein, on
         any due date of each interest payment on the Seller Loan and/or High
         Yield Bonds, as the case may be, occurring prior to July 1, 2005, TLI
         will release funds from the Concentration Account or the Trust Account
         in an amount equal to the interest payment then due and payable on the
         Seller Loan and/or High Yield Bonds, as the case may be, and dividend
         such funds to Container Holdings. Any dividend made to Container
         Holdings pursuant to the terms of this clause (c) shall be deemed to
         be a "Tier One Permitted Dividend" for all purposes of this
         Agreement."

         SECTION 1.11  Amendment to Section 4.2.1. Effective as of November 3,
2004, Section 4.2.1 of the Credit Agreement is hereby amended by inserting the
phrase "or the





Concentration Account, as applicable," immediately following the phrase "Trust
Account" in second line thereof.

         SECTION 1.12  Amendment to Section 4.2.2. Effective as of November 3,
2004, Section 4.2.2 of the Credit Agreement is hereby amended by inserting the
phrase "or the Concentration Account, as applicable," immediately following the
phrase "Trust Account" in second line thereof.

         SECTION 1.13  Amendment to Section 8.1(a). Effective as of November 3,
2004, Section 8.1(a) of the Credit Agreement is hereby amended by deleting the
period at the end of the final line thereof and inserting the phrase ";
provided, however, that, notwithstanding the foregoing provisions of this
Section 8.1(a), with respect to the fiscal quarter ending March 31, 2005, the
Borrowers shall not be obligated to furnish the aforementioned financial
statements and related information to the Administrative Agent until June 30,
2005."

         SECTION 1.14  Amendment to Section 8.1(b). Effective as of November 3,
2004, Section 8.1(b) of the Credit Agreement is hereby amended by deleting the
period at the end of the final line thereof and inserting the phrase ";
provided, however, that, notwithstanding the foregoing provisions of this
Section 8.1(b), with respect to the fiscal year ending December 31, 2004, the
Borrowers shall not be obligated to furnish the aforementioned financial
statements and related information to the Administrative Agent until June 30,
2005."

         SECTION 1.15  Amendment to Section 8.1(j). Effective as of November 3,
2004, Section 8.1(j) of the Credit Agreement is hereby amended by deleting the
phrase "June 30" in the third line and inserting the phrase "September 30" in
replacement thereof.

                                   ARTICLE II
                       REPRESENTATIONS AND INTERPRETATION

         SECTION 2.1.  Representations and Warranties. Each of TAL, TOL and TOCC
hereby represents and warrants to each of the other parties hereto that (i) it
has the power and is duly authorized to execute and deliver this Amendment, (ii)
this Amendment has been duly authorized, executed and delivered by such party,
(iii) it is and will continue to be duly authorized to perform its obligations
under this Amendment, (iv) the execution, delivery and performance by it of this
Amendment does not and will not require any consent or approval, which has not
already been obtained, from any governmental authority, member or any other
Person, (v) the execution, delivery and performance by it of this Amendment
shall not result in the breach of, or constitute a default under, any material
agreement or instrument to which it is a party, (vi) all conditions precedent
under the Credit Agreement to the foregoing amendments and the execution of this
Amendment have been complied with and (vii) the next scheduled payment of
interest in respect of the Seller Loan is after July 1, 2005.

         SECTION 2.2.  Ratification of the Credit Agreement. This Amendment
shall be deemed to be an amendment to the Credit Agreement, and the Credit
Agreement, as amended hereby, is hereby ratified, approved and confirmed in each
and every respect.





         SECTION 2.3.  Limited Amendment of the Credit Agreement. Except as
specifically amended or modified herein, the Credit Agreement shall continue in
full force and effect in accordance with the provisions thereof. On and after
the execution and delivery hereof, (i) this Amendment shall be part of the
Credit Agreement, and (ii) each reference in the Credit Agreement to "this
Agreement" or "hereof", "hereunder" or words of like import, and each reference
in any other document to the Credit Agreement shall mean and be a reference to
the Credit Agreement as amended or modified hereby.


                                   ARTICLE III
                                  MISCELLANEOUS

         SECTION 3.1.  Counterparts.  This Amendment may be executed by the
parties hereto in any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.

         SECTION 3.2.  Captions. Section captions used in this Amendment are
inserted for convenience of reference only and shall not affect the construction
of this Amendment or any provisions hereof.

         SECTION 3.3.  GOVERNING LAW. THIS AMENDMENT, THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS AMENDMENT, AND ANY CLAIM OR CONTROVERSY DIRECTLY OR
INDIRECTLY BASED UPON OR ARISING OUT OF THIS AMENDMENT OR THE TRANSACTIONS
CONTEMPLATED BY THIS AMENDMENT (WHETHER BASED ON CONTRACT, TORT, OR ANY OTHER
THEORY), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, SHALL
IN ALL RESPECTS BE GOVERNED BY AND INTERPRETED, CONSTRUED, AND DETERMINED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO
CHOICE OF LAW OR CONFLICTS OTHER THAN GENERAL OBLIGATIONS LAW SECTIONS 5-1401
AND 5-1402).

         SECTION 3.4.  Successors and Assigns. This Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.

                               [Signatures Follow]




















         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers as of
the date first above written.

                                      BORROWERS:

                                      TAL INTERNATIONAL CONTAINER CORPORATION


                                      By:   /s/ Brian Sondey
                                          -------------------------------------
                                          Name:  Brian Sondey
                                          Title: President


                                      TRANS OCEAN LTD.


                                      By:   /s/ Brian Sondey
                                          -------------------------------------
                                          Name:  Brian Sondey
                                          Title: President


                                      TRANS OCEAN CONTAINER CORPORATION


                                      By:   /s/ Brian Sondey
                                          -------------------------------------
                                          Name:  Brian Sondey
                                          Title: President


















                                      LENDERS:

                                      FORTIS BANK (NEDERLAND) N.V.


                                      By: _________________________________
                                          Name:
                                          Title:

                                      By: _________________________________
                                          Name:
                                          Title:


                                      ADMINISTRATIVE AGENT:

                                      FORTIS BANK (NEDERLAND) N.V.


                                      By: _________________________________
                                          Name:
                                          Title:

                                      By: _________________________________
                                          Name:
                                          Title:





                                                                    EXHIBIT 10.3


         THE INDEBTEDNESS EVIDENCED HEREBY IS SUBORDINATE AND JUNIOR IN
           RIGHT OF PAYMENT IN THE MANNER AND TO THE EXTENT SET FORTH
           IN AN INTERCREDITOR AGREEMENT DATED AS OF NOVEMBER 3, 2004
        AMONG TAL INTERNATIONAL GROUP, INC., CERTAIN OF ITS SUBSIDIARIES,
        FORTIS BANK (NEDERLAND) N.V., AS ADMINISTRATIVE AGENT FOR CERTAIN
             LENDERS, AND TRANSAMERICA ACCOUNTS HOLDING CORPORATION,
                          AS AGENT FOR CERTAIN LENDERS





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


                                CREDIT AGREEMENT

                                   dated as of

                                November 3, 2004

                                      among

                         TAL INTERNATIONAL GROUP, INC.,
                                  as Borrower,

                            THE LENDERS named herein

                                       and

                   TRANSAMERICA ACCOUNTS HOLDING CORPORATION,
                                    as Agent


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







         This Credit Agreement is dated as of November 3, 2004, and entered into
by and among TAL International Group, Inc., a Delaware corporation (the
"COMPANY"), the Lenders named on the signature pages hereto (the "Lenders"), and
Transamerica Accounts Holding Corporation, as Agent for the Lenders (in such
capacity, the "Agent").

                                    RECITALS

         WHEREAS, the Company desires that the Lenders extend a senior credit
facility to the Company in connection with the Transactions (as defined herein);

         NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereby agree as follows:

SECTION 1 DEFINITIONS

         1.1 CERTAIN DEFINED TERMS. The following terms used in this Agreement
shall have the following meanings:

         "ACCELERATION NOTICE" shall have the meaning ascribed to such term in
Section 7.

         "ACQUIRED INDEBTEDNESS" means Indebtedness of a Person or any of its
Subsidiaries (a) existing at the time such Person becomes a Restricted
Subsidiary or at the time it merges or consolidates with or into the Company or
any of its Restricted Subsidiaries or assumed in connection with the acquisition
of assets from such Person, (b) not incurred in connection with, or in
anticipation or contemplation of, such Person becoming a Restricted Subsidiary
or such acquisition, merger or consolidation and (c) that is without recourse to
the Company or any of its Subsidiaries or to any of their respective properties
or assets other than the Person or the assets to which such Indebtedness related
prior to the time such Person became a Restricted Subsidiary or the time of such
acquisition, merger or consolidation.

         "ACQUISITION" means the acquisition by the Company, or through a
wholly-owned Subsidiary of the Company, of all of the Capital Stock of
Transamerica Leasing Inc. and Trans Ocean Ltd., in each case pursuant to the
terms of the Acquisition Agreements.

         "ACQUISITION AGREEMENTS" means the Stock Purchase Agreement and each
other Ancillary Agreement referred to therein.

         "AFFILIATE" means, with respect to any specified Person, any other
Person who directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, such specified Person. The
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise;
provided, that Beneficial Ownership of 10% or more of the Voting Stock of any
Person shall be deemed to be control of such Person. The terms "controlling" and
"controlled" have meanings correlative of the foregoing.



         "AGREEMENT" means this Credit Agreement dated as of November 3, 2004,
as it may be amended, supplemented or otherwise modified from time to time in
accordance with the terms hereof.

         "APPLICABLE RATE" means (a) for the Initial Quarterly Period, 8.75% per
annum and (b) for each subsequent Quarterly Period, the per annum Applicable
Rate in effect for the immediately preceding Quarterly Period plus 0.25% per
annum; provided, that, in no event, other than as provided in Section 2.3C and
the payment of Liquidated Damages, will the interest rate on the Interim Loan
exceed 11.5% per annum.

         "ASSET SALE" means any direct or indirect sale, issuance, conveyance,
lease (other than leases entered into in the ordinary course of business),
assignment or other transfer (collectively, "transfer") of:

                  (1) any Capital Stock of any Restricted Subsidiary (other than
directors' qualifying shares or shares required by applicable law to be held by
a Person other than the Company or a Restricted Subsidiary); or

                  (2) any other property or assets of the Company or any
Restricted Subsidiary other than in the ordinary course of business;

provided, that Asset Sales shall not include:

                           (a) a transaction or series of related transactions
for which the Company or its Restricted Subsidiaries receive aggregate
consideration of less than $1.0 million;

                           (b) the transfer of all or substantially all of the
assets of the Company permitted under Section 6.5;

                           (c) any Restricted Payment permitted under Section
6.3 or Permitted Investment;

                           (d) the sale of Cash Equivalents;

                           (e) the creation of a Permitted Lien (but not the
sale or other disposition of the property subject to such Lien);

                           (f) the good faith surrender or waiver of contract
rights, tort claims or statutory rights;

                           (g) sales or grants of licenses or sublicenses to use
the patents, copyright and other intellectual property of the Company or any
of the Restricted Subsidiaries to the extent such license does not interfere
with the business of the Company or any Restricted Subsidiary;

                           (h) the sale or other disposition of worn out,
obsolete or surplus equipment (other than Containers);



                           (i) a transfer to the Company or to a Wholly-Owned
Restricted Subsidiary; and

                           (j) a transfer, lease, assignment or other transfer
by a Qualified Container Subsidiary of Qualifying Container Assets and related
assets pursuant to a Qualified Containers Transaction.

         "ASSET SALE PREPAYMENT" has the meaning ascribed to it in Section
2.4A(ii)(a).

         "BANKRUPTCY LAW" means the Bankruptcy Reform Act of 1978, as amended,
and codified as 11 U.S.C. ss.ss.101 et seq.

         "BANKRUPTCY ORDER" means any court order made in a proceeding pursuant
to or within the meaning of any Bankruptcy Law, containing an adjudication of
bankruptcy or insolvency, or providing for liquidation, winding up, dissolution
or reorganization, or appointing a custodian of a debtor or of all or any
substantial part of a debtor's property, or providing for the staying,
arrangement, adjustment or composition of indebtedness or other relief of a
debtor.

         "BENEFICIAL OWNER" has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" will be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" have meanings correlative to the
foregoing.

         "BOARD OF DIRECTORS" means, as to any Person, the board of directors or
similar governing body of such Person or any duly authorized committee thereof.

         "BOARD RESOLUTION" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Agent.

         "BUSINESS" means the marine container leasing business and related
businesses.

         "BUSINESS DAY" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of New York, New York or is a day on
which banking institutions therein located are authorized or required by law or
other governmental action to close.

         "CAPITAL STOCK" means:

                  (1) with respect to any Person that is a corporation, any and
all shares, interests, participations or other equivalents (however designated
and whether or not voting) of corporate stock, including each class of Common
Stock and Preferred Stock of such Person;

                  (2) with respect to any Person that is not a corporation, any
and all partnership, membership or other equity interests of such Person; and



                  (3) any warrants, rights or options to purchase any of the
interests referred to in clause (1) or (2) above.

         "CAPITALIZED LEASE OBLIGATION" means, as to any Person, the obligations
of such Person under a lease that are required to be classified and accounted
for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.

         "CASH EQUIVALENTS" means:

                  (1) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof;

                  (2) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either Standard & Poor's Ratings Group ("S&P")
or Moody's Investors Service, Inc. ("MOODY'S");

                  (3) commercial paper maturing no more than one year from the
date of creation thereof and, at the time of acquisition, having a rating of at
least A-1 from S&P or at least P-1 from Moody's;

                  (4) certificates of deposit or bankers' acceptances maturing
within one year from the date of acquisition thereof issued by any bank
organized under the laws of the United States of America or any state thereof or
the District of Columbia or any U.S. branch of a foreign bank having at the date
of acquisition thereof combined net capital and surplus of not less than $250.0
million;

                  (5) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clause (1) above
entered into with any bank meeting the qualifications specified in clause (4)
above; and

                  (6) investments in money market funds which invest
substantially all their assets in securities of the types described in clauses
(1) through (5) above.

         "CHANGE OF CONTROL" means the occurrence of one or more of the
following events:

                  (1) any direct or indirect sale, lease, transfer, conveyance
or other disposition (other than by way of merger or consolidation), in one
transaction or a series of related transactions, of all or substantially all of
the assets of the Company to any Person or group of related Persons for purposes
of Section 13(d) of the Exchange Act (a "GROUP"), other than (a) a transaction
in which the transferee is controlled by one or more Permitted Holders and (b)
the lease of Containers by the Company and its Subsidiaries in the ordinary
course of business;



                  (2) the Company consolidates with, or merges with or into, any
Person, or any Person consolidates with, or merges with or into, the Company,
other than (a) a transaction in which the surviving or transferee Person is a
Person that is controlled by the Permitted Holders or (b) any such transaction
where the Voting Stock of the Company outstanding immediately prior to such
transaction is converted into or exchanged for Voting Stock (other than
Disqualified Capital Stock) of the surviving or transferee Person constituting a
majority of the outstanding shares of such Voting Stock of such surviving or
transferee Person (immediately after giving effect to such issuance);

                  (3) the approval by the holders of Capital Stock of the
Company of any plan or proposal for the liquidation, winding up or dissolution
of the Company;

                  (4) prior to the first Public Equity Offering, the Permitted
Holders cease for any reason to be the Beneficial Owner, directly or indirectly,
in the aggregate of at least a majority of the total voting power of the Voting
Stock of the Company, whether by virtue of the issuance, sale or other
disposition of Capital Stock of the Company, a merger, consolidation or sale of
assets involving the Company, a Restricted Subsidiary, any voting trust or other
agreement;

                  (5) subsequent to the first Public Equity Offering, (a) any
Person or Group is or becomes the Beneficial Owner, directly or indirectly, in
the aggregate of more than 50% of the total voting power of the Voting Stock of
the Company, and (b) the Permitted Holders Beneficially Own, directly or
indirectly, in the aggregate a lesser percentage of the total voting power of
the Voting Stock of the Company than such other Person or Group; or

                  (6) during any consecutive two-year period, individuals who at
the beginning of such period constituted the Board of Directors (together with
any new directors whose election by such Board of Directors or whose nomination
for election by the stockholders of the Company was approved pursuant to a vote
of a majority of the directors then still in office who were either directors on
the Closing Date or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors then in office;

provided, that a sale, transfer, conveyance, disposition or lease by a Qualified
Container Subsidiary of Qualifying Container Assets and related assets pursuant
to a Qualified Containers Transaction shall not constitute a Change of Control.

         "CHANGE OF CONTROL DATE" has the meaning ascribed to such term in
Section 2.4A(iv).

         "CHANGE OF CONTROL OFFER" has the meaning ascribed to such term in
Section 2.4A(iv).

         "CLOSING DATE" means the date of the making of the Interim Loan
hereunder.

         "COMMISSION" means the Securities and Exchange Commission or any
successor agency.

         "COMMODITY PRICE PROTECTION AGREEMENT" means, with respect to any
Person, any forward contract, commodity swap, commodity option or other similar
agreement or



arrangement entered into to protect such Person or its Subsidiaries against
fluctuations in commodity prices.

         "COMMON STOCK" of any Person means any and all shares, interests or
other participations in, and other equivalents (however designated and whether
voting or non-voting) of such Person's common stock, whether outstanding on the
Closing Date or issued after the Closing Date, and includes, without limitation,
all series and classes of such common stock.

         "COMPANY" has the meaning ascribed to such term in the introduction to
this Agreement.

         "CONSOLIDATED EBITDA" means for any period, the sum (without
duplication) of:

                  (1) Consolidated Net Income of the Company; and

                  (2) to the extent Consolidated Net Income of the Company has
been reduced thereby:

                           (a) all income tax expense of the Company and its
consolidated Restricted Subsidiaries;

                           (b)      Consolidated Interest Expense;

                           (c) depreciation and amortization expense of the
Company and its consolidated Restricted Subsidiaries (including any increased
expense or depreciation or amortization charges resulting from purchase
accounting adjustments or inventory write-ups with respect to acquisitions
and amortization charges or write-off of deferred financing costs and
debt issuance costs);

                           (d) all other non-cash charges of the Company and its
consolidated Restricted Subsidiaries (minus, with respect to any such non-cash
charge occurring after the Closing Date that was previously added in a prior
period to Consolidated Net Income to calculate Consolidated EBITDA and that
represents an accrual of or reserve for cash expenditures in any future period,
any payments made during such period);

                           (e) any non-capitalized costs incurred in connection
with financings, acquisitions or dispositions (including financing and
refinancing fees and any premium or penalty paid in connection with redeeming
or retiring Indebtedness prior to the stated maturity thereof pursuant to the
agreements governing such Indebtedness;

                           (f) (i) UBS equipment rental expense to the extent
that assets related to such expense have been repurchased by the Company or
its Restricted Subsidiaries and (ii) corporate governance costs allocated from
the Purchased Entities' prior parent, including costs associated with senior
management and other overhead, as described in Schedule A;

                           (g) expenses attributable to Incentive Arrangements;
and

                           (h) expenses attributable to the payment of the
Management Fee.



in each case, for such period and as determined on a consolidated basis in
accordance with GAAP.

         "CONSOLIDATED FIXED CHARGE COVERAGE RATIO" as of any date of
determination means the ratio of (a) the aggregate amount of Consolidated EBITDA
for the period of the most recent four consecutive fiscal quarters ending prior
to the date of such determination to (b) Consolidated Interest Expense for such
four fiscal quarters; provided, however, that:

                  (1) if the Company or any Restricted Subsidiary has incurred
any Indebtedness since the beginning of such period that remains outstanding or
if the transaction giving rise to the need to calculate the Consolidated Fixed
Charge Coverage Ratio is an incurrence of Indebtedness, or both, Consolidated
EBITDA and Consolidated Interest Expense for such period shall be calculated
after giving effect on a pro forma basis to such Indebtedness as if such
Indebtedness had been incurred on the first day of such period;

                  (2) if the Company or any Restricted Subsidiary has repaid,
repurchased, defeased or otherwise discharged any Indebtedness since the
beginning of such period or if any Indebtedness is to be repaid, repurchased,
defeased or otherwise discharged (in each case other than Indebtedness incurred
under any revolving credit facility unless such Indebtedness has been
permanently repaid and has not been replaced) on the date of the transaction
giving rise to the need to calculate the Consolidated Fixed Charge Coverage
Ratio, Consolidated EBITDA and Consolidated Interest Expense for such period
shall be calculated on a pro forma basis as if such discharge had occurred on
the first day of such period and as if the Company or such Restricted Subsidiary
has not earned the interest income actually earned during such period in respect
of cash or Cash Equivalents used to repay, repurchase, defease or otherwise
discharge such Indebtedness;

                  (3) if since the beginning of such period the Company or any
Restricted Subsidiary shall have made any Asset Sale, Consolidated EBITDA for
such period shall be reduced by an amount equal to Consolidated EBITDA (if
positive) directly attributable to the assets which are the subject of such
Asset Sale for such period, or increased by an amount equal to Consolidated
EBITDA (if negative), directly attributable thereto for such period and
Consolidated Interest Expense for such period shall be reduced by an amount
equal to the Consolidated Interest Expense directly attributable to any
Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased,
defeased or otherwise discharged with respect to the Company and its continuing
Restricted Subsidiaries in connection with such Asset Sale for such period (or,
if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated
Interest Expense for such period directly attributable to the Indebtedness of
such Restricted Subsidiary to the extent the Company and its continuing
Restricted Subsidiaries are no longer liable for such Indebtedness after such
sale);

                  (4) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger, amalgamation or otherwise) shall have made an
Investment in any Restricted Subsidiary (or any Person which becomes a
Restricted Subsidiary) or an acquisition of assets, including any acquisition of
assets occurring in connection with a transaction requiring a calculation to be
made hereunder, which constitutes all or substantially all of an operating unit
of a business, Consolidated EBITDA and Consolidated Interest Expense for such
period shall be



calculated after giving pro forma effect thereto (including the incurrence of
any Indebtedness) as if such Investment or acquisition occurred on the first day
of such period; and

                  (5) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged or amalgamated with or
into the Company or any Restricted Subsidiary since the beginning of such
period) shall have made any Asset Sale, any Investment or acquisition of assets
that would have required an adjustment pursuant to clause (3) or (4) above if
made by the Company or a Restricted Subsidiary during such period, Consolidated
EBITDA and Consolidated Interest Expense for such period shall be calculated
after giving pro forma effect thereto as if such Asset Sale, Investment or
acquisition occurred on the first day of such period.

         For purposes of this definition, whenever pro forma effect is to be
given to an acquisition of assets, the amount of income or earnings relating
thereto and the amount of Consolidated Interest Expense associated with any
Indebtedness incurred in connection therewith, the pro forma calculations shall
be determined in good faith by a responsible financial or accounting Officer of
the Company. Any such pro forma calculations may include operating expense
reductions (net of associated expenses) for such period resulting from the
acquisition or other Investment which is being given pro forma effect that (a)
would be permitted to be reflected on pro forma financial statements pursuant to
Rule 11-02 of Regulation S-X under the Securities Act or (b) have been realized
or for which substantially all the steps necessary for realization have been
taken or, at the time of determination, are reasonably expected to be taken
within 90 days immediately following any such acquisition or other Investment,
including, but not limited to, the execution, termination, renegotiation or
modification of any contracts, the termination of any personnel or the closing
of any facility, as applicable, provided that, in any case, such adjustments
shall be calculated on an annualized basis and such adjustments are set forth in
an Officers' Certificate signed by the Company `s chief financial officer and
another Officer which states in detail (i) the amount of such adjustment or
adjustments, (ii) that such adjustment or adjustments are based on the
reasonable good faith beliefs of the Officers executing such Officers'
Certificate at the time of such execution and (iii) that such adjustment or
adjustments and the plan or plans related thereto have been reviewed and
approved by the Company's Board of Directors. Any such Officers' Certificate
will be provided to the Agent if the Company incurs any Indebtedness or takes
any other action under this Agreement in reliance thereon. If any Indebtedness
bears a floating rate of interest and is being given pro forma effect, the
interest on such Indebtedness shall be calculated as if the rate in effect on
the date of determination had been the applicable rate for the entire period
(taking into account any Interest Rate Agreement applicable to such Indebtedness
if such Interest Rate Agreement has a remaining term in excess of 12 months).

         If any Indebtedness is incurred under a revolving credit facility and
is being given pro forma effect, the interest on such Indebtedness shall be
calculated based on the average daily balance of such Indebtedness for the four
fiscal quarters subject to the pro forma calculation to the extent that such
Indebtedness was incurred solely for working capital purposes.

         "CONSOLIDATED FIXED CHARGES" means, with respect to any Person for any
period, the sum, without duplication, of:



                  (1) Consolidated Interest Expense (excluding amortization or
write-off of deferred financing costs); plus

                  (2) the product of (x) the amount of all dividend payments on
any series of Preferred Stock of such Person (other than (i) dividends paid in
Qualified Capital Stock, (ii) dividends included in the definition of
Consolidated Interest Expense and (iii) dividends paid to the Company or any
Wholly Owned Restricted Subsidiary) paid, accrued or scheduled to be paid or
accrued during such period times (y) a fraction, the numerator of which is one
and the denominator of which is one minus the then current effective
consolidated federal, state and local tax rate of such Person, expressed as a
decimal.

         "CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person for
any period, the difference of (a) the aggregate of the interest expense of such
Person and its Restricted Subsidiaries for such period, on a consolidated basis,
as determined in accordance with GAAP, and including, without duplication, (i)
all amortization or accretion of original issue discount; (ii) the interest
component of Capitalized Lease Obligations paid, accrued and/or scheduled to be
paid or accrued by such Person and its Restricted Subsidiaries during such
period; and (iii) net cash costs under all Interest Swap Obligations (including
amortization of fees), minus, (b) to the extent included in such total interest
expense, and to the extent incurred by the Company or any Restricted Subsidiary,
(i) amortization or write off of debt issuance costs and deferred financing
costs and (ii) interest expense attributable to dividends in respect of all
Preferred Stock of the Company that is not Disqualified Stock pursuant to
Statement of Financial Accounting Standards No. 150, "Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and Equity".

         "CONSOLIDATED NET INCOME" means, for any period, the aggregate net
income (or loss) of the Company and its consolidated Subsidiaries for such
period on a consolidated basis, determined in accordance with GAAP; provided,
that there shall be excluded therefrom (to the extent otherwise included
therein):

                  (1) any net income of any Person (other than the Company) if
such Person is not a Restricted Subsidiary, except that: (a) the Company's
equity in the net income of any such Person for such period shall be included in
such Consolidated Net Income up to the aggregate amount of cash actually
distributed by such Person during such period to the Company or a Restricted
Subsidiary as a dividend or other distribution; and (b) the Company's equity in
a net loss of any such Person for such period shall be included in determining
such Consolidated Net Income;

                  (2) any gain (or loss) realized upon the sale or other
disposition of any assets of the Company, its consolidated Subsidiaries or any
other Person (including pursuant to any sale-and-leaseback arrangement) which is
not sold or otherwise disposed of in the ordinary course of business and any
gain (or loss) realized upon the sale or other disposition of any Capital Stock
of any Person;

                  (3) extraordinary gains or losses;



                  (4) income or loss attributable to discontinued operations
(including, without limitation, operations disposed of during such period
whether or not such operations were classified as discontinued);

                  (5) the cumulative effect of a change in accounting
principles;

                  (6) any non-recurring fees, charges or other expenses
(including bonus and retention payments and non-cash compensation charges
related to employee stock option awards, restricted stock and other equity
awards) made or incurred in connection with the Acquisition or the financing
thereof;

                  (7) any adjustments, restructuring costs, non-recurring
expenses, non-operating expenses and other similar costs that are (a) described
on Schedule A hereto or (b) incurred in connection with acquisitions consummated
after the Closing Date;

                  (8) amortization of debt discount;

                  (9) capitalized interest;

                  (10) non-cash interest expense;

                  (11) dividends accrued in respect of all Preferred Stock of
the Company that is Disqualified Stock and all Preferred Stock of any Restricted
Subsidiary, in each case to the extent held by Persons other than the Company or
a Wholly Owned Restricted Subsidiary (other than dividends payable solely in
Capital Stock (other than Disqualified Stock)); provided, however, that such
dividends will be multiplied by a fraction the numerator of which is one and the
denominator of which is one minus the effective combined tax rate of the issuer
of such Preferred Stock (expressed as a decimal) for such period (as estimated
by the chief financial officer of the Company in good faith);

                  (12) interest accruing on any Indebtedness of any other Person
to the extent such Indebtedness is guaranteed by (or secured by the assets of)
the Company or any Restricted Subsidiary;

                  (13) Systems/Organizational Establishment Expenses;

                  (14) interest expense attributable to dividends in respect of
all Preferred Stock of the Company that is not Disqualified Stock pursuant to
Statement of Financial Accounting Standards No. 150, "Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and Equity"; and

                  (15) depreciation or amortization relating to purchase
accounting;

in each case, for such period. Notwithstanding the foregoing, for the purposes
of Section 6.3 only, there shall be excluded from Consolidated Net Income any
repurchases, repayments or redemptions of Investments, proceeds realized on the
sale of Investments or return of capital to the Company or a Restricted
Subsidiary to the extent such repurchases, repayments,



redemptions, proceeds or returns increase the amount of Restricted Payments
permitted under such covenant.

         "CONSOLIDATED NET WORTH" of any Person means the consolidated
stockholders' equity of the Person, determined on a consolidated basis in
accordance with GAAP, less (to the extent included in such calculation) the
amount of any such stockholders' equity attributable to Disqualified Capital
Stock of such Person.

         "CONTAINER" means marine and maritime containers (including dry cargo
containers, refrigerated containers, tank containers, special purpose container,
gen sets, open top containers, flat rack containers, bulk containers, high cube
containers, cellular palletwide containers and all other related equipment) .

         "COVERED TAXES" has the meaning ascribed to it in Section 10.19.

         "CREDIT AGREEMENT" means the Credit Agreement dated as of the Closing
Date, among Transamerica Leasing Inc., Trans Ocean Ltd., Trans Ocean Container
Corporation, the lenders party thereto (together with their successors and
assigns) and Fortis Bank (Nederland) N.V., as administrative agent (in such
capacity, together with its successors and assigns, the "ADMINISTRATIVE AGENT"),
as amended, extended, renewed, restated, replaced, increased, supplemented or
otherwise modified (in whole or in part, and without limitation as to amount,
terms, conditions, covenants and other provisions) from time to time (whether
upon or after termination or otherwise), and any agreement (and related
documents) governing Indebtedness incurred to Refinance or otherwise replace
(including by means of sales of debt securities to institutional investors), in
whole or in part, the borrowings and commitments then outstanding or permitted
to be outstanding under such Credit Agreement or a successor Credit Agreement.

         "CURRENCY AGREEMENT" means any foreign exchange contract, currency swap
agreement, futures contract, options contract, synthetic cap or other similar
agreement or arrangement designed to protect the Company or any Subsidiary
against fluctuations in currency values.

         "CUSTODIAN" means any receiver, interim receiver, receiver and manager,
trustee, assignee, liquidator, sequestrator or similar official charged with
maintaining possession or control over property for one or more creditors,
whether under any Bankruptcy Law or otherwise.

         "DEFAULT" means an event or condition the occurrence of which is, or
with the lapse of time or the giving of notice or both would be, an Event of
Default.

         "DISQUALIFIED CAPITAL STOCK" with respect to any Person means that
portion of any Capital Stock of such Person which, by its terms (or by the terms
of any security into which it is convertible or for which it is exchangeable at
the option of the holder thereof), or upon the happening of any event (other
than an event that would constitute a Change of Control), matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the sole option of the holder thereof (except in each case,
upon the occurrence of a Change of Control) on or prior to November 3, 2015 for
cash or is convertible into or



exchangeable for debt securities of the Company or its Subsidiaries at any time
prior to such anniversary.

         "DOCUMENTS" means the Loan Documents and the Credit Agreement.

         "DOLLARS" or the sign "$" means the lawful money of the United States
of America.

         "ELIGIBLE ASSIGNEE" means (a) if the effective date of the proposed
assignment or participation of the Interim Loan, an Interim Note or any interest
therein or herein is prior to the first anniversary of the Closing Date, (i) any
Lender or any Affiliate of any Lender, or (ii) with respect to all other
Persons, any Person to which the Company has given its prior written consent to
an assignment or sale of a participation to such Person (which consent may be
granted, denied or withheld in the Company's sole discretion); and (b) if the
effective date of the proposed assignment or participation of the Interim Loan,
a Interim Note or any interest therein or herein is on or after the first
anniversary of the Closing Date, any Person, so long as such assignment is
consummated in accordance with Law.

         "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of this Agreement and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.

         "EVENT OF DEFAULT" means each of the events set forth in Section 7.

         "EXCHANGE" has the meaning ascribed to it in Section 5.2(ii).

         "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
or any successor statute or statutes thereto.

         "EXCHANGE NOTES" has the meaning ascribed to it in Section 5.2(ii).

         "EXCHANGE OFFER" means an exchange offer that may be made by the
Company, pursuant to the Registration Rights Agreement, to exchange for any and
all the Exchange Notes a like aggregate principal amount of notes having
substantially identical terms to the Exchange Notes registered under the
Securities Act.

         "EXCHANGE REQUEST" has the meaning ascribed to it in Section 5.2.

         "EXISTING INDEBTEDNESS" means the Indebtedness of the Company and its
Restricted Subsidiaries outstanding on the Closing Date.

         "FAIR MARKET VALUE" means, with respect to any asset or property, the
price which could be negotiated in an arm's length, free market transaction, for
cash, between a willing seller and a willing and able buyer, neither of whom is
under undue pressure or compulsion to complete the transaction. Fair Market
Value shall be determined by the Board of Directors of the Company acting in
good faith and shall be evidenced by a Board Resolution of the Board of
Directors of the Company delivered to the Agent.



         "FOREIGN SUBSIDIARY" means, with respect to any Person, any Subsidiary
of such Person that is organized under the laws of any jurisdiction other than
the United States of America, any state thereof or the District of Columbia.

         "GAAP" means accounting principles generally accepted in the United
States set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, which are in effect as of the
Closing Date.

         "INCENTIVE ARRANGEMENTS" means any (a) earn-out agreements, (b) stock
appreciation rights, (c) "phantom" stock plans, (d) employment agreements, (e)
non-competition agreements and (f) incentive and bonus plans entered into by the
Company or any Restricted Subsidiary for the benefit of, and in order to retain,
executives, officers or employees of Persons or businesses in connection with
the acquisition of the Capital Stock of such Persons or the acquisition of such
businesses by the Company or such Restricted Subsidiary.

         "INCUR" has the meaning set forth in Section 6.1 (and "incurrence,"
"incurred," "incurrable" and "incurring" shall have meanings correlative to the
foregoing).

         "INDEBTEDNESS" means with respect to any Person, without duplication:

                  (1) all Obligations of such Person for borrowed money;

                  (2) all Obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments;

                  (3) all Capitalized Lease Obligations of such Person;

                  (4) all Obligations of such Person issued or assumed as the
deferred purchase price of property, all conditional sale obligations and all
Obligations under any title retention agreement (but excluding trade accounts
payable and other accrued liabilities arising in the ordinary course of business
that are not overdue by 90 days or more or are being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted and any
deferred purchase price represented by earn outs consistent with the Company's
past practice);

                  (5) all Obligations for the reimbursement of any obligor on
any letter of credit, banker's acceptance or similar credit transaction, whether
or not then due;

                  (6) guarantees and other contingent obligations in respect of
Indebtedness referred to in clauses (1) through (5) above and clause (8) below;

                  (7) all Obligations of any other Person of the type referred
to in clauses (1) through (6) which are secured by any Lien on any property or
asset of such Person, the amount of any such Obligation being deemed to be the
lesser of the Fair Market Value of the property or asset securing such
Obligation or the amount of such Obligation;



                  (8) all Interest Swap Obligations and all Obligations under
Currency Agreements of such Person; and

                  (9) all Disqualified Capital Stock issued by such Person with
the amount of Indebtedness represented by such Disqualified Capital Stock being
equal to the greater of its voluntary or involuntary liquidation preference and
its maximum fixed repurchase price, but excluding accrued dividends, if any.

For purposes hereof, the "MAXIMUM FIXED REPURCHASE PRICE" of any Disqualified
Capital Stock which does not have a fixed repurchase price shall be calculated
in accordance with the terms of such Disqualified Capital Stock as if such
Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Agreement, and if such price
is based upon, or measured by, the Fair Market Value of such Disqualified
Capital Stock, such Fair Market Value shall be determined reasonably and in good
faith by the Board of Directors of the issuer of such Disqualified Capital
Stock.

         "INDEMNIFIED LIABILITIES" has the meaning ascribed to such term in
Section 10.4.

         "INDEMNITEES" has the meaning ascribed to such term in Section 10.4.

         "INDEPENDENT FINANCIAL ADVISOR" means a nationally-recognized
accounting, appraisal or investment banking firm: (a) that does not, and whose
directors, officers and employees or Affiliates do not, have a direct or
indirect financial interest in the Company; and (b) that, in the judgment of the
Board of Directors of the Company, is otherwise independent and qualified to
perform the task for which it is to be engaged.

         "INITIAL QUARTERLY PERIOD" means the period commencing on the Closing
Date and ending on the date that is 90 days after the Closing Date, or if such
date is not a Business Day, the first Business Day succeeding such date.

         "INTEREST RATE AGREEMENT" means, with respect to any Person, any
interest rate swap agreement, interest rate cap agreement or other financial
agreement or arrangement with respect to exposure of such Person or its
Subsidiaries to interest rates.

         "INTEREST SWAP OBLIGATIONS" means the obligations of any Person
pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such other
Person calculated by applying a fixed or floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements.

         "INTERIM LOAN" means, collectively, the loans made by the Lenders
pursuant to Section 2.1A.

         "INTERIM LOAN COMMITMENT" means the commitment of the Lenders to make
the Interim Loan as set forth in Section 2.1A.



         "INTERIM NOTES" has the meaning ascribed to such term in Section 2.1D.

         "INTERNAL REVENUE CODE" or "CODE" means the Internal Revenue Code of
1986, as amended from time to time, and any successor code or statute.

         "INVESTMENT" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of the lender) or other
extensions of credit (including by way of guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition for value of Capital Stock, Indebtedness
or other similar instruments issued by such Person. If the Company or any
Restricted Subsidiary issues, sells or otherwise disposes of any Capital Stock
of a Person that is a Restricted Subsidiary such that, after giving effect
thereto, such Person is no longer a Restricted Subsidiary, any Investment by the
Company or any Restricted Subsidiary in such Person remaining after giving
effect thereto will be deemed to be a new Investment at such time. The
acquisition by the Company or any Restricted Subsidiary of a Person that holds
an Investment in a third Person will be deemed to be an Investment by the
Company or such Restricted Subsidiary in such third Person at such time. Except
as otherwise provided for herein, the amount of an Investment shall be its fair
market value at the time the Investment is made and without giving effect to
subsequent changes in value.

         For purposes of the definition of "Unrestricted Subsidiary", the
definition of "Restricted Payment" and Section 6.3:

                  (i) "Investment" shall include the portion (proportionate to
the Company's equity interest in such Subsidiary) of the Fair Market Value of
the net assets of any Subsidiary of the Company at the time that such Subsidiary
is designated an Unrestricted Subsidiary; provided, that upon a redesignation of
such Subsidiary as a Restricted Subsidiary, the Company shall be deemed to
continue to have a permanent "Investment" in an Unrestricted Subsidiary equal to
an amount (if positive) equal to (a) the Company's "Investment" in such
Subsidiary at the time of such redesignation less (b) the portion (proportionate
to the Company's equity interest in such Subsidiary) of the Fair Market Value of
the net assets of such Subsidiary at the time of such redesignation; and

                  (ii) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its Fair Market Value at the time of such
transfer, in each case as determined in good faith by the Board of Directors of
the Company.

         "LAWS" means all applicable statutes, laws, ordinances, regulations,
rules, orders, judgments, writs, injunctions or decrees of any state,
commonwealth, nation, territory, possession or province, or tribunal, and "Law"
means each of the foregoing.

         "LENDERS" has the meaning ascribed to that term in the introduction to
this Agreement and shall include any assignee of the Interim Loan, any Interim
Note or Interim Loan Commitment to the extent of such assignment.



         "LIEN" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).

         "LIQUIDATED DAMAGES" has the meaning ascribed to that term in the
Registration Rights Agreement.

         "LOAN DOCUMENTS" means this Agreement, the Interim Notes, the Senior
Indenture, the Exchange Notes and the Registration Rights Agreement.

         "LOAN OBLIGATIONS" means all Obligations of every nature of the Company
from time to time owing to the Lenders and Agent under the Loan Documents.

         "MAJORITY LENDERS" means the Agent together with Lenders holding in the
aggregate more than 50% of the outstanding principal amount of Interim Notes.

         "MANAGEMENT FEE" means, collectively, the consulting services fee and
all other amounts payable to The Jordan Company, L.P. pursuant to the terms of
that certain Management Consulting Agreement dated as of November 3, 2004 among
The Jordan Company, L.P., the Company and the Company's direct and indirect
subsidiaries party thereto (as in effect on the date hereof) and (ii) the
consulting services fee and all other amounts payable to Klesch & Company
Limited pursuant to the terms of that certain Management Consulting Agreement
dated as of November 3, 2004 among Klesch & Company Limited, the Company and the
Company's direct and indirect subsidiaries party thereto (as in effect on the
date hereof).

         "MATERIAL ADVERSE EFFECT" means a material adverse effect on the
business, results of operations, properties, assets, or financial condition of
the Company and its Subsidiaries, taken as a whole.

         "MATURITY DATE" means November 2, 2014.

         "NET CASH PROCEEDS" means, with respect to any Asset Sale, the proceeds
in the form of cash or Cash Equivalents, including payments in respect of
deferred payment obligations when received in the form of cash or Cash
Equivalents (other than the portion of any such deferred payment constituting
interest), received by the Company or any of its Restricted Subsidiaries from
such Asset Sale, net of:

                  (1) reasonable out-of-pocket expenses and fees relating to
such Asset Sale (including, without limitation, legal, accounting and investment
banking and other fees and sales commissions);

                  (2) all federal, state, provincial, foreign and local taxes
and other costs and expenses actually paid, accrued or estimated by the Company
(in good faith) as a consequence of such Asset Sale;

                  (3) repayment of, or any other payments made in respect of,
Indebtedness that is secured by the property or assets that are the subject of
such Asset Sale which (i) is required to



be repaid in connection with such Asset Sale or (ii) is paid in order to obtain
a necessary consent to such Asset Sale; and

                  (4) all distributions and other payments required to be made
to minority interest holders in Restricted Subsidiaries as a result of such
Asset Sale;

                  (5) appropriate amounts to be provided by the Company or any
Restricted Subsidiary, as the case may be, as a reserve, in accordance with
GAAP, against any liabilities associated with such Asset Sale and retained by
the Company or any Restricted Subsidiary, as the case may be, after such Asset
Sale, including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale; and

                  (6) any portion of the purchase price from an Asset Sale
placed in escrow , whether as a reserve for adjustment of the purchase price,
for satisfaction of indemnities in respect of such Asset Sale or otherwise in
connection with such Asset Sale; provided, that upon the termination of such
escrow, Net Cash Proceeds will be increased by any portion of funds in such
escrow that are released to the Company or any Wholly Owned Restricted
Subsidiary.

         "NOTE OFFERING" means the issuance by the Company, after the Closing
Date on one or more occasions, of notes or other debt securities in a private
placement or public offering (including a Rule 144A offering or similar
transaction).

         "NOTICE OF BORROWING" means a notice substantially in the form of
Exhibit I with respect to a proposed borrowing.

         "OBLIGATIONS" means all obligations for principal, premium, interest,
Liquidated Damages, penalties, fees, indemnifications, reimbursements, damages
and other liabilities payable under the documentation governing any
Indebtedness.

         "OFFER PAYMENT DATE" has the meaning ascribed to such term in Section
2.4A(iv)(c)(2).

         "OFFICER" means the Chief Executive Officer, the President, the Chief
Financial Officer or any Vice President of the Company.

         "OFFICERS' CERTIFICATE" means a certificate signed by two Officers of
the Company, at least one of whom shall be the principal financial officer of
the Company, and delivered to the Agent.

         "OTHER TAXES" has the meaning ascribed to such term in Section 10.19B.

         "PAYMENT OFFICE" shall mean the office of the Agent located at 9399
West Higgins Road, Suite 600, Rosemont, Illinois 60018, or such other office as
the Agent may designate to the Company and the Lenders from time to time.

         "PERMITTED BUSINESS" means the Business and any business that is the
same as or similar, reasonably related, complementary or incidental to the
business in which the Company



and its Restricted Subsidiaries are engaged on the Closing Date (including
Qualified Containers Transactions).

         "PERMITTED HOLDERS" means The Jordan Company, L.P., The Resolute Fund
SIE, L.P., The Resolute Fund Netherlands PV I, L.P., The Resolute Fund
Netherlands PV II, L.P., The Resolute Fund NQP, L.P., The Resolute Fund
Singapore PV, L.P., Edgewater Private Equity Fund III, L.P., Edgewater Private
Equity Fund IV, L.P., Fairholme Partners, L.P., Fairholme Ventures, Fairholme
Holdings, JZ Equity Partners PLC, and Seacon Holdings Limited and their
respective Affiliates.

         "PERMITTED INDEBTEDNESS" means, without duplication, each of the
following:

                  (1) Indebtedness under the Interim Notes issued in an
aggregate outstanding principal amount not to exceed $275.0 million;

                  (2) Indebtedness incurred from time to time pursuant to the
Credit Agreement or Qualified Container Indebtedness in an aggregate principal
amount not to exceed the greater of (a) $875 million and (b) 85% of the book
value of the consolidated total tangible assets of the Company and its
Subsidiaries (including, without limitation, Qualified Containers Subsidiaries);

                  (3) other Indebtedness of the Company and its Restricted
Subsidiaries outstanding on the Closing Date;

                  (4) Hedging Obligations consisting of (a) Interest Rate
Agreements related to Indebtedness permitted to be incurred by Company and any
Restricted Subsidiary pursuant to this Agreement, (b) Currency Agreements not
entered into for the purpose of speculation and (c) Commodity Price Protection
Agreements not entered into for the purpose of speculation;

                  (5) Intercompany Indebtedness of the Company or a Restricted
Subsidiary for so long as such Indebtedness is held by the Company or a
Wholly-Owned Restricted Subsidiary; provided that if as of any date any other
Person owns or holds any such Indebtedness in respect of such Indebtedness, such
date shall be deemed the incurrence of Indebtedness not constituting Permitted
Indebtedness under this clause (5) by the issuer of such Indebtedness;

                  (6) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient funds in
the ordinary course of business; provided, that such Indebtedness is
extinguished within three business days of incurrence;

                  (7) Indebtedness of the Company or any of its Restricted
Subsidiaries represented by letters of credit for the account of the Company or
such Restricted Subsidiary, as the case may be, in order to provide security for
workers' compensation claims, payment obligations in connection with
self-insurance or similar requirements in the ordinary course of business;

                  (8) obligations in respect of performance, bid, surety and
appeal bonds and completion guarantees provided by the Company or any Restricted
Subsidiary in the ordinary course of business;



                  (9) Indebtedness represented by Capitalized Lease Obligations
and Purchase Money Indebtedness of the Company and its Restricted Subsidiaries
incurred from time to time in the ordinary course of business (including
Refinancings thereof that do not result in an increase in the aggregate
principal amount of Indebtedness of such Person as of the date of such proposed
Refinancing (plus the amount of any premium required to be paid under the terms
of the instrument governing such Indebtedness and plus the amount of reasonable
expenses incurred by the Company in connection with such Refinancing)) not to
exceed $50.0 million at any time outstanding;

                  (10) Refinancing Indebtedness;

                  (11) Indebtedness represented by guarantees (i) by the Company
or a Restricted Subsidiary of Indebtedness incurred by the Company or a
Restricted Subsidiary or (ii) by a Qualified Containers Subsidiary of
Indebtedness incurred by another Qualified Containers Subsidiary, in either case
so long as the incurrence of such Indebtedness is otherwise permitted by the
terms of this Agreement;

                  (12) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary providing for indemnification, adjustment of purchase
price or similar obligations, in each case, incurred in connection with the
disposition of any business, assets or Subsidiary, or from letters of credit,
surety bonds or performance bonds securing any obligation of the Company or a
Restricted Subsidiary pursuant to such agreements (to the extent such letters of
credit are not drawn against, or if and to the extent drawn against, the
Indebtedness representing such drawing is extinguished within 10 Business Days
from its incurrence) other than guarantees of Indebtedness incurred by any
Person acquiring all or any portion of such business, assets or Subsidiary for
the purpose of financing such acquisition; provided that the maximum aggregate
liability in respect of all such Indebtedness shall at no time exceed the gross
proceeds actually received by the Company and the Subsidiary in connection with
such disposition;

                  (13) Indebtedness of the Company or any of its Restricted
Subsidiaries to the extent the net proceeds thereof are promptly used to redeem
or repay the Interim Notes in full in accordance with this Agreement;

                  (14) Indebtedness of Foreign Subsidiaries in an aggregate
principal amount at any time outstanding not in excess of $25.0 million; or

                  (15) additional Indebtedness of the Company and its Restricted
Subsidiaries in an aggregate principal amount not to exceed $50.0 million at any
time outstanding.

         For purposes of determining compliance with Section 6.1, (a) the
outstanding principal amount of any item of Indebtedness shall be counted only
once and (b) in the event that an item of Indebtedness meets the criteria of
more than one of the categories of Permitted Indebtedness described in clause
(1) through (15) above or is entitled to be incurred pursuant to the
Consolidated Fixed Charge Coverage Ratio provisions of such covenant, the
Company shall, in its sole discretion, classify (or later reclassify) such item
of Indebtedness in any manner that complies with this covenant. The Company will
be entitled to divide and classify an item of Indebtedness in more than one of
the types of Indebtedness described above. The accrual of



interest, the accretion or amortization of original issue discount, the payment
of interest on any Indebtedness in the form of additional Indebtedness with the
same terms and the reclassification of preferred stock as Indebtedness due to a
change in accounting principles will not be deemed to be an incurrence of
Indebtedness; provided, in each such case, that the amount of any such accrual,
accretion or payment is included in Fixed Charges of the Company as accrued.
Notwithstanding any other provision of this covenant, the maximum amount of
Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to
this covenant shall not be deemed to be exceeded solely as a result of
fluctuations in exchange rates or currency values.

         "PERMITTED INVESTMENTS" means:

                  (1) Investments in any Person that is or will become
immediately after such Investment a Restricted Subsidiary or that will merge or
consolidate with or into the Company or a Restricted Subsidiary, or that
transfers or conveys all or substantially all of its assets to the Company or a
Restricted Subsidiary;

                  (2) Investments in the Company by any Restricted Subsidiary;
provided that any Indebtedness evidencing such Investment is unsecured and
subordinated, pursuant to a written agreement, to the Company's Obligations
under the Interim Notes and this Agreement;

                  (3) Investments in any Qualified Containers Subsidiary or any
Investment by a Qualified Containers Subsidiary in any other Person incurred in
connection with any Qualified Containers Transaction;

                  (4) Investments in cash and Cash Equivalents;

                  (5) Hedging Obligations consisting of (a) Interest Rate
Agreements, (b) Currency Agreements and (c) Commodity Price Protection
Agreements entered into in the ordinary course of the Company's or its
Restricted Subsidiaries' businesses and otherwise in compliance with this
Agreement;

                  (6) Investments in the Interim Notes;

                  (7) Investments in securities of trade creditors or customers
received pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such trade creditors or customers in exchange for
claims against such trade creditors or customers;

                  (8) Investments as a result of consideration received in
connection with an Asset Sale made in compliance with Section 6.5;

                  (9) Investments in existence on the Closing Date and any
extension, modification or renewal of any such Investments existing on the
Closing Date, but only to the extent not involving additional advances,
contributions or other Investments of cash or other assets or other increases
thereof (other than as a result of the accrual or accretion of interest or
original issue discount or the issuance of pay-in-kind securities, in each case,
pursuant to the terms of such Investment as in effect on the Closing Date;



                  (10) loans and advances, including advances for travel and
moving expenses, to employees, officers and directors of the Company and its
Restricted Subsidiaries in the ordinary course of business for bona fide
business purposes and in accordance with applicable laws;

                  (11) advances to suppliers and customers in the ordinary
course of business;

                  (12) an Investment by the Company or any Restricted Subsidiary
in receivables owing to the Company or any Restricted Subsidiary if created or
acquired in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms; provided, however, that such trade terms
may include such concessionary trade terms as the Company or any such Restricted
Subsidiary deems reasonable under the circumstances;

                  (13) Investments as lessor under arm's-length capital leases
(determined in accordance with GAAP) of maritime containers entered into on
customary terms in the ordinary course of business with unaffiliated third
parties;

                  (14) Investments in any Person to the extent such Investments
consist of prepaid expenses, negotiable instruments held for collection and
lease, utility and workers' compensation, performance and other similar deposits
made in the ordinary course of business by the Company or any Restricted
Subsidiary; and

                  (15) additional Investments in an aggregate amount not to
exceed $25.0 million at any time outstanding.

         "PERMITTED LIENS" means the following types of Liens:

                  (1) Liens (other than Liens arising under ERISA) for taxes,
assessments or governmental charges or claims either (a) not delinquent or (b)
contested in good faith by appropriate proceedings and as to which the Company
or its Restricted Subsidiaries shall have set aside on its books such reserves
as may be required pursuant to GAAP;

                  (2) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens
imposed by law or pursuant to customary reservations or retentions of title
incurred in the ordinary course of business for sums not yet delinquent or being
contested in good faith, if such reserve or other appropriate provision, if any,
as shall be required by GAAP shall have been made in respect thereof;

                  (3) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security, including any Lien securing letters of credit
issued in the ordinary course of business, or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money);

                  (4) easements, rights-of-way, zoning restrictions and other
similar charges or encumbrances in respect of real property not interfering in
any material respect with the ordinary conduct of the business of the Company or
any of its Restricted Subsidiaries;



                  (5) any interest or title of a lessor under any Capitalized
Lease Obligation permitted pursuant to clause (9) of the definition of
"Permitted Indebtedness;" provided, that such Liens do not extend to any
property or assets which is not leased property subject to such Capitalized
Lease Obligation;

                  (6) Liens securing Purchase Money Indebtedness permitted
pursuant to clause (9) of the definition of "Permitted Indebtedness;" provided,
that (a) the Indebtedness shall not exceed the cost of the property or assets
acquired, together, in the case of real property, with the cost of the
construction thereof and improvements thereto, and shall not be secured by a
Lien on any property or assets of the Company or any Restricted Subsidiary other
than such property or assets so acquired or constructed and improvements thereto
and (b) the Lien securing such Indebtedness shall be created within 180 days of
such acquisition or construction or, in the case of a refinancing of any
Purchase Money Indebtedness, within 180 days of such refinancing;

                  (7) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of bankers'
acceptances issued or created for the account of such Person to facilitate the
purchase, shipment or storage of such inventory or other goods;

                  (8) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;

                  (9) Liens encumbering deposits made to secure obligations
arising from statutory, regulatory, contractual, or warranty requirements of the
Company or any of its Restricted Subsidiaries, including rights of offset and
set-off;

                  (10) Liens securing Interest Swap Obligations that relate to
Indebtedness that is otherwise permitted under this Agreement;

                  (11) Liens securing Indebtedness under Currency Agreements
that are permitted under this Agreement;

                  (12) judgment Liens not giving rise to an Event of Default;

                  (13) Liens securing Acquired Indebtedness incurred in
accordance with Section 6.1; provided, that:

                           (a) such Liens secured such Acquired Indebtedness at
the time of and prior to the incurrence of such Acquired Indebtedness by the
Company or a Restricted Subsidiary and were not granted in connection with, or
in anticipation of, the incurrence of such Acquired Indebtedness by the Company
or a Restricted Subsidiary; and

                           (b) such Liens do not extend to or cover any property
or assets of the Company or of any of its Restricted Subsidiaries other than
the property or assets that secured the Acquired Indebtedness prior to the
time such Indebtedness became Acquired Indebtedness of the Company or a
Restricted Subsidiary and are no more favorable to the lienholders than those



securing the Acquired Indebtedness prior to the incurrence of such Acquired
Indebtedness by the Company or a Restricted Subsidiary;

                  (14) Liens securing the Interim Notes and all other monetary
obligations under this Agreement;

                  (15) Liens securing Qualified Containers Indebtedness or
otherwise incurred in connection with a Qualified Containers Transaction;

                  (16) Liens existing as of the Closing Date;

                  (17) Liens in favor of the Company or the Restricted
Subsidiaries;

                  (18) Liens on assets of the Company or any Restricted
Subsidiaries securing Indebtedness and other Obligations under the Credit
Agreement; and

                  (19) Liens securing Refinancing Indebtedness incurred to
Refinance any Indebtedness secured by a Lien permitted under this paragraph and
incurred in accordance with Section 6.1; provided, that such Liens: (i) are no
less favorable to the Lenders and are not more favorable to the lienholders with
respect to such Liens than the Liens in respect of the Indebtedness being
Refinanced; and (ii) do not extend to or cover any property or assets of the
Company or any of its Restricted Subsidiaries not securing the Indebtedness so
Refinanced.

         "PERSON" means an individual, partnership, corporation, limited
liability company, unincorporated organization, trust or joint venture, or a
governmental agency or political subdivision thereof.

         "PREFERRED STOCK" of any Person means any Capital Stock of such Person
that has preferential rights to any other Capital Stock of such Person with
respect to dividends or redemptions or upon liquidation.

         "PUBLIC EQUITY OFFERING" means an underwritten public offering of
Common Stock of the Company or any holding company of the Company pursuant to a
registration statement filed with the Commission (other than on Form S-8).

         "PURCHASED ENTITIES" means Transamerica Leasing Inc., Trans Ocean Ltd.,
Transamerica Leasing do Brasil Ltda., Trans Ocean Container Corporation,
Spacewise Inc., Transamerica Leasing N.V., Transamerica Leasing SRL, ICS
Terminals (UK) Limited, Trans Ocean Regional Corporate Holdings, Transamerica
Leasing Pty. Ltd., Transamerica Leasing GmbH, Transamerica Leasing (HK) Ltd.,
Greybox Logistics Services Inc., Intermodal Equipment Inc., Greybox Services
Ltd. and Transamerica Leasing Limited.

         "PURCHASE MONEY INDEBTEDNESS" means Indebtedness of the Company and its
Restricted Subsidiaries incurred for the purpose of financing all or any part of
the purchase price, or the cost of installation, construction or improvement, of
property or equipment, provided, that the aggregate principal amount of such
Indebtedness does not exceed the lesser of the Fair Market Value of such
property or such purchase price or cost.



         "QUALIFIED CAPITAL STOCK" means any Capital Stock that is not
Disqualified Capital Stock.

         "QUALIFIED CONTAINERS INDEBTEDNESS" means Indebtedness incurred by a
Qualified Containers Subsidiary in connection with, or pursuant to, a Qualified
Containers Transaction.

         "QUALIFIED CONTAINERS SUBSIDIARY" means:

                  (1) Transamerica Leasing Inc., Trans Ocean Ltd. and Trans
Ocean Container Corporation;

                  (2) any Restricted Subsidiary that at the time of
determination shall be or continue to be designated a Qualified Containers
Subsidiary by the Board of Directors of the Company in the manner provided
below; and

                  (3) without regard to clause (2) above or to the paragraph
immediately below, any Subsidiary of a Qualified Containers Subsidiary.

         The Board of Directors may designate any Restricted Subsidiary
(including any newly acquired or newly formed Subsidiary) to be a Qualified
Containers Subsidiary unless such Subsidiary owns any Capital Stock of the
Company or any other Restricted Subsidiary that is not a Qualified Containers
Subsidiary or a Subsidiary of the Subsidiary to be so designated, provided, that
each Subsidiary to be so designated and each of its Subsidiaries at the time of
designation, and at all times thereafter does not create, incur, issue, assume,
guarantee or otherwise become directly or indirectly liable with respect to any
Indebtedness pursuant to which the lender has recourse to any of the assets of
the Company or any of its Restricted Subsidiaries other than Qualified
Containers Subsidiaries and Subsidiaries thereof in any way other than (a)
pursuant to representations, warranties, covenants, agreements and indemnities
entered into in connection or pursuant to a Qualified Containers Transaction or
(b) in connection with the Qualifying Container Assets and related assets as
provided in the definition of "Qualified Containers Transaction".

         Any such designation by the Board of Directors shall be evidenced to
the Agent by promptly filing with the Agent a copy of the Board Resolution
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing provisions.

         "QUALIFIED CONTAINERS TRANSACTION" means (a) any securitization or
similar financing transaction by a Qualified Containers Subsidiary or (b) any
transaction or series of transactions entered into by the Company or any of its
Restricted Subsidiaries, from time to time, pursuant to which the Company or
such Restricted Subsidiary sells, conveys or otherwise transfers to (i) a
Qualified Containers Subsidiary (in the case of a transfer by the Company or
such Restricted Subsidiary) and (ii) any other Person (in the case of a transfer
by a Qualified Containers Subsidiary), or grants a security interest in, any
Qualifying Container Assets (whether now existing or arising in the future) of
the Company or any of its Restricted Subsidiaries or Qualified Containers
Subsidiaries, and any assets related thereto, including, without limitation,
accounts receivable or rights under lease agreements, all contracts and all
guarantees or other obligations in respect of such Qualifying Container Assets,
proceeds of such Qualifying Container Assets and



other assets (including, without limitation, contract rights) which are
customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions or
other financing arrangements involving Qualifying Container Assets and related
assets.

         "QUALIFYING CONTAINER ASSETS" means Containers and related assets
(whether now existing or arising in the future) of the Company or any of its
Restricted Subsidiaries or Qualified Containers Subsidiaries, and any assets
related thereto, including, without limitation, accounts receivable or rights
under lease agreements, all contracts and all guarantees or other obligations in
respect of such Qualifying Container Assets, proceeds of such Qualifying
Container Assets and other assets (including, without limitation, contract
rights) which are customarily transferred or in respect of which security
interests are customarily granted in connection with asset securitization
transactions or other financing arrangements involving Container and related
assets.

         "QUARTERLY PERIOD" means the Initial Quarterly Period and each
successive 90-day period; provided that if any such 90-day period shall
terminate on a date that is not a Business Day, then the applicable Quarterly
Period to which such period shall relate shall instead terminate on the first
Business Day succeeding such date.

         "REFINANCE" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "REFINANCED" and "REFINANCING"
shall have correlative meanings.

         "REFINANCING INDEBTEDNESS" means any Refinancing by the Company or any
Restricted Subsidiary of Indebtedness incurred in accordance with Section 6.1
(other than pursuant to Permitted Indebtedness) or clause (1), (2), (3), (9),
(10) or (15) of the definition of Permitted Indebtedness, in each case that does
not:

                  (1) have an aggregate principal amount (or, if such
Indebtedness is issued with original issue discount, an aggregate offering
price) greater than the sum of (x) the aggregate principal amount of the
Indebtedness being Refinanced (or, if such Indebtedness being Refinanced is
issued with original issue discount, the aggregate accreted value) as of the
date of such proposed Refinancing plus (y) the amount of fees, expenses,
premium, defeasance costs and accrued but unpaid interest relating to the
Refinancing of such Indebtedness being Refinanced; or

                  (2) create Indebtedness with: (a) a Weighted Average Life to
Maturity that is less than the Weighted Average Life to Maturity of the
Indebtedness being Refinanced; or (b) a final maturity earlier than the final
maturity of the Indebtedness being Refinanced.

If such Indebtedness being Refinanced is subordinate or junior by its terms to
the Interim Notes, then such Refinancing Indebtedness shall be subordinate by
its terms to the Interim Notes at least to the same extent and in the same
manner as the Indebtedness being Refinanced.

         "REGISTER" has the meaning ascribed to such term in Section 5.4.



         "REGISTRATION RIGHTS AGREEMENT" means a registration rights agreement
substantially in the form of Exhibit II (with such changes therein as the Agent
and the Company shall approve).

         "RESTRICTED PAYMENT" has the meaning ascribed to such term in
Section 6.3.

         "RESTRICTED SUBSIDIARY" of any Person means any Subsidiary of such
Person which at the time of determination is not an Unrestricted Subsidiary.

         "SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.

         "SENIOR INDENTURE" means an indenture between the Company and a trustee
substantially in the form of Exhibit III hereto (with such changes as the Agent
and the Company shall approve, and, at such time, if any, as notes issued
thereunder are sold in a public offering, with other appropriate changes to
reflect such public offering), as the same may at any time be amended, modified
and supplemented and in effect.

         "SIGNIFICANT SUBSIDIARY" with respect to any Person, means any
Restricted Subsidiary of such Person that satisfies the criteria for a
"significant subsidiary" set forth in Rule 1-02(w) of Regulation S-X under the
Exchange Act.

         "STOCK PURCHASE AGREEMENT" means the Stock Purchase Agreement dated as
of July 10, 2004 among TA Leasing Holding Co., Inc., Transamerica, Corporation
and Klesch & Company Limited, as amended by the First Amendment to Stock
Purchase Agreement dated as of August 10, 2004 and the Second Amendment to Stock
Purchase Agreement dated as of September 30, 2004.

         "SUBORDINATED INDEBTEDNESS" means Indebtedness of the Company which is
expressly subordinated in right of payment to the Interim Notes.

         "SUBSIDIARY" with respect to any Person, means:

                  (1) any corporation of which the outstanding Capital Stock
having at least a majority of the votes entitled to be cast in the election of
directors under ordinary circumstances shall at the time be owned, directly or
indirectly, by such Person;

                  (2) any trust for which any Qualified Containers Subsidiary is
a depositor and any other Person created by a Qualified Containers Subsidiary
for the purposes of facilitating a Qualified Containers Transaction; or

                  (3) any other Person of which at least a majority of the
voting interest under ordinary circumstances is at the time, directly or
indirectly, owned by such Person.

         "SURVIVING ENTITY" shall have the meaning ascribed to such term in
Section 6.5(b).

         "SYNDICATION" has the meaning ascribed to such term in Section 10.2A.



         "SYSTEMS/ORGANIZATIONAL ESTABLISHMENT EXPENSES" means the aggregate of
all expenditures (whether paid in cash or accrued as liabilities) by the Company
and the Restricted Subsidiaries in financial, information technology and other
similar systems of the Company and the Restricted Subsidiaries.

         "TAXES" means all taxes, assessments, fees, levies, imposts, duties,
penalties, deductions, liabilities, withholdings or other charges of any nature
whatsoever, including interest penalties, from time to time or at any time
imposed by any Law or any tribunal.

         "TRANSACTIONS" shall mean, collectively, (i) the Acquisition, (ii) the
incurrence of the loans drawn down on the Closing Date under the Credit
Agreement, (iii) the incurrence of the Interim Loan hereunder on the Closing
Date, (iv) any other transaction on the Closing Date contemplated in relation to
the foregoing and (v) the payment of fees and expenses in connection with the
foregoing.

         "TRANSFEREE" has the meaning ascribed to such term in Section 10.19A.

         "UNRESTRICTED SUBSIDIARY" of any Person means:

                  (1) any Subsidiary of such Person that at the time of
determination shall be or continue to be designated an Unrestricted Subsidiary
by the Board of Directors of such Person in the manner provided below; and

                  (2) any Subsidiary of an Unrestricted Subsidiary.

         The Board of Directors may designate any Subsidiary (including any
newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary
unless such Subsidiary owns any Capital Stock of, or owns or holds any Lien on
any property of, the Company or any other Subsidiary of the Company that is not
a Subsidiary of the Subsidiary to be so designated, provided that:

                  (1) the Company certifies to the Agent that such designation
complies with Section 6.3; and

                  (2) each Subsidiary to be so designated and each of its
Subsidiaries has not at the time of designation, and does not thereafter,
create, incur, issue, assume, guarantee or otherwise become directly or
indirectly liable with respect to any Indebtedness pursuant to which the lender
has recourse to any of the assets of the Company or any of its Restricted
Subsidiaries.

         The Board of Directors may designate any Unrestricted Subsidiary to be
a Restricted Subsidiary only if:

                  (1) immediately after giving effect to such designation, the
Company is able to incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) in compliance with Section 6.1; and

                  (2) immediately before and immediately after giving effect to
such designation, no Default or Event of Default shall have occurred and be
continuing.



         Any such designation by the Board of Directors shall be evidenced to
the Agent by promptly filing with the Agent a copy of the Board Resolution
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing provisions.

         "U.S. LEGAL TENDER" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.

         "VOTING STOCK" means, with respect to any Person, securities of any
class or classes of Capital Stock of such Person entitling the holders thereof
(whether at all times or only so long as no senior class of stock has voting
power by reason of any contingency) to vote in the election of members of the
Board of Directors (or equivalent governing body) of such Person.

         "WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (1) the then
outstanding aggregate principal amount of such Indebtedness into (2) the sum of
the total of the products obtained by multiplying:

                  (a) the amount of each then remaining installment, sinking
fund, serial maturity or other required payment of principal, including payment
at final maturity, in respect thereof, by

                  (b) the number of years (calculated to the nearest
one-twelfth) which will elapse between such date and the making of such payment.

         "WHOLLY-OWNED RESTRICTED SUBSIDIARY" of any Person means any Restricted
Subsidiary of such Person of which all the outstanding Capital Stock (other than
in the case of a Foreign Subsidiary, directors' qualifying shares or an
immaterial amount of shares required to be owned by other Persons pursuant to
applicable law) are owned by such Person or any Wholly-Owned Restricted
Subsidiary of such Person.

         1.2 ACCOUNTING TERMS. For the purposes of this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP.

         1.3 OTHER DEFINITIONAL PROVISIONS; ANNIVERSARIES. Any of the terms
defined in Section 1.1 may, unless the context otherwise requires, be used in
the singular or the plural depending on the reference.

SECTION 2  AMOUNT AND TERMS OF INTERIM LOAN COMMITMENT AND INTERIM LOAN;
           INTERIM NOTES

         2.1      INTERIM LOAN AND INTERIM NOTES.

                  A. INTERIM LOAN COMMITMENT. Subject to the terms and
conditions of this Agreement and in reliance upon the representations and
warranties of the Company herein set forth, the Lenders hereby severally and not
jointly agree to lend to the Company on the Closing Date $275,000,000 in the
aggregate (the "INTERIM Loan"), each such Lender committing to lend the amount
set forth next to such Lender's name on the signature pages hereto. The Lenders'



commitment to make the Interim Loan to the Company pursuant to this Section 2.1A
is herein called individually, the "INTERIM LOAN COMMITMENT" and collectively
the "INTERIM LOAN COMMITMENTS."

                  B. NOTICE OF BORROWING. When the Company desires to borrow
under this Section 2.1, it shall deliver to the Agent a Notice of Borrowing no
later than 3:00 P.M. (New York time) at least two Business Days in advance of
the Closing Date or such later date as shall be agreed to by the Agent. The
Notice of Borrowing shall specify the applicable date of borrowing (which shall
be a Business Day). Upon receipt of such Notice of Borrowing, the Agent shall
promptly notify each Lender of its pro rata share of the Interim Loan and the
other matters covered by the Notice of Borrowing.

                  C. DISBURSEMENT OF FUNDS. (i) No later than 10:00 a.m. (New
York time) on the Closing Date, or such later time on the Closing Date as shall
be agreed to by the Agent and each Lender, each Lender will make available its
pro rata share of the Interim Loan requested to be made on such date in the
manner provided below. All amounts shall be made available to the Agent in U.S.
Legal Tender and immediately available funds at the Payment Office and the Agent
immediately will make available to the Company by depositing to its account at
the Payment Office the aggregate of the amounts so made available in the type of
funds received.

                  Unless the Agent shall have been notified by any Lender prior
to the Closing Date that such Lender does not intend to make available to the
Agent its pro rata share of the Interim Loan to be made on such date, the Agent
may assume that such Lender has made such amount available to the Agent on such
date, and the Agent, in reliance upon such assumption, may (in its sole
discretion and without any obligation to do so) make available to the Company a
corresponding amount. If such corresponding amount is not in fact made available
to the Agent by such Lender and the Agent have made available same to the
Company, the Agent shall be entitled to recover such corresponding amount from
such Lender. If such Lender does not pay such corresponding amount forthwith
upon the Agent's demand therefor, the Agent shall promptly notify the Company,
and the Company shall immediately pay such corresponding amount to the Agent.
The Agent shall also be entitled to recover from such Lender or the Company, as
the case may be, interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the Agent to the
Company to the date such corresponding amount is recovered by the Agent, at a
rate per annum equal to (x) if paid by such Lender, the overnight Federal Funds
Rate or (y) if paid by the Company, the then applicable rate of interest on the
Interim Loan.

                           (ii) Nothing herein shall be deemed to relieve any
Lender from its obligation to fulfill its Interim Loan Commitment hereunder or
to prejudice any rights which the Company may have against any Lender as a
result of any default by such Lender hereunder.

                  D. INTERIM NOTES. The Company shall execute and deliver to
each Lender on the Closing Date a Interim Note dated the Closing Date
substantially in the form of Exhibit IV to evidence such Lender's pro rata share
of the Interim Loan Commitment and with appropriate insertions (the "INTERIM
NOTES").



                  E. SCHEDULED PAYMENT OF INTERIM LOAN. The Company shall pay in
full the outstanding principal amount of the Interim Loan and all other
Obligations owing hereunder no later than the Maturity Date. Without limiting
the generality of the foregoing, the Company shall pay accrued interest (and
Liquidated Damages, if any) as and when required by Section 2.3B hereof and
reimburse the Agent and Lenders for costs and expenses of the Agent and Lenders,
to the extent reimbursable under Section 10.3 hereof, promptly, but in any event
within five Business Days, upon presentment of an invoice therefor.

                  F. TERMINATION OF INTERIM LOAN COMMITMENT. The Interim Loan
Commitment hereunder shall terminate on the earlier of (i) the termination of
the Stock Purchase Agreement in accordance with its terms or (ii) November 8,
2004 if no portion of the Interim Loan has been funded on or before such date.

                  G. PRO RATA BORROWINGS. The Interim Loan made under this
Agreement shall be made by the Lenders pro rata on the basis of their respective
Interim Loan Commitments. It is understood that no Lender shall be responsible
for any default by any other Lender of its obligation to make its portion of the
Interim Loan hereunder and that each Lender shall be obligated to make its
portion of the Interim Loan hereunder, regardless of the failure of any other
Lender to fulfill its commitments hereunder.

         2.2  RESERVED.

         2.3  INTEREST ON THE INTERIM LOAN.

                  A. RATE OF INTEREST. Subject to Section 2.3C, the Interim Loan
shall bear interest for each Quarterly Period at a rate per annum equal to the
Applicable Rate for such period.

                  B. INTEREST PAYMENTS. (i) Interest (and any Liquidated Damages
then payable) shall be payable in arrears on each April 15 and October 15,
commencing with April 15, 2005 and upon any prepayment or redemption of the
Interim Loan (to the extent accrued on the amount being prepaid) and at maturity
of the Interim Loan in respect of any amounts paid on such date.

                  C. POST-MATURITY INTEREST. Notwithstanding any other provision
of this Agreement to the contrary, any principal payments on the Interim Loan
not paid when due and, to the extent permitted by applicable law, any interest
payment on the Interim Loan not paid when due, in each case whether at stated
maturity, by notice of prepayment, by acceleration or otherwise, shall
thereafter bear interest payable upon demand at a rate which is 2.00% per annum
in excess of the rate of interest otherwise payable under this Agreement for the
Interim Loan.

                  D. COMPUTATION OF INTEREST. Interest on the Interim Loan shall
be computed on the basis of a 360-day year and twelve 30-day months. In
computing interest on the Interim Loan, the date of the making of the Interim
Loan shall be included and the date of payment shall be excluded.



         2.4 PREPAYMENTS AND PAYMENTS.

                  A. PREPAYMENTS.

                           (i) VOLUNTARY PREPAYMENTS. The Company may, upon not
less than one Business Day's prior written or telephonic notice confirmed in
writing to the Agent at any time and from time to time, without premium or
penalty of any kind (other than in respect of Liquidated Damages), prepay the
Interim Loan made to the Company in whole or in part. Notice of prepayment
having been given as aforesaid, the principal amount of the Interim Loan to be
prepaid shall become due and payable on the prepayment date, together with
accrued but unpaid interest (and Liquidated Damages, if any), on such amount
to the prepayment date. Amounts of the Interim Loan so prepaid may not be
reborrowed.

                           (ii) MANDATORY PREPAYMENTS.

                                    (a) PREPAYMENTS FROM ASSET SALES. Upon
receipt by the Company or any Restricted Subsidiary of the Company of Net Cash
Proceeds of any Asset Sale permitted by Section 6.10, the Company or any
Restricted Subsidiary of the Company shall, or shall cause its Restricted
Subsidiaries to, apply the Net Cash Proceeds of such Asset Sale within 365 days
of receipt thereof (v) in the case of the receipt by any Restricted Subsidiary
(but not by the Company) of Net Cash Proceeds of any Asset Sale, to repay
Indebtedness under any Qualified Containers Indebtedness or to repay
Indebtedness under the Credit Agreement; (w) to acquire all or substantially
all of the assets of, or any Capital Stock of, another Permitted Business, if,
after giving effect to any such acquisition of Capital Stock, the Permitted
Business is or becomes a Restricted Subsidiary of the Company; (x) to acquire
Capital Stock constituting a minority interest in any Person that at such time
is a Restricted Subsidiary that is engaged in a Permitted Business; (y) to
acquire or make an investment in property, plant, equipment or other
non-current assets that replace the properties and assets that were the subject
of such Asset Sale or that will be used or useful in the Permitted Business
(including expenditures for maintenance, repair or improvement of existing
properties and assets); or (z) a combination of repayment and investment
permitted by the foregoing clauses (v), (w), (x) and (y). Pending the final
application of Net Cash Proceeds, the Company or its Restricted Subsidiaries,
as the case may be, may temporarily reduce revolving credit borrowings or
invest such Net Cash Proceeds in Cash Equivalents.

                  To the extent not used as above, the Company shall, or shall
cause its Restricted Subsidiaries to, prepay the Interim Loan (an "ASSET SALE
PREPAYMENT"), all on a pro rata basis, with the Net Cash Proceeds received from
any Asset Sale on a date not later than the Business Day next succeeding the
365th day after the consummation of such Asset Sale if and to the extent that
such Net Cash Proceeds are not applied by the Company or any Restricted
Subsidiary of the Company within 365 days as provided in the immediately
preceding paragraph or such earlier date, if any, as the Board of Directors of
the Company or of such Restricted Subsidiary determines not to apply the Net
Cash Proceeds relating to such Asset Sale as set forth in clauses (v), (w), (x)
(y) or (z) of the preceding paragraph. Notwithstanding the foregoing provisions
of this paragraph, no mandatory repayments shall be required pursuant to this
Section 2.4A(ii) until the date on which the aggregate Net Cash Proceeds from
all Asset Sales not applied in



accordance with clauses (v), (w), (x), (y) or (z) of the preceding paragraph
within the time periods specified by this paragraph equal or exceed $20.0
million.

                                    (b) NOTICE. The Company shall notify the
Agent of any prepayment to be made pursuant to this Section 2.4A(ii) at least
one Business Day prior to such prepayment date (unless shorter notice is
satisfactory to the Agent).

                                    (c) PREPAYMENTS FROM NOTE OFFERING.
Promptly, but in any event within three Business Days, following the
consummation of any Note Offering, the Company shall repay all or a portion
of the principal amount of the Interim Loan and all other Obligations owing
hereunder or any other Loan Document in an amount equal to the lesser of
(i) the outstanding principal amount of the Interim Loan and all other
Obligations owing hereunder or any other Loan Document and (ii) the amount
of the net cash proceeds received by the Company from such Note Offering.

                           (iii) COMPANY'S MANDATORY PREPAYMENT OBLIGATION;
APPLICATION OF PREPAYMENTS. All prepayments shall include payment of accrued
interest (and Liquidated Damages, if any) on the principal amount so prepaid
and shall be applied to payment of interest before application to principal.

                           (iv) MANDATORY OFFER TO PURCHASE INTERIM NOTES. (a)
Upon the occurrence of a Change of Control (the date of such occurrence, the
"CHANGE OF CONTROL DATE"), the Lenders shall have the right to require the
repurchase of all of the Interim Notes pursuant to an offer to purchase (the
"CHANGE OF CONTROL OFFER") at a purchase price equal to 100% of the principal
amount thereof on the date of purchase, plus accrued and unpaid interest
thereon (including Liquidated Damages, if any) to the date of repurchase.

                                    (b) Within 30 days following the Change of
Control Date the Company shall mail a notice to the Agent containing all
instructions and materials necessary to enable the Lenders to tender Interim
Notes pursuant to the Change of Control Offer and stating the following:

                                            (1) that the Change of Control Offer
                           is being made pursuant to this Section 2.4A(iv) and
                           that all Interim Notes validly tendered will be
                           accepted for payment;

                                            (2) the purchase price and the
                           purchase date, which shall be a Business Day that is
                           no earlier than 30 days nor later than 60 days from
                           the date such notice is mailed (the "OFFER PAYMENT
                           DATE");

                                            (3) that any Note not tendered will
                           continue to accrue interest;

                                            (4) that any Note accepted for
                           payment pursuant to the Change of Control Offer shall
                           cease to accrue interest after the Offer Payment Date
                           unless the Company shall default in the payment of
                           the repurchase price of the Interim Notes;



                                            (5) that if a Lender elects to have
                           a Interim Note purchased pursuant to the Change of
                           Control Offer it will be required to surrender the
                           Note, with the form entitled "Option of Lender to
                           Elect Purchase" on the reverse of the Note completed,
                           to the Company prior to 10:00 a.m. New York time on
                           the Offer Payment Date;

                                            (6) that a Lender will be entitled
                           to withdraw its election if the Company receives, not
                           later than 9:00 a.m. New York time on the Business
                           Day preceding the Offer Payment Date, a telegram,
                           telex, facsimile transmission or letter setting forth
                           the principal amount of Interim Notes such Lender
                           delivered for purchase, and a statement that such
                           Lender is withdrawing its election to have such Note
                           purchased; and

                                            (7) that if Interim Notes are
                           purchased only in part a new Note of the same type
                           will be issued in principal amount equal to the
                           unpurchased portion of the Interim Notes surrendered.

                                    (c) On or before the Offer Payment Date, the
Company shall (i) accept for payment Interim Notes or portions thereof which
are to be purchased in accordance with the above, and (ii) deposit at the
Payment Office U.S. Legal Tender sufficient to pay the purchase price of all
Interim Notes to be purchased. The Agent shall promptly mail to the Lenders
whose Interim Notes are so accepted payment in an amount equal to the purchase
price.

                                    (d) Notwithstanding anything to the contrary
set forth in this clause (iv), the Company will not be required to make a
Change of Control Offer upon the occurrence of a Change of Control if a third
party makes the Change of Control Offer in the manner, at the times and
otherwise in compliance with the requirements set forth in this clause (iv).

         B. MANNER AND TIME OF PAYMENT. All payments of principal and interest
(including Liquidated Damages) hereunder and under the Interim Notes by the
Company shall be made without defense, setoff or counterclaim and in same-day
funds and delivered to the Agent, unless otherwise specified, not later than
3:00 P.M. (New York time) on the date due at the Payment Office for the account
of the Lenders; funds received by the Agent after that time shall be deemed to
have been paid by the Company on the next succeeding Business Day. The foregoing
notwithstanding, the Company hereby is authorized to set off against any amount
due and payable to a Lender hereunder the amount of any claim arising under a
final non-appealable judgment that has been finally determined by a court of
competent jurisdiction to be payable by such Lender to the Company.

         C. PAYMENTS ON NON-BUSINESS DAYS. Whenever any payment to be made
hereunder or under the Interim Notes shall be stated to be due on a day which is
not a Business Day, the payment shall be made on the next succeeding Business
Day and such extension of time shall be included in the computation of the
payment of interest hereunder or under the Interim Notes or of the commitment
and other fees hereunder, as the case may be.



         D. NOTATION OF PAYMENT. Each Lender agrees that before disposing of any
Note held by it, or any part thereof (other than by granting participations
therein), such Lender will make a notation thereon of all principal payments
previously made thereon and of the date to which interest thereon has been paid,
which notation shall constitute prima facie evidence of the amounts of the
Obligations recorded; provided that the failure to make (or any error in the
making of) such a notation shall not limit or otherwise affect the obligation of
the Company hereunder or under such Interim Notes to pay the Obligations in
accordance with their terms.

         2.5 USE OF PROCEEDS.

                  A. INTERIM LOAN. The proceeds of the Interim Loan shall be
applied by the Company, together with borrowings under the Credit Agreement, to
pay for the Acquisition and then to the payment of fees and expenses relating to
the Acquisition.

                  B. MARGIN REGULATIONS. No portion of the proceeds of any
borrowing under the Loan Documents shall be used by the Company in any manner
which might cause the borrowing or the application of such proceeds to violate
the applicable requirements of Regulation U, Regulation T or Regulation X of the
Board of Governors of the Federal Reserve System or any other regulation of the
Board of Governors or to violate the Exchange Act, in each case as in effect on
the date or dates of such borrowing and such use of proceeds.

SECTION 3  CONDITIONS

         3.1  CONDITIONS TO INTERIM LOAN.  The obligations of the Lenders to
make the Interim Loan are subject to prior or concurrent satisfaction of each
of the following conditions:

                  A. On or before the Closing Date, all corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental hereto and thereto not
previously found acceptable by the Agent shall be reasonably satisfactory in
form and substance to the Agent, and the Agent shall have received on behalf of
the Lenders the following items, each of which shall be in form and substance
reasonably satisfactory to the Agent and, unless otherwise noted, dated the
Closing Date:

                           (1) a copy of the Company's charter, certified as of
the Closing Date by one of its Officers, together with a certificate of status,
compliance, good standing or like certificate with respect to the Company
issued by the appropriate government officials of the jurisdiction of its
incorporation, each to be dated a recent date prior to the Closing Date;

                           (2) a copy of the Company's bylaws, certified as of
the Closing Date by one of its Officers;

                           (3) resolutions of the Company's Board of Directors
approving and authorizing the execution, delivery and performance of this
Agreement, each of the other Documents to which it is a party and any other
documents, instruments and certificates required to be executed by the Company
in connection herewith and therewith and approving and authorizing the
execution and delivery of the Documents and the consummation of the
Transactions, each certified as of the Closing Date by one of its Officers as
being in full force and effect without modification or amendment;



                           (4) executed copies of this Agreement and the
Interim Notes substantially in the form of Exhibit IV executed in accordance
with Section 2.1D drawn to the order of the Lenders and with appropriate
insertions;

                           (5) an originally executed Notice of Borrowing
substantially in the form of Exhibit I, signed by a duly authorized Officer of
the Company;

                           (6) an originally executed copy of the written
opinion of Mayer, Brown, Rowe & Maw LLP, special counsel to the Company,
addressed to the Agent and each of the Lenders covering the matters set forth
in Exhibit V;

                           (7) (i) executed or conformed copies of the Credit
Agreement and all documents and instruments relating thereto and any amendments
thereto made on or prior to the Closing Date and a copy of each legal opinion
delivered in connection with the Credit Agreement, and the terms and
provisions of the Credit Agreement and all documents and instruments relating
thereto shall be reasonably satisfactory to the Agent and (ii) an Officers'
Certificate from the Company certifying that the Credit Agreement is in full
force and effect on the Closing Date; and

                           (8) true and correct copies of each consulting or
management advisory agreement executed by the Company in connection with the
consummation of the Transactions, each duly certified by the secretary or
assistant secretary of the Company as being a true, correct and complete copy
thereof.

                  B. Simultaneously with the making of the Interim Loan by the
Lenders, the Company shall have delivered to the Agent an Officers' Certificate
from the Company in form and substance satisfactory to the Agent to the effect
that (i) the representations and warranties in Section 4 are true, correct and
complete in all material respects on and as of the Closing Date to the same
extent as though made on and as of that date and (ii) on or prior to the Closing
Date, the Company has performed and complied with in all material respects all
covenants and conditions to be performed and observed by the Company hereunder
on or prior to the Closing Date (other than such conditions the satisfaction of
which is subject to the satisfaction of the Agent and/or the Majority Lenders).

                  C. No event shall have occurred and be continuing or would
result from the consummation of the borrowing contemplated by the Notice of
Borrowing which would constitute an Event of Default or Default.

                  D. The pro forma consolidated capital structure of the Company
and its Subsidiaries, after giving effect to the Transactions, shall be
consistent with the capital structure described on Schedule C.

                  E. There shall not have occurred since December 31, 2003 (and
the Lenders shall have become aware of no facts or conditions not previously
known to the Lenders) anything which the Lenders shall reasonably determine
could have a material adverse effect on the rights or remedies of the Lenders,
or on the ability of the Company to perform its obligations to the Lenders;



                  F. Simultaneously with the making of the Interim Loan by the
Lenders, the Acquisition shall have been consummated on the terms set forth in
the Acquisition Agreements; and the date that the Acquisition shall have been
consummated was no later than November 8, 2004.

                  G. The Company shall have received ratings with respect to the
high yield notes to be issued in the contemplated Note Offering of B- (or
better) from S&P or B3 (or better) from Moody's and such ratings shall remain in
full force and effect without having been downgraded.

                  H. An agreement among the Agent, the Company and the
Administrative Agent shall been executed and delivered by each party thereto and
otherwise be in full force and effect, such agreement to be in form, scope and
substance reasonably satisfactory to the Agent.

SECTION 4  REPRESENTATIONS AND WARRANTIES

         In order to induce the Lenders to enter into this Agreement and to make
the Interim Loan, the Company represents and warrants to the Lenders that, at
the time of execution hereof and after consummation of the Transactions, the
following statements are true, correct and complete:

         4.1 COMPANY STATUS. The Company (i) is a duly organized and validly
existing company in good standing under the laws of the jurisdiction of its
organization, (ii) has the corporate power and authority to own its property and
assets and to transact the business in which it is engaged and presently
proposes to engage and (iii) is duly qualified and is authorized to do business
and is in good standing in each jurisdiction where the conduct of its business
requires such qualification except for failures to be so qualified which,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.

         4.2 COMPANY POWER AND AUTHORITY. The Company has the power and
authority to execute, deliver and perform the terms and provisions of each of
the Loan Documents to which it is a party and the Intercreditor Agreement and
has taken all necessary company action to authorize the execution, delivery and
performance by it of each of such Loan Documents and the Intercreditor
Agreement. The Company has duly executed and delivered each of the Loan
Documents to which it is a party and the Intercreditor Agreement, and each of
such Loan Documents and the Intercreditor Agreement constitutes the legal, valid
and binding obligation of such party enforceable in accordance with its terms,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws generally affecting creditors' rights and by
equitable principles (regardless of whether enforcement is sought in equity or
at law).

         4.3 NO VIOLATION. Neither the execution, delivery or performance by the
Company of the Loan Documents to which it is a party, nor compliance by it with
the terms and provisions thereof, nor consummation of the transactions
contemplated therein (i) will contravene any material provision of any
applicable law, statute, rule or regulation or of any applicable order, writ,
injunction or decree of any court or governmental instrumentality, (ii) will
conflict or be inconsistent with or result in any breach of any of the terms,
covenants, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to



create or impose) any Lien (except pursuant to the Credit Agreement) upon any of
the material properties or assets of the Company pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement or loan agreement, or any
other material agreement, contract or instrument, to which the Company is a
party or by which it or any of its material property or assets is bound or to
which it may be subject, or (iii) will violate any provision of the certificate
of incorporation or by-laws (or equivalent organizational documents) of the
Company.

         4.4 GOVERNMENTAL APPROVALS. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made prior to the date when required and which
remain in full force and effect), or exemption by, any governmental or public
body or authority, or any subdivision thereof, is required to authorize, or is
required in connection with, (i) the Company's execution, delivery and
performance of any Document or (ii) the legality, validity, binding effect or
enforceability of any such Document against the Company.

         4.5 FINANCIAL STATEMENTS; FINANCIAL CONDITION; UNDISCLOSED
             LIABILITIES; ETC.

                  (a) On and as of the Closing Date, after giving effect to the
Transactions (including the making of all transfers, whether absolute or
intended for security, and including the incurring of all of the indebtedness by
the Company as contemplated by the Transactions), the Company does not intend to
incur, and does not believe that it will incur, debts beyond its ability to pay
such debts as such debts mature; provided, however, that this Section 4.5(a)
shall not constitute any representation as to the amount of the assets or the
amount of the liabilities of the Company as of the Closing Date. As used in this
Section 4.5, the term "debt" means any liability on a claim, and "claim" means
(i) right to payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured or (ii) right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.

                  (b) The Company is entering into the Transactions (including
the making of all transfers, whether absolute or intended for security, and
including the incurring of all of the indebtedness by the Company as
contemplated by the Transactions), in good faith and without the intent to
hinder, delay or defraud any creditor of the Company.

                  (c) Except as fully disclosed in writing to the Lenders prior
to the Closing Date or as otherwise disclosed on Schedule B hereto, there were
as of the Closing Date no liabilities or obligations with respect to the Company
(whether absolute, accrued, contingent or otherwise and whether or not due)
which, either individually or in aggregate, would be material to the Company or
to the Company and its Subsidiaries taken as a whole.

         4.6 LITIGATION. There are no actions, suits or proceedings pending or,
to the best knowledge of the Company, threatened, against the Company on the
Closing Date (i) with respect to any Document or (ii) that could reasonably be
expected to have a Material Adverse Effect.



         4.7  RESERVED

         4.8  RESERVED

         4.9 CAPITALIZATION. On the Closing Date and after giving effect to the
Transactions, the authorized capital stock of the Company shall consist of
200,000 shares of common stock, of which 100,000 are outstanding, and 500,000
shares of preferred stock, of which 200,000 shares have been designated Series A
12% Cumulative Senior Preferred Stock. All such outstanding shares of common
stock have been duly and validly issued, are fully paid and nonassessable and
are free of preemptive rights.

         4.10 SUBSIDIARIES. As of the Closing Date and immediately after giving
effect to the Transactions, the Company has no Subsidiaries other than the
Purchased Entities.

         4.11 COMPLIANCE WITH STATUTES, ETC. The Company is in compliance with
all applicable statutes, regulations and orders of, and all applicable
restrictions imposed by, all governmental bodies, domestic or foreign, in
respect of the conduct of its business and the ownership of its property, except
such noncompliances as would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.

         4.12 INVESTMENT COMPANY ACT. The Company is not an "investment company"
or a company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.

         4.13 PUBLIC UTILITY HOLDING COMPANY ACT. The Company is not a "holding
company," or a "subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company" within
the meaning of the Public Utility Holding Company Act of 1935, as amended.

         4.14 INDEBTEDNESS. Schedule B sets forth a true and complete list of
all Indebtedness (exclusive of Indebtedness pursuant to (x) this Agreement and
(y) other Indebtedness in an aggregate principal amount not to exceed $100,000)
of the Company as of the Closing Date and which is to remain outstanding
immediately after giving effect to the Transactions and the incurrence of the
Interim Loan on such date, in each case showing the aggregate principal amount
thereof (and the aggregate amount of any undrawn commitments with respect
thereto) and the name of the respective borrower and any other entity which
directly or indirectly guaranteed such debt.

         4.15 TRANSACTIONS. As of the Closing Date, all consents and approvals
of, and filings and registrations with, and all other actions in respect of, all
governmental agencies, authorities or instrumentalities required of the Company
in order to make or consummate the transactions contemplated by the Loan
Documents and the Credit Agreement will have been obtained, given, filed or
taken and are or will be in full force and effect (or effective judicial relief
with respect thereto has been obtained), except where the failure to so obtain,
give, file or take either would not have a Material Adverse Effect or resulted
from any action or inaction of the Purchased Entities prior to the consummation
of the Transactions. There does not exist any judgment, order or injunction
against the Company prohibiting the making of the Interim Loan hereunder or the
performance by the Company of its obligations under the Loan Documents and the
Credit



Agreement. All actions required to be taken by the Company pursuant to or in
furtherance of the transactions contemplated by the Loan Documents and the
Credit Agreement have been taken in material compliance with the Loan Documents
and Credit Agreement and all applicable laws.

         4.16 INSURANCE. Set forth on Schedule D hereto is a true, correct and
complete summary of all material insurance carried by the Company on and as of
the Closing Date, with the amounts insured set forth therein.

         4.17 NO DEFAULT. No event has occurred and is continuing which
constitutes a Default or an Event of Default.

         4.18 COMPLIANCE WITH CONTRACTS, ETC. The Company is not (A) in
violation of its certificate of incorporation, bylaws or other organizational
documents or (B) in violation of any applicable law, ordinance, administrative
or governmental rule or regulation, or (C) in default (nor will an event occur
which with notice or passage of time or both would constitute such a default)
under or in violation of any indenture or loan or credit agreement or any other
material agreement or instrument to which it is a party or by which it or any of
its properties or assets may be bound or affected, except, with respect to
clauses (B) and (C), for such violations or defaults that would not, singly or
in the aggregate, have a Material Adverse Effect.

         4.19 USE OF PROCEEDS; MARGIN STOCK, ETC. The proceeds of the Interim
Loan will be used solely for the purposes specified herein. Neither the making
of the Interim Loan nor the use of proceeds thereof will violate or be
inconsistent with the provisions of Regulation T, U or X, of the Board of
Governors of the Federal Reserve System.

         4.20 SENIOR INDENTURE; ETC. The Company shall (to the extent such
documents are executed), on the date it executes and delivers the Senior
Indenture, the Registration Rights Agreement and the Exchange Notes, have the
full corporate power, authority and capacity to do so and to perform all of its
obligations to be performed thereunder; all corporate and other acts, conditions
and things required to be done and performed or to have occurred prior to such
execution and delivery to constitute them as valid and legally binding
obligations of the Company enforceable against the Company in accordance with
their respective terms except to the extent that the enforceability thereof may
be limited by applicable bankruptcy, insolvency, reorganization or similar laws
affecting the enforcement of creditors' rights generally or by general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law), shall have been done and performed and shall
have occurred in due compliance with all applicable Laws; on the date, if any,
of such execution and delivery by the Company, the Senior Indenture, the
Registration Rights Agreement and the Exchange Notes shall constitute legal,
valid, binding and unconditional obligations of the Company enforceable against
the Company in accordance with their respective terms, except to the extent that
the enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of creditors' rights
generally or by general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law).



         4.21 AFFILIATE TRANSACTIONS. Neither the Company nor any Subsidiary is
a party to any transaction with any Permitted Holder, or any officer or director
of any Permitted Holder, except as set forth on Schedule E.

         4.22 NO PRIOR BUSINESS. The Company has not, at any time since its
formation, and, until the Closing Date, will not have (A) owned any assets or
property, (B) entered into any transaction (other than (i) the transactions
contemplated by, or required in connection with, the Transactions or (ii)
administrative transactions in connection with its formation and organization),
or (C) engaged in any business other than the negotiation of the transactions
contemplated by, or required in connection with, the Transactions.

SECTION 5 AFFIRMATIVE COVENANTS

         The Company covenants and agrees that, until the Interim Loan and the
Interim Notes and all other amounts due under this Agreement have been
indefeasibly paid in full it shall perform all covenants in this Section 5
required to be performed by it:

         5.1 FINANCIAL STATEMENTS AND OTHER REPORTS.  The Company will furnish
to the Agent:

                  (a) FINANCIAL REPORTS. Whether or not required by the rules
and regulations of the Commission, so long as any Interim Notes are outstanding:

                           (1) all quarterly and annual financial information
that would be required to be contained in a filing with the Commission on
Forms 10-Q and 10-K if the Company were required to file such Forms, including
a "Management's Discussion and Analysis of Financial Condition and Results
of Operations" that describes the financial condition and results of operations
of the Company and its consolidated Subsidiaries and, with respect to the
annual information only, a report thereon by the Company's certified
independent accountants;

                           (2) all current reports that would be required to be
filed with the Commission on Form 8-K if the Company were required to file
such reports, in each case within the time periods specified in the Commission
rules and regulations; and

                           (3) in addition, following the consummation of the
Exchange Offer, whether or not required by the rules and regulations of the
SEC, the Company will file a copy of all such information and reports with the
Commission for public availability within the time periods specified in the
SEC's rules and regulations (unless the Commission will not accept such a
filing).

                  (b) OFFICER'S CERTIFICATES. At the time of the delivery of the
financial statements provided for in Section 5.01(a), a certificate in the form
of Exhibit VI of the Chief Executive Officer, President, Vice President or Chief
Financial Officer of the Company to the effect that, to the best of such
officer's knowledge, no Default or Event of Default has occurred and is
continuing or, if any Default or Event of Default has occurred and is
continuing, specifying the nature and extent thereof and the action which the
Company has taken, is taking, or proposes to take with respect to each such
condition or event.



                  (c) NOTICE OF DEFAULT. Promptly, and in any event within five
Business Days after an Authorized Officer of the Company obtains knowledge
thereof, notice of the occurrence of any event which constitutes a Default or
Event of Default.

                  (d) OTHER REPORTS AND FILINGS. Promptly, copies of all notices
of default in the observance or performance by the Company or any of its
Subsidiaries of any agreement or condition relating to any Indebtedness in a
principal amount equal to or exceeding $25,000,000 in the aggregate (other than
the Obligations) or contained in any instrument or agreement evidencing,
securing or relating thereto.

                  (e) OTHER INFORMATION. From time to time, such other
information or documents (financial or otherwise) with respect to the Company or
its Subsidiaries as the Agent may reasonably request in writing.

         5.2 EXCHANGE OF INTERIM NOTES. On any date after the first anniversary
of the Closing Date, the Company shall, on the 15th Business Day following
receipt of (1) the written request (the "EXCHANGE REQUEST") of a holder of
Interim Notes requesting the exchange of Interim Notes for Exchange Notes and
(2) the written consent of the Majority Lenders consenting to such exchange:

                  (i) Execute and deliver and cause a bank or trust company
acting as trustee thereunder to execute and deliver, the Senior Indenture, if
such Senior Indenture has not previously been executed and delivered;

                  (ii) Execute and deliver to all of the holders or beneficial
owners in accordance with the Senior Indenture notes in the form attached to the
Senior Indenture (the "EXCHANGE NOTES") in exchange for all outstanding Interim
Notes dated the date of the issuance of such Exchange Notes, payable to the
order of such holder or owner, as the case may be, in the same principal amount
as such Interim Notes being exchanged;

                  (iii) Execute and deliver, to such holder or owner, as the
case may be, a Registration Rights Agreement in the form of Exhibit II, if such
Registration Rights Agreement has not previously been executed and delivered or,
if such Registration Rights Agreement has previously been executed and delivered
and such holder or owner is not already a party thereto, permit such holder or
owner to become a party thereto; and

                  (iv) Deliver to the trustee under the Indenture an opinion of
counsel, in form and substance reasonably satisfactory to the trustee (and
subject to customary exceptions and qualifications), with respect to the valid
existence of the Company, the power and authority thereof, the due execution and
delivery of each of the Senior Indenture, the Exchange Notes and the
Registration Rights Agreement, and the enforceability of each of the Senior
Indenture, the Exchange Notes and the Registration Rights Agreement against the
Company.

         Interim Notes delivered to the Company under this Section 5.2 in
exchange for Exchange Notes shall be canceled by the Company and the
corresponding amount of the Interim Loan deemed repaid and the Exchange Notes
shall be governed by and construed in accordance with the terms of the Senior
Indenture.



         The bank or trust company acting as trustee under the Senior Indenture
shall be selected by the Agent and shall at all times be a corporation organized
and doing business under the laws of the United States of America or the State
of New York, in good standing and having an office in the Borough of Manhattan,
in The City of New York, which is authorized under such laws to exercise
corporate trust powers and is subject to supervision or examination by Federal
or State authority; and, in connection with the foregoing, U.S. Bank, National
Association or The Bank of New York are approved by the Agent to be the trustee
under the Senior Indenture.

         5.3 PAYMENTS IN U.S. DOLLARS. All payments of any Obligations to be
made hereunder or under the Interim Notes by the Company or any other obligor
with respect thereto shall be made solely in U.S. Legal Tender.

         5.4 REGISTER. The Company hereby designates the Agent to serve as the
Company's agent, solely for purposes of this Section 5.4, to maintain a register
(the "REGISTER") on which they will record the Interim Loan made by each of the
Lenders and each repayment in respect of the principal amount of the Interim
Loan of each Lender. Failure to make any such recordation, or any error in such
recordation shall not affect the Company's obligations in respect of such
Interim Loan. With respect to any Lender, the transfer of the Interim Loan
Commitment of such Lender and the rights to the principal of, and interest on,
the Interim Loan made pursuant to such Interim Loan Commitment shall not be
effective until such transfer is recorded on the Register maintained by the
Agent with respect to ownership of such Interim Loan Commitment and Interim Loan
and prior to such recordation all amounts owing to the transferor with respect
to such Interim Loan Commitment and Interim Loan shall remain owing to the
transferor. The registration of assignment or transfer of all or part of any
Interim Loan Commitment and Interim Loan shall be recorded by the Agent on the
Register only upon the receipt by the Agent of a properly executed and delivered
assignment and assumption agreement pursuant to Section 10.2A. Coincident with
the delivery of such an assignment and assumption agreement to the Agent for
acceptance and registration of assignment or transfer of all or part of the
Interim Loan, or as soon thereafter as practicable, the assigning or transferor
Lender shall surrender the Interim Note evidencing such Interim Loan, and
thereupon one or more new Interim Notes of the same type and in the same
aggregate principal amount shall be issued to the assigning or transferor Lender
and/or the new Lender.

SECTION 6         NEGATIVE COVENANTS

         The Company covenants and agrees that until the satisfaction in full of
the Interim Loan and the Interim Notes and all other Obligations due under this
Agreement it will fully and timely perform all covenants in this Section 6.

         6.1 LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS. The Company
will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, create, incur, assume, guarantee, acquire, become liable,
contingently or otherwise, with respect to, or otherwise become responsible for
payment of (collectively, "incur") any Indebtedness other than Permitted
Indebtedness. Notwithstanding the foregoing, the Company and its Restricted
Subsidiaries may incur Indebtedness (including Acquired Indebtedness) if on the
date of (after giving effect to) the incurrence of such Indebtedness, the
Consolidated Fixed Charge Coverage Ratio of the Company will be at least 2.0
to 1.0.



         6.2 LIMITATION ON LIENS. The Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume
or otherwise cause or suffer to exist any Liens (other than Permitted Liens) of
any kind against or upon any property or assets of the Company or any of its
Restricted Subsidiaries whether owned on the Closing Date or acquired after the
Closing Date, or any proceeds therefrom, unless all payments due under this
Agreement and the Interim Notes are secured on an equal and ratable basis with
the Indebtedness so secured until such time as such Indebtedness is no longer
secured by a Lien. If such Indebtedness is by its terms expressly subordinated
to the Interim Notes, the Lien securing such Indebtedness shall be subordinate
and junior to the Lien securing the Interim Notes with the same relative
priority as such subordinate or junior Indebtedness shall have with respect to
the Interim Notes.

         6.3 LIMITATION ON RESTRICTED PAYMENTS.  (a) The Company will not, and
will not cause or permit any of its Restricted Subsidiaries to, directly or
indirectly:

                  (1) declare or pay any dividend or make any distribution
(other than dividends or distributions payable (i) in Qualified Capital Stock of
the Company, (ii) to the Company or a Restricted Subsidiary or (iii) by a
Subsidiary that is not a Wholly-Owned Restricted Subsidiary on a pro rata basis
to the holders of its equity interests, but only if the holders include the
Company, a Wholly-Owned Restricted Subsidiary or a Person who is not otherwise
an Affiliate of the Company);

                  (2) purchase, redeem or otherwise acquire or retire for value
any Capital Stock of the Company, or any Restricted Subsidiary or Affiliate of
the Company (other than any such Capital Stock owned by the Company or any
Wholly-Owned Restricted Subsidiary);

                  (3) make any principal payment on, purchase, defease, redeem,
prepay, decrease or otherwise acquire or retire for value, prior to any
scheduled final maturity, scheduled repayment or scheduled sinking fund payment,
any Indebtedness of the Company that is subordinate or junior in right of
payment to the Interim Notes; or

                  (4) make any Investment (other than Permitted Investments);

                  (each of the foregoing actions set forth in clauses (1), (2),
(3) and (4) being referred to as a "RESTRICTED PAYMENT"), if at the time of such
Restricted Payment or immediately after giving effect thereto:

                  (i) a Default or an Event of Default shall have occurred and
be continuing;

                  (ii) the Company is not permitted to incur at least $1.00 of
additional Indebtedness (other than Permitted Indebtedness) pursuant to Section
6.1; or

                  (iii) the aggregate amount of Restricted Payments (including
such proposed Restricted Payment) made subsequent to the Closing Date (the
amount expended for such purposes, if other than in cash, being the Fair Market
Value of such property at the time of the making thereof) shall exceed the sum
of:



                           (A) 50% of the cumulative Consolidated Net Income (or
if cumulative Consolidated Net Income is a loss, minus 100% of such loss) of
the Company during the period beginning on the first day of the first fiscal
quarter after the Closing Date and ending on the last day of the Company's
most recent fiscal quarter ending prior to the date of such Restricted Payment
for which financial statements are available (the "REFERENCE DATE") (treating
such period as a single accounting period); plus

                           (B) (i) 100% of the aggregate net cash proceeds and
the Fair Market Value of other assets (other than Indebtedness of any Person
that, upon its transfer to the Company, would not constitute Cash Equivalents)
received by the Company from any Person (other than a Subsidiary of the
Company) from the issuance and sale subsequent to the Closing Date and on or
prior to the Reference Date of Qualified Capital Stock of the Company and
(ii) 100% of any cash and the Fair Market Value of other assets (other than
Indebtedness of any Person that, upon its contribution to the Company, would
not constitute Cash Equivalents) received by the Company from its shareholders
as a capital contribution after the Closing Date; plus

                           (C) 100% of the aggregate net cash proceeds received
from the issuance of Indebtedness or shares of Disqualified Capital Stock of
the Company (other than to a Restricted Subsidiary of the Company) that have
been converted into or exchanged for Qualified Capital Stock of the Company
subsequent to the Closing Date and on or prior to the Reference Date; plus

                           (D) the net reduction in the Investments (other than
Permitted Investments) made by the Company or any Restricted Subsidiary in any
Person (other than a Restricted Subsidiary) to the extent such reduction
results from net proceeds received by the Company and its Restricted
Subsidiaries upon the (x) repurchase, repayment or redemption of such
Investments by such Person (but only to the extent constituting return of
capital), or (y) sale of such Investment, in each case, in an amount not
exceeding the aggregate amount of such Investments; plus

                           (E) the Company's or any Restricted Subsidiary's
portion (proportionate to the Company's or such Restricted Subsidiary's equity
interest in such Subsidiary) of the fair market value of the net assets of any
Unrestricted Subsidiary at the time such Unrestricted Subsidiary is designated
a Restricted Subsidiary in an amount not to exceed the amount of Investments
(excluding Permitted Investments) previously made (and treated as a Restricted
Payment) by the Company or any of its Restricted Subsidiaries in such
Unrestricted Subsidiary.

                  In the case of clause (iii)(B) above, any net cash proceeds
from issuances and sales of Qualified Capital Stock of the Company financed
directly or indirectly using funds borrowed from the Company or any Subsidiary
of the Company, shall be excluded until and to the extent such borrowing is
repaid.

                  (b) The provisions set forth in the immediately preceding
clause (a) do not prohibit:



                  (1) the payment of any dividend or other distribution or
redemption within 60 days after the date of declaration of such dividend or call
for redemption if such payment would have been permitted on the date of
declaration or call for redemption;

                  (2) the acquisition of any shares of Qualified Capital Stock
of the Company, solely in exchange for other shares of Qualified Capital Stock
of the Company;

                  (3) the acquisition of any Indebtedness of the Company that is
subordinate or junior in right of payment to the Interim Notes either (i) solely
in exchange for shares of Qualified Capital Stock of the Company, or (ii)
through the application of net proceeds of a sale for cash (other than to a
Restricted Subsidiary of the Company) within 60 days after such sale, if no
Default or Event of Default would exist after giving effect thereto, of
Refinancing Indebtedness;

                  (4) an Investment either (i) solely in exchange for shares of
Qualified Capital Stock of the Company or (ii) through the application of the
net proceeds of a sale for cash (other than to a Subsidiary of the Company) of
shares of Qualified Capital Stock of the Company within 60 days after such sale;

                  (5) in the event of a Change of Control, and if no Default
shall have occurred and be continuing or would exist after giving effect, the
payment, purchase, redemption, defeasance or other acquisition or retirement of
Indebtedness that is subordinated to the Interim Notes, in each case, at a
purchase price not greater than 101% of the principal amount of such
Indebtedness (or, if such Indebtedness was issued with original issue discount,
101% of the accreted value), plus any accrued and unpaid interest thereon;
provided, that prior to such payment, purchase, redemption, defeasance or other
acquisition or retirement, the Company has made a Change of Control Offer with
respect to the Interim Notes as a result of such Change of Control and has
repurchased all Interim Notes validly tendered and not withdrawn in connection
with such Change of Control Offer;

                  (6) payments or distributions to dissenting stockholders of
Capital Stock of the Company pursuant to applicable law, pursuant to or in
connection with a consolidation, merger or transfer of assets that complies with
the provisions of this Agreement applicable to mergers, consolidations and
transfers of all or substantially all of the property and assets of the Company
or any of its Restricted Subsidiaries;

                  (7) payments, advances or dividends to any direct or indirect
parent entity of the Company to be used by such entity solely to pay its
franchise taxes and reasonable directors' fees and other fees and expenses owing
by it in the ordinary course of business; provided, that such advances are in an
aggregate amount not to exceed $2.0 million in any fiscal year, and actually
used by such entity to pay such taxes, fees and expenses;

                  (8) the application of the proceeds from the issuance of the
Interim Notes, borrowings under the Credit Agreement and sales of the Company's
Capital Stock on the Closing Date as described on Schedule F;

                  (9) the purchase, repurchase, retirement, redemption or other
acquisition of shares of Capital Stock of the Company, any of its Subsidiaries
or any direct or indirect parent of



the Company from employees, former employees, directors, former directors or
consultants of the Company, any of its Subsidiaries or any direct or indirect
parent entity of the Company (or permitted transferees of such employees, former
employees, directors or former directors), pursuant to the terms of the
agreements (including employment agreements) or plans (or amendments thereto)
approved by the Board of Directors of the Company or of any direct or indirect
parent of the Company under which such individuals purchase or sell or are
granted the option to purchase or sell, shares of such Capital Stock; provided,
that the aggregate amount of such repurchases and other acquisitions in any
calendar year shall not exceed the lesser of (i) the sum of (x) $5 million and
(y) the aggregate amount of Restricted Payments permitted (but not made)
pursuant to this clause (10) in prior calendar years and (ii) $10.0 million;
provided further, that such amount in any calendar year may be increased by an
amount not to exceed the net cash proceeds of key man life insurance policies
received by the Company after the Closing Date;

                  (10) repurchases of Capital Stock deemed to occur upon
exercise of stock options, warrants or other similar rights if such Capital
Stock represents a portion of the exercise price of such options, warrants or
other similar rights;

                  (11) cash payments in lieu of the issuance of fractional
shares in connection with the exercise of warrants, options or other securities
convertible into or exchangeable for Qualified Capital Stock of the Company;
provided, that any such cash payment shall not be for the purpose of evading the
limitations imposed by this Section 6.3 (as determined in good faith by the
Board of Directors of the Company);

                  (12) if no Default or Event of Default has occurred and is
continuing or would exist after giving effect thereto, the payment of the
Management Fee; provided, that the aggregate amount of such management fee in
any calendar year shall not exceed the greater of (i) $5.0 million or (ii) 2.5%
of Consolidated EBITDA of the Company;

                  (13) Restricted Payments made to effect a Qualified Containers
Transaction, other than a Restricted Payment made by the Company;

                  (14) any Restricted Payment made out of the net cash proceeds
or the Fair Market Value of other assets received by the Company from any Person
(other than a Subsidiary of the Company) from the substantially concurrent sale
of, or made by exchange for, Qualified Capital Stock of the Company or a
substantially concurrent capital contribution received by Company from its
stockholders;

                  (15) if no Default or Event of Default shall have occurred and
be continuing or would exist after giving effect thereto, other Restricted
Payments not to exceed $25.0 million in the aggregate following the Closing
Date; and

                  (16) the payment of dividends on Disqualified Capital Stock
not issued in violation of Section 6.1 (provided, that the amount of any such
dividends during any period shall be included in the calculation of Consolidated
Interest Expense for such period for the purposes of determining the Company's
compliance with Section 6.1).



                  In determining the aggregate amount of Restricted Payments
made subsequent to the Closing Date in accordance with the preceding clause
(a)(iii) amounts expended pursuant to clauses (1), (4)(ii), (5), (9), (14) and
(15) shall be included in such calculation.

         6.4 SENIOR DEBT AMENDMENTS.

         The Company will not, and will not permit any of its Restricted
Subsidiaries to, without the prior written consent of the Agent, enter into any
amendment which is adverse to the Agent or the Lenders of (or permit any
agreement in respect of debt that Refinances the debt incurred pursuant to the
Credit Agreement to become effective the effect of which would impose on the
Company terms that if implemented pursuant to an amendment to the Credit
Agreement would be prohibited by this Section) any term of the Credit Agreement
consisting of or relating to (i) clause (iv) of the definition of "Permitted
Dividend," (ii) interest rates, fees, and aggregate principal amount of loans to
be outstanding, in each case in excess of the amounts contemplated by the
definition of "Senior Debt" in the Intercreditor Agreement, (iii) the relative
payment priority of the "IO Distributable Amount", (iv) the definition of "Legal
Final Payment Date", (v) the defined terms "Designated Event of Default" and "IO
Distributable Amount", (vi) the relative payment priority of the "IO
Distributable Amount" and (vii) Section 3.6(b) of the Credit Agreement.

         6.5 MERGER, CONSOLIDATION AND SALE OF ASSETS. Except in connection with
any Qualified Container Transaction or any leases of Containers by the
Restricted Subsidiaries in the ordinary course of business, the Company will
not, in a single transaction or series of related transactions, consolidate or
merge with or into any Person, or sell, assign, transfer, lease, convey or
otherwise dispose of (or cause or permit any Restricted Subsidiary to sell,
assign, transfer, lease, convey or otherwise dispose of) all or substantially
all of the Company's assets (determined on a consolidated basis for the Company
and its Restricted Subsidiaries) whether as an entirety or substantially as an
entirety to any Person unless:

                  (1) either:

                           (a) the Company shall be the surviving or continuing
corporation; or

                           (b) the Person (if other than the Company) formed by
such consolidation or into which the Company is merged or the Person which
acquires by sale, assignment, transfer, lease, conveyance or other disposition
the properties and assets of the Company and of the Company's Restricted
Subsidiaries substantially as an entirety (the "SURVIVING ENTITY"):

                                    (x) shall be an entity organized and validly
existing under the laws of the United States or any State thereof or the
District of Columbia; and

                                    (y) shall expressly assume, by supplemental
agreement (in form and substance reasonably satisfactory to the Agent),
executed and delivered to the Agent, the due and punctual payment of the
principal of, and premium, if any, interest and Liquidated Damages, if any, on
all of the Interim Notes and the performance of every covenant of the Interim
Notes, this Agreement, and the Registration Rights Agreement on the part of
the Company to be performed or observed thereunder;



                  (2) immediately after giving effect to such transaction and
the assumption contemplated by clause (1)(b)(y) above (including giving effect
to any Indebtedness and Acquired Indebtedness incurred or anticipated to be
incurred in connection with or in respect of such transaction);

                           (a) the Company is able to incur at least $1.00 of
additional Indebtedness (other than Permitted Indebtedness) in compliance with
Section 6.1; and

                           (b) no Default or Event of Default shall have
occurred or be continuing.

         This covenant will not apply to (1) a merger of the Company with an
affiliate solely for the purpose of reincorporating the Company in another
jurisdiction; or (2) any consolidation or merger, or any sale, assignment,
transfer, conveyance, lease or other disposition of assets among the Restricted
Subsidiaries of the Company.

         For purposes of the foregoing, the transfer (by lease, assignment, sale
or otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Restricted
Subsidiaries of the Company the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Company, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company.

         Upon any consolidation, combination or merger or any transfer of all or
substantially all of the assets of the Company in accordance with the foregoing,
in which the Company is not surviving or the continuing corporation, the
successor Person formed by such consolidation or into which the Company is
merged or to which such conveyance, lease or transfer is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Agreement and the Interim Notes with the same effect as if such
surviving entity had been named as such.

         6.6 LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
RESTRICTED SUBSIDIARIES. The Company will not, and will not cause or permit any
of its Restricted Subsidiaries to, directly or indirectly, create or otherwise
cause or permit to exist or become effective any encumbrance or restriction on
the ability of any Restricted Subsidiary to:

                  (1) pay dividends or make any other distributions on or in
respect of its Capital Stock;

                  (2) make loans or advances or to pay any Indebtedness or other
obligation owed to the Company or any other Restricted Subsidiary; or

                  (3) transfer any of its property or assets to the Company or
any other Restricted Subsidiary;

         except for such encumbrances or restrictions existing under or by
reason of:

                           (a) applicable law, rule, regulation or order;



                           (b) this Agreement;

                           (c) customary non-assignment provisions of any
contract, license or lease of any Restricted Subsidiary to the extent such
provisions restrict the transfer of the lease or the property leased thereunder;

                           (d) any instrument governing Acquired Indebtedness,
which encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person or the properties
or assets of the Person so acquired;

                           (e)       the Credit Agreement;

                           (f) any encumbrance or restriction on a Qualified
Container Subsidiary under any agreement entered into in connection with any
Qualified Containers Transaction or any related Qualified Containers
Indebtedness;

                           (g) any encumbrance or restriction pursuant to an
agreement in effect or entered into on the Closing Date (and all replacements
or substitutions thereof on terms not materially more adverse to the Lenders
and not materially less favorable or materially more onerous to the Company
and its Restricted Subsidiaries than those contained in the Existing
Indebtedness on the Closing Date)

                           (h) restrictions on the transfer of assets subject to
any Permitted Lien;

                           (i) customary agreements (i) to sell assets or
Capital Stock permitted under this Agreement pending the closing of such sale
or (ii) relating to the transfer of, or in licenses related to, copyrights,
patents or other intellectual property;

                           (j) provisions in joint venture agreements and other
similar agreements (in each case relating solely to the respective joint
venture or similar entity or the equity interests therein);

                           (k) Purchase Money Indebtedness or Capitalized Lease
Obligations permitted under this Agreement; provided, that such encumbrances
and restrictions relate only to the assets financed with such Indebtedness;

                           (l) restrictions on cash or other deposits under bona
fide arrangements with customers entered into in the ordinary course of
business;

                           (m) Indebtedness of any Foreign Subsidiary permitted
under this Agreement;

                           (n) Refinancing Indebtedness; provided that the
restrictions contained in the agreements governing such Refinancing
Indebtedness are not materially more restrictive, taken as a whole, than those
contained in the agreements governing the Indebtedness being refinanced;



                           (o) agreements or instruments that prohibit the
payment of dividends or the making of other distributions with respect to
Capital Stock other than on a pro rata basis; and

                           (p) with respect to any Restricted Subsidiary (other
than a Foreign Subsidiary), any encumbrance or restriction contained in the
terms of any Indebtedness, or any agreement pursuant to which such Indebtedness
was issued, if (1) the encumbrance or restriction applies only in the event
of a payment default or a default with respect to a financial covenant
contained in such Indebtedness or agreement, (2) the encumbrance or restriction
is not materially more disadvantageous to the Lenders than is customary in
comparable financings and (3) such encumbrance or restriction will not
materially affect the Company's ability to make principal or interest payments
on the Interim Notes.

         6.7 LIMITATIONS ON TRANSACTIONS WITH AFFILIATES. The Company will not,
and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, enter into or permit to exist any transaction or series of related
transactions (including, without limitation, the purchase, sale, lease or
exchange of any property or the rendering of any service) with, or for the
benefit of, any of its Affiliates (each, an "AFFILIATE Transaction"), other than

                  (i) Permitted Affiliate Transactions, and

                  (ii) Affiliate Transactions on terms that are no less
favorable than those that might reasonably have been obtained in a comparable
transaction at such time on an arm's-length basis from a Person that is not an
Affiliate of the Company or such Restricted Subsidiary.

         With respect to all Affiliate Transactions (other than Permitted
Affiliate Transactions):

                  (i) if such Affiliate Transaction involves aggregate payments
or other property with a Fair Market Value in excess of $10.0 million it will be
approved by a majority of the members of the Board of Directors of the Company
(including a majority of the disinterested members thereof), such approval to be
evidenced by a Board Resolution stating that such Board of Directors has
determined that such transaction complies with the foregoing provisions; and

                  (ii) if such Affiliate Transaction involves an aggregate Fair
Market Value of more than $25.0 million, the Company will, prior to the
consummation thereof, obtain a favorable opinion as to the fairness of the
financial terms of such transaction or series of related transactions to the
Company or the relevant Restricted Subsidiary, as the case may be, from an
Independent Financial Advisor and file the same with the Agent.

         The restrictions set forth in this covenant shall not apply to the
following transactions (collectively, "PERMITTED AFFILIATE TRANSACTIONS"):

                  (1) reasonable fees and compensation paid to, and indemnity
provided on behalf of, officers, directors, employees or consultants of the
Company or any Restricted Subsidiary;



                  (2) transactions exclusively between or among the Company and
any of its Wholly-Owned Restricted Subsidiaries or exclusively between or among
Wholly-Owned Restricted Subsidiaries;

                  (3) any agreement as in effect as of the Closing Date or any
transaction contemplated thereby and any amendment thereto or any replacement
agreement thereto, so long as any such amendment or replacement agreement is not
more disadvantageous to the Lenders, the Company or the Restricted Subsidiaries
in any material respect than the original agreement as in effect on the Closing
Date;

                  (4) Restricted Payments permitted by this Agreement (except
for Restricted Payments described in Section 6.3(b)(16)) or Permitted
Investments;

                  (5) any merger or other transaction with an Affiliate solely
for the purpose of reincorporating the Company in another jurisdiction or
creating a holding company of the Company;

                  (6) any reasonable employment, stock option, stock repurchase,
employee benefit compensation, business expense reimbursement, severance,
termination or other employment-related agreements, arrangements or plans
entered into in good faith by the Company or any of its Restricted Subsidiaries
in the ordinary course of business;

                  (7) any loans or advances to employees in the ordinary course
of business in accordance with the past practices of the Company or the
Restricted Subsidiaries; and

                  (8) any issuance of Qualified Capital Stock of the Company.

         6.8 CONDUCT OF BUSINESS. The Company will not, and will not permit any
of its Restricted Subsidiaries to, engage in any businesses other than Permitted
Businesses except to such extent as would not be material to the Company and its
Restricted Subsidiaries taken as a whole.

         6.9  RESERVED.

         6.10 LIMITATION ON ASSET SALES.  The Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly,
consummate any Asset Sale unless:

                  (1) the Company or the applicable Restricted Subsidiary, as
the case may be, receives consideration at the time of such Asset Sale at least
equal to the Fair Market Value of the assets sold or otherwise disposed;

                  (2) at least 75% of the consideration received by the Company
or the Restricted Subsidiary, as the case may be, from such Asset Sale is in the
form of cash or Cash Equivalents received at the time of such disposition;
provided that the amount of any liabilities (as shown on the most recent
applicable balance sheet) of the Company or such Restricted Subsidiary (other
than liabilities that are by their terms subordinated to the Interim Notes) that
are assumed by the transferee of any such assets shall be deemed to be cash for
purposes of this



provision if the documents governing such liabilities provide that there is no
further recourse to the Company or any of its Subsidiaries with respect to such
liabilities; and

                  (3) all of the Net Cash Proceeds in respect thereof are
applied by the Company or a Restricted Subsidiary of the Company in accordance
with Section 2.4A(ii)(a).

                  In the event of the transfer of substantially all (but not
all) of the property and assets of the Company and its Restricted Subsidiaries
as an entirety to a Person in a transaction permitted under Section 6.5 that
does not constitute a Change of Control, the successor entity shall be deemed to
have sold the properties and assets of the Company and its Restricted
Subsidiaries not so transferred for purposes of this Section 6.9, and shall
comply with the provisions of this 6.9 and Section 2.4A(ii)(a) with respect to
such deemed sale as if it constituted an Asset Sale. The Fair Market Value of
such properties and assets of the Company or its Restricted Subsidiaries deemed
to be sold shall be deemed to be Net Cash Proceeds for purposes of this Section
6.9 and Section 2.4A(ii)(a).


SECTION 7 EVENTS OF DEFAULT

         If any of the following conditions or events ("EVENTS OF DEFAULT")
shall occur and be continuing:

         7.1 FAILURE TO MAKE PAYMENTS (OTHER THAN PRINCIPAL) WHEN DUE. The
failure to pay interest and Liquidated Damages, if any, on any Interim Notes or
any other amount (other than principal for the Interim Notes) when the same
becomes due and payable and the default continues for a period of 30 days;

         7.2 FAILURE TO MAKE PRINCIPAL PAYMENTS WHEN DUE. The failure to pay the
principal of or premium, if any, on any Interim Notes, when such principal
becomes due and payable, at maturity, upon redemption or otherwise (including
the failure to make an Asset Sale Prepayment or a payment to purchase Interim
Notes tendered pursuant to a Change of Control Offer, in each case when such
payments are due, or the failure to repay the principal outstanding with respect
to the Interim Notes upon the consummation of a Note Offering);

         7.3 OTHER DEFAULTS UNDER AGREEMENT OR LOAN DOCUMENTS. A default in the
observance or performance of any other covenant or agreement contained in this
Agreement or any other Loan Document (other than the payment of the principal
of, or premium, if any, or interest or and Liquidated Damages, if any, on any
Interim Note) which default continues for a period of 30 days after the Company
receives written notice specifying the default (and demanding that such default
be remedied) from the Agent or the Lenders of at least 25% of the outstanding
principal amount of the Interim Notes (except in the case of a default with
respect to Section 6.5, which will constitute an Event of Default with such
notice requirement but without such passage of time requirement);

         7.4 DEFAULT IN OTHER AGREEMENTS. The failure to pay at final maturity
(giving effect to any applicable grace periods and any extensions thereof) the
principal amount of any Indebtedness of the Company or any Restricted
Subsidiary, or the acceleration of the final stated maturity of any such
Indebtedness (which acceleration is not rescinded, annulled or otherwise cured
within 30 days from the date of acceleration) if the aggregate principal amount
of such



Indebtedness, together with the principal amount of any other such Indebtedness
in default for failure to pay principal at final maturity or which has been
accelerated (in each case with respect to which the 30-day period described
above has elapsed), aggregates $25.0 million or more at any time;

         7.5 JUDGMENTS AND ATTACHMENTS. One or more judgments in an aggregate
amount in excess of $25.0 million shall have been rendered against the Company
or any of its Restricted Subsidiaries (other than any judgment as to which a
reputable and solvent third party insurer has accepted full coverage) and such
judgments remain undischarged, unpaid or unstayed for a period of 60 days after
such judgment or judgments become final and non-appealable;

         7.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF CUSTODIAN, ETC. A court of
competent jurisdiction enters a Bankruptcy Order under any Bankruptcy Law that:

                  (A) is for relief against the Company or any Significant
Subsidiary in an involuntary case or proceeding, or

                  (B) appoints a Custodian of the Company or any Significant
Subsidiary for all or substantially all of its properties, or

                  (C) orders the liquidation of the Company or any Significant
Subsidiary;

and in each case the Bankruptcy Order remains unstayed and in effect for 60
consecutive days.

         7.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF CUSTODIAN, ETC. The Company
or any Significant Subsidiary pursuant to or within the meaning of any
Bankruptcy Law:

                  (A) commences a voluntary case or proceeding, or

                  (B) consents to the entry of a Bankruptcy Order for relief
against it in an involuntary case or proceeding, or

                  (C) consents to the appointment of a Custodian of it or for
all or substantially all of its property, or

                  (D) makes a general assignment for the benefit of its
creditors or files a proposal or scheme of arrangement involving the
rescheduling or composition of its indebtedness, or

                  (E) consents to the filing of a petition in bankruptcy against
it.

         7.8 BREACH OF WARRANTY. Any representation or warranty made by the
Company pursuant to this Agreement shall be false or incorrect in any material
respect on the date as of which made or deemed made;

         THEN (i) upon the occurrence and during the continuation of any Event
of Default described in the foregoing Section 7.6 or 7.7 with respect to the
Company, all of the unpaid principal amount of and accrued interest on the
Interim Loan and all other outstanding



Obligations shall automatically become immediately due and payable, without
presentment, demand, protest or other requirements of any kind, all of which are
hereby expressly waived by the Company, and the commitments of the Lenders
hereunder shall thereupon terminate, and (ii) upon the occurrence and during the
continuation of any Event of Default not referred to in clause (i), the Agent
shall, upon written notice of the holder or holders of at least 25% in aggregate
principal amount of the Interim Loan then outstanding, by written notice to the
Company and the agent under the Credit Agreement specifying the respective Event
of Default and that it is a "notice of acceleration" (the "ACCELERATION
NOTICE"), declare all of the unpaid principal amount of and accrued interest on
the Interim Loan and all other outstanding Obligations to be, and the same (x)
shall forthwith become, due and payable, or (y) if there are any amounts
outstanding under the Credit Agreement, shall become immediately due and payable
upon the first to occur of an acceleration under the Credit Agreement or five
business days after receipt by the Company and the agent under the Credit
Agreement of such Acceleration Notice but only if such Event of Default is then
continuing, and the obligations of the Lenders hereunder shall thereupon
terminate. Nevertheless, if at any time after acceleration of the maturity of
the Interim Loan, the Company shall pay all arrears of interest and all payments
on account of the principal thereof which shall have become due otherwise than
by acceleration (with interest on principal and, to the extent permitted by law,
on overdue interest, at the rates specified in this Agreement or the Interim
Notes) and all Defaults and Events of Default (other than non-payment of
principal of and accrued interest on the Interim Loan and the Interim Notes due
and payable solely by virtue of acceleration) shall be remedied or waived
pursuant to Section 10.6, then the Agent shall, upon written notice of the
holders of at least a majority in aggregate principal amount of the Interim Loan
then outstanding, by written notice to the Company rescind and annul the
acceleration and its consequences; but such action shall not affect any
subsequent Event of Default or Default or impair any right consequent thereon.

         Holders of not less than a majority in aggregate principal amount of
the then outstanding Interim Notes by notice to the Agent may on behalf of the
holders of all of the Interim Notes waive an existing Default or Event of
Default and its consequences hereunder, except a continuing Default or Event of
Default in the payment of the principal or interest on the Interim Notes or that
relates to any covenant or provision which cannot be modified or amended without
the consent of each holder of an Interim Note; provided, however, that the
holders of a majority in aggregate principal amount of the then outstanding
Interim Notes may rescind an acceleration and its consequences, including any
related payment default that resulted from such acceleration if (a) the
rescission would not conflict with any judgment or decree, (b) all existing
Events of Default have been cured or waived except nonpayment of principal or
interest that has become due solely because of the acceleration, (c) to the
extent the payment of such interest is lawful, interest on overdue installments
of interest and overdue principal, which has become due otherwise than by such
declaration of acceleration, has been paid and (d) the Agent and Lenders have
been reimbursed for all reasonable fees and expenses in accordance with the
terms of this Agreement. Upon any such waiver, such Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured for every purpose of this Agreement; but no such waiver shall extend to
any subsequent or other Default or impair any right consequent thereon.



SECTION 8 [INTENTIONALLY OMITTED]

SECTION 9 THE AGENT

         9.1 APPOINTMENT. Each Lender hereby irrevocably designates and appoints
Transamerica Accounts Holding Corporation as its Agent to act as specified
herein and in the other Loan Documents, and each Lender hereby irrevocably
authorizes Transamerica Accounts Holding Corporation as the Agent to take such
action on its behalf under the provisions of this Agreement and the other Loan
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
The Agent agrees to act as such upon the express conditions contained in this
Section 9. Notwithstanding any provision to the contrary elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein or in the other Loan
Documents, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against the Agent. The provisions
of this Section 9 are solely for the benefit of the Agent and the Lenders, and
neither the Company nor any of its Subsidiaries shall have any rights as a third
party beneficiary of any of the provisions hereof. In performing its functions
and duties under this Agreement, the Agent shall act solely as agent of the
Lenders and the Agent does not assume and shall not be deemed to have assumed
any obligation or relationship of agent or trust with or for the Company or any
of its Subsidiaries.

         9.2 DELEGATION OF DUTIES. The Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by them
with reasonable care except to the extent otherwise required by Section 9.3.

         9.3 EXCULPATORY PROVISIONS. Neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by them or such
Person under or in connection with this Agreement or the other Loan Documents
(except for their or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the Company, any of its
Subsidiaries or any of their respective officers contained in this Agreement,
any other Loan Documents, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Loan Document or for any failure of
the Company, any of its Subsidiaries or any of their respective officers to
perform its obligations hereunder or thereunder. The Agent shall not be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or the other Loan Documents, or to inspect the properties, books or
records of the Company or any of its Subsidiaries. The Agent shall not be
responsible to any Lender for the effectiveness, genuineness, validity,
enforceability, collectability or sufficiency of this Agreement or any other
Loan Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statement or in any
financial or other statements, instruments, reports, certificates or any other
documents in connection herewith



or therewith furnished or made by the Agent to the Lenders or by or on behalf of
the Company or any of its Subsidiaries to the Agent or any Lender or be required
to ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained herein or therein or
as to the use of the proceeds of the Interim Loan or of the existence or
possible existence of any Default or Event of Default.

         9.4 RELIANCE BY AGENT. The Agent shall be entitled to rely, and shall
be fully protected in relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, facsimile, telex
or teletype message, statement, order or other document or conversation believed
by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons, and upon advice and statements of legal counsel
(including, without limitation, counsel to the Company or any of its
Subsidiaries), independent accountants and other experts selected by the Agent.
The Agent shall be fully justified in failing or refusing to take any action
under this Agreement or any other Loan Document unless it shall first receive
such advice or concurrence of the Majority Lenders as it deems appropriate or it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. As between the Agent and the Lenders, the
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the other Loan Documents in accordance with a
request of the Majority Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all of the Lenders.

         9.5 NOTICE OF DEFAULT. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default hereunder unless
the Agent has actually received notice from the Lender or the Company referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default." In the event that the Agent receives such
a notice, the Agent shall give prompt notice thereof to the Lenders. The Agent
shall take such action with respect to such Default or Event of Default as shall
be reasonably directed by Lenders holding in the aggregate more than 50% of the
outstanding principal amount of Interim Notes; provided that, as between the
Agent and the Lenders unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.

         9.6 NON-RELIANCE ON AGENT. Each Lender expressly acknowledges that
neither the Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates have made any representations or warranties to
it and that no act by the Agent hereinafter taken, including any review of the
affairs of the Company or any of its Subsidiaries, shall be deemed to constitute
any representation or warranty by the Agent to any Lender. Each Lender
represents to the Agent that it has, independently and without reliance upon the
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, assets, operations, property, financial and other condition, prospects
and creditworthiness of the Company and its Subsidiaries and made its own
decision to make the Interim Loan hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon the
Agent or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this



Agreement, and to make such investigation as it deems necessary to inform itself
as to the business, assets, operations, property, financial and other condition,
prospects and creditworthiness of the Company and its Subsidiaries. The Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the business, operations, assets, property,
financial and other condition, prospects or creditworthiness of the Company or
any of its Subsidiaries which may come into the possession of the Agent or any
of its officers, directors, employees, agents, attorneys-in-fact or affiliates.

         9.7 INDEMNIFICATION. The Lenders agree to indemnify the Agent in its
capacity as such ratably according to their respective "percentages" as used in
determining the Majority Lenders at such time, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, reasonable expenses or disbursements of any kind whatsoever which may at
any time (including, without limitation, at any time following the payment in
full of the Obligations) be imposed on, incurred by or asserted against the
Agent in its capacity as such in any way relating to or arising out of this
Agreement or any other Loan Document, or any documents contemplated by or
referred to herein or the transactions contemplated hereby of any action taken
or omitted to be taken by the Agent under or in connection with any of the
foregoing, but only to the extent that any of the foregoing is not paid by the
Company or any of its Subsidiaries; provided that no Lender shall be liable to
the Agent for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from the gross negligence or willful misconduct
of the Agent. If any indemnity furnished to the Agent for any purpose shall, in
the opinion of the Agent be insufficient or become impaired, the Agent may call
for additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished. The agreements in this
Section 9.7 shall survive the payment in full of all Obligations.

         9.8 AGENT IN ITS INDIVIDUAL CAPACITY. The Agent and its affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with the Company and its Subsidiaries as though the Agent were not the Agent
hereunder. With respect to the Interim Loan made by it and all Obligations owing
to it, the Agent shall have the same rights and powers under this Agreement as
any Lender and may exercise the same as though it were not the Agent and the
term "Lender" and "Lenders" shall include the Agent in its individual
capacities.

         9.9 RESIGNATION OF THE AGENT; SUCCESSOR AGENT. The Agent may resign as
Agent upon 20 days' notice to the Lenders and the Company. Upon the resignation
of the Agent, Lenders holding in the aggregate more than 50% of the outstanding
principal amount of Interim Notes shall appoint from among the Lenders a
successor Agent for the Lenders subject to prior approval by the Company (such
approval not to be unreasonably withheld or delayed), whereupon such successor
Agent shall succeed to the rights, powers and duties of the resigning Agent, and
the term "Agent" shall include such successor Agent effective upon its
appointment, and the resigning Agent's rights, powers and duties as the Agent
shall be terminated, without any other or further act or deed on the part of
such former Agent or any of the parties to this Agreement. After the resignation
of the Agent hereunder, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement.



SECTION 10 MISCELLANEOUS

         10.1 RESERVED.

         10.2 PARTICIPATIONS IN AND ASSIGNMENTS OF INTERIM LOAN AND
              INTERIM NOTES.

                  A. Each Lender shall have the right at any time to sell,
assign, transfer or negotiate (collectively, a "SYNDICATION") all or any portion
of its Interim Notes or its Interim Loan Commitment in an aggregate amount of
not less than $10,000,000 to any Eligible Assignee. In the case of any sale,
transfer or negotiation of all or part of the Interim Notes or any Interim Loan
Commitment authorized under this Section 10.2A, the assignee, transferee or
recipient shall become a party to this Agreement as a Lender by execution of an
assignment and assumption agreement in substantially the form set forth as
Exhibit VII; provided that (i) at such time Section 2.1A or 2.2A, as the case
may be, shall be deemed modified to reflect the Interim Loan Commitment of such
new Lender and of the existing Lenders, (ii) upon surrender of the Interim Notes
to the Company, new Interim Notes will be issued to such new Lender and to the
assigning Lender, such new Interim Notes to be in conformity with the
requirements of Section 2.1D or 2.2E, as the case may be (with appropriate
modifications), to the extent needed to reflect the revised Interim Loan
Commitment, and (iii) the Agent shall receive at the time of each such
assignment, from the assigning or assignee Lender, the payment of a
non-refundable assignment fee of $3,500; and provided, further, that such
transfer or assignment will not be effective until recorded by the Agent on the
Register pursuant to Section 5.4. To the extent of any assignment pursuant to
this Section 10.2A, the assigning Lender shall be relieved of its obligations
hereunder with respect to its assigned Interim Loan Commitment, and the
assignee, transferee or recipient shall have, to the extent of such sale,
assignment, transfer or negotiation, the same rights, benefits and obligations
as it would if it were a Lender with respect to such Interim Notes or Interim
Loan Commitment, including, without limitation, the right to approve or
disapprove actions which, in accordance with the terms hereof, require the
approval of a Lender. At the time of each assignment pursuant to this Section
10.2A to an Eligible Assignee which is not already a Lender hereunder and which
is not a United States Person (as such term is defined in Section 7701(a)(30) of
the Internal Revenue Code) for Federal income tax purposes, the respective
Eligible Assignee shall provide to the Company and the Agent the appropriate
Internal Revenue Service Forms (and, if applicable, a Section 10.2D(ii)
Certificate) described in Section 10.2D.

                  B. Each Lender may grant participations in all or any part of
its Interim Notes or its Interim Loan Commitment in an aggregate amount of not
less than $10,000,000 to any Eligible Assignee.

                  C. Nothing in this Agreement shall prevent or prohibit any
Lender from pledging its Interim Notes and Interim Notes hereunder to a Federal
Reserve Bank in support of borrowings made by such Lender from such Federal
Reserve Bank.

                  D. Each Lender that is an assignee or transferee of an
interest under this Agreement pursuant to Section 10.2A (unless the respective
Lender was already a Lender hereunder immediately prior to such assignment or
transfer) and that is not a United States Person (as such term is defined in
Section 7701(a)(30) of the Internal Revenue Code) agrees to



deliver to the Company and the Agent, on the date of such assignment or transfer
to such Lender, (i) two accurate and complete original signed copies of Internal
Revenue Service Form 4224 or 1001 (or successor forms) certifying to such
Lender's entitlement to a complete exemption from United States withholding tax
with respect to payments to be made under this Agreement and under any Note, or
(ii) if the Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of
the Internal Revenue Code and cannot deliver either Internal Revenue Service
Form 1001 or 4224 pursuant to clause (i) above, two accurate and complete
original signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying to such Lender's entitlement to a complete exemption from United
States withholding tax with respect to payments of interest to be made under
this Agreement and under any Note. In addition, each Lender agrees that, when a
lapse in time or change in circumstances renders the previous certification
obsolete or inaccurate in any material respect, it will deliver to the Company
and the Agent two new accurate and complete original signed copies of Internal
Revenue Service Form 4224 or 1001, or Form W-8, as the case may be, and such
other forms as may be required in order to confirm or establish the entitlement
of such Lender to a continued exemption from or reduction in United States
withholding tax with respect to payments under this Agreement and any Note, or
it shall immediately notify the Company and the Agent of its inability to
deliver any such Form or Certificate. Subject to Section 10.2A and the
immediately succeeding sentence, the Company shall be entitled, to the extent it
is required to do so by law, to deduct or withhold income or similar taxes
imposed by the United States (or any political subdivision or taxing authority
thereof or therein) from interest, fees or other amounts payable hereunder or
made on any other Loan Document for the account of any Lender which is not a
United States Person (as such term is defined in Section 7701(a)(30) of the
Internal Revenue Code) for U.S. Federal income tax purposes to the extent that
such Lender has not provided to the Company U.S. Internal Revenue Service Forms
that establish a complete exemption from such deduction or withholding.
Notwithstanding anything to the contrary contained in the preceding sentence or
elsewhere in this Section 10.2D and except as set forth in Section 10.2A, the
Company agrees to pay additional amounts and to indemnify and hold harmless each
Lender (without regard to the identity of the jurisdiction requiring the
deduction or withholding), and reimburse such Lender upon its written request,
in respect of any amounts deducted or withheld by it as described in the
immediately preceding sentence as a result of any changes after the date of any
assignment or transfer in any applicable law, treaty, governmental rule,
regulation, guideline or order, or in the interpretation thereof, relating to
the deducting or withholding of income or similar Taxes.

         10.3 EXPENSES. Whether or not the transactions contemplated hereby
shall be consummated, the Company agrees to promptly pay (i) all the reasonable
and documented fees and expenses of Agent in connection with the preparation,
negotiation, execution and delivery of the Loan Documents (including, without
limitation, the reasonable fees and disbursements of Gibson, Dunn & Crutcher
LLP); provided, however, that the Company's obligation to reimburse Agent for
fees and expenses under this clause (i) shall not exceed $100,000; (ii) the
reasonable and documented fees, expenses and disbursements of counsel to the
Lenders in connection with any amendments, modifications and waivers hereto or
thereto and consents to departures from the terms hereof and thereof; and (iii)
after the occurrence of an Event of Default, all costs and expenses (including
actual and reasonable attorneys fees and costs of settlement) incurred by the
Lenders or the Agent in enforcing any Obligations of or in collecting any
payments due from the Company hereunder or under the Interim Notes by reason of
such Event of Default or in



connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or of any insolvency
or bankruptcy proceedings.

         10.4 INDEMNITY. In addition to the payment of expenses pursuant to
Section 10.3, whether or not the transactions contemplated hereby shall be
consummated, the Company agrees to indemnify, pay and hold each of the Lenders,
the Agent and any holder of any of the Interim Notes, and each of their
respective officers, directors, employees, agents, representatives and
affiliates (collectively called the "INDEMNITEES"), harmless from and against
any and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, expenses and disbursements of any kind or
nature whatsoever (including, without limitation, the reasonable fees and
disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not such Indemnitee shall be designated as a party thereto, but
excluding any special, indirect, consequential or punitive damages), which may
be suffered by, imposed on, incurred by, or asserted against that Indemnitee, in
any manner resulting from, connected with, in respect of, relating to or arising
out of this Agreement, the other Loan Documents, the Lenders' agreements to make
the Interim Loan or the use or intended use of any of the proceeds of the
Interim Loan hereunder or the issuance of the Exchange Notes (the "INDEMNIFIED
LIABILITIES"); provided that the Company shall have no obligation to an
Indemnitee hereunder with respect to Indemnified Liabilities (i) to the extent
such liabilities are non-appealable and finally judicially determined to have
resulted solely from the willful misconduct, gross negligence, bad faith or
recklessness of that Indemnitee (and, upon any such determination, any
indemnification payments with respect to such losses, claims, damages,
liabilities or related costs and expenses previously received by such Indemnitee
shall be promptly reimbursed by such Indemnitee), (ii) to the extent the Company
is entitled to indemnification under the Acquisition Agreements (without, for
the purposes of this Section 10.4, giving effect to any limitations on
indemnification set forth in the Stock Purchase Agreement (whether as a result
of the expiration of any applicable survival period or the effect of any
monetary thresholds, deductions or caps and including, without limitation, the
limitations set forth in 9.01 and 9.05 of the Stock Purchase Agreement)) or
(iii) to the extent such liabilities relate solely to pre-Closing Date
occurrences relating to the operation of the Business. To the extent that the
undertaking to indemnify, pay and hold harmless set forth in the preceding
sentence may be unenforceable because it is violative of any law or public
policy, the Company shall contribute the maximum portion which it is permitted
to pay and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by the Indemnitees or any of them.

         10.5 SETOFF. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default, each Lender, the Agent and each subsequent
holder of any Note are hereby authorized by the Company at any time or from time
to time, without notice to the Company, or to any other Person, any such notice
being hereby expressly waived, so long as the claim arises under a final
non-appealable judgment that has been finally determined by a court of competent
jurisdiction, to set off and to appropriate and to apply any and all deposits
(general or special, including, but not limited to, Indebtedness evidenced by
certificates of deposit, whether matured or unmatured but not including trust
accounts or any other accounts held for the benefit of another Person) and any
other Indebtedness at any time held or owing by such Person or any such
subsequent holder to or for the credit or the account of the Company against and
on account of the obligations and



liabilities of the Company to such Person or such subsequent holder under this
Agreement and the Interim Notes, including, but not limited to, all claims of
any nature or description arising out of or connected with this Agreement or the
Interim Notes, irrespective of whether or not (a) such Person or such subsequent
holder shall have made any demand hereunder or (b) such Person or such
subsequent holder shall have declared the principal of or the interest on its
portion of the Interim Loan and its Interim Notes and other amounts due
hereunder to be due and payable as permitted by Section 7 and although said
obligations and liabilities, or any of them, may be contingent or unmatured. The
Agent and each Lender hereby waive and disclaim any right of set-off against
amounts due to it from the Company under the Interim Notes any amount due and
payable by the Agent or such Lender, or any Subsidiary or Affiliate of such
Lender, to the Company or any Subsidiary or Affiliate of the Company pursuant to
the terms of the Stock Purchase Agreement.

         10.6 AMENDMENTS AND WAIVERS. No amendment, modification, termination or
waiver of any term or provision of this Agreement, of the Interim Notes, or,
prior to the execution and delivery thereof, of the form of the Registration
Rights Agreement or the form of the Senior Indenture, or consent to any
departure by the Company therefrom, shall in any event be effective without the
prior written concurrence of the Company, and the Majority Lenders; provided
that without the prior written consent of each Lender affected, an amendment,
modification, termination or waiver of this Agreement, any Interim Notes, and,
prior to the execution and delivery thereof, of the form of Registration Rights
Agreement or the form of Senior Indenture or consent to departure from a term or
provision hereof or thereof may not: (i) reduce the principal amount of Interim
Notes whose holders must consent to any such amendment, modification,
termination, waiver or consent; (ii) reduce the rate of or extend the time for
payment of principal or interest on any Note; (iii) reduce the principal amount
of any Note; (iv) make any Note payable in money other than that stated in the
Note; (v) amend, change or modify in any material respect the obligation of the
Company to make and consummate a Change of Control Offer after the occurrence of
a Change of Control; and provided, further, that without the consent of the
Agent, no such amendment, modification, termination or waiver may amend, modify,
terminate or waive any provision of Section 9 as the same applies to the Agent
or any other provision of this Agreement as it relates to the rights or
obligations of the Agent. Any waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given. No notice
to or demand on the Company in any case shall entitle the Company to any further
notice or demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Section 10.6
shall be binding upon each holder of the Interim Notes at the time outstanding,
each further holder of the Interim Notes, and, if signed by the Company, on the
Company.

         10.7 INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or be otherwise within the limitation of, another covenant shall not avoid
the occurrence of an Event of Default or Default if such action is taken or
condition exists.

         10.8 ENTIRETY. The Loan Documents embody the entire agreement of the
parties and supersede all prior agreements and understandings, if any, relating
to the subject matter hereof and thereof.



         10.9 NOTICES. Unless otherwise provided herein, any notice or other
communications herein required or permitted to be given shall be in writing and
may be personally served, telecopied, telexed or sent by mail and shall be
deemed to have been given when delivered in person, upon receipt of telecopy or
telex against receipt of answer back or four Business Days after depositing it
in the mail, registered or certified, with postage prepaid and properly
addressed; provided that notices shall not be effective until received. For the
purposes hereof, the addresses of the parties hereto, until notice of a change
thereof is delivered as provided in this Section 10.9, shall be set forth under
each party's name on the signature pages hereto.

         10.10 SURVIVAL OF WARRANTIES AND CERTAIN AGREEMENTS.

                  A. All agreements, representations and warranties made herein
shall survive the execution and delivery of this Agreement, the making of the
Interim Loan hereunder and the execution and delivery of the Interim Notes and,
notwithstanding the making of the Interim Loan, the execution and delivery of
the Interim Notes or any investigation made by or on behalf of any party, shall
continue in full force and effect as long as any Obligations remain outstanding.
The closing of the transactions herein contemplated shall not prejudice any
right of one party against any other party in respect of anything done or
omitted hereunder or in respect of any right to damages or other remedies.

                  B. Notwithstanding anything in this Agreement or implied by
law to the contrary, the agreements of the Company set forth in Sections 10.3,
10.4, 10.14, 10.15, 10.17, 10.19 and 10.22 shall survive the payment of the
Interim Loan and the Interim Notes and the termination of this Agreement.

         10.11 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No failure
or delay on the part of the Agent or any Lender or any holder of any Interim
Note in the exercise of any power, right or privilege hereunder, under the
Interim Notes shall impair such power, right or privilege or be construed to be
a waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. All rights and
remedies existing under this Agreement, under the Interim Notes are cumulative
to and not exclusive of any rights or remedies otherwise available.

         10.12 SEVERABILITY. In case any provision in or obligation under this
Agreement, under the Interim Notes shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

         10.13 HEADINGS. Section and Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.

         10.14 APPLICABLE LAW. THIS AGREEMENT, THE INTERIM NOTES SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.



         10.15 SUCCESSORS AND ASSIGNS; SUBSEQUENT LENDERS OF INTERIM NOTES. This
Agreement shall be binding upon the parties hereto and their respective
successors and assigns and shall inure to the benefit of the parties hereto and
the successors and assigns of the Lenders. The terms and provisions of this
Agreement shall inure to the benefit of any assignee or transferee of the
Interim Notes pursuant to Section 10.2A, and in the event of such transfer or
assignment, the rights and privileges herein conferred upon the Lenders shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof. In determining whether the holders
of a sufficient aggregate principal amount of the Interim Loan shall have
consented to any action under this Agreement, any amount of the Interim Loan
owned or held by the Company, or any of its Affiliates shall be disregarded. The
Company's rights or any interest therein hereunder may not be assigned without
the prior express written consent of each of the Lenders.

         10.16 COUNTERPARTS; EFFECTIVENESS. This Agreement and any amendments,
waivers, consents or supplements may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument. This Agreement shall
become effective upon the execution of a counterpart hereof by each of the
parties hereto, and delivery thereof to the Agent or, in the case of the
Lenders, written telex or facsimile notice or telephonic notification (confirmed
in writing) of such execution and delivery. The Agent will give the Company and
each Lender prompt notice of the effectiveness of this Agreement.

         10.17 CONSENT TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL.

                  A. Any legal action or proceeding with respect to this
Agreement, any Interim Note may be brought in the courts of the State of New
York or of the United States for the Southern District of New York, and, by
execution and delivery of this Agreement, each of the parties to this Agreement
hereby irrevocably accepts for itself and in respect of its respective property,
generally and unconditionally, the jurisdiction of the aforesaid courts. Each of
the parties to this Agreement hereby further irrevocably waives any claim that
any such courts lack jurisdiction over such party, and agrees not to plead or
claim, in any legal action or proceeding with respect to this Agreement or the
Interim Notes brought in any of the aforesaid courts, that any such court lacks
jurisdiction over such party. Each of the parties to this Agreement irrevocably
consents to the service of process in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
such party, at its respective address for notices pursuant to Section 10.9, such
service to become effective 30 days after such mailing. To the extent permitted
by law, each of the parties to this Agreement hereby irrevocably waives any
objection to such service of process and further irrevocably waives and agrees
not to plead or claim in any action or proceeding commenced hereunder or under
any Note that service of process was in any way invalid or ineffective. Nothing
herein shall affect the right of any party to this Agreement to serve process in
any other manner permitted by law or to commence legal proceedings or otherwise
proceed against any party in any other jurisdiction.

                  B. Each of the parties to this Agreement hereby irrevocably
waives any objection which it may now or hereafter have to the laying of venue
of any of the aforesaid actions or proceedings arising out of or in connection
with this Agreement or the Interim Notes



brought in the courts referred to in clause A above and hereby further
irrevocably waives and agrees not to plead or claim in any such court that any
such action or proceeding brought in any such court has been brought in an
inconvenient forum.

                  C. Each of the parties to this Agreement hereby irrevocably
waives all right to a trial by jury in any action, proceeding or counterclaim
arising out of or relating to this Agreement or the Interim Notes or the
transactions contemplated hereby or thereby.

         10.18 PAYMENTS BY AGENT.

                  A. The Agent agrees that promptly after its receipt of each
payment of any interest or premium on or principal of the Interim Notes from or
on behalf of the Company, it shall, except as otherwise provided in this
Agreement, distribute such payment to the Lenders (other than any Lender that
has consented in writing to waive its pro rata share of such payment) pro rata
based upon their respective pro rata shares, if any, of such payment.

                  B. Each of the Lenders agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security, by
the exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Loan Documents, or otherwise)
which is applicable to the payment of the principal of, or interest on, the
Interim Loan of a sum which with respect to the related sum or sums received by
other Lenders is in a greater proportion than the total of such Obligation then
owed and due to such Lender bears to the total of such Obligation then owed and
due to all of the Lenders immediately prior to such receipt, then such Lender
receiving such excess payment shall purchase for cash without recourse or
warranty from the other Lenders an interest in the Obligations of the Company to
such Lenders in such amount as shall result in a proportional participation by
all of the Lenders in such amount; provided that, if all or any portion of such
excess amount is thereafter recovered from such Lender, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.

         10.19 TAXES.

                  A. Any and all payments by the Company hereunder or under any
of the other Loan Documents shall be made free and clear of and without
deduction or withholding for any and all present or future Taxes, unless such
Taxes are required by law or the administration thereof to be deducted or
withheld and excluding (i) in the case of each Lender and the Agent, Taxes
imposed on its net income and franchise taxes imposed on it by the jurisdiction
under the laws of which such Person is organized or any political subdivision
thereof, (ii) in the case of each such Lender and the Agent, any Taxes that are
in effect and that would apply to a payment to such Person, as applicable, as of
the Closing Date, and (iii) if any Person acquires any interest in this
Agreement (a "TRANSFEREE"), any Taxes to the extent that they are in effect and
would apply to a payment to such Transferee as of the date of the acquisition of
such interest, as the case may be (all such nonexcluded Taxes being hereinafter
referred to as "COVERED TAXES"). If the Company shall be required by Law or the
administration thereof to deduct or withhold any Covered Taxes from or in
respect of any sum payable hereunder or under any other Loan Document, (a)
unless such requirement results from the failure of the payee to perform its
obligations under Section 10.2D, the sum payable shall be increased as may be
necessary so that



after making all required deductions or withholdings (including deductions or
withholdings applicable to additional amounts paid under this paragraph), the
Lender receives an amount equal to the sum it would have received if no such
deduction or withholding had been made; (b) the Company shall make such
deductions or withholdings; and (c) the Company forthwith shall pay the full
amount deducted or withheld to the relevant taxation or other authority in
accordance with applicable Law.

                  B. The Company agrees to pay forthwith any present or future
stamp documentary taxes or any other excise or property taxes, charges or
similar levies (all such taxes, charges and levies being herein referred to as
"OTHER TAXES") imposed by any jurisdiction (or any political subdivision or
taxing authority thereof or therein) which arise from any payment made by the
Company hereunder or under any of the other Loan Documents or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any of the other Loan Documents.

                  C. The Company agrees to indemnify the Agent and each of the
Lenders for the full amount of Covered Taxes or Other Taxes not deducted or
withheld and paid by the Company in accordance with Sections 10.19A and 10.19B
to the relevant taxation or other authority and any Taxes other than Covered
Taxes or Other Taxes imposed by any jurisdiction on amounts payable by the
Company under this Section 10.19 paid by the Lender or the Agent and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not any such Taxes or Other Taxes were correctly or
legally asserted. Payment under this indemnification shall be made within 30
days from the date the Agent or such Lender makes written demand therefor. A
certificate as to the amount of such Taxes or Other Taxes and evidence of
payment thereof submitted to the Company shall be prima facie evidence, absent
manifest error, of the amount due from the Company to the Agent or such Lender.

                  D. The Company shall furnish to the Agent and each of the
Lenders the original or a certified copy of a receipt evidencing any payment of
Taxes or Other Taxes made by the Company as soon as such receipt becomes
available.

                  E. The provisions of this Section 10.19 shall survive the
termination of the Agreement and repayment of all Obligations.

         10.20 WAIVER OF STAY, EXTENSION OR USURY LAWS. The Company covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay or extension law or any usury law or other law that would prohibit
or forgive the Company from paying all or any portion of the principal of or
interest on the Interim Loan as contemplated herein, wherever enacted, now or at
any time hereafter in force, or which may affect the covenants or the
performance of this Agreement; and (to the extent that it may lawfully do so)
the Company hereby expressly waives all benefit or advantage of any such law,
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Agent, but will suffer and permit the execution of
every such power as though no such law had been enacted.



         10.21 REQUIREMENTS OF LAW. If at any time after the Closing Date any
Lender reasonably determines that the introduction of or any change in any
applicable law or governmental rule, regulation, order, guideline, directive or
request (whether or not having the force of law) concerning capital adequacy, or
any change in interpretation or administration thereof by any governmental
authority, central bank or comparable agency, will have the effect of increasing
the amount of capital required or expected to be maintained by such Lender or
any corporation controlling such Lender based on the existence of such Lender's
Interim Loan hereunder or its obligations hereunder, then the Company and each
of its Subsidiaries jointly and severally agree to pay to such Lender, upon its
written demand therefor, such additional amounts as shall be required to
compensate such Lender or such other corporation for the increased cost to such
Lender or such other corporation or the reduction in the rate of return to such
Lender or such other corporation as a result of such increase of capital. In
determining such additional amounts, each Lender will act reasonably and in good
faith and will use averaging and attribution methods which are reasonable;
provided that such Lender's reasonable good faith determination of compensation
owing under this Section 10.21 shall, absent demonstrable error, be final and
conclusive and binding on all the parties hereto. Each Lender, upon determining
that any additional amounts will be payable pursuant to this Section 10.21, will
give written notice thereof to the Company (a copy of which shall be sent by
such Lender to the Agent), which notice shall show the basis for calculation of
such additional amounts, although the failure to give any such notice shall not
release or diminish any of the Company's or its Subsidiaries' obligations to pay
additional amounts pursuant to this Section 10.21 upon the subsequent receipt of
such notice. In the event any Lender delivers a written notice requesting the
payment of additional amounts pursuant to this Section 10.21, the Company may,
at its sole expense and effort, upon notice to such Lender and the Agent,
require such Lender to transfer and assign, without recourse (in accordance with
and subject to the restrictions contained in Section 10.2), all of its
interests, rights and obligations under its Interim Loan and this Agreement to
an assignee that shall assume such assigned obligations (which assignee may be
another Lender, if a Lender accepts such assignment); provided that:

         (i) the Company shall have paid to the Agent the assignment fee
specified in Section 10.2;

         (ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Interim Loans, accrued interest thereon (including
Liquidated Damages, if any), and all other amounts payable to it hereunder and
under the other Loan Documents from the assignee (to the extent of such
outstanding principal and accrued interest (and Liquidated Damages, if any) and
fees) or the Company (in the case of all other amounts); and

         (iii) such assignment does not conflict with applicable laws.

         In connection with any such replacement, if the replaced Lender does
not execute and deliver to the Agent a duly completed assignment and assumption
agreement substantially in the form Exhibit VII hereto reflecting such
replacement within five Business Days of the date on which the replacement
Lender executes and delivers such assignment and assumption agreement to the
replaced Lender, then such replaced Lender shall be deemed to have executed and
delivered such assignment and assumption agreement. A Lender shall not be
required to make any such assignment or delegation if, prior thereto, as a
result of a waiver by such Lender or



otherwise, the circumstances entitling the Company to require such assignment
and delegation cease to apply.

         10.22 CONFIDENTIALITY.

                  A. Subject to the provisions of clause B of this Section
10.22, each of the Agent and each Lender agrees that it will not disclose
without the prior consent of the Company (other than to its Affiliates,
employees, auditors, advisors or counsel or to another Lender if the Lender or
such Lender's holding or parent company in its sole discretion determines that
any such party should have access to such information, provided such Persons
shall be subject to the provisions of this Section 10.22 to the same extent as
such Lender) any information with respect to the Company or any of its
Subsidiaries which is now or in the future furnished pursuant to this Agreement
or any other Loan Document and which is designated by the Company to the Agent
and the Lenders in writing as confidential, provided that the Agent or any
Lender may disclose any such information (a) as has become generally available
to the public, (b) as may be required or appropriate in any report, statement or
testimony submitted to any municipal, state or Federal regulatory body having or
claiming to have jurisdiction over the Agent or such Lender or to the Federal
Reserve Board or the Federal Deposit Insurance Corporation or similar
organizations (whether in the United States or elsewhere) or their successors,
(c) as may be required or appropriate in respect to any summons or subpoena or
in connection with any litigation, (d) in order to comply with any law, order,
regulation or ruling applicable to the Agent or such Lender, (e) to the Agent
and (f) to any prospective or actual transferee or participant in connection
with any contemplated transfer or participation of any of the Interim Notes or
any interest therein by such Lender; provided that such prospective transferee
agrees to provisions substantially the same as those contained in this Section
10.22. Each of the Agent and the Lenders agrees not to use any information
supplied to it by, or on behalf, of the Company or any of its Subsidiaries
pursuant to this Agreement for any purpose or in any manner other than (i)
evaluating the performance of the Company and its Subsidiaries hereunder, (ii)
enforcing the rights, remedies and obligations hereunder and under the other
Loan Documents and the Intercreditor Agreement and (iii) in connection with the
Stock Purchase Agreement.

                  B. The Company hereby acknowledges and agrees that each Lender
may share with any of its affiliates any information related to the Company or
any of its Subsidiaries (including, without limitation, any nonpublic customer
information regarding the creditworthiness of the Company and its Subsidiaries);
provided such Persons shall be subject to the provisions of this Section 10.22
to the same extent as such Lender.

         10.23 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.

                  No past, present or future director, officer, employee,
incorporator or stockholder of the Company, as such, will have any liability for
any obligations of the Company under the Interim Notes, this Agreement, or any
other Loan Document or for any claim based on, in respect of, or by reason of,
such obligations or their creation. Each Lender waives and releases all such
liability. The waiver and release are part of the consideration for entering
into this Agreement and consummating the transactions hereunder.

                                      * * *






         WITNESS the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.

                                      COMPANY:

                                      TAL INTERNATIONAL GROUP, INC.


                                      By:   /s/ A. Richard Caputo, Jr.
                                          ----------------------------------
                                           Name:  A. Richard Caputo, Jr.
                                           Title: Vice President







                                  AGENT:

                                  TRANSAMERICA ACCOUNTS HOLDING CORPORATION


                                  By:    /s/ Vincent Hillery
                                      -------------------------------------
                                        Name:  Vincent Hillery
                                        Title: Executive Vice President








                                  LENDER:

COMMITMENT:                       TRANSAMERICA ACCOUNTS HOLDING CORPORATION


                                  By:     /s/ Vincent Hillery
                                      -------------------------------------
                                        Name:  Vincent Hillery
                                        Title: Executive Vice President





                                                                   EXHIBIT 10.4


                                 AMENDMENT NO. 1

         AMENDMENT NO. 1 dated as of March 31, 2005 ("Amendment") among TAL
INTERNATIONAL GROUP, INC., a Delaware corporation (the "Company"), the lenders
party hereto (the "Lenders") and TRANSAMERICA ACCOUNTS HOLDING CORPORATION, as
Agent for the Lenders (the "Agent"), and amends the Credit Agreement dated as of
November 3, 2004 (as amended, restated, supplemented or otherwise modified from
time to time, the "Credit Agreement") among the Company, the Lenders and the
Agent.

                  WHEREAS, the Company and the Lenders desire to make certain
amendments to the Credit Agreement, as more fully set forth herein.

                  NOW THEREFORE, in consideration of the above premises and the
mutual covenants, conditions, and provisions hereinafter set forth, the parties
hereto agree as follows:

                  Section 1. DEFINITIONS; CONSTRUCTION. Terms defined in the
Credit Agreement and not otherwise defined herein are used herein as therein
defined. Unless the context of this Amendment clearly requires otherwise,
references to the plural include the singular, references to the singular
include the plural, the part includes the whole, the terms "include" and
"including" are not limiting, and the term "or" has the inclusive meaning
represented by the phrase "and/or".

                  Section 2. AMENDMENT TO SECTION 1.1 OF THE CREDIT AGREEMENT.
Effective as of the date of this Amendment, the defined term "ELIGIBLE ASSIGNEE"
appearing in Section 1.1 of the Credit Agreement hereby is amended and restated
as follows:

                  "ELIGIBLE ASSIGNEE" means (a) if the effective date of the
         proposed assignment or participation of the Interim Loan, an Interim
         Note or any interest therein or herein is prior to the first
         anniversary of the Closing Date, (i) any Lender or any Affiliate of any
         Lender, or (ii) with respect to all other Persons, any Person to which
         the Company has given its prior written consent to an assignment or
         sale of a participation to such Person (such consent not to be
         unreasonably withheld or delayed); and (b) if the effective date of the
         proposed assignment or participation of the Interim Loan, a Interim
         Note or any interest therein or herein is on or after the first
         anniversary of the Closing Date, any Person, so long as such assignment
         is consummated in accordance with Law.

                  Section 3. AMENDMENT TO SECTION 10.2 OF THE CREDIT AGREEMENT.
Effective as of the date of this Amendment, Section 10.2 of the Credit Agreement
hereby is amended by inserting the following new subsection 10.2.E at the end of
such Section:

                  "E. In connection with any proposed assignment or
         participation by any Lender of its Interim Loan or its Interim Loan
         Commitment, (a) such Lender shall deliver written notice to the Company
         of such proposed assignment or participation prior to such Lender's
         commencement of any discussions or negotiations with any prospective
         assignee or participant; provided, that the provisions of this
         subsection (a) shall apply only prior to the earlier of (i) the time
         that the Company files a registration statement with the Commission or
         (ii) the time that the Company becomes subject to the reporting





         requirements of Section 13 or 15(d) of the Exchange Act and (b) the
         Company agrees, so long as such Person agrees to be bound by the
         provisions of Section 10.22 hereof as if it were an original signatory
         hereto and as long as such Person is an Eligible Assignee, (i) to
         provide to the prospective assignee or participant all information
         reasonably requested by any such Person with respect to the business,
         results of operations, properties, assets or financial condition of the
         Company and its Subsidiaries and (ii) to make available the senior
         officers and representatives of the Company and its Subsidiaries for
         such meetings as any such Person may reasonably request from time to
         time during normal business hours."

                  Section 4. AGREEMENT IN RESPECT OF SECTION 5.1(A)(1).
Effective as of the date of this Amendment, the Lenders and the Company hereby
agree that the Company shall deliver to the Agent the quarterly and annual
financial information required by Section 5.1(a)(1) of the Credit Agreement for
the Company's fiscal quarter and fiscal year ending December 31, 2004 on or
prior to May 15, 2005, and such deliveries shall fulfill the Company's
obligations under such Section 5.1(a)(1) in respect of the Company's fiscal
quarter and fiscal year ending December 31, 2004.

                  Section 5. CONDITIONS PRECEDENT TO AMENDMENT. The satisfaction
of each of the following, unless waived by the Lenders, in their sole
discretion, shall constitute conditions precedent to the effectiveness of this
Amendment:

                  (a) No injunction, writ, restraining order, or other order of
         any nature prohibiting, directly or indirectly, the consummation of the
         transactions contemplated herein shall have been issued and remain in
         force by any governmental authority against the Company.

                  Section 6. REPRESENTATIONS AND WARRANTIES. To induce the
Lenders to enter into this Amendment, the Company represents and warrants to the
Lenders that:

                  (a) Authority. The execution and delivery by the Company of
         this Amendment and the performance by the Company of its obligations
         under this Amendment (i) are within its corporate power and authority,
         (ii) have been duly authorized by all necessary corporate proceedings,
         (iii) do not conflict with or result in any breach or contravention of
         any material provision of applicable law, statute, rule or regulation
         to which the Company is subject or any judgment, order, writ,
         injunction, license or permit by which the Company is bound so as to
         materially adversely affect the assets, business or any activity of the
         Company, (iv) do not conflict with any provision of the certificate of
         incorporation or bylaws of the Company or any indenture, mortgage, deed
         of trust, credit agreement, loan agreement, or any other material
         agreement, contract or instrument binding upon the Company, (v) do not
         require any waivers, consents or approvals by any of its creditors
         which have not been obtained, or (vi) do not require any material
         approval which has not been obtained.

                  (b) Enforceability of Obligations. This Amendment and the
         Credit Agreement, as amended hereby, constitute the legal, valid and
         binding obligations of the Company enforceable against the Company in
         accordance with its terms, except to the


                                       2



         extent that the enforceability thereof may be limited by applicable
         bankruptcy, insolvency, fraudulent convenyance, reorganization,
         moratorium or other similar laws generally affecting creditors' rights
         and by equitable principles (regardless of whether enforcement is
         sought in equity or at law).

                  (c) No Event of Default. No Event of Default or Default has
         occurred and is continuing.

                  Section 7.        REFERENCE TO AND EFFECT ON LOAN DOCUMENTS.
                                    -----------------------------------------

                  (a) Upon the effectiveness of this Amendment, on and after the
         date hereof, each reference in the Credit Agreement to "this
         Agreement", "hereunder", "hereof" or words of like import, and each
         reference in the other Loan Documents to the Credit Agreement, shall
         mean and be a reference to the Credit Agreement as amended hereby;

                  (b) Except as expressly set forth herein, this Amendment shall
         not by implication or otherwise limit, impair, constitute a waiver of,
         or otherwise affect the rights and remedies of the Company, the Lenders
         or the Agent under the Credit Agreement or any other Loan Document, and
         shall not alter, modify, amend or in any way affect any of the terms,
         conditions, obligations, covenants or agreements contained in the
         Credit Agreement or any other Loan Document, all of which are ratified
         and affirmed in all respects and shall continue in full force and
         effect.

                  (c) Nothing herein shall be deemed to entitle the Company, the
         Lenders or the Agent to a waiver, amendment, modification or other
         change of any of the terms, conditions, obligations, covenants or
         agreements contained in the Credit Agreement or any other Loan Document
         in similar or differing circumstances.

                  (d) This Amendment shall be a Loan Document for all purposes.

                  Section 8. BENEFITS OF AMENDMENT. The terms and provisions of
this Amendment shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns to the extent contemplated by
the Credit Agreement.

                  Section 9. INTERPRETATION. The Article and Section headings
used in this Amendment are for convenience of reference only and shall not
affect the construction hereof.

                  Section 10. EXECUTION IN COUNTERPARTS. This Amendment may be
executed in any number of counterparts, each of which counterparts, when so
executed and delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute but one and the same Amendment.
Faxed signatures of this Amendment shall be binding for all purposes.

                  Section 11. SEVERABILITY. If any provision of this Amendment
shall be held to be invalid, illegal or unenforceable under applicable law in
any jurisdiction, such provision shall be ineffective only to the extent of such
invalidity, illegality or unenforceability, which shall not affect any other
provisions hereof or the validity, legality and enforceability of such provision
in any other jurisdiction.


                                       3



                  Section 12. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.

                  Section 13. EXPENSES. The Company agrees to pay the reasonable
and documented fees, expenses and disbursements of Gibson, Dunn & Crutcher LLP,
special counsel for the Agent, incurred in connection with the preparation,
negotiation, execution and delivery of this Amendment.

                  Section 14. NO COURSE OF DEALING. The execution and delivery
of this Amendment shall not establish a course of dealing among the Lenders and
the Agent, on the one hand, and the Company, on the other, or in any other way
obligate the Lenders to hereafter provide any further amendments, waivers, or
consents of any kind to the Company.

                  Section 15. ARM'S LENGTH AGREEMENT. Each of the parties to
this Amendment agrees and acknowledges that this Amendment has been negotiated
in good faith, at arm's length, and not by any means forbidden by law.

                  Section 16. ENTIRE AGREEMENT. This Amendment together with all
other instruments, agreements, and certificates executed by the parties in
connection herewith or with reference thereto, embody the entire understanding
and agreement between the parties hereto and thereto with respect to the subject
matter hereof and thereof and supercede all prior agreements, understandings,
and inducements, whether express or implied, oral or written.

                           [Signature page to follow.]


                                       4







                  IN WITNESS WHEREOF, the parties have caused this Amendment to
be executed and delivered as of the date first above written.


                               TAL INTERNATIONAL GROUP, INC.


                               By:   /s/ A. Richard Caputo, Jr.
                                   -----------------------------------
                               Name:  A. Richard Caputo, Jr.
                               Title: Vice President

                               TRANSAMERICA ACCOUNTS HOLDING
                               CORPORATION, AS AGENT AND SOLE LENDER


                               By:   /s/ Vincent Hillery
                                   -----------------------------------
                               Name:  Vincent Hillery
                               Title: Executive Vice President















                                                                    EXHIBIT 10.5

                                 AMENDMENT NO. 2

         AMENDMENT NO. 2 dated as of May 14, 2005 ("Amendment") among TAL
INTERNATIONAL GROUP, INC., a Delaware corporation (the "Company"), the lenders
party hereto (the "Lenders") and TRANSAMERICA ACCOUNTS HOLDING CORPORATION, as
Agent for the Lenders (the "Agent"), and amends the Credit Agreement dated as of
November 3, 2004 (as amended by Amendment No. 1 dated as of March 31, 2005 and
as further amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement") among the Company, the Lenders and the Agent.

                  WHEREAS, the Company and the Lenders desire to make certain
amendments to the Credit Agreement, as more fully set forth herein.

                  NOW THEREFORE, in consideration of the above premises and the
mutual covenants, conditions, and provisions hereinafter set forth, the parties
hereto agree as follows:

                  Section 1. DEFINITIONS; CONSTRUCTION. Terms defined in the
Credit Agreement and not otherwise defined herein are used herein as therein
defined. Unless the context of this Amendment clearly requires otherwise,
references to the plural include the singular, references to the singular
include the plural, the part includes the whole, the terms "include" and
"including" are not limiting, and the term "or" has the inclusive meaning
represented by the phrase "and/or".

                  Section 2. AGREEMENT IN RESPECT OF SECTION 5.1(A)(1).
         Effective as of the date of this Amendment, the Lenders and the Company
         hereby agree that the Company shall deliver to the Agent the quarterly
         and annual financial information required by Section 5.1(a)(1) of the
         Credit Agreement for the Company's fiscal quarter and fiscal year
         ending December 31, 2004 and its fiscal quarter ending March 31, 2005,
         in each case on or prior to June 30, 2005, and such deliveries shall
         fulfill the Company's obligations under such Section 5.1(a)(1) in
         respect of the Company's fiscal quarter and fiscal year ending December
         31, 2004 and its fiscal quarter ending March 31, 2005.

                  Section 3. CONDITIONS PRECEDENT TO AMENDMENT. The satisfaction
of each of the following, unless waived by the Lenders, in their sole
discretion, shall constitute conditions precedent to the effectiveness of this
Amendment:

                  (a) No injunction, writ, restraining order, or other order of
         any nature prohibiting, directly or indirectly, the consummation of the
         transactions contemplated herein shall have been issued and remain in
         force by any governmental authority against the Company.

                  Section 4. REPRESENTATIONS AND WARRANTIES. To induce the
Lenders to enter into this Amendment, the Company represents and warrants to the
Lenders that:

                  (a) Authority. The execution and delivery by the Company of
         this Amendment and the performance by the Company of its obligations
         under this Amendment (i) are within its corporate power and authority,
         (ii) have been duly




         authorized by all necessary corporate proceedings, (iii) do not
         conflict with or result in any breach or contravention of any material
         provision of applicable law, statute, rule or regulation to which the
         Company is subject or any judgment, order, writ, injunction, license or
         permit by which the Company is bound so as to materially adversely
         affect the assets, business or any activity of the Company, (iv) do not
         conflict with any provision of the certificate of incorporation or
         bylaws of the Company or any indenture, mortgage, deed of trust, credit
         agreement, loan agreement, or any other material agreement, contract or
         instrument binding upon the Company, (v) do not require any waivers,
         consents or approvals by any of its creditors which have not been
         obtained, or (vi) do not require any material approval which has not
         been obtained.

                  (b) Enforceability of Obligations. This Amendment and the
         Credit Agreement, as amended hereby, constitute the legal, valid and
         binding obligations of the Company enforceable against the Company in
         accordance with its terms, except to the extent that the enforceability
         thereof may be limited by applicable bankruptcy, insolvency, fraudulent
         convenyance, reorganization, moratorium or other similar laws generally
         affecting creditors' rights and by equitable principles (regardless of
         whether enforcement is sought in equity or at law).

                  (c) No Event of Default. No Event of Default or Default has
         occurred and is continuing.

                  Section 5. REFERENCE TO AND EFFECT ON LOAN DOCUMENTS.

                  (a) Upon the effectiveness of this Amendment, on and after the
         date hereof, each reference in the Credit Agreement to "this
         Agreement", "hereunder", "hereof" or words of like import, and each
         reference in the other Loan Documents to the Credit Agreement, shall
         mean and be a reference to the Credit Agreement as amended hereby;

                  (b) Except as expressly set forth herein, this Amendment shall
         not by implication or otherwise limit, impair, constitute a waiver of,
         or otherwise affect the rights and remedies of the Company, the Lenders
         or the Agent under the Credit Agreement or any other Loan Document, and
         shall not alter, modify, amend or in any way affect any of the terms,
         conditions, obligations, covenants or agreements contained in the
         Credit Agreement or any other Loan Document, all of which are ratified
         and affirmed in all respects and shall continue in full force and
         effect.

                  (c) Nothing herein shall be deemed to entitle the Company, the
         Lenders or the Agent to a waiver, amendment, modification or other
         change of any of the terms, conditions, obligations, covenants or
         agreements contained in the Credit Agreement or any other Loan Document
         in similar or differing circumstances.

                  (d) This Amendment shall be a Loan Document for all purposes.

                  Section 6. BENEFITS OF AMENDMENT. The terms and provisions of
this Amendment shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns to the extent contemplated by
the Credit Agreement.

                                       2


                  Section 7. INTERPRETATION. The Article and Section headings
used in this Amendment are for convenience of reference only and shall not
affect the construction hereof.

                  Section 8. EXECUTION IN COUNTERPARTS. This Amendment may be
executed in any number of counterparts, each of which counterparts, when so
executed and delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute but one and the same Amendment.
Faxed signatures of this Amendment shall be binding for all purposes.

                  Section 9. SEVERABILITY. If any provision of this Amendment
shall be held to be invalid, illegal or unenforceable under applicable law in
any jurisdiction, such provision shall be ineffective only to the extent of such
invalidity, illegality or unenforceability, which shall not affect any other
provisions hereof or the validity, legality and enforceability of such provision
in any other jurisdiction.

                  Section 10. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.

                  Section 11. EXPENSES. The Company agrees to pay the reasonable
and documented fees, expenses and disbursements of Gibson, Dunn & Crutcher LLP,
special counsel for the Agent, incurred in connection with the preparation,
negotiation, execution and delivery of this Amendment.

                  Section 12. NO COURSE OF DEALING. The execution and delivery
of this Amendment shall not establish a course of dealing among the Lenders and
the Agent, on the one hand, and the Company, on the other, or in any other way
obligate the Lenders to hereafter provide any further amendments, waivers, or
consents of any kind to the Company.

                  Section 13. ARM'S LENGTH AGREEMENT. Each of the parties to
this Amendment agrees and acknowledges that this Amendment has been negotiated
in good faith, at arm's length, and not by any means forbidden by law.

                  Section 14. ENTIRE AGREEMENT. This Amendment together with all
other instruments, agreements, and certificates executed by the parties in
connection herewith or with reference thereto, embody the entire understanding
and agreement between the parties hereto and thereto with respect to the subject
matter hereof and thereof and supercede all prior agreements, understandings,
and inducements, whether express or implied, oral or written.

                           [Signature page to follow.]



                                       3




                  IN WITNESS WHEREOF, the parties have caused this Amendment to
be executed and delivered as of the date first above written.


                                     TAL INTERNATIONAL GROUP, INC.


                                     By:    /s/ A. Richard Caputo, Jr.
                                           -----------------------------
                                     Name:   A. Richard Caputo, Jr.
                                     Title:  Vice President



                                     TRANSAMERICA ACCOUNTS HOLDING
                                     CORPORATION, AS AGENT AND SOLE LENDER


                                     By:    /s/ Vincent Hillery
                                           -----------------------------
                                     Name:   Vincent Hillery
                                     Title:  Executive Vice President


















                                                                    EXHIBIT 10.6


                             INTERCREDITOR AGREEMENT

         This INTERCREDITOR AGREEMENT, dated as of November 3, 2004 (as amended,
modified or supplemented from time to time in accordance with the terms hereof,
this "Agreement"), is by and among TransAmerica Leasing Inc., a Delaware
corporation (together with its successors and assigns, "TLI"), Trans Ocean
Limited, a Delaware corporation (together with its successors and assigns,
"TOL"), Trans Ocean Container Corp., a Delaware corporation (together with its
successors and assigns, "TOCC"; each of TLI, TOL and TOCC, a "Senior Borrower"
and collectively, the "Senior Borrowers"), TAL International Inc., a Delaware
corporation (together with its successors and assigns, "TAL" or the
"Subordinated Borrower"), Fortis Bank (Nederland) N.V., an administrative agent
(together with its successors and assigns as administrative agent, "Fortis") for
the lenders under the Senior Credit Agreement (as hereafter defined) and
Transamerica Accounts Holding Corporation, a Delaware corporation as agent
(together with its successors and assigns in such capacity, the "Administrative
Agent") for the lenders under the Subordinated Credit Agreement (as hereinafter
defined).

                                    RECITALS

         WHEREAS, the Senior Borrowers, Fortis and various lenders are party to
a Credit Agreement, dated as of November 3, 2004 (as amended, modified or
supplemented from time to time in accordance with its terms, the "Senior Credit
Agreement") pursuant to which the Senior Borrowers may from time to time borrow
amounts from the lenders named therein;

         WHEREAS, TAL, the Administrative Agent and various lenders are party to
a Senior Subordinated Credit Agreement, dated as of November 3, 2004 (as
amended, modified or supplemented from time to time in accordance with its
terms, the "Subordinated Credit Agreement") pursuant to which TAL will borrow
Two Hundred Seventy-Five Million Dollars ($275,000,000) from the lenders named
therein;

         WHEREAS, it is a condition precedent to Fortis and the Senior Lenders
entering into the Senior Credit Agreement and to make any loans or otherwise
extend credit to the Senior Borrowers under the Senior Credit Agreement that the
Administrative Agent, on behalf of the Subordinated Lenders, enter into this
Agreement; and

         NOW THEREFORE, in consideration of the foregoing, the mutual agreements
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and as an inducement to Fortis and
the Senior Lenders to enter into the Senior Credit Agreement and to extend
credit to the Senior Borrowers, and in consideration of the granting, thereof,
the parties hereto hereby agree as follows:

         SECTION 1.    DEFINITIONS. Capitalized terms defined in the recitals
hereof shall have the meanings herein as are ascribed thereto in the recitals.
As used herein, the following terms shall have the following meanings:




                                       1



         Bankruptcy Code. Title 11, United States Code as in effect from time to
time (and any successor

thereto).

         Capital Stock. Any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing.

         Event of Default. This term shall have the meaning set forth in the
Senior Credit Agreement, as in effect on the date hereof.

         High Yield Bonds. Any issuance by TAL after the date hereof of notes or
other debt securities (other than the Exchange Notes (as defined in the
Subordinated Credit Agreement)) in a private placement or public offering
(including a Rule 144A offering or similar transaction) the proceeds of which
are used by TAL to refinance, in whole or in part, the Subordinated Debt
outstanding on the date hereof.

         Legal Final Payment Date. The Payment Date (as defined in the Senior
Credit Agreement) occurring in January 2012.

         Payment Blockage Notice.  This term is defined in Section 3(c) hereof.

         Payment Blockage Period.  This term is defined in Section 3(c) hereof.

         Remedy Blockage Notice.  This term is defined in Section 3(c) hereof.

         Remedy Blockage Period.  This term is defined in Section 3(c) hereof.

         Senior Credit Agreement.  This term shall have the meaning set forth in
the Recitals.

         Senior Debt. All indebtedness of the Senior Borrowers, their
Subsidiaries or any other Person arising under or in respect of the Senior Debt
Documents owing to Fortis and/or the Senior Lenders and/or their respective
assignees who may become holders or participants in any such indebtedness,
whether by amendment of the Senior Debt Documents or otherwise, and any
indebtedness arising out of any extension, refinancing or refunding of such
indebtedness, including without limitation, principal, reimbursement
obligations, interest (including, without limitation post-petition interest
whether or not a court of competent jurisdiction would allow payment thereof to
Fortis or the Senior Lenders under the Bankruptcy Code), fees, costs and
expenses, owing to Fortis and the Senior Lenders or any such holder or
participant of or in any loan made under the Senior Debt Documents in each case
whether direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising and all obligations of the Borrowers and their
Subsidiaries to any of the Senior Lenders and/or Fortis with respect to any
Interest Rate Hedge Agreements; provided, however, that the term "Senior Debt"
shall not include any increases in the foregoing obligations owed under the
Senior Debt Documents to the extent of:

                  (a)  increases in the aggregate principal amount of the Senior
         Debt in excess of an amount equal


                                       2




         to the greater of (i) Eight Hundred Seventy Five Million Dollars
         ($875,000,000) and (ii) Eighty-Five percent (85%) of the book value of
         the consolidated total tangible assets of TAL and its Subsidiaries
         (including, without limitation, the Senior Borrowers);

                  (b)  increases in the weighted average annual interest margin
         over Libor (determined based on the average unpaid principal balance of
         the Senior Debt during the preceding twelve month period or such
         shorter period as the Senior Debt has been outstanding) that accrues
         with respect to all classes of Indebtedness of the Senior Borrowers to
         the Senior Lenders in excess of 3.0%; and

                  (c)  increases in the commitment fees, agent fees and other
         regularly occurring fees, charges or expenses provided for under the
         Senior Debt Documents as in effect on the date hereof; provided,
         however, that nothing contained in this clause (c) shall limit the
         amount of fees or expenses paid, or payable, to Fortis and the Senior
         Lenders in connection with the granting of any waiver, consent or
         modification to the Senior Debt Documents or in connection with the
         granting of any forbearance as a result of an event of default by the
         Senior Borrowers under the Senior Debt Documents.

         Senior Debt Collateral. The collateral described in the Senior Debt
Documents.

         Senior Debt Documents. All of the documents set forth on Exhibit A
hereto.

         Senior Lender.  A financial institution that is named as a "Lender"
under the Senior Credit Agreement.

         Subordinated Debt. All indebtedness of TAL, its Subsidiaries or any
other Person arising under or in respect of the Subordinated Debt Documents
owing to the Administrative Agent and/or the Subordinated Lenders and/or their
respective assignees who may become holders or participants in any such
indebtedness, whether by amendment of the Subordinated Debt Documents or
otherwise, and any indebtedness arising out of any extension, refinancing
(including the Exchange Notes (as defined in the Subordinated Debt Documents) or
refunding of such indebtedness, including without limitation, principal,
reimbursement obligations, interest (including, without limitation post-petition
interest whether or not a court of competent jurisdiction would allow payment
thereof to the Administrative Agent and/or the Subordinated Lenders under the
Bankruptcy Code), fees, costs and expenses owing to the Administrative Agent and
the Subordinated Lenders or any such holder or participant of or in any loan
made under the Subordinated Debt Documents in each case whether direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising.

         Subordinated Debt Documents.  All of the documents set forth on
Exhibit B hereto.


         Subordinated Lenders. The persons named as lenders under the
Subordinated Credit Agreement and the holders of the Exchange Notes (as defined
in the Subordinated Credit Agreement) issued in exchange for the Interim Loan
(as defined in the Subordinated Credit Agreement).

         SECTION 2.    SUBORDINATION. Anything herein to the contrary
notwithstanding, TAL, for itself, its Subsidiaries and their respective
successors, and the Administrative Agent, on



                                       3




behalf of the Subordinated Lenders, agrees that the payment of all Subordinated
Debt is subordinated, to the extent and in the manner provided herein, to the
prior satisfaction of the Senior Debt (including all obligations under the
Senior Credit Agreement, whether outstanding on the Closing Date or thereafter
incurred). This Section 2 shall constitute a continuing offer to all Persons who
become holders of, or continue to hold, the Senior Debt, and such provisions are
made for the benefit of the holders of Senior Debt and Fortis may enforce such
provisions.

         SECTION 3.    RESTRICTIONS ON PAYMENTS OF SUBORDINATED DEBT; PAYMENT
AND REMEDY BLOCKAGE PERIODS. (a) Until the Senior Debt shall have been repaid in
full in cash, and except as otherwise provided in this Section 3, TAL shall not
during the continuation of a Payment Blockage Period, directly or indirectly,
make any payment of, and none of the Administrative Agent or the Subordinated
Lenders shall accept payment of principal of, or interest on, or any other
amount on account of, any portion of the Subordinated Debt, or repurchase,
redeem or otherwise acquire any of the Subordinated Debt, nor cancel, rescind,
set off or otherwise discharge any part of the Subordinated Debt. In addition,
none of the Administrative Agent, TAL or any Subordinated Lender shall, during
the continuation of any Remedy Blockage Period, demand, sue for, or take any
other action to enforce or collect upon any such payment or to enforce its
rights with respect to the Subordinated Debt.

         (b)      Subject to the following restrictions set forth in this
Section 3(b), the Administrative Agent and the Subordinated Lenders may, upon
the occurrence and during the continuance of an event of default under the
Subordinated Credit Agreement, pursue its rights and remedies as a holder of
Subordinated Debt to enforce payment thereof subject to the following
restrictions:

                       (1) no Remedy Blockage Period is then in effect;

                       (2) the Administrative Agent shall provide Fortis with a
                  notice of such event of default not less than ten (10) days
                  prior to taking any such action;

                       (3) none of the Administrative Agent or any Subordinated
                  Lender shall file, and will not join with others in filing, a
                  bankruptcy petition against any of the Senior Borrowers until
                  at least one year and one day (or the longest preference
                  period under the Bankruptcy Code or state insolvency laws then
                  in effect) after all of the Senior Debt has been repaid in
                  full;

                       (4) to the extent that the Administrative Agent or any
                  Subordinated Lender obtains an interest in the Capital Stock
                  of any Senior Borrower or any Subsidiary of any Senior
                  Borrower, none of the Administrative Agent or any Subordinated
                  Lender shall, without the prior written consent of Fortis in
                  each instance, amend, or agree to the amendment of, the
                  organizational documents of any of the Senior Borrowers that
                  is material and adverse to the rights of the Senior Lenders
                  under the Senior Debt Documents; and

                       (5) none of the Administrative Agent or any Subordinated
                  Lender shall take any action, or join with others to take any
                  action, (i) challenging the validity or enforceability of any
                  lien or security interest granted by any of the Senior



                                       4



                  Borrowers in favor of Fortis and the Senior Lenders pursuant
                  to the terms of the Senior Debt Documents, or (ii) seeking
                  the "substantive consolidation" of any of the Senior
                  Borrowers or any of their Subsidiaries with TAL or any other
                  Person.

         (c)      For purposes of this paragraph 3, "Payment Blockage Period"
means (A) for so long as an Event of Default under any of Section 13.1(a),
13.1(b) or 13.1(d) of the Senior Credit Agreement has occurred and is
continuing, or (B) in the case of any other Event of Default under the Senior
Credit Agreement not dealt with in clause (A) above, the period commencing upon
the date on which Fortis sends a notice to the Administrative Agent of the
occurrence of such Event of Default (such notice to reference this Agreement and
state that it is a "Payment Blockage Notice") and ending on the earlier of (x)
the date which is 180 days after the commencement of such period and (y) the
first date after the commencement of such period on which all Events of Default
under the Senior Credit Agreement have been cured or waived; and "Remedy
Blockade Period" means any period commencing upon the date on which Fortis sends
a notice to the Administrative Agent of the occurrence of an Event of Default
under the Senior Credit Agreement (such notice to reference this Agreement and
state that it is a "Remedy Blockage Notice") and ending on the date which is the
earlier of (x) 30 days after the commencement of such period and (y) the first
day after the commencement of such period on which all Events of Default under
the Senior Credit Agreement have been cured or waived.

         Notwithstanding the foregoing, no Payment Blockage Period may be
commenced under clause (B) above as a result of an Event of Default if the same
Event of Default was the basis of the commencement of a prior Payment Blockage
Period unless such Event of Default shall have been cured or waived for at least
60 days. No Remedy Blockage Period may be commenced as a result of any Event of
Default under the Senior Credit Agreement if the same Event of Default under the
Senior Credit Agreement had been the basis for the commencement of a prior
Remedy Blockage Period unless such Event of Default under the Senior Credit
Agreement shall have been cured or waived for at least 60 days. Furthermore,
there may occur no more than one Remedy Blockage Period during the term of this
Agreement, and no more than one Payment Blockage Period during any 360 day
period.

         (d)      Upon any payment or distribution of assets of TAL or of any
Senior Borrower of any kind or character, whether in cash, property or
securities, to creditors upon any total or partial liquidation, dissolution,
winding-up, reorganization, assignment for the benefit of creditors or
marshaling of assets and liabilities of TAL or any Senior Borrower or any of
their respective Subsidiaries or in a bankruptcy, reorganization, insolvency,
receivership or other similar proceeding relating to TAL or any Senior Borrower
or any of their respective Subsidiaries or its assets, whether voluntary or
involuntary, all Senior Debt due or to become due shall first be paid in full in
cash or such payment duly provided for to the satisfaction of the holders of
Senior Debt, before any payment or distribution of any kind or character is made
on account of any Subordinated Debt or for the acquisition of any of
Subordinated Debt for cash or property or otherwise. Upon any such dissolution,
winding-up, liquidation, reorganization, receivership or similar proceeding, any
payment or distribution of assets of TAL or any Senior Borrower or any of their
respective Subsidiaries of any kind or character, whether in cash, property or
securities, to which the Administrative Agent or the Subordinated Lenders would
be entitled, except for the provisions hereof, shall be paid by TAL or the
Senior Borrowers, as the case may be, or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person



                                       5




making such payment or distribution, or by the Subordinated Lenders or by the
Administrative Agent if received by it, directly to the holders of Senior Debt
(pro rata to such holders on the basis of the respective amounts of Senior Debt
held by such holders) or their respective representatives, for application to
the payment of Senior Debt remaining unpaid until all such Senior Debt has been
paid in full in cash or cash equivalents after giving effect to any concurrent
payment, distribution or provision therefore to or for the holders of Senior
Debt.

         (e)      Anything contained herein to the contrary notwithstanding,
TAL is entitled to issue, and the Subordinated Lenders are entitled to accept,
the Exchange Notes (as defined in the Subordinated Credit Agreement) and TAL is
entitled to issue, and the holders of the Exchange Notes (as defined in the
Subordinated Debt Documents) are entitled to accept, the Exchange Notes as
defined in the registration rights agreement identified as a Subordinated Debt
Document.

         SECTION 4.    LEGENDS. Each instrument evidencing the Subordinated Debt
(including the Exchange Notes (as defined in the Subordinated Credit Agreement))
shall bear a legend or include a statement providing that payment of principal
thereof and interest thereon has been Subordinated to the Senior Debt in the
manner and to the extent set forth in this Agreement.

         SECTION 5.    SUBROGATION. The Administrative Agent and the
Subordinated Lender shall be subrogated to the rights of Fortis and the Senior
Lenders until the Subordinated Debt shall be paid in full; provided, that the
Administrative Agent and the Subordinated Lender shall be subrogated only to the
extent that amounts paid over to or collected by the Administrative Agent and
the Subordinated Lenders have been applied to the Senior Debt and such
applications have not been subsequently reversed; provided further, that the
Administrative Agent's and the Subordinated Lender's subrogation rights shall be
subordinated to the Senior Debt in the same manner as the Subordinated Debt
until the Senior Debt is paid in full in cash. For purposes of such subrogation,
no payments or distributions to Fortis or any Senior Lender by, or on behalf of,
TAL, or by, or on behalf of, the Administrative Agent or any Subordinated Lender
by virtue of this Agreement, which otherwise would have been made to the
Administrative Agent or a Subordinated Lender shall, as between TAL and the
Administrative Agent or a Subordinated Lender, as the case may be, be deemed to
be a payment by TAL to or on account of the Senior Debt, it being understood
that the provisions of this agreement are and are intended solely for the
purpose of defining the relative rights of the Administrative Agent and the
Subordinated Lenders, on the one hand, and Fortis and the Senior Lenders, on the
other hand.

         SECTION 6.    FORTIS' RIGHTS TO REALIZE UPON COLLATERAL. Fortis has
complete and sole discretion in, and shall not be liable to TAL or any
Subordinated Lender for determining, how, when, if, and in what manner Fortis
forecloses or otherwise realizes upon any Senior Debt Collateral or enforced or
exercises any rights or remedies of a secured party or lien creditor of any
other rights with respect to such Senior Debt Collateral or otherwise takes any
action with respect thereto provided, that prior to taking any action to dispose
of the Senior Debt Collateral Fortis shall provide the Administrative Agent with
(i) thirty (30) days' prior written notice of such action, and (ii) in the case
of a private sale of Senior Debt Collateral, information relating to the price
expected to be realized from such disposition. Subject to, but without in any
way limiting the foregoing, each of TAL and the Administrative Agent
specifically acknowledges and agrees that Fortis shall be entitled to take such
action as it deems appropriate to enforce the



                                       6




Senior Debt or with respect to any Senior Debt Collateral whether or not such
action is beneficial or detrimental to the interests of TAL or the holders of
the Subordinated Debt; provided, however, that Fortis acknowledges and agrees
that its sole recourse is, and shall be, recourse to the assets of the Senior
Borrowers (including the Senior Debt Collateral) and it has no, and shall not
seek any, recourse to TAL or its assets with respect to any such enforcement
action. Until the Senior Debt shall have been indefeasibly paid in full, none of
TAL, the Administrative Agent or any Subordinated Lender shall attach, foreclose
on, pursue any remedies otherwise available at law or in equity with respect to
the Senior Debt Collateral, or take any other action with respect to any of the
Senior Debt Collateral and shall have no rights to have the Senior Debt
Collateral or any part thereof marshaled upon any foreclosure, sale or other
realization thereon by Fortis; provided, however, that this sentence shall not
directly or indirectly prohibit or restrict the Administrative Agent or any
Subordinated Lender with respect to any attachment, foreclosure, or pursuit of
any other remedies otherwise available at law or in equity with respect to TAL
and its assets. Fortis' ability to enforce its rights on behalf of the Senior
Lenders in the Senior Debt Collateral, shall not be conditioned upon, and under
no circumstances shall Fortis or the Senior Lenders have any duty to any obligor
thereon or guarantor thereof or to resort to any other rights or remedies
whatsoever and Fortis and the Senior Lenders shall have the right to foreclose
or otherwise realize upon any part or all of the Senior Debt Collateral
irrespective of whether or not other proceedings or steps are pending seeking
resort to or realization upon or from any other obligor on or guarantor of the
Senior Debt.

         SECTION 7.    RECEIPTS BY ADMINISTRATIVE AGENT AND SUBORDINATED
LENDERS. In the event the Administrative Agent or any Subordinated Lender shall
receive any payment or distribution of assets of TAL or any Borrower of any kind
or character, whether in cash, properties or securities (including without
limitation any distributions received on account of any security interests,
liens, or other encumbrances), which are not permitted by or made and received
in accordance with the provisions of this Agreement, such payment or
distribution to the Administrative Agent or any Subordinated Lender shall not be
commingled with other funds and shall be held in trust for the benefit of, and
shall be paid over or delivered to, Fortis in precisely the form received
(except for the endorsement or assignment of the Administrative Agent or the
Subordinated Lenders where necessary). In the event of any failure by the
Administrative Agent or any Subordinated Lender to make any such endorsement or
assignment, Fortis is hereby irrevocably authorized to make the same.

         SECTION 8.    ISSUANCE OF HIGH YIELD BONDS. Until all Senior Debt has
been paid in full, TAL will not, without the prior written consent of Fortis,
issue any High Yield Bonds unless:

         (i)   the annual amount of interest that will be payable by TAL on
               such High Yield Bonds plus the annual amount of interest payable
               on any portion of the indebtedness evidenced by the Subordinated
               Credit Agreement that remains outstanding after the issuance of
               the High Yield Bonds (in each case without giving effect to any
               default interest) shall not exceed Thirty Million Dollars
               ($30,000,000);

         (ii)  the maturity date of the High Yield Bonds shall not be prior
               to the date that is one year and one day after the Legal Final
               Payment Date of the Senior Debt,



                                       7



                and no scheduled principal payments on such High Yield Bonds
                shall be payable prior to the date that is one year and one day
                after the Legal Final Payment Date of the Senior Debt;

         (iii)  the indenture or other document pursuant to which the High
                Yield Bonds are issued will contain subordination provisions
                with respect to the Senior Debt that have been approved by
                Fortis prior to the issuance of such High Yield Bonds, such
                approval not to be unreasonably withheld or conditioned upon
                the execution by the trustee of the High Yield Bonds of a
                separate subordination agreement with Fortis or any other
                Senior Lender; and

         (iv)   the other material terms and conditions of the High Yield
                Bonds including, without limitation, all terms relating to
                defaults, events of default and remedies are not materially
                more disadvantageous to the Senior Lenders, taken as a
                whole, than the then prevailing market terms for similar
                types of Indebtedness.

         SECTION 9.    SPECIFIC PERFORMANCE; WAIVER OF DEFENSES, ETC. Fortis, on
behalf of the Senior Lenders, is hereby authorized to demand specific
performance of this Agreement, whether or not Fortis, the Senior Borrowers or
the Senior Lenders shall have complied with the provisions hereof applicable to
it, at any time when TAL, the Administrative Agent or the Subordinated Lender
shall have failed to comply with any provision hereof applicable to it. Each of
TAL and the Administrative Agent, in its individual capacity and on behalf of
the Subordinated Lenders, hereby irrevocably waives any defense based on the
adequacy of a remedy at law which might be asserted as a bar to the remedy of
specific performance hereof in any action brought therefor by Fortis or any
Senior Lender. TAL and the Administrative Agent, in its individual capacity on
behalf of the Subordinated Lenders, further waives presentment, notice and
protest in connection with all negotiable instruments evidencing the Senior
Debt, notice of any loan made, letter of credit issued, extended or renewed,
extension granted or other action taken in reliance hereon and, except as
provided in this Agreement, all demands and notices of every kind in connection
with this Agreement or Senior Debt; subject to compliance with the provisions of
Section 14(b) hereof, assents to any renewal, extension or postponement of the
time of payment of Senior Debt or any other indulgence with respect thereto, to
any substitution, exchange or release of collateral therefor in accordance with
the terms hereof and to the addition or release of any person primarily or
secondarily liable thereon; and, subject to compliance with the provisions of
Section 14(b) hereof, agrees to the provisions of any instrument, security or
other writing evidencing Senior Debt. This Agreement on the part of TAL and the
Administrative Agent, in its individual capacity on behalf of the Subordinated
Lenders, shall be and remain absolute and unconditional under any and all
circumstances, and no act or omission on the part of TAL or the Administrative
Agent consistent with the terms of this Agreement shall affect or impair the
agreements of TAL or the Administrative Agent hereunder, unless Fortis shall
otherwise consent in writing.

         SECTION 10.   FURTHER ASSURANCES. The parties hereto shall execute and
deliver to each other party such further instruments and shall take such further
action as any party hereto may at any time or times reasonably request in order
to carry out the provisions and intent of this Agreement.



                                       8




         SECTION 11.   REVIVAL OF SENIOR DEBT. The Administrative Agent, in its
individual capacity and on behalf of the Subordinated Lenders, and TAL agree
that, if at any time all or any part of any payment previously applied by Fortis
to the Senior Debt is returned by or recovered from Fortis or any Senior Lender
by reason of any order of any bankruptcy court or by reason of the operation of
any other applicable law, this Agreement shall automatically be reinstated to
the same effect as if the prior application had not been made. It is further
agreed that any diminution (whether pursuant to court decree or otherwise,
including without limitation for any of the reasons described in the preceding
sentence) of the Senior Borrowers' obligation to make any distribution or
payment pursuant to any Senior Debt, except to the extent such diminution occurs
by reason of the repayment (which has not been disgorged or returned) of such
Senior Debt in cash, shall have no force or effect for purposes of the
subordination provisions contained in this Agreement, with any turnover of
payments as otherwise calculated pursuant to this Agreement to be made as if no
such diminution had occurred.

         SECTION 12.   AMENDMENT. The provisions hereof and the rights granted
to Fortis, on behalf of the Senior Lenders, hereunder are for the protection of
Fortis and the Senior Lenders and any other assignee who may become a holder of
or participant in any of the Senior Debt, whether by amendment to the Senior
Credit Agreement or otherwise, and not for the protection or benefit of the
Senior Borrowers. This Agreement may be amended only by an instrument in writing
signed by all of the parties hereto.

         SECTION 13.   COUNTERPARTS. This Agreement may be executed in any
number of counterparts, but all of such counterparts shall together constitute
but one agreement. In making proof of this Agreement, it shall not be necessary
to produce or account for more than one counterpart signed by each of the
parties hereto.

         SECTION 14.   REQUIRED CONSENTS FOR CERTAIN EVENTS AFFECTING
SUBORDINATED INDEBTEDNESS. (a) The Administrative Agent agrees with Fortis, for
the benefit of Fortis and the Senior Lenders, that the Administrative Agent will
not enter into any amendment of the material terms of any agreement, document or
instrument evidencing the Subordinated Debt including, without limitation, all
terms relating to subordination, payments, defaults and events of default,
remedies, the term, maturity, interest rate and fees applicable to such
indebtedness and any and all financial and other material covenants without the
prior written consent of Fortis.

         (b)   Fortis hereby agrees with TAL and the Administrative Agent that
it will not, without the prior written consent of the Administrative Agent,
enter into any amendment of the Senior Credit Agreement if the effect of such
amendment would alter the definition of the defined terms "Designated Event of
Default" or "IO Distributable Amount" or change the relative payment priority of
the "IO Distributable Amount".

         (c)   TAL agrees with Fortis that it shall promptly, and in any event
within five Business Days of the execution thereof, furnish to Fortis copies of
any amendment to the Subordinated Debt Documents.

         (d)   The Senior Borrowers agree with the Administrative Agent that
they shall promptly, and in any event within five Business Days of the execution
thereof, furnish to the Administrative Agent copies of any amendment to the
Senior Credit Agreement.



                                       9




         SECTION 15.   NOTICES. Any notice or other communication in connection
with this Agreement shall be in writing and in the case of a letter, either
mailed registered or certified, postage prepaid, in the United States mail or
telecopied to the addresses or telecopy numbers set forth below:

               If to the Administrative Agent:

                       c/o Transamerica Finance Corporation
                       9399 West Higgins Road, Suite 600
                       Rosemont, IL 60018
                       Fax:
                       Attn:

                       with a copy to:

                       c/o Transamerica Finance Corporation
                       9399 West Higgins Road, Suite 600
                       Rosemont, IL 60018
                       Fax: (847) 685-1143
                       Attn: Vincent Hillery, Esq.


               If to Fortis:

                       Coolsingel 93
                       P.O. Box 749
                       3000 AS Rotterdam,
                       The Netherlands - RO1.16.02
                       Fax:  011-31 (10) 401-6343
                       Attn: Menno van Lacum

               If to TAL, TLI, TOL or TOCC:

                       c/o TAL International Container Corporation
                       100 Manhattanville Road,
                       Purchase, New York  10577-2135
                       Fax:
                       Attn:


or in any case, at such other address or telecopy number for notice as shall
have last been furnished in writing to the party giving notice.

         Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (i) if delivered by hand, overnight courier or
telecopy to any person above at the time of the receipt thereof by such person
or upon the sending of such telecopy and (ii) only in the case of notices or
demands being sent within the borders of the United States of America,




                                       10




if sent by registered or certified first-class mail, postage prepaid, on the
third Business Day following the mailing thereof.

         SECTION 16.   NO WAIVERS. No failure or delay on the part of any par
to exercise, and no course of dealing with respect to, any right, power or
privilege under this Agreement or any document or instrument relating to the
Senior Debt or the Subordinated Debt shall operate as a waiver thereof. No
single or partial exercise of any such right, power or privilege shall preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege.

         SECTION 17.   SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of each of the parties hereto, and their
respective successors and assigns. None of the Administrative Agent or any
Subordinated Lender may sell, assign, pledge, encumber or otherwise dispose of
the Subordinated Debt unless (i) such sale, assignment, pledge, encumbrance or
disposition is made expressly subject to the terms and provisions of this
Agreement, and (ii) such purchaser, assignee or pledgee shall have executed and
delivered a joinder to this Agreement.

         SECTION 18.   SEVERABILITY. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under present or future laws during the
term hereof, such provision shall be fully severable, this Agreement shall be
construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part hereof, and the remaining provisions hereof shall
remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom. Furthermore, in
lieu of such illegal, invalid or unenforceable provision there shall be added
automatically as a part of this Agreement a legal, valid and enforceable
provision as similar in terms to the illegal, invalid or unenforceable provision
as may be possible.

         SECTION 19.   COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument. In making proof of this Agreement it shall not be necessary to
produce or account for more than one such counterpart.

         SECTION 20.   GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (EXCEPT FOR THE CONFLICT OF LAWS
RULES THEREOF, BUT INCLUDING GENERAL OBLIGATIONS LAW SECTIONS 5-1401 AND
5-1402).

         SECTION 21.   ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT REPRESENTS THE
FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.



                                       11




         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on and as of the date first above written.

                                  TRANSAMERICA LEASING INC.


                                  By:   /s/ A. Richard Caputo, Jr.
                                      ------------------------------------------
                                           Name:  A. Richard Caputo, Jr.
                                           Title: Authorized Officer


                                  TRANS OCEAN LTD.


                                  By:   /s/ A. Richard Caputo, Jr.
                                      ------------------------------------------
                                           Name:  A. Richard Caputo, Jr.
                                           Title: Authorized Officer


                                  TRANS OCEAN CONTAINER CORPORATION


                                  By:   /s/ A. Richard Caputo, Jr.
                                      ------------------------------------------
                                           Name:  A. Richard Caputo, Jr.
                                           Title: Authorized Officer


                                  TAL INTERNATIONAL INC.


                                  By:   /s/ A. Richard Caputo, Jr.
                                      ------------------------------------------
                                           Name:  A. Richard Caputo, Jr.
                                           Title: Authorized Officer



                                  TRANSAMERICA ACCOUNTS HOLDING CORPORATION


                                  By:   /s/ Vincent Hillery
                                      ------------------------------------------
                                           Name:  Vincent Hillery
                                           Title: Executive Vice President




                                       12




                                  FORTIS BANK (NEDERLAND) N.V.


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


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




















                                       13





                                                                    EXHIBIT 10.8


                          TAL INTERNATIONAL GROUP, INC.

                         INVESTOR SUBSCRIPTION AGREEMENT

     THIS INVESTOR SUBSCRIPTION AGREEMENT, dated as of November 3, 2004 (this
"Agreement"), is made by and among TAL International Group, Inc., a Delaware
corporation (the "Company"), whose address is c/o The Jordan Company, L.P., 767
Fifth Avenue, 48th Floor, New York, New York 10153, and the persons and entities
whose names are set forth on Exhibit I hereto (collectively the "Shareholders").

     1. Share Subscriptions.

         (a) Each Shareholder herewith subscribes for the number of shares set
forth opposite such Shareholder's name in Exhibit I hereto of the Company's
Common Stock, par value $0.001 per share (the "Common Stock"), at a purchase
price of U.S. $1.00 per share and tenders cash in consideration of the
subscription for such shares of Common Stock.

         (b) Each Shareholder herewith subscribes for the number of shares set
forth opposite such Shareholder's name in Exhibit I hereto of the Company's
Series A 12% Cumulative Senior Preferred Stock, $0.001 par value (the "Preferred
Stock" and, together with the Common Stock, the "Shares"), at a purchase price
of U.S. $1,000.00 per share and tenders cash in consideration of the
subscription for such shares of Preferred Stock.

         (c) Each Shareholder acknowledges to the Company and the other
Shareholders that such Shareholder understands and agrees, as follows:

THE SHARES HAVE NOT BEEN REGISTERED UNDER FEDERAL OR STATE SECURITIES LAWS. THE
SHARES ARE VERY SPECULATIVE AND RISKY. THERE IS NO PUBLIC OR OTHER MARKET FOR
THE SHARES NOR IS ANY LIKELY TO DEVELOP. THE COMPANY AND ITS SUBSIDIARIES HAVE
BORROWED A SUBSTANTIAL PORTION OF THE FUNDS USED TO OPERATE ITS BUSINESS. EACH
SHAREHOLDER ACKNOWLEDGES THAT SUCH SHAREHOLDER MAY AND CAN AFFORD TO LOSE SUCH
SHAREHOLDER'S ENTIRE INVESTMENT IN THE SHARES AND THAT SUCH SHAREHOLDER
UNDERSTANDS SUCH SHAREHOLDER MAY HAVE TO HOLD THIS INVESTMENT INDEFINITELY.

     2. Seacon Claw-Back.

         (a) If upon an Exit the ROIC of the Resolute Investors with respect to
their equity securities in the Company, whether purchased hereunder or purchased
directly from the Company at any time in the future pursuant to an equity
issuance by the Company (and for the avoidance of doubt shall not include any
purchase of equity securities by the Resolute Investors from any Seacon
Investor, any other Resolute Investor or any third party) is less than the
minimum amounts specified in clause (b) below, then the Resolute Investors shall
have the




option of purchasing from the Seacon Investors the shares of Common Stock
purchased by them pursuant to this Agreement and all proceeds of such shares
other than Cash Dividends (as defined in the Escrow Agreement) (as defined
below)) at a purchase price of $0.01 per share (the "Claw-Back Option"). The
number of shares of Common Stock subject to the Claw-Back Option shall be equal
to the minimum number of shares of Common Stock that would enable the Resolute
Investors to achieve the ROIC specified in clause (b) below as of the date of
any Exit, but in any event, shall not be more than 4,875 shares of Common Stock
being purchased by the Seacon Investors hereunder, subject to adjustment for
stock splits, combinations, stock dividends, recapitalizations and similar
transactions (the "Option Shares").

         (b) For purposes of this Section 2, the minimum ROICs that will trigger
the Claw-Back Option are as follows:

               (i) If the Exit occurs after the date hereof but prior to the
three-year anniversary of the date hereof, then the minimum ROIC shall be equal
to two (2) times the amount of the Resolute Investors' invested capital in the
Company; provided that if an Exit, other than an Exit specified in clause (iii)
of the definition of "Exit", occurs after the date hereof but prior to the
one-year anniversary of the date hereof, then the minimum ROIC shall be equal to
one and one-half (1 1/2) times the amount of the Resolute Investors' invested
capital in the Company

               (ii) If the Exit occurs on or after the three-year anniversary of
the date hereof but prior to the four-year anniversary of the date hereof then
the minimum ROIC shall be equal to two and one-half (2 1/2) times the amount of
the Resolute Investors' invested capital in the Company;

               (iii) If the Exit occurs on or after the four-year anniversary of
the date hereof but prior to the five-year anniversary of the date hereof then
the minimum ROIC shall be equal to two and three-fourths (2 3/4) times the
amount of the Resolute Investors' invested capital in the Company; and

               (iv) If the Exit occurs on or after the five-year anniversary of
the date hereof then the minimum ROIC shall be equal to an amount or amounts
that produce a compounded annual internal rate of return on the Resolute
Investors' invested capital in the Company of at least twenty percent (20%).

         (c) The Resolute Investors may exercise the Claw-Back Option upon the
occurrence of an Exit by sending a written notice thereof to the Seacon
Investors (the "Exercise Notice"), which Exercise Notice shall specify the
number of Option Shares being purchased thereunder. Any Exercise Notice may be
sent to the Seacon Investors on or prior to the occurrence of an Exit and may be
conditioned on the consummation of the Exit. The purchase option under this
Section 2 shall be allocated among the Resolute Investors pro rata based on the
number of shares of Common Stock held by them at the date of exercise of the
Claw-Back Option.

         (d) For purposes of this Section 2, the following terms shall have the
corresponding meanings:

                                      -2-


               (i) "Exit" shall mean (i) the sale by the Resolute Investors of
all of their equity securities in the Company, (ii) the sale of all or
substantially all of the assets of the Company or (iii) the expiration of any
lock-up period or other transfer restrictions whether imposed by law or
agreement in connection with the consummation of initial public offering by the
Company in which all outstanding Preferred Stock is redeemed in full for cash.

               (ii) "Resolute Investors" shall mean The Resolute Fund, L.P., The
Resolute Fund Singapore PV, L.P., The Resolute Fund Netherlands PV I, L.P., The
Resolute Fund Netherlands PV II, L.P., The Resolute Fund NQP, L.P., JZ Equity
Partners PLC, Fairholme Partners, L.P., Fairholme Ventures II, LLC, Fairholme
Holdings, Ltd., Edgewater Private Equity Fund III, L.P., Edgewater Private
Equity IV, L.P., and their respective affiliates and Permitted Transferees (as
defined in the Shareholder Agreement (as defined below)). For the avoidance of
doubt, the rights granted to the Resolute Investors under this Section 2 shall
be transferable to their Permitted Transferees in connection with a permitted
transfer of their equity securities in the Company.

               (iii) "ROIC" shall mean (i) the actual amount of the purchase
price received by the Resolute Investors (net of all purchase price adjustments,
whether positive or negative) in a sale of the equity securities of the Company,
net of the Resolute Investors' pro rata portion of any reasonable investment
banking, broker, finder, attorneys, accounting and other fees and expenses
incurred in connection with such sale and (ii) all dividends or other
distributions or redemption proceeds received by the Resolute Investors with
respect to their equity securities of the Company. Proceeds shall not include
any monitoring or transaction fees received by the Resolute Investors and shall
not include the assumption of debt or any reasonable amounts paid in respect of
a non-compete agreement, transition services, consulting arrangements or similar
arrangements. Proceeds may be cash, stock, notes, or other securities or
property and shall be valued at their fair market value, as determined by the
Board of Directors of the Company in good faith.

               (iv) "Seacon Investors" shall mean shall mean Seacon Holdings
Limited and its affiliates and its Permitted Transferees. For the avoidance of
doubt, the obligations imposed on the Seacon Investors under this Section 2
shall be binding on their Permitted Transferees in connection with a permitted
transfer of the Option Shares.

         (b) As a condition precedent to the effectiveness of this Agreement,
the Seacon Investors shall execute and deliver to the Resolute Investors an
Escrow Agreement in the form of Exhibit II hereto (the "Escrow Agreement") in
order to secure the performance of the Seacon Investor's obligations under this
Section 2 and shall deliver the Option Shares to the Escrow Agent under the
Escrow Agreement with stock powers duly endorsed in blank.

     3. Proposed Transactions.

         (a) This Agreement references certain pertinent documents as well as
applicable laws and regulations. Each Shareholder acknowledges to the Company
and the other Shareholders that such references are not summaries or complete
and are qualified in their entirety by the complete texts of the documents, laws
and regulations so summarized.

                                      -3-


         (b) Each Shareholder acknowledges to the Company and the other
Shareholders that such Shareholder has had ample opportunity to ask questions
regarding each of the following documents:

               (i) Amended and Restated Certificate of Incorporation of the
Company;

               (ii) Bylaws of the Company;

               (iii) Stock Purchase Agreement, dated as of July 10, 2004, by and
between TA Leasing Holding Co., Inc. and Klesch & Company Limited, as amended,
including all exhibits and schedules thereto (the "Stock Purchase Agreement");

               (iv) Shareholders Agreement, dated as of the date hereof, by and
among the Company and the Shareholders, including all exhibits and schedules
thereto (the "Shareholder Agreement");

               (v) Management Subscription Agreement, dated as of the date
hereof, by and among the Company and the management shareholders named therein,
including all exhibits and schedules thereto (the "Management Subscription
Agreement");

               (vi) Management Consulting Agreement, dated as of the date
hereof, by and among the Company, its Related Companies and The Jordan Company,
L.P. ("TJC"), including all exhibits and schedules thereto (the "TJC Management
Consulting Agreement");

               (vii) Management Advisory Agreement, dated as of the date hereof,
by and among the Company, its Related Companies and the advisor party thereto,
including all exhibits and schedules thereto (the "Advisory Agreement");

               (viii) Transaction Fee Agreement, dated as of the date hereof, by
and between the Company and Seacon Holdings Limited (the "Seacon Fee
Agreement");

               (ix) Senior Subordinated Credit Agreement, dated as of November
3, 2004, by and among the Company and the lenders named therein, as such
agreement may be amended, waived or otherwise modified or refinanced from time
to time and all other agreements and documents related thereto (the "Loan
Agreement");

               (x) Credit Agreement, dated as of November 3, 2004, by and among
the Company, Fortis Bank, as Agent, Transamerica Leasing Inc. and TranOcean
Limited, as such agreement may be amended, waived or otherwise modified or
refinanced from time to time and all other agreements and documents related
thereto (the "Credit Agreement");

               (xi) The Company's 2004 Management Stock Plan (the "Management
Stock Plan"); and

               (xii) This Agreement and all exhibits and schedules hereto.

                                      -4-


         The documents referred to in (i) through (xii) are hereinafter
collectively referred to as the "Operative Documents", except that, for purposes
of Section 5(e) only, this Agreement will not be considered an Operative
Document.

     4. Shareholder Representations, Warranties and Covenants. Each Shareholder
represents, warrants and covenants to the Company and each other Shareholder
that:

         (a) Such Shareholder has the legal capacity, power and authority to
enter into and perform all of its obligations under this Agreement. The
execution, delivery and performance of this Agreement by such Shareholder will
not violate any other agreement to which such Shareholder is a party including,
without limitation, any voting agreement, shareholders agreement or voting
trust. This Agreement has been duly and validly authorized, executed and
delivered by such Shareholder and constitutes a valid and binding agreement of
such Shareholder, enforceable against such Shareholder in accordance with its
terms, except that such enforceability (i) may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting or relating to
enforcement of creditors' rights generally and (ii) is subject to general
principles of equity.

         (b) Such Shareholder will not (i) transfer any Shares if such transfer
would result in a default by the Company or its subsidiaries under any of the
provisions of the Operative Documents, (ii) except as required or contemplated
by the Operative Documents, grant any proxies, deposit any Shares into a voting
trust or enter into a voting agreement with respect to any Shares, or (iii) take
any action that would make any representation or warranty of such Shareholder
contained herein untrue or incorrect or have the effect of preventing or
disabling such Shareholder from performing his obligations under any of the
Operative Documents, or would result in a default by the Company or its
subsidiaries under the provisions of any of the Operative Documents. Each
Shareholder further agrees that such Shareholder's ability to transfer Shares is
subject to the limitations, restrictions and conditions of the Shareholder
Agreement and the other Operative Documents.

         (c) Such Shareholder has no pending or threatened claim, complaint,
action, suit, proceeding, hearing or investigation against the Company or its
subsidiaries for any period prior to the date hereof, nor does such Shareholder
intend to bring or file any claim, complaint, action, suit, proceeding, hearing
or investigation against the Company or its subsidiaries for any period prior to
the date hereof.

         (d) The Company has afforded such Shareholder and such Shareholder's
advisors, if any, the opportunity to discuss an investment in the Shares and to
ask questions of representatives of the Company concerning the terms and
conditions of the offering of the Shares and the Operative Documents, and such
representatives have provided answers to all such questions concerning the
offering of the Shares and the Operative Documents. Such Shareholder has
consulted its own financial, tax, accounting and legal advisors, if any, as to
such Shareholder's investment in the Shares and with the Operative Documents and
the consequences thereof and risks associated therewith. Such Shareholder and
such Shareholder's advisors, if any, have examined or have had the opportunity
to examine before the date hereof the Operative Documents and all information
that such Shareholder deems to be material to an understanding of the Company
and its subsidiaries, the proposed business of the Company and its subsidiaries,

                                      -5-


and the offering of the Shares. Such Shareholder also acknowledges that to such
Shareholder's knowledge there have been no general or public solicitations or
advertisements or other broadly disseminated disclosures (including, without
limitation, any advertisement, article, notice or other communication published
in any newspaper, magazine or similar media or broadcast over television, radio
or internet, or any seminar or meeting whose attendees have been invited by any
general solicitation or advertising) by or on behalf of the Company regarding an
investment in the Shares.

         (e) Such Shareholder represents to the Company and the other
shareholders of the Company that it knows and understands and has given full
consideration to and has had the opportunity to ask questions of any person
authorized to act on behalf of the Company concerning any aspect of the
transactions with affiliates being consummated by the Company in connection with
the Shareholders Agreement, the Loan Agreement, the Credit Agreement, the
Management Subscription Agreement, the TJC Management Consulting Agreement, the
Advisory Agreement, the Management Subscription Agreement, the Seacon Fee
Agreement and the Management Stock Plan, including all agreements, obligations,
covenants and arrangements contained therein or contemplated thereby, including
all exhibits and schedules thereto (collectively, the "Affiliate Transaction
Agreements").

     5. Risk Factors and Other Considerations: Each Shareholder acknowledges to
the Company and the other Shareholders that:

         (a) (i) The Company's subsidiaries are the Company's only material
assets, and that the Company and certain of its subsidiaries have borrowed a
substantial portion of the funds used to effect the purchase by the Company's
subsidiaries of the shares listed in the Stock Purchase Agreement; (ii) it is
unlikely that dividends will be paid on the Shares; (iii) there is no legal
requirement or promise made by the Company to declare or pay such dividends and
such dividends may not in any event be paid if such payment would violate any
term of the Operative Documents; and (iv) certain of the Operative Documents
severely restrict the ability of the Company to make any dividend or redemption
payments on the Shares in any case and such payment may be further restricted by
future agreements or instruments binding on the Company or its subsidiaries.

         (b) Any financial projections or forecasts with respect to the Company
and its subsidiaries are only forecasts prepared by management, which are
subject to many assumptions and factors beyond the Company's and its
subsidiaries' control, and that there can be no assurances that these forecasts
will be realized.

         (c) An investment in the Shares is a speculative investment which
involves a high risk of loss and that on and after the date hereof, there will
be no public market for the Shares and the Company does not contemplate that a
public market will develop.

         (d) Such Shareholder has given full consideration to and has had the
opportunity to ask questions of any person authorized to act on behalf of the
Company concerning any aspect of the transactions with affiliates being
consummated by the Company in connection with the Affiliate Transaction
Agreements.

                                      -6-


         (e) The Operative Documents and any other agreement or instrument that
may restrict the ability of the Company to make any dividend or redemption
payments may be created, amended, modified or supplemented, from time to time,
and may be refinanced, extended or substituted, from time to time, without
notice to, or the consent or approval of, the Shareholders.

     6. Securities Law and Other Matters. Each Shareholder represents and
warrants to the Company and the other Shareholders that:

         (a) Such Shareholder is an "accredited investor", as such term is
defined in Rule 501 of Regulation D under the Securities Act of 1933, as amended
(the "Securities Act").

         (b) (i) Such Shareholder used no "purchaser's representative" (as that
term is used in Regulation D under the Securities Act) in connection with the
transactions contemplated by the Operative Documents; (ii) such Shareholder has
substantial knowledge and experience in financial, investment and business
matters, and specifically in the business of the Company and its subsidiaries,
and has the requisite knowledge and experience to evaluate the risks and merits
of its investment in the Shares; (iii) the decision of such Shareholder to
purchase the Shares hereunder has been made by such Shareholder independent of
any other Shareholder and independent of any statements, disclosures or
judgments as to the properties, business, prospects or condition (financial or
otherwise) of the Company and its subsidiaries which may have been made or given
by any Shareholder or other person.

         (c) (i) The Shares being purchased by such Shareholder hereunder have
not been registered under the Securities Act on the ground that the sales of
Shares pursuant to this Agreement are exempt under Section 4(2) of the
Securities Act as not constituting a distribution, and that the Company's
reliance on such exemption is predicated in part on each Shareholder's
representation which such Shareholder herewith makes that the Shares have been
acquired solely by and for the account of such Shareholder for investment
purposes only, and are not being purchased for subdivision, fractionalization,
resale or distribution and other than as expressly set forth in the Operative
Documents, such Shareholder has no contract, undertaking, agreement or
arrangement with any other Shareholder to sell, transfer or pledge to such other
Shareholder or anyone else the Shares being sold to such Shareholder (or any
part thereof), and such Shareholder has no present plans or intentions to enter
into any such contract, undertaking, agreement or arrangement; (ii) the Shares
being sold to such Shareholder must be held indefinitely unless they are
subsequently registered under the Securities Act or a transfer is made pursuant
to an exemption from such registration, including, for example, pursuant to Rule
144 thereunder and that except as set forth in the Shareholders Agreement, the
Company has no agreements in respect of registering the Shares under Federal or
state law; and (iii) such Shareholder's financial condition is such that such
Shareholder is not under any present necessity or constraint, and does not
foresee in the future any necessity or constraint, to dispose of the Shares to
satisfy any existing or contemplated debt or undertaking.

         (d) In the event that in the future the Company engages in any
negotiation or transaction (including a merger or consolidation or other
reorganization by or of the Company) in which Regulation D under the Securities
Act may or will be available to the Company, each of the Shareholders who is not
then a professional investor agrees irrevocably (and with the


                                      -7-


knowledge and intention that the other holders of the Company's stock of all
classes will rely thereon in making their respective present investment
decisions) that such Shareholder will, within five (5) business days of notice
from the Company, which notice may be given in the sole discretion of the
Company, appoint a purchaser's representative or representatives who shall be
qualified and acceptable to the Company and any other person(s) who is (are)
involved in the proposed transaction so that the maximum benefits of Regulation
D under the Securities Act shall be available to the Company and all of its
Shareholders.

     7. Registration Rights. The Shares have not been registered under the
Securities Act nor any state securities laws and, in consequence thereof, all of
the Shares must be held indefinitely unless (a) subsequently registered under
the Securities Act or other applicable federal and state securities laws or (b)
exemptions from such registration are available at the time of a proposed sale
or transfer thereof. Except as set forth in the Shareholders Agreement, the
Company has no agreements in respect of a registration statement under either
federal or state law.

     8. Legend. All certificates representing the Shares shall be endorsed as
follows:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO, AND ARE
TRANSFERABLE ONLY UPON COMPLIANCE WITH, THE PROVISIONS OF A SHAREHOLDERS
AGREEMENT, DATED AS OF NOVEMBER 3, 2004, AMONG THE COMPANY AND ITS SHAREHOLDERS
AND A SUBSCRIPTION AGREEMENT, DATED AS OF NOVEMBER 3, 2004, AMONG THE COMPANY
AND CERTAIN OR ITS SHAREHOLDERS. A COPY OF THE ABOVE REFERENCED AGREEMENTS MAY
BE OBTAINED FROM THE SECRETARY OF THE COMPANY.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT, OR AN EXEMPTION FROM REGISTRATION, UNDER SAID
ACT."

         Each Shareholder acknowledges to the Company and the other Shareholders
that (i) the effect of such legend, among other things, is or may be to limit or
destroy the value of the certificate for purposes of sale or for use as loan
collateral and that "stop transfer" instructions may be noted against the Shares
sold to such Shareholder hereunder; and (ii) any transferee of such Shareholder
is required to become a party to the Shareholders Agreement as a condition to
acquiring Shares.

     9. Miscellaneous.

         (a) Subject to the conditions of transfer of Shares hereunder and in
the Shareholders Agreement, this Agreement shall be binding upon and shall inure
to the benefit of each individual Shareholder and such Shareholder's respective
heirs, executors, administrators, assigns and legal representatives and to the
Company and its respective successors and assigns, by way of merger,
consolidation or operation of law or otherwise. Once a Shareholder is no longer
a shareholder of the Company all rights and benefits (but not the obligations)
previously


                                      -8-


enjoyed by such party pursuant to the terms of this Agreement shall
automatically terminate with respect to such party.

         (b) Prior to consummation of any transfer of Shares held by a
Shareholder permitted under the Shareholders Agreement, except for transfers
pursuant to a public offering, such party shall cause the transferee to execute
an agreement in which the transferee agrees to be bound by the terms of this
Agreement and the Shareholders Agreement.

         (c) The language used in this Agreement will be deemed to be the
language chosen by the parties hereto to express their mutual intent, and no
rule of strict construction will be applied against any person.

         (d) THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED, APPLIED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. EACH OF
THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT IN THE EVENT OF ANY BREACH OF
THIS AGREEMENT, THE NON-BREACHING PARTY WOULD BE IRREPARABLY HARMED AND COULD
NOT BE MADE WHOLE BY MONETARY DAMAGES, AND THAT, IN ADDITION TO ANY OTHER REMEDY
TO WHICH THEY MAY BE ENTITLED AT LAW OR IN EQUITY, THE PARTIES SHALL BE ENTITLED
TO SUCH EQUITABLE OR INJUNCTIVE RELIEF AS MAY BE APPROPRIATE. THE CHOICE OF
FORUM SET FORTH IN THIS SECTION 9 SHALL NOT BE DEEMED TO PRECLUDE THE
ENFORCEMENT OF ANY JUDGMENT OF A NEW YORK FEDERAL OR STATE COURT OR THE TAKING
OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SUCH A JUDGMENT IN ANY OTHER
APPROPRIATE JURISDICTION.

         (e) IN THE EVENT ANY PARTY TO THIS AGREEMENT COMMENCES ANY LITIGATION,
PROCEEDING OR OTHER LEGAL ACTION IN CONNECTION WITH OR RELATING TO THIS
AGREEMENT, ANY RELATED AGREEMENT OR ANY MATTERS DESCRIBED OR CONTEMPLATED HEREIN
OR THEREIN, THE PARTIES TO THIS AGREEMENT HEREBY (1) AGREE UNDER ALL
CIRCUMSTANCES ABSOLUTELY AND IRREVOCABLY TO INSTITUTE ANY LITIGATION, PROCEEDING
OR OTHER LEGAL ACTION IN A COURT OF COMPETENT JURISDICTION LOCATED WITHIN THE
SOUTHERN DISTRICT OF NEW YORK, WHETHER A STATE OR FEDERAL COURT; (2) AGREE THAT
IN THE EVENT OF ANY SUCH LITIGATION, PROCEEDING OR ACTION, SUCH PARTIES WILL
CONSENT AND SUBMIT TO THE PERSONAL JURISDICTION OF ANY SUCH COURT DESCRIBED IN
CLAUSE (1) OF THIS SECTION AND TO SERVICE OF PROCESS UPON THEM IN ACCORDANCE
WITH THE RULES AND STATUTES GOVERNING SERVICE OF PROCESS (IT BEING UNDERSTOOD
THAT NOTHING IN THIS SECTION SHALL BE DEEMED TO PREVENT ANY PARTY FROM SEEKING
TO REMOVE ANY ACTION TO A FEDERAL COURT IN THE SOUTHERN DISTRICT OF NEW YORK;
(3) AGREE TO WAIVE TO THE FULL EXTENT PERMITTED BY LAW ANY OBJECTION THAT THEY
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH LITIGATION, PROCEEDING OR
ACTION IN ANY SUCH COURT OR THAT ANY SUCH LITIGATION, PROCEEDING OR ACTION WAS
BROUGHT IN ANY INCONVENIENT FORUM; (4) AGREE, AFTER CONSULTATION WITH COUNSEL,
TO WAIVE ANY RIGHTS TO A JURY TRIAL TO


                                      -9-


RESOLVE ANY DISPUTES OR CLAIMS RELATING TO THIS AGREEMENT; (5) AGREE TO
DESIGNATE, APPOINT AND DIRECT AN AUTHORIZED AGENT TO RECEIVE ON ITS BEHALF
SERVICE OF ANY AND ALL PROCESS AND DOCUMENTS IN ANY LEGAL PROCEEDING IN THE
SOUTHERN DISTRICT OF NEW YORK; (6) AGREE TO PROVIDE THE OTHER PARTIES TO THIS
AGREEMENT WITH THE NAME, ADDRESS AND FACSIMILE NUMBER OF SUCH AGENT; (7) AGREE
AS AN ALTERNATIVE METHOD OF SERVICE TO SERVICE OF PROCESS IN ANY LEGAL
PROCEEDING BY MAILING OF COPIES THEREOF TO SUCH PARTY AT ITS ADDRESS SET FORTH
HEREIN FOR COMMUNICATIONS TO SUCH PARTY; (8) AGREE THAT ANY SERVICE MADE AS
PROVIDED HEREIN SHALL BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (9)
AGREE THAT NOTHING HEREIN SHALL AFFECT THE RIGHTS OF ANY PARTY TO EFFECT SERVICE
OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. TO THE EXTENT PERMITTED BY LAW
IN CONNECTION WITH OR RELATING TO THIS AGREEMENT, ANY RELATED AGREEMENT OR ANY
MATTERS DESCRIBED OR CONTEMPLATED HEREIN OR THEREIN, AND AGREE TO TAKE ANY AND
ALL ACTION NECESSARY OR APPROPRIATE TO EFFECT SUCH WAIVER.

         (f) All personal pronouns used in this Agreement, whether used in
masculine, feminine or neuter gender, shall include all other genders if the
context so requires; the singular shall include the plural, and vice versa.

         (g) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument. If the requirements of this Agreement have otherwise
been met, new Shareholders may become parties to this Agreement by executing a
counterpart to this Agreement at which time the Company shall revise the
Exhibits as may be necessary or appropriate.

         (h) The words "sale," "sell," "transfer" and the like shall include any
disposition by way of transfer, with or without consideration to any person for
any purpose and shall include, but shall not be limited in any way to,
redemption (of other than its preferred stock) by the issuer, private or public
sale or exchanges of securities or any other similar transaction involving the
Shares.

         (i) In case any one or more of the provisions or parts of a provision
contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect any other provision or part of a
provision of this Agreement or any other jurisdiction, but this Agreement shall
be reformed and construed in any such jurisdiction as if such invalid or illegal
or unenforceable provision or part of a provision had never been contained
herein and such provision or part shall be reformed so that it would be valid,
legal and enforceable to the maximum extent permitted in such jurisdiction.

         (j) This Agreement and the other agreements entered into on the date
hereof in connection with this Agreement supersede all prior agreements between
the parties with respect to the subject matter thereof (including the letter
agreement dated September 16, 2004, by and among The Resolute Fund, L.P., TMC
Holdings, Inc. and Klesch & Company Limited


                                      -10-


and the letter agreement dated September 16, 2004, by and between The Resolute
Fund, L.P. and Klesch & Company Limited) and constitute a complete and exclusive
statement of the terms of the agreements among the parties with respect to the
subject matter thereof.

         (k) Each of the parties hereto agrees to execute all such further
instruments and documents and to take all such further action as are necessary
to effectuate the terms and purposes of this Agreement.

         (l) Whenever notice is required to be given by any party hereunder,
such notice shall be deemed sufficient when delivered to the Company at its
address above and to each of the other Shareholders at such Shareholder's
address set forth on Exhibit I hereto or to such other address as the
Shareholder shall have furnished to the Company.

         (m) Each party to this Agreement represents and warrants to the other
parties to this agreement that, except as set forth on Exhibit III hereto, such
party has not used any broker, finder or legal, financial or other advisor in
connection with the transactions contemplated by this Agreement and the other
Operative Documents, and no party hereto has or shall have any liability or
otherwise suffer or incur any damage, cost or expense as a result of or in
connection with any brokerage or finder's fee or other commission or fee payment
(collectively, "Damages") of any person or entity retained by such party in
connection with any of the transactions contemplated by this Agreement and other
the Operative Documents. In addition, each party to this Agreement agrees to
indemnify and hold harmless each other party to this Agreement and their
respective affiliates for any Damages in connection with the transactions
contemplated by this Agreement and the other Operative Documents.

         (n) Each party shall be entitled to rely conclusively upon any notice
received, or the failure to receive any notice, from any other party with
respect to rights and obligations under this Agreement.

     10. Receipt of Share Certificates. Each Shareholder herewith acknowledges
receipt of the certificate(s) evidencing the Shares purchased by such
Shareholder.

                            [Signature Pages Follow]




                                      -11-



         IN WITNESS WHEREOF, each of the undersigned has signed this Agreement
as of the date first above written.


                        TAL INTERNATIONAL GROUP, INC.


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



                        THE RESOLUTE FUND, L.P.

                        By:  Resolute Fund Partners, LLC, its General Partner


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



                        THE RESOLUTE FUND SINGAPORE PV, L.P.

                        By:  Resolute Fund Partners, LLC, its General Partner


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



                        THE RESOLUTE FUND NETHERLANDS PV I, L.P.

                        By:  Resolute Fund Partners, LLC, its General Partner


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


                                      S-1




                        THE RESOLUTE FUND NETHERLANDS PV II, L.P.

                        By:  Resolute Fund Partners, LLC, its General Partner


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



                        THE RESOLUTE FUND NQP, L.P.

                        By:  Resolute Fund Partners, LLC, its General
                        Partner


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



                                      S-2






                        JZ EQUITY PARTNERS, PLC



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









                                      S-3



                        FAIRHOLME PARTNERS, L.P.

                        By:  Fairholme Capital Management, L.L.C., its
                             General Partner


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



                        FAIRHOLME VENTURES II, LLC.

                        By:  Fairholme Capital Management, L.L.C., its
                             Managing Member


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



                        FAIRHOLME HOLDINGS, LTD.

                        By:  Fairholme Capital Management, L.L.C., its
                             Investment Manager


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


                                      S-4





                        EDGEWATER PRIVATE EQUITY FUND III, L.P.

                        By:  Edgewater III Management L.P., its
                             General Partner


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



                        EDGEWATER PRIVATE EQUITY FUND IV, L.P.

                        By:  Edgewater IV Management LLC, its General Partner


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





                                      S-5


                        SEACON HOLDINGS LIMITED



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















                                      S-6






                                    EXHIBIT I

                              Shareholder Schedule

<TABLE>

             Shareholder                       Shares of Common Stock      Shares of Preferred Stock
---------------------------------------        ----------------------      -------------------------

The Resolute Fund, L.P.                                52,555.85                   119,785.41741
c/o The Jordan Company, L.P.
767 Fifth Avenue, 48th Floor
New York, New York 10153

The Resolute Fund Singapore PV, L.P.                    2,066.69                     4,710.39778
c/o The Jordan Company, L.P.
767 Fifth Avenue, 48th Floor
New York, New York 10153

The Resolute Fund Netherlands PV I, L.P.                2,480.02                     5,652.47563
c/o The Jordan Company, L.P.
767 Fifth Avenue, 48th Floor
New York, New York 10153

The Resolute Fund Netherlands PV II, L.P.               2,066.69                     4,710.39778
c/o The Jordan Company, L.P.
767 Fifth Avenue, 48th Floor
New York, New York 10153

The Resolute Fund NQP, L.P.                                62.00                       141.31140
c/o The Jordan Company, L.P.
767 Fifth Avenue, 48th Floor
New York, New York 10153

JZ Equity Partners PLC                                  6,372.84                    14,525.00000
17a Curzon Street
London, W1J 5HS
United Kingdom

Fairholme Partners, L.P.                                4,248.56                     9,683.33333
51 J F K Parkway
Short Hills, New Jersey 07078

Fairholme Ventures II, LLC                              4,248.56                     9,683.33333
51 J F K Parkway
Short Hills, New Jersey 07078

Fairholme Holdings, Ltd.                                4,248.57                     9,683.33334
51 J F K Parkway
Short Hills, New Jersey 07078


                                      I-i



Edgewater Private Equity Fund III, L.P.                   877.50                     2,000.00000
c/o The Edgewater Funds
900 N. Michigan Ave., Suite 1800
Chicago, IL 60611

Edgewater Private Equity Fund IV, L.P.                  5,495.34                    12,525.00000
c/o The Edgewater Funds
900 N. Michigan Ave., Suite 1800
Chicago, IL 60611

Seacon Holdings Limited                                11,943.75                     5,000.00000
Attn: Robert Taylor
PO Box 771,
2nd Floor
Thorp House
Rouge Bouillon, St Helier
Jersey JE4 ORX
Channel Islands
</TABLE>








                                      I-ii







                                                                   EXHIBIT 10.10



            THE JORDAN COMPANY, L.P. MANAGEMENT CONSULTING AGREEMENT


         THIS MANAGEMENT CONSULTING AGREEMENT ("Agreement"), is executed as of
November 3, 2004 by and among The Jordan Company, L.P. (the "Consultant"), TAL
International Group, Inc., a Delaware corporation (the "Company"), and its
direct or indirect subsidiaries, including those party hereto (each are referred
to as a "Subsidiary" and collectively as the "Subsidiaries").

                              W I T N E S S E T H:
                              - - - - - - - - - -


         WHEREAS, the Consultant has and/or has access to personnel who are
highly skilled in the field of rendering advice to businesses such as the
Company;

         WHEREAS, the Board of Directors of the Company has been made fully
aware of the relationships of certain members of the Company's Board of
Directors to the Consultant;

         WHEREAS, the Company's Board of Directors has reviewed in detail and
discussed the terms and provisions of this Agreement and the fairness of this
Agreement and whether more favorable agreements for the Company could be
obtained from unaffiliated third parties; and

         WHEREAS, on the basis of its review of this Agreement, the Board of
Directors of the Company deemed it advisable and in the best interests of the
Company and necessary to the conduct, promotion, and attainment of the business
objectives of the Company that the Company retain Consultant to provide business
and financial advice to the Company.

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein set forth, the parties hereto do hereby agree as
follows:

     1. The Company hereby retains the Consultant, through the Consultant's own
personnel or through personnel available to the Consultant, to render consulting
services from time to time to the Company and its direct and indirect
Subsidiaries (whether now existing or hereafter acquired) in connection with
their acquisitions, divestitures and investments, their financial and business
affairs, their relationships with their lenders, stockholders and other
third-party associates or affiliates, and the expansion of their businesses.
Consultant shall render such services to the Company and/or its direct and
indirect Subsidiaries in good faith and in accordance with professional
standards and applicable law. The term of this Agreement shall commence the date
hereof and continue until December 31, 2009, unless extended, or sooner
terminated, as provided in Section 5 below. The Consultant's personnel shall be
reasonably available to the Company's managers, auditors and other personnel for
consultation and advice pursuant to this Agreement, subject to Consultant's
reasonable convenience and scheduling. Services may be rendered at the
Consultant's offices or at such other locations selected by the Consultant as
the Company and the Consultant shall from time to time agree.






     2. (a) In recognition of the services rendered through the date hereof by
the Consultant in connection with the evaluation, negotiation, financing and
closing of the Stock Purchase Agreement, dated July 10, 2004, between TA Leasing
Holding Co., Inc. and Klesch & Company Limited, as amended, and related
financing, the Company shall pay Consultant a fee of $14,000,000.

        (b) In addition to the foregoing, in recognition of the services
rendered through the date hereof by the Consultant for the evaluation,
negotiation, financing and closing of the Stock Purchase Agreement, dated July
10, 2004, between TA Leasing Holding Co., Inc. and Klesch & Company Limited, as
amended (the "SPA"), and related financing, the Company shall pay all reasonable
and documented out-of-pocket costs and expenses incurred by Consultant for
services provided by the entities listed on Exhibit I in connection with such
evaluation, negotiation, financing and closing, promptly after submission of the
appropriate invoices. In addition, the Company shall reimburse Consultant for
any private aircraft, travel, meals and lodging expenses incurred by Consultant
in connection with such evaluation, negotiation, financing and closing and
thereafter in connection with the SPA and related financing, up to $850,000 in
the aggregate, promptly after submission of the appropriate invoices.

     3. (a) Subject to Section 4, for services to be rendered, the Company shall
pay quarterly to the Advisor a consulting services fee equal to (i) 60% of the
first $1,250,000 of the Base Amount (as defined below) plus (ii) the Advisor's
Pro Rata Portion (as defined below) of any Base Amount in excess of $1,250,000.
Such fee will be paid quarterly in arrears on each Payment Date (as defined in
the Credit Agreement dated as of November 3, 2004, among Transamerica Leasing,
Inc., Trans Ocean Ltd., Trans Ocean Container Corporation, the Lenders party
thereto and Fortis Bank (Nederland) N.V. (the "Senior Credit Agreement"),
starting with a payment in respect of the quarter ended March 31, 2005.

        (b) For purposes of this Agreement the following terms shall have the
corresponding meanings:

               (i) "Base Amount" shall mean an amount equal to 2.5% of EBITDA
          (as defined in that certain Senior Subordinated Credit Agreement,
          dated as of November 3, 2004, by and among the Company and the lenders
          named therein) for the most recently completed and reported fiscal
          quarter of the Company and its Subsidiaries on a consolidated basis.

               (ii) "Common Stock" shall mean the Common Stock, par value $.001
          per share of the Company.

               (iii) "Pro Rata Portion" shall mean the fraction obtained by
          dividing (x) the number of shares of Common Stock owned by the
          Resolute Investors on the date of payment of the consulting fee under
          this Section 3 by (y) the number of shares of Common Stock owned by
          the Resolute Investors plus the number of shares of Common Stock owned
          by the Seacon Investors on the date of payment of the consulting fee
          under this Section 3.


                                      -2-



               (iv) "Resolute Investors" shall mean The Resolute Fund, L.P., The
          Resolute Fund Singapore PV, L.P., The Resolute Fund Netherlands PV I,
          L.P., The Resolute Fund Netherlands PV II, L.P., The Resolute Fund
          NQP, L.P., JZ Equity Partners PLC, Fairholme Partners, L.P., Fairholme
          Ventures II, LLC, Fairholme Holdings, Ltd., Edgewater Private Equity
          Fund III, L.P., Edgewater Private Equity IV, L.P., and their
          respective affiliates.

               (v) "Seacon Investors" shall mean Seacon Holdings Limited and its
          affiliates.

     4. Notwithstanding the foregoing, the Company shall not be required to pay
the fees under Sections 2 or 3, (a) if and to the extent expressly prohibited by
the provisions of any credit, stock, financing or other agreements or
instruments binding upon the Company, its Subsidiaries or properties including,
without limitation, the Senior Credit Agreement, (b) if the Company or any of
its subsidiaries has not paid cash interest on any interest payment date or has
postponed or not made any principal payments with respect to any of their
indebtedness on any scheduled payment dates and such payments have not been made
within applicable cure periods, or has not paid or accrued cash dividends on any
dividend payment date as set forth in its certificate of incorporation or as
declared by its Board of Directors, or has postponed or not made any redemptions
on any redemption date as set forth in its certificate of incorporation with
respect to its preference shares, if any or (c) if for any other reason payment
of the monitoring fee set forth in Section 1 of the Transaction Fee Agreement
dated as of the date hereof, by and between Seacon Holdings Limited and the
Company and its subsidiaries is prohibited under any credit, stock or other
financing agreement of the Company. Any payments otherwise owed hereunder, which
are not made for any of the above-mentioned reasons, shall not be canceled but
rather accrue, and shall be payable by the Company promptly when, and to the
extent, that the Company and its Subsidiaries are no longer prohibited from
making such payments and when the Company has become current with respect to
such principal or interest payments, and has become current with respect to such
dividends and has made such redemptions with respect to such preferred shares,
if any. Any payment required hereunder which is not paid when due shall bear
interest at the rate of five percent (5%) per annum. This Section 4 will not, in
any event, restrict or limit the Company's obligations under Sections 8 and 9,
which will be absolute and not subject to set-off.

     5. This Agreement shall be automatically renewed for successive one-year
terms starting December 31, 2009 unless either party hereto, within sixty (60)
days prior to the scheduled renewal date, notifies the other party as to its
election to terminate this Agreement. Notwithstanding the foregoing, this
Agreement may be terminated by not less than thirty (30) days' prior written
notice from the Company to the Consultant at any time after (a) substantially
all of the shares or substantially all of the assets of the Company or all of
its Subsidiaries are sold to an entity which is not an Affiliate (as defined in
the Shareholders Agreement, dated the date hereof, between the Company and the
other parties thereto) of the Resolute Investors or the Seacon Investors, (b)
the Company is merged or consolidated into another entity unaffiliated with the
Consultant and/or the Seacon Investors and the Company is not the survivor or
resulting company of such transaction, (c) the Company consummates a "Public
Offering" (as defined in the Shareholders Agreement dated as of the date hereof,
by and among the Company and the


                                      -3-



stockholders of the Company party thereto) for gross proceeds of at least $50
million, (d) the Resolute Investors own less than five percent (5%) of the
outstanding Common Stock.

     6. The Consultant shall have no liability to the Company for breach of this
Agreement on account of (i) any advice which it renders to the Company or any of
its direct or indirect Subsidiaries, provided the Consultant believed in good
faith that such advice was useful or beneficial to the Company or any of its
direct or indirect Subsidiaries at the time it was rendered, or (ii) the
Consultant's inability to achieve results desired by the Company (or any of its
direct or indirect Subsidiaries) or Consultant's failure to render services to
the Company at any particular time or from time to time. The Company's and any
its direct or indirect Subsidiaries' sole remedy for any claim for breach under
this Agreement shall be termination of this Agreement.

     7. Notwithstanding anything contained in this Agreement to the contrary,
the Company agrees and acknowledges for itself and, to the extent it is able, on
behalf of its direct and indirect Subsidiaries that the Consultant, the Resolute
Fund, L.P., JZ Equity Partners PLC, or any affiliates of any of the foregoing
(collectively, the "Jordan Affiliates") and their respective portfolio
companies, shareholders, members, partners, employees, directors and agents
intend to engage and participate in acquisitions and business transactions
outside of the scope of the relationship created by this Agreement and neither
the Consultant, any of the Jordan Affiliates nor any of their respective
shareholders, members, partners, employees, directors or agents shall be under
any obligation whatsoever to make such acquisitions or business transactions
through the Company or any of its direct or indirect Subsidiaries or offer such
acquisitions or business transactions to the Company or any of its direct or
indirect Subsidiaries.

     8. The Company will and will cause each of its direct and indirect
Subsidiaries to, indemnify and hold harmless to the fullest extent permitted by
applicable law, the Consultant, its affiliates and associates, each of the
Jordan Affiliates, and each of the respective owners, members, partners,
officers, directors, employees and agents of each of the foregoing, from and
against any loss, liability, damage, claim or expenses (including the fees and
expenses of counsel) arising as a result or in connection with this Agreement,
the Consultant's services hereunder or other activities on behalf of the Company
and its direct and indirect Subsidiaries.

     9. Any payments paid by the Company under this Agreement shall not be
subject to set-off and shall be increased by the amount, if any, of any taxes
(other than income taxes) or other governmental charges levied in respect of
such payments, so that the Consultant is made whole for such taxes or charges.

     10. (a) This Agreement and the other agreements entered into on the date
hereof in connection with this Agreement supersede all prior agreements between
the parties with respect to the subject matter thereof (including the letter
agreement dated September 16, 2004, by and among The Resolute Fund, L.P., TMC
Holdings, Inc. and Klesch & Company Limited and the letter agreement dated
September 16, 2004, by and between The Resolute Fund, L.P. and Klesch & Company
Limited) and constitute a complete and exclusive statement of the terms of the
agreements among the parties with respect to the subject matter thereof.

                                      -4-


         (b) This Agreement may be assigned by Consultant to any of its
subsidiaries or affiliates without the consent of the Company, provided,
however, such assignment shall not relieve such party from its obligations
hereunder. Any assignment of this Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns.

         (c) In the event that any provision of this Agreement shall be held to
be void or unenforceable in whole or in part, the remaining provisions of this
Agreement and the remaining portion of any provision held void or unenforceable
in part shall continue in full force and effect.

         (d) Except as otherwise specifically provided herein, notice given
hereunder shall be deemed sufficient if delivered personally or sent by
registered or certified mail to the address of the party for whom intended at
the principal executive offices of such party, or at such other address as such
party may hereinafter specify by written notice to the other party.

         (e) If at any time after the date upon which this Agreement is
executed, the Company acquires or creates one or more subsidiary corporations (a
"Subsequent Subsidiary"), the Company, or in the case of Subsequent Subsidiaries
that are not direct or indirect Subsidiaries of the Company to the extent it is
able, shall cause such Subsequent Subsidiary to be subject to this Agreement and
all references herein to the Company's "direct and indirect Subsidiaries" shall
be interpreted to include all Subsequent Subsidiaries.

         (f) Each Subsidiary of the Company shall be jointly and severally
liable and obligated hereunder with respect to each obligation, responsibility
and liability of the Company, as if a direct obligation of such Subsidiary.

         (g) No waiver by either party of any breach of any provision of this
Agreement shall be deemed a continuing waiver or a waiver of any preceding or
succeeding breach of such provision or of any other provision herein contained.

         (h) The Consultant and its personnel shall, for purposes of this
Agreement, be independent contractors with respect to the Company.

         (i) THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED, APPLIED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. EACH OF
THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT IN THE EVENT OF ANY BREACH OF
THIS AGREEMENT, THE NON-BREACHING PARTY WOULD BE IRREPARABLY HARMED AND COULD
NOT BE MADE WHOLE BY MONETARY DAMAGES, AND THAT, IN ADDITION TO ANY OTHER REMEDY
TO WHICH THEY MAY BE ENTITLED AT LAW OR IN EQUITY, THE PARTIES SHALL BE ENTITLED
TO SUCH EQUITABLE OR INJUNCTIVE RELIEF AS MAY BE APPROPRIATE. THE CHOICE OF
FORUM SET FORTH IN THIS SECTION 10(i) SHALL NOT BE DEEMED TO PRECLUDE THE
ENFORCEMENT OF ANY JUDGMENT OF A NEW YORK FEDERAL OR STATE COURT OR THE TAKING
OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SUCH A JUDGMENT IN ANY OTHER
APPROPRIATE JURISDICTION.


                                      -5-




          (j) IN THE EVENT ANY PARTY TO THIS AGREEMENT COMMENCES ANY LITIGATION,
PROCEEDING OR OTHER LEGAL ACTION IN CONNECTION WITH OR RELATING TO THIS
AGREEMENT, ANY RELATED AGREEMENT OR ANY MATTERS DESCRIBED OR CONTEMPLATED HEREIN
OR THEREIN, THE PARTIES TO THIS AGREEMENT HEREBY (1) AGREE UNDER ALL
CIRCUMSTANCES ABSOLUTELY AND IRREVOCABLY TO INSTITUTE ANY LITIGATION, PROCEEDING
OR OTHER LEGAL ACTION IN A COURT OF COMPETENT JURISDICTION LOCATED WITHIN THE
SOUTHERN DISTRICT OF NEW YORK, WHETHER A STATE OR FEDERAL COURT; (2) AGREE THAT
IN THE EVENT OF ANY SUCH LITIGATION, PROCEEDING OR ACTION, SUCH PARTIES WILL
CONSENT AND SUBMIT TO THE PERSONAL JURISDICTION OF ANY SUCH COURT DESCRIBED IN
CLAUSE (1) OF THIS SECTION AND TO SERVICE OF PROCESS UPON THEM IN ACCORDANCE
WITH THE RULES AND STATUTES GOVERNING SERVICE OF PROCESS (IT BEING UNDERSTOOD
THAT NOTHING IN THIS SECTION SHALL BE DEEMED TO PREVENT ANY PARTY FROM SEEKING
TO REMOVE ANY ACTION TO A FEDERAL COURT IN THE SOUTHERN DISTRICT OF NEW YORK;
(3) AGREE TO WAIVE TO THE FULL EXTENT PERMITTED BY LAW ANY OBJECTION THAT THEY
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH LITIGATION, PROCEEDING OR
ACTION IN ANY SUCH COURT OR THAT ANY SUCH LITIGATION, PROCEEDING OR ACTION WAS
BROUGHT IN ANY INCONVENIENT FORUM; (4) AGREE, AFTER CONSULTATION WITH COUNSEL,
TO WAIVE ANY RIGHTS TO A JURY TRIAL TO RESOLVE ANY DISPUTES OR CLAIMS RELATING
TO THIS AGREEMENT; (5) AGREE TO DESIGNATE, APPOINT AND DIRECT AN AUTHORIZED
AGENT TO RECEIVE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS AND DOCUMENTS IN
ANY LEGAL PROCEEDING IN THE SOUTHERN DISTRICT OF NEW YORK; (6) AGREE TO PROVIDE
THE OTHER PARTIES TO THIS AGREEMENT WITH THE NAME, ADDRESS AND FACSIMILE NUMBER
OF SUCH AGENT; (7) AGREE AS AN ALTERNATIVE METHOD OF SERVICE TO SERVICE OF
PROCESS IN ANY LEGAL PROCEEDING BY MAILING OF COPIES THEREOF TO SUCH PARTY AT
ITS ADDRESS SET FORTH HEREIN FOR COMMUNICATIONS TO SUCH PARTY; (8) AGREE THAT
ANY SERVICE MADE AS PROVIDED HEREIN SHALL BE EFFECTIVE AND BINDING SERVICE IN
EVERY RESPECT; AND (9) AGREE THAT NOTHING HEREIN SHALL AFFECT THE RIGHTS OF ANY
PARTY TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. TO THE
EXTENT PERMITTED BY LAW IN CONNECTION WITH OR RELATING TO THIS AGREEMENT, ANY
RELATED AGREEMENT OR ANY MATTERS DESCRIBED OR CONTEMPLATED HEREIN OR THEREIN,
AND AGREE TO TAKE ANY AND ALL ACTION NECESSARY OR APPROPRIATE TO EFFECT SUCH
WAIVER.

                            [Signature Page Follows]


                                      -6-





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


                                             THE JORDAN COMPANY, L.P.

                                             By:    The Jordan Company GP, LLC,
                                                    its General Partner


                                             By:  /s/ A. Richard Caputo, Jr.
                                                -------------------------------
                                             Name:  A. Richard Caputo, Jr.
                                             Title: Senior Principal



                                             TAL INTERNATIONAL GROUP, INC.


                                             By:  /s/ Brian J. Higgins
                                                -------------------------------
                                             Name:  Brian J. Higgins
                                             Title: Authorized Officer






                                                                   EXHIBIT 10.11


                          MANAGEMENT ADVISORY AGREEMENT


         THIS MANAGEMENT ADVISORY AGREEMENT ("Advisory Agreement"), is executed
as of November 3, 2004 by and among Klesch & Company Limited (the "Advisor"),
TAL International Group, Inc., a Delaware corporation (the "Company"), and its
direct or indirect subsidiaries, including those party hereto (each are referred
to as a "Subsidiary" and collectively as the "Subsidiaries").

                              W I T N E S S E T H:
                              - - - - - - - - - -


         WHEREAS, the Advisor has and/or has access to personnel who are highly
skilled in the field of rendering advice to businesses such as the Company;

         WHEREAS, the Board of Directors of the Company has been made fully
aware of the relationships of certain members of the Company's Board of
Directors to the Advisor;

         WHEREAS, the Company's Board of Directors has reviewed in detail and
discussed the terms and provisions of this Agreement and the fairness of this
Agreement and whether more favorable agreements for the Company could be
obtained from unaffiliated third parties; and

         WHEREAS, on the basis of its review of this Agreement, the Board of
Directors of the Company deemed it advisable and in the best interests of the
Company and necessary to the conduct, promotion, and attainment of the business
objectives of the Company that the Company retain Advisor to provide business
and financial advice to the Company.

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein set forth, the parties hereto do hereby agree as
follows:

         1. The Company hereby retains the Advisor, through the Advisor's own
personnel or through personnel available to the Advisor, to render consulting
services from time to time to the Company and its direct and indirect
Subsidiaries (whether now existing or hereafter acquired) in connection with
their acquisitions, divestitures and investments, their financial and business
affairs, their relationships with their lenders, stockholders and other
third-party associates or affiliates, and the expansion of their businesses.
Advisor shall render such services to the Company and/or its direct and indirect
Subsidiaries in good faith and in accordance with professional standards and
applicable law. The term of this Agreement shall commence the date hereof and
continue until December 31, 2009, unless extended, or sooner terminated, as
provided in Section 4. The Advisor's personnel shall be reasonably available to
the Company's managers, auditors and other personnel for consultation and advice
pursuant to this Agreement, subject to Advisor's reasonable convenience and
scheduling. Services may be rendered at the Advisor's offices or at such other
locations selected by the Advisor as the Company and the Advisor shall from time
to time agree.

         2. (a) Subject to Section 4, for services to be rendered, the Company
shall pay quarterly to the Advisor a consulting services fee equal to (i) 40% of
the first $1,250,000 of the



Base Amount (as defined below) plus (ii) the Advisor's Pro Rata Portion (as
defined below) of any Base Amount in excess of $1,250,000. Such fee will be paid
quarterly in arrears on each Payment Date (as defined in the Credit Agreement
dated as of November 3, 2004, among Transamerica Leasing, Inc., Trans Ocean
Ltd., Trans Ocean Container Corporation, the Lenders party thereto and Fortis
Bank (Nederland) N.V. (the "Senior Credit Agreement"), starting with a payment
in respect of the quarter ended March 31, 2005.

            (b) For purposes of this Agreement the following terms shall have
the corresponding meanings:

                  (i) "Base Amount" shall mean an amount equal to 2.5% of EBITDA
         (as defined in that certain Senior Subordinated Credit Agreement, dated
         as of November 3, 2004, by and among the Company and the lenders named
         therein) for the most recently completed and reported fiscal quarter of
         the Company and its Subsidiaries on a consolidated basis.

                  (ii) "Common Stock" shall mean the Common Stock, par value
         $.001 per share of the Company.

                  (iii) "Pro Rata Portion" shall mean the fraction obtained by
         dividing (x) the number of shares of Common Stock owned by the Seacon
         Investors on the date of payment of the consulting fee under this
         Section 2 by (y) the number of shares of Common Stock owned by the
         Resolute Investors plus the number of shares of Common Stock owned by
         the Seacon Investors on the date of payment of the consulting fee under
         this Section 2.

                  (iv) "Seacon Investors" shall mean Seacon Holdings Limited and
         its affiliates.

                  (v) "Resolute Investors" shall mean The Resolute Fund, L.P.,
         The Resolute Fund Singapore PV, L.P., The Resolute Fund Netherlands PV
         I, L.P., The Resolute Fund Netherlands PV II, L.P., The Resolute Fund
         NQP, L.P., JZ Equity Partners PLC, Fairholme Partners, L.P., Fairholme
         Ventures II, LLC, Fairholme Holdings, Ltd., Edgewater Private Equity
         Fund III, L.P., Edgewater Private Equity IV, L.P., and their respective
         affiliates.

            (c) In addition to the foregoing, in recognition of the services
rendered through the date hereof by the Advisor for the evaluation, negotiation,
financing and closing of the Stock Purchase Agreement, dated July 10, 2004,
between TA Leasing Holding Co., Inc. and Klesch & Company Limited, as amended,
and related financing, the Company shall pay all reasonable and documented
out-of-pocket costs and expenses incurred by Advisor for services provided by
the entities listed on Exhibit I in connection with such evaluation,
negotiation, financing and closing, promptly after submission of the appropriate
invoices. In addition, the Company shall reimburse Advisor at Closing for any
private aircraft, travel, meals and lodging expenses incurred by Advisor in
connection with such evaluation, negotiation, financing and closing up to
$850,000 in the aggregate, promptly after submission of the appropriate
invoices.

                                      -2-




         3. Notwithstanding the foregoing, the Company shall not be required to
pay the fees under Sections 2, (a) if and to the extent expressly prohibited by
the provisions of any credit, stock, financing or other agreements or
instruments binding upon the Company, its Subsidiaries or properties including,
without limitation, the Senior Credit Agreement, (b) if the Company or any of
its subsidiaries has not paid cash interest on any interest payment date or has
postponed or not made any principal payments with respect to any of their
indebtedness on any scheduled payment dates and such payments have not been made
within applicable cure periods, or has not paid or accrued cash dividends on any
dividend payment date as set forth in its certificate of incorporation or as
declared by its Board of Directors, or has postponed or not made any redemptions
on any redemption date as set forth in its certificate of incorporation with
respect to its preference shares, if any or (c) if for any other reason payment
of the monitoring fee set forth in Section 3 of the Management Consulting
Agreement dated as of the date hereof, by and among The Jordan Company, L.P. and
the Company and its subsidiaries (the "TJC Management Agreement") is prohibited
under any credit, Stock or other financing agreement of the Company. Any
payments otherwise owed hereunder, which are not made for any of the
above-mentioned reasons, shall not be canceled but rather accrue, and shall be
payable by the Company promptly when, and to the extent, that the Company and
its Subsidiaries are no longer prohibited from making such payments and when the
Company has become current with respect to such principal or interest payments
and has become current with respect to such dividends and has made such
redemptions with respect to such preferred shares, if any. Any payment required
hereunder which is not paid when due shall bear interest at the rate of five
percent (5%) per annum. This Section 3 will not, in any event, restrict or limit
the Company's obligations under Sections 7 and 8, which will be absolute and not
subject to set-off.

         4. This Agreement shall be automatically renewed for successive
one-year terms starting December 31, 2009 unless either party hereto, within
sixty (60) days prior to the scheduled renewal date, notifies the other party as
to its election to terminate this Agreement. Notwithstanding the foregoing, this
Agreement may be terminated by not less than thirty (30) days' prior written
notice from the Company to the Advisor at any time after (a) substantially all
of the shares or substantially all of the assets of the Company or all of its
Subsidiaries are sold to an entity which is not an Affiliate (as defined in the
Shareholders Agreement, dated the date hereof, between the Company and the other
parties thereto) of the Advisor or The Resolute Investors, (b) the Company is
merged or consolidated into another entity unaffiliated with the Advisor and/or
the Resolute Investors and the Company is not the survivor or resulting company
of such transaction, (c) the Company consummates a "Public Offering" (as defined
in the Shareholders Agreement dated as of the date hereof by and among the
Company and the stockholders of the Company party thereto) for gross proceeds of
at least $50 million, (d) the Seacon Investors own less than five percent (5%)
of the outstanding Common Stock (for the avoidance of doubt, all shares of
Common Stock subject to the Escrow Agreement are owned by the Seacon Investors
unless and until such shares are released from escrow and distributed to the
Resolute Investors), or (e) the TJC Management Agreement is terminated for any
reason after the initial five-year term thereof other than any termination by
the Company pursuant to clause (d) of Section 5 of the TJC Management Agreement.

         5. The Advisor shall have no liability to the Company for breach of
this Agreement on account of (i) any advice which it renders to the Company or
any of its direct or indirect

                                      -3-




Subsidiaries, provided the Advisor believed in good faith that such advice was
useful or beneficial to the Company or any of its direct or indirect
Subsidiaries at the time it was rendered, or (ii) the Advisor's inability to or
achieve results desired by the Company (or any of its direct or indirect
Subsidiaries) or Advisor's failure to render services to the Company at any
particular time or from time to time. The Company's and any its direct or
indirect Subsidiaries' sole remedy for any claim for breach under this Agreement
shall be termination of this Agreement.

         6. Notwithstanding anything contained in this Agreement to the
contrary, the Company agrees and acknowledges for itself and, to the extent it
is able, on behalf of its direct and indirect Subsidiaries that the Advisor and
its shareholders, members, partners, employees, directors and agents intend to
engage and participate in acquisitions and business transactions outside of the
scope of the relationship created by this Agreement and neither the Advisor nor
any of its shareholders, members, partners, employees, directors or agents shall
be under any obligation whatsoever to make such acquisitions or business
transactions through the Company or any of its direct or indirect Subsidiaries
or offer such acquisitions or business transactions to the Company or any of its
direct or indirect Subsidiaries.

         7. The Company will, and will cause each of their direct and indirect
Subsidiaries to, indemnify and hold harmless to the fullest extent permitted by
applicable law, the Advisor, its affiliates and associates, and each of the
respective owners, members, partners, officers, directors, employees and agents
of each of the foregoing, from and against any loss, liability, damage, claim or
expenses (including the fees and expenses of counsel) arising as a result or in
connection with this Agreement, the Advisor's services hereunder or other
activities on behalf of the Company and its direct and indirect Subsidiaries.

         8. Any payments paid by the Company under this Agreement shall not be
subject to set-off and shall be increased by the amount, if any, of any taxes
(other than income taxes) or other governmental charges levied in respect of
such payments, so that the Advisor is made whole for such taxes or charges.

         9. (a) This Agreement and the other agreements entered into on the date
hereof in connection with this Agreement supersede all prior agreements between
the parties with respect to the subject matter thereof (including the letter
agreement dated September 16, 2004, by and among The Resolute Fund, L.P., TMC
Holdings, Inc. and Klesch & Company Limited and the letter agreement dated
September 16, 2004, by and between The Resolute Fund, L.P. and Klesch & Company
Limited) and constitute a complete and exclusive statement of the terms of the
agreements among the parties with respect to the subject matter thereof. Without
limiting the generality of the foregoing, the fee payable to Seacon Holdings
Limited under the Transaction Fee Agreement dated as of the date hereof, between
the Company and Seacon Holdings Limited, shall satisfy, in all respects, the $12
million transaction fee specified to be paid to the Advisor pursuant to the
letter agreement dated September 16, 2004, by and between The Resolute Fund,
L.P. and Klesch & Company Limited.

             (b) This Agreement may be assigned by Advisor to any of its
subsidiaries or affiliates without the consent of the Company; provided,
however, such assignment shall not relieve such party from its obligations
hereunder. Any assignment of this Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns.


                                      -4-



             (c) In the event that any provision of this Agreement shall be held
to be void or unenforceable in whole or in part, the remaining provisions of
this Agreement and the remaining portion of any provision held void or
unenforceable in part shall continue in full force and effect.

             (d) Except as otherwise specifically provided herein, notice given
hereunder shall be deemed sufficient if delivered personally or sent by
registered or certified mail to the address of the party for whom intended at
the principal executive offices of such party, or at such other address as such
party may hereinafter specify by written notice to the other party.

             (e) If at any time after the date upon which this Agreement is
executed, the Company acquires or creates one or more subsidiary corporations (a
"Subsequent Subsidiary"), the Company, or in the case of Subsequent Subsidiaries
that are not direct or indirect Subsidiaries of the Company, to the extent it is
able, shall cause such Subsequent Subsidiary to be subject to this Agreement and
all references herein to the Company's "direct and indirect Subsidiaries" shall
be interpreted to include all Subsequent Subsidiaries.

             (f) Each Subsidiary of the Company shall be jointly and severally
liable and obligated hereunder with respect to each obligation, responsibility
and liability of the Company, as if a direct obligation of such Subsidiary.

             (g) No waiver by either party of any breach of any provision of
this Agreement shall be deemed a continuing waiver or a waiver of any preceding
or succeeding breach of such provision or of any other provision herein
contained.

             (h) The Advisor and its personnel shall, for purposes of this
Agreement, be independent contractors with respect to the Company.

             (i) THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED, APPLIED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. EACH OF
THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT IN THE EVENT OF ANY BREACH OF
THIS AGREEMENT, THE NON-BREACHING PARTY WOULD BE IRREPARABLY HARMED AND COULD
NOT BE MADE WHOLE BY MONETARY DAMAGES, AND THAT, IN ADDITION TO ANY OTHER REMEDY
TO WHICH THEY MAY BE ENTITLED AT LAW OR IN EQUITY, THE PARTIES SHALL BE ENTITLED
TO SUCH EQUITABLE OR INJUNCTIVE RELIEF AS MAY BE APPROPRIATE. THE CHOICE OF
FORUM SET FORTH IN THIS SECTION 9(i) SHALL NOT BE DEEMED TO PRECLUDE THE
ENFORCEMENT OF ANY JUDGMENT OF A NEW YORK FEDERAL OR STATE COURT OR THE TAKING
OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SUCH A JUDGMENT IN ANY OTHER
APPROPRIATE JURISDICTION.

             (j) IN THE EVENT ANY PARTY TO THIS AGREEMENT COMMENCES ANY
LITIGATION, PROCEEDING OR OTHER LEGAL ACTION IN CONNECTION WITH OR RELATING TO
THIS AGREEMENT, ANY RELATED AGREEMENT OR ANY MATTERS DESCRIBED OR CONTEMPLATED
HEREIN OR THEREIN, THE PARTIES TO THIS AGREEMENT HEREBY (1) AGREE UNDER ALL
CIRCUMSTANCES

                                      -5-




ABSOLUTELY AND IRREVOCABLY TO INSTITUTE ANY LITIGATION, PROCEEDING OR OTHER
LEGAL ACTION IN A COURT OF COMPETENT JURISDICTION LOCATED WITHIN THE SOUTHERN
DISTRICT OF NEW YORK, WHETHER A STATE OR FEDERAL COURT; (2) AGREE THAT IN THE
EVENT OF ANY SUCH LITIGATION, PROCEEDING OR ACTION, SUCH PARTIES WILL CONSENT
AND SUBMIT TO THE PERSONAL JURISDICTION OF ANY SUCH COURT DESCRIBED IN CLAUSE
(1) OF THIS SECTION AND TO SERVICE OF PROCESS UPON THEM IN ACCORDANCE WITH THE
RULES AND STATUTES GOVERNING SERVICE OF PROCESS (IT BEING UNDERSTOOD THAT
NOTHING IN THIS SECTION SHALL BE DEEMED TO PREVENT ANY PARTY FROM SEEKING TO
REMOVE ANY ACTION TO A FEDERAL COURT IN THE SOUTHERN DISTRICT OF NEW YORK; (3)
AGREE TO WAIVE TO THE FULL EXTENT PERMITTED BY LAW ANY OBJECTION THAT THEY MAY
NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH LITIGATION, PROCEEDING OR ACTION
IN ANY SUCH COURT OR THAT ANY SUCH LITIGATION, PROCEEDING OR ACTION WAS BROUGHT
IN ANY INCONVENIENT FORUM; (4) AGREE, AFTER CONSULTATION WITH COUNSEL, TO WAIVE
ANY RIGHTS TO A JURY TRIAL TO RESOLVE ANY DISPUTES OR CLAIMS RELATING TO THIS
AGREEMENT; (5) AGREE TO DESIGNATE, APPOINT AND DIRECT AN AUTHORIZED AGENT TO
RECEIVE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS AND DOCUMENTS IN ANY LEGAL
PROCEEDING IN THE SOUTHERN DISTRICT OF NEW YORK; (6) AGREE TO PROVIDE THE OTHER
PARTIES TO THIS AGREEMENT WITH THE NAME, ADDRESS AND FACSIMILE NUMBER OF SUCH
AGENT; (7) AGREE AS AN ALTERNATIVE METHOD OF SERVICE TO SERVICE OF PROCESS IN
ANY LEGAL PROCEEDING BY MAILING OF COPIES THEREOF TO SUCH PARTY AT ITS ADDRESS
SET FORTH HEREIN FOR COMMUNICATIONS TO SUCH PARTY; (8) AGREE THAT ANY SERVICE
MADE AS PROVIDED HEREIN SHALL BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;
AND (9) AGREE THAT NOTHING HEREIN SHALL AFFECT THE RIGHTS OF ANY PARTY TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. TO THE EXTENT PERMITTED
BY LAW IN CONNECTION WITH OR RELATING TO THIS AGREEMENT, ANY RELATED AGREEMENT
OR ANY MATTERS DESCRIBED OR CONTEMPLATED HEREIN OR THEREIN, AND AGREE TO TAKE
ANY AND ALL ACTION NECESSARY OR APPROPRIATE TO EFFECT SUCH WAIVER.

                            [Signature Pages Follow]




                                      -6-





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


                                         KLESCH & COMPANY LIMITED




                                         By:   /s/ A. Gary Klesch
                                             ---------------------------------
                                         Name:  A. Gary Klesch
                                         Title: Chairman










                                         TAL INTERNATIONAL GROUP, INC.




                                         By:   /s/ A. Richard Caputo, Jr.
                                             ---------------------------------
                                         Name:  A. Richard Caputo, Jr.
                                         Title: Vice President









                                                                   EXHIBIT 10.12


                              TAX SHARING AGREEMENT
                              ---------------------


         THIS TAX SHARING AGREEMENT is made and entered into this 3rd day of
November, 2004 (this "Agreement"), by and among TAL International Group, Inc., a
Delaware corporation (the "Company"), Transamerica Leasing Inc., a Delaware
corporation ("Leasing"), Trans Ocean Ltd., a Delaware corporation ("Trans
Ocean"), and each corporation, other than the Company, Leasing and Trans Ocean,
which is a signatory to this Agreement (Leasing, Trans Ocean and such other
corporations shall collectively be referred to as the "Subsidiaries" and
individually referred to as a "Subsidiary").

                                   WITNESSETH:
                                   -----------

         WHEREAS, the Company owns directly or indirectly capital stock of each
of the Subsidiaries which represents at least 80 percent of the vote and value
of each of the Subsidiaries and may, therefore, include the income and expense
of each of the Subsidiaries in the Company's consolidated federal income tax
returns; and

         WHEREAS, the parties hereto desire to consolidate such returns upon the
terms and conditions herein set forth;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein set forth, the parties hereto do hereby agree as
follows:

         1.   Filing and Preparation of Future Returns. Each of the Subsidiaries
agrees to consent to joining with the Company and its consolidated Subsidiaries
(the Company and each of the Subsidiaries being herein collectively referred to
as the "Group") in the filing of the consolidated federal income tax returns for
any taxable year for which a consolidated return can be filed and each taxable
year thereafter, in accordance with applicable income tax laws and regulations.
The Company agrees that it will prepare and file in a timely manner all federal
income tax returns required to be filed on behalf of the Company and its
consolidated Subsidiaries and will pay the taxes shown to be due thereon.

         2.   Tax Payments; Estimated Tax Payments.
              -------------------------------------

(             a)   For each taxable year ending after the date hereof during
which a Subsidiary is included in a consolidated Federal income tax return with
the Company, each Subsidiary will pay to the Company an amount equal to its
Subsidiary Tax Liability, as defined in the next sentence. Subsidiary Tax
Liability means the hypothetical Federal income tax liability of a Subsidiary
for a taxable year determined as if such Subsidiary had filed its own separate
Federal income tax return for such taxable year and all prior taxable years
ending after the date hereof, except that such Subsidiary shall be treated as
having available as loss or credit carryovers for purposes of computing such
Subsidiary's Subsidiary Tax Liability all losses or credits previously generated
by it and utilized by other Subsidiaries, other than any such losses or credits
that were previously taken into account in computing such Subsidiary's
Subsidiary Tax Liability, each such Subsidiary shall be treated as though such
Subsidiary made an election specified in Section 172(b)(3) of the Internal
Revenue Code of 1986, as amended (the "Code") to forgo the carryback period for
net operating losses and all credits and other tax attributes shall also be
carried forward








only, and shall not be carried back to prior taxable years. Such hypothetical
Federal income tax liability shall be determined at the end of the taxable year
and shall reflect any tax elections, conventions, treatments or methods which
are actually utilized by the Group in filing its consolidated Federal income tax
return. Such hypothetical Federal income tax liability shall not be less than
zero. To the extent that the obligation to pay such amount has not fully
satisfied pursuant to paragraph 2(b) of this Agreement, such Subsidiary shall
pay any such remaining amount to the Company on the last date on which the
Company is required to make its final payment of Federal income taxes for the
taxable year without incurring any penalties or additions to tax.

              (b)  On any date on which the Company is required to make an
estimated payment of the consolidated Federal income tax of the Group under
Section 6655 of the Code, each Subsidiary will make estimated payments to the
Company in an amount equal to such Subsidiary's hypothetical estimated
consolidated Federal income tax liability for a Subsidiary determined in
accordance with the principles of paragraph 2(a). If the total of such estimated
payments made by such Subsidiary to the Company with respect to a taxable year
shall be in excess of the liability of such Subsidiary to the Company pursuant
to paragraph 2(a) of this Agreement for such taxable year, the Company shall pay
the amount of such excess to such Subsidiary no later than the date on which the
Company files the consolidated Federal income tax return for the Group.

         3.   Adjustments to Liability.
              -------------------------

              (a)  If the Subsidiary Tax Liability of a Subsidiary is changed as
the result of any final administrative or judicial determination (including a
final "determination" as defined in Section 1313(a) of the Code) with respect to
consolidated Federal income tax returns actually filed by the Group, then the
amount of the payments required from such Subsidiary to the Company under
paragraph 2(a) shall be recomputed by substituting the amount of such
Subsidiary's Subsidiary Tax Liability after the adjustments described above in
place of such Subsidiary's Subsidiary Tax Liability, provided that the
principles of paragraph 2(a) shall be applied in connection with such
recomputation notwithstanding any contrary determination. If such final
determination results in an increase in the Subsidiary Tax Liability, such
Subsidiary shall, subject to the reduction provided for in the next sentence,
pay to the Company not later than five days after such final determination an
amount equal to the excess of the new Subsidiary Tax Liability over the amount
previously paid to the Company by such Subsidiary. If such final determination
results in a reduction in such Subsidiary's Subsidiary Tax Liability for a
taxable year, such reduction shall first be applied to offset any increase to
such Subsidiary's Subsidiary Tax Liability for any other taxable year to which
such final determination applies, and any remaining amount of such reduction
shall be carried forward and credited against such Subsidiary's Subsidiary Tax
Liability for succeeding taxable years. The parties recognize that such new
liability for any taxable year is not necessarily such Subsidiary's final
liability for that year, and may be recomputed more than once.

              (b)  Payments made pursuant to paragraph 2(a) shall bear interest
in the same manner as any late payment or refund of Federal income tax.

         4.   Other Taxes. In the event there shall be imposed on the Company or
any of the Subsidiaries any foreign, federal, state or local tax to which
principles of consolidated taxation



                                       2



may be applied and practical, each of the Company and each of the Subsidiaries
agree that this Agreement shall also be applicable with respect to such taxes.
For purposes of this Agreement, the term taxes shall include, but is not limited
to, all net income, capital gains, gross income, gross receipts, sales, use,
transfer, franchise, profits, license, capital, payroll, excise, value added or
other taxes and any related interest or governmental charge.

         5.   Payment. Any payment required by a Subsidiary to the Company under
Sections 2, 3 or 4 of this Agreement shall be made first by reducing the amount
of any account payable created under the next sentence (but not below zero), and
then by entering or increasing an account payable to the Company on the books of
account of such Subsidiary. Any payment required by the Company to a Subsidiary
under this Agreement shall be made first by reducing the amount of any account
payable created under the prior sentence (but not below zero), and then by
entering or increasing an account payable to such Subsidiary on the books of
account of the Company. Any account payable created under this paragraph shall
be due in whole or in part on five days' notice by a Subsidiary or the Company,
as the case may be, and shall be payable by the party whose liability such
account payable is positive, and any due but unpaid amounts shall bear interest
from and after such due date at the rate of interest then most recently
announced by Citibank, N.A. as its Prime rate, plus two percent (2%) per annum.

         6.   Limitation of Liability. The Company shall have no liability to
the Subsidiaries on account of (a) any advice which it renders to the
Subsidiaries or any of their direct or indirect subsidiaries, provided the
Company believed in good faith that such advice was useful or beneficial to the
Subsidiaries or any of their direct or indirect subsidiaries at the time it was
rendered, (b) the Subsidiaries' inability to obtain financing or achieve other
results desired by the Subsidiaries (or any of their direct or indirect
subsidiaries) or the Company's failure to render services to the Subsidiaries at
any particular time or from time to time, or (c) the failure of any acquisition,
divestiture, financing or business plan to meet the financial, operating or
other expectations of the Subsidiaries or any of its direct or indirect
subsidiaries. The Subsidiaries' and any of their direct or indirect
subsidiaries' sole remedy for any claim under this Agreement shall be
termination of this Agreement.

         7.   Indemnification. The Subsidiaries will, and will cause each of
their direct and indirect subsidiaries to, indemnify and hold harmless to the
fullest extent permitted by applicable law, the Company, its affiliates and
associates, and each of the respective owners, partners, officers, directors,
employees and agents of each of the foregoing, from and against any loss,
liability, damage, claim or expenses (including the fees and expenses of
counsel) arising as a result or in connection with this Agreement, the Company's
services hereunder or other activities on behalf of the Subsidiaries and their
direct and indirect subsidiaries.

         8.   No Set-Off. Any payments paid by the Subsidiaries under this
Agreement shall not be subject to set-off and shall be increased by the amount,
if any, of any taxes (other than income taxes) or other governmental charges
levied in respect of such payments, so that the Company is made whole for such
taxes or charges.

         9.   Additional Subsidiaries. If at any time after the date upon which
this Agreement is executed, any party to this Agreement acquires or creates one
or more Subsidiary corporations, companies, partnerships or other entities that
are either includible in the Group or the separate



                                       3




existence of which is disregarded (collectively referred to as "Subsidiary
Entities" and individually referred to as "Subsidiary Entity"), either the
Company or a Subsidiary shall cause such Subsidiary Entity to be subject to this
Agreement and all references to either Group or a Subsidiary herein shall
thereafter be interpreted to refer to the Company, the Subsidiaries and such
Subsidiary Entity or Subsidiary Entities, or to a Subsidiary and such Subsidiary
Entity or Subsidiary Entities respectively.

         10.   Successors and Assigns. This Agreement shall be binding on and
inure to the benefit of any successor, by merger, acquisition of assets or
otherwise, to any of the parties hereto (including but not limited to any
successor of the Company or a Subsidiary succeeding to the tax attributes of
each under Section 381 of the Code), to the same extent as if such successor had
been an original party to this Agreement.

         11.  Termination. This Agreement shall continue in effect until
terminated by written agreement between all the parties hereto.

         12.  Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and
supersedes and cancels any and all such previous written or oral agreements
between the parties hereto. This Agreement may not be modified, waived,
terminated or amended except expressly by an instrument in writing signed by the
Company and the Subsidiaries.

         13.  Severability. In the event that any provision of this Agreement
shall be held to be void or unenforceable in whole or in part, the remaining
provisions of this Agreement and the remaining portion of any provision held
void or unenforceable in part shall continue in full force and effect.

         14.  Notice. Except as otherwise specifically provided herein, notice
given hereunder shall be deemed sufficient if delivered personally or sent by
registered or certified mail to the address of the party for whom intended at
the principal executive offices of such party, or at such other address as such
party may hereinafter specify by written notice to the other party.

         15.  Obligations Joint and Several. Each Subsidiary shall be jointly
and severally liable and obligated hereunder with respect to each obligation,
responsibility and liability of the Subsidiaries, as if a direct obligation of
such Subsidiary.

         16.  No Waiver. No waiver by any party of any breach of any provision
of this Agreement shall be deemed a continuing waiver or a waiver of any
preceding or succeeding breach of such provision or of any other provision
herein contained.

         17.  Governing Law. This Agreement shall be governed by the internal
laws of the State of New York.



                           [Signature Page to Follow]








                                       4




         IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.



                                        TAL INTERNATIONAL GROUP, INC.


                                        By:  /s/ A. Richard Caputo, Jr.
                                            -------------------------------
                                        Name:  A. Richard Caputo, Jr.
                                        Title: Vice President


                                        TRANSAMERICA LEASING INC.


                                        By:   /s/ A. Richard Caputo, Jr.
                                            -------------------------------
                                        Name:  A. Richard Caputo, Jr.
                                        Title: Authorized Officer


                                        TRANS OCEAN LTD.


                                        By:   /s/ A. Richard Caputo, Jr.
                                            -------------------------------
                                        Name:  A. Richard Caputo, Jr.
                                        Title: Authorized Officer


                                        TRANS OCEAN CONTAINER
                                        CORPORATION


                                        By:   /s/ A. Richard Caputo, Jr.
                                            -------------------------------
                                        Name:  A. Richard Caputo, Jr.
                                        Title: Authorized Officer


                                        TRANSAMERICA LEASING DO BRASIL LTDA.


                                        By:   /s/ A. Richard Caputo, Jr.
                                            -------------------------------
                                        Name:  A. Richard Caputo, Jr.
                                        Title: Authorized Officer







                                        TRANS OCEAN CONTAINER CORPORATION


                                        By:   /s/ A. Richard Caputo, Jr.
                                            -------------------------------
                                        Name:  A. Richard Caputo, Jr.
                                        Title: Authorized Officer


                                        SPACEWISE INC.


                                        By:   /s/ A. Richard Caputo, Jr.
                                            -------------------------------
                                        Name:  A. Richard Caputo, Jr.
                                        Title: Authorized Officer


                                        TRANSAMERICA LEASING N.V.


                                        By:   /s/ A. Richard Caputo, Jr.
                                            -------------------------------
                                        Name:  A. Richard Caputo, Jr.
                                        Title: Authorized Officer


                                        TRANSAMERICA LEASING SRL


                                        By:   /s/ A. Richard Caputo, Jr.
                                            -------------------------------
                                        Name:  A. Richard Caputo, Jr.
                                        Title: Authorized Officer


                                        ICS TERMINALS (UK) LIMITED


                                        By:   /s/ A. Richard Caputo, Jr.
                                            -------------------------------
                                        Name:  A. Richard Caputo, Jr.
                                        Title: Authorized Officer







                                        TRANS OCEAN LEASING (DEUTSCHLAND) GMBH


                                        By:   /s/ A. Richard Caputo, Jr.
                                            -------------------------------
                                        Name:  A. Richard Caputo, Jr.
                                        Title: Authorized Officer


                                        TRANS OCEAN MANAGEMENT S.A.


                                        By:   /s/ A. Richard Caputo, Jr.
                                            -------------------------------
                                        Name:  A. Richard Caputo, Jr.
                                        Title: Authorized Officer


                                        TRANS OCEAN REGIONAL CORPORATE HOLDINGS


                                        By:   /s/ A. Richard Caputo, Jr.
                                            -------------------------------
                                        Name:  A. Richard Caputo, Jr.
                                        Title: Authorized Officer


                                        TRANS OCEAN MANAGEMENT CORPORATION


                                        By:   /s/ A. Richard Caputo, Jr.
                                            -------------------------------
                                        Name:  A. Richard Caputo, Jr.
                                        Title: Authorized Officer


                                        TRANSAMERICA LEASING PTY. LTD.


                                        By:   /s/ A. Richard Caputo, Jr.
                                            -------------------------------
                                        Name:  A. Richard Caputo, Jr.
                                        Title: Authorized Officer







                                        TRANSAMERICA LEASING GMBH


                                        By:   /s/ A. Richard Caputo, Jr.
                                            -------------------------------
                                        Name:  A. Richard Caputo, Jr.
                                        Title: Authorized Officer


                                        TRANSAMERICA LEASING (HK) LTD.


                                        By:   /s/ A. Richard Caputo, Jr.
                                            -------------------------------
                                        Name:  A. Richard Caputo, Jr.
                                        Title: Authorized Officer


                                        GREYBOX LOGISTICS SERVICES INC.


                                        By:   /s/ A. Richard Caputo, Jr.
                                            -------------------------------
                                        Name:  A. Richard Caputo, Jr.
                                        Title: Authorized Officer


                                        INTERMODAL EQUIPMENT INC.


                                        By:   /s/ A. Richard Caputo, Jr.
                                            -------------------------------
                                        Name:  A. Richard Caputo, Jr.
                                        Title: Authorized Officer


                                        GREYBOX SERVICES LTD.


                                        By:   /s/ A. Richard Caputo, Jr.
                                            -------------------------------
                                        Name:  A. Richard Caputo, Jr.
                                        Title: Authorized Officer












                                                                   EXHIBIT 10.13

                              EMPLOYMENT AGREEMENT

          THIS EMPLOYMENT AGREEMENT (this "Agreement") dated November 3, 2004,
is made by and between TAL International Group, Inc. (the "Company") and Brian
M. Sondey ("Executive").

          WHEREAS, the Company desires to employ Executive and to enter into an
agreement embodying the terms of such employment;

          WHEREAS, Executive desires to accept such employment on the terms
hereinafter set forth in this Agreement;

          NOW, THEREFORE, in consideration of the premises and mutual covenants
herein and for other good and valuable consideration the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:

     1. Term of Employment. Subject to the provisions of Section 7, Executive
shall be employed by the Company for a period commencing on November 3, 2004
(the "Effective Date"), and ending on the third anniversary of the Effective
Date (the "Term"); provided that the Term shall automatically be extended for
successive one-year periods unless either party shall give the other written
notice of its intention not to extend the Term at least ninety (90) days prior
to the expiration of the then current Term.

     2. Position.

          (a) Executive shall serve as the Company's Chief Executive Officer. In
such position, Executive shall have such duties and authority as shall be
determined from time to time by the Board of Directors of the Company (the
"Board"), which duties and authority shall be consistent with the Executive's
position as the chief executive officer of a corporation of a similar size, and
engaged in a similar business, as the Company. Executive shall report directly
to the Board.

          (b) Except for permitted vacations, illnesses, and leaves of absence
that are authorized by the Board, during the Term, Executive shall devote all of
his business time and best efforts to the performance of his duties hereunder
and will not engage in any other business, profession or occupation for
compensation or otherwise; provided, however, that Executive may take reasonable
amounts of time to (i) manage his personal investments and personal and family
affairs if such activities do not significantly interfere with his duties under
this Agreement or (ii) engage in charitable, educational, religious, civic and
similar types of activities, speaking engagements, attendance at seminars and
similar activities, to the extent that such activities do not inhibit or
conflict with the performance of the Executive's duties hereunder or inhibit or
conflict in any material way with the business of the Company.

     3. Base Salary. During the Term, the Company shall pay Executive an annual
base salary (the "Base Salary") at the annual rate of $400,000 payable in
regular installments in accordance with the Company's usual payroll practices.
The amount of the Executive's Base Salary may be increased as of the first day
of each calendar year in



an amount mutually agreed upon by the Company and the Executive based upon a
performance evaluation performed by the Board of Directors. In no event,
however, shall the rate of the Executive's Base Salary be reduced during the
term of this Agreement. Notwithstanding any other provision of this Section 3 to
the contrary, as of the first day of each calendar year, starting with calendar
year 2006, the Executive's Base Salary shall be increased to an amount equal to
no less than that determined by multiplying the Base Salary payable to the
Executive for the immediately preceding calendar year by one (1) plus the
percentage increase, if any, in the Consumer Price Index (as defined below) for
the most recent calendar month for which such Consumer Price Index has been
published over the Consumer Price Index for the same calendar month in the
immediately preceding calendar year. For purposes of this Agreement, the term
"Consumer Price Index" shall mean the Consumer Price Index for all Urban
Consumers, New York - Northeastern New Jersey area (1982-1984 = 100) issued by
the Bureau of Labor Statistics of the United States Department of Labor;
provided, however, that if the Consumer Price Index shall be converted to a
different standard reference base or otherwise revised, the determination of the
salary increase shall be made with the use of such conversion factor, formula or
table for converting the Consumer Price Index as may be published by the Bureau
of Labor Statistics.

     4. Bonus. With respect to each fiscal year of the Company during the Term,
Executive shall be eligible to earn an annual bonus award that is determined
pursuant to and paid in accordance with an annual bonus plan of the Company,
consistent with the past practices of the Company (including the past practices
of the predecessor to the Company).

     5. Employee Benefits. During the Term, Executive shall be provided health
insurance and short term and long term disability insurance and other health and
welfare benefits and participation in a 401(k) plan or another plan selected by
the Board (collectively "Employee Benefits") on the same basis as those benefits
are generally made available to other senior executives of the Company.
Executive shall be provided with four weeks of paid vacation per year. The
Company shall obtain a directors and officers insurance policy covering
Executive and containing such coverages as are approved by agreement of the
Executive and the Board.

     6. Business Expenses and Perquisites. During the Term, reasonable and
documented business expenses incurred by Executive in the performance of his
duties hereunder shall be reimbursed by the Company in accordance with Company
policies as in effect for the Company's executive employees.

     7. Termination. Notwithstanding any other provision of this Agreement:

          (a) For Cause by the Company. The Term and Executive's employment
hereunder may be terminated by the Company for Cause (as defined below). If
Executive's employment is terminated for Cause, he shall be entitled to receive
his Base Salary through the date of termination. Upon termination of Executive's
employment for Cause pursuant to this Section 7(a), Executive shall have no
further rights to any compensation (including any Bonus) or any other benefits
under this


                                       2



Agreement. However, all other benefits, if any, due Executive following
Executive's termination of employment pursuant to this Section 7(a) shall be
determined in accordance with the plans, policies and practices of the Company.

          (b) Disability or Death. The Term and Executive's employment hereunder
shall terminate upon Executive's death and if Executive becomes physically or
mentally incapacitated and is therefore unable to perform his duties to the
Company for more than 90 days during any 180 day period as determined by a
competent physician selected by the Board (such incapacity is hereinafter
referred to as "Disability"). The determination of Disability made in writing to
the Company and Executive shall be final and conclusive for all purposes of the
Agreement.

          Upon termination of Executive's employment hereunder for either
Disability or death, Executive or his estate (as the case may be) shall be
entitled to receive (i) Executive's Base Salary through the end of the month in
which such termination occurs plus Executive's Base Salary and Bonus for one
additional year and (ii) a pro rata portion (based on the period from the
beginning of the year through the date of termination) of any Bonus that
Executive would have been entitled to receive pursuant to Section 4 hereof in
such year, payable when such Bonus would have otherwise been payable had
Executive's employment not terminated.

          Upon termination of Executive's employment due to Disability or death
pursuant to this Section 7(b), Executive shall have no further rights to any
compensation (including any Bonus) or any other benefits under this Agreement
except as provided under this Section 7(b). However, all other benefits, if any,
due Executive or any of Executive's heirs or beneficiaries following Executive's
termination for Disability or death shall be determined in accordance with the
plans, policies and practices of the Company.

          (c) Without Cause by the Company. The Term and Executive's employment
hereunder may be terminated by the Company without Cause upon 30 days written
notice to Executive. If Executive's employment is terminated by the Company
without Cause (other than by reason of Disability or death), Executive shall
continue to receive his Base Salary and Bonus for the balance of the Term, but
in no event less than eighteen months, determined as if such termination had not
occurred. Upon termination of Executive's employment by the Company without
Cause pursuant to this Section 7(c), Executive shall have no further rights to
any compensation (including any Bonus) or any other benefits under this
Agreement except as provided under this Section 7(c). However, all other
benefits, if any, due Executive following Executive's termination of employment
by the Company without Cause shall be determined in accordance with the plans,
policies and practices of the Company.

          (d) For Good Reason by Executive. The Term and Executive's employment
hereunder may be terminated by Executive for Good Reason upon 30 days written
notice to the Company. Such termination shall be treated for all purposes as a
termination without Cause pursuant to Section 7(c) and the provisions of Section
7(c) shall apply to such termination.

                                       3


          (e) Without Good Reason by Executive. The Term and Executive's
employment hereunder may be terminated by Executive without Good Reason upon 30
days written notice to the Company. Such termination shall be treated for all
purposes as a termination for Cause pursuant to Section 7(a) and the provisions
of Section 7(a) shall apply to such termination.

          (f) Notice of Termination. Any purported termination of employment by
the Company or by Executive shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 12(h) 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 employment under the provision so
indicated.

     8. Non-Competition; Non-Solicitation; Non-Disclosure, etc.

          (a) Applicability. In the event of the termination of Executive's
employment with the Company for any reason or no reason, the Company will,
within ten (10) business days of the effective date of such termination, provide
to Executive notice of whether the Company has elected either (i) to waive
compliance by Executive with Section 8(b) as it is applicable to Executive, in
which case, Section 8(b) will cease to be applicable to Executive on the 30th
day following such effective date, or (ii) to require compliance by Executive
with Section 8(b), in which case, (A) Section 8(b) will be applicable to
Executive for twelve months following such effective date (the "Restricted
Period") and (B) the Company will, during the Restricted Period, and as a
condition of such compliance, continue to pay Executive an amount equal to his
Base Salary, but excluding any Bonus, or other bonuses, benefits or flexible
perquisites, applicable to the six months prior to such effective date;
provided, however, that the Company shall have no obligation to make such
payment, if Executive's employment is terminated for Cause; and provided,
further, that such payment shall not be duplicative of any other payment
required under Section 7 after termination of employment. If the Company fails
to provide such notice, then it will be deemed to have elected to waive
compliance under clause (i). Regardless of whether the Company waives compliance
by Executive with Section 8(b) or makes the payments specified in clause
(ii)(B), Sections 8(c), 8(d) and 8(e) shall continue to apply to Executive for
the duration specified therein.

          (b) Non-Competition. In consideration of this Agreement, Executive
covenants and agrees that during the Term and during the Restricted Period,
Executive shall not, subject to Section 8(a), without the express written
approval of the Board, directly or indirectly, in one or a series of
transactions, own, manage, operate, control, invest or acquire an interest in,
whether as a proprietor, partner, shareholder, member, lender, director,
officer, employee, joint venturer, investor, lessor, supplier, customer, agent,
representative or other participant, or otherwise engage or participate in,
whether as a proprietor, partner, shareholder, member, lender, director,
officer, employee, joint venturer, investor, lessor, supplier, customer, agent,
representative or other participant, any business which competes, directly or
indirectly, with the Business (as defined below) ("Competitive Business")
without regard to (A) whether the Competitive Business has its


                                       4


office, manufacturing or other business facilities within or without the Market,
(B) whether any of the activities of Executive referred to above occur or are
performed within or without the Market or (C) whether Executive resides, or
reports to an office, within or without the Market; provided, however, that (x)
Executive may, anywhere in the Market, directly or indirectly, in one or a
series of transactions, own, invest or acquire an interest in up to five percent
(5%) of the capital share of a corporation whose capital share is traded
publicly, or that (y) Executive may accept employment with a successor company
to the Company. For the avoidance of doubt, a Competitive Business shall not
include a shipping company that leases, finances, sells and/or manages shipping
containers solely for itself and not for any third party. Furthermore, Executive
shall not be deemed to be engaged in a Competitive Business if he is employed at
a company that is not engaged in a Competitive Business but which has a sister
company that is engaged in a Competitive Business if Executive has no
involvement, direct or indirect, in the sister company whatsoever.

          (c) Non-Solicitation. If Executive's employment is terminated, then
Executive shall not for 12 months after termination of employment (A) directly
or indirectly, in one or a series of transactions, recruit, solicit or otherwise
induce or influence any proprietor, partner, shareholder, member, lender,
director, officer, employee, sales agent, joint venturer, investor, lessor,
customer, supplier, agent, representative or any other person or entity which
has a business relationship with the Company or a Related Company or had a
business relationship with the Company or a Related Company within the
twenty-four (24) month period preceding the date of the incident in question
(other than a customer or supplier who has a business relationship with
Executive's new employer (if any)), to discontinue, reduce or modify such
employment, agency or business relationship with the Company or a Related
Company, or (B) employ or seek to employ or cause any Competitive Business to
employ or seek to employ any person or entity who is then (or was at any time
within twelve (12) months prior to the date Executive or the Competitive
Business employs or seeks to employ such Person) employed or retained by the
Company or a Related Company. Notwithstanding the foregoing, nothing herein
shall prevent Executive from providing a letter of recommendation to an employee
with respect to a future employment opportunity.

          (d) Non-Disclosure. Executive further agrees, that during and after
his employment with the Company, Executive will not, directly or indirectly in
one or a series of transactions disclose to any person or entity or use or
otherwise exploit for Executive's own benefit or for the benefit of anyone other
than the Company or its subsidiaries any Confidential Information (as defined
below) whether prepared by Executive or not, provided, however, that any
Confidential Information may be disclosed to officers, representatives,
employees and agents of the Company or its Related Companies who need to know
such Confidential Information in order to perform the services or conduct the
operations required or expected of them in the Business. Executive shall use his
best efforts to prevent the removal of any Confidential Information from the
premises of the Company or its Related Companies, except as required in his
normal course of employment by the Company or its subsidiaries. During the Term,
Executive shall use his commercially reasonable efforts to cause all Persons to
whom Confidential Information shall be disclosed by Executive hereunder to
observe the


                                       5


terms and conditions set forth herein as though each such Person or entity was
bound hereby. After the Term, Executive shall not disclose Confidential
Information other than to his advisors, representatives and agents who execute a
confidentiality agreement whereby they will agree to observe the confidentiality
terms and conditions set forth herein. Executive shall have no obligation
hereunder to keep confidential any Confidential Information if and to the extent
disclosure of any thereof is specifically required by law; provided, however,
that in the event disclosure is required by applicable law, Executive shall
provide the Company with prompt notice of such requirement to the extent allowed
by law, prior to making any disclosure, so that the Company may seek an
appropriate protective order. At the request of the Company, Executive agrees to
deliver to the Company all Confidential Information which Executive may possess
or control. Executive agrees that all Confidential Information of the Company
and Related Companies (whether now or hereafter existing) conceived, discovered
or made by him during his employment with the Company or its Related Companies
exclusively belongs to the Company and its direct and indirect subsidiaries (and
not to Executive). Executive will promptly disclose such Confidential
Information to the Company and its Related Companies and perform all actions
reasonably requested by the Company and its Related Companies to establish and
confirm such exclusive ownership.

          (e) Non-Disparagement. Executive agrees that during and after his
employment with the Company, he shall not make any false, defamatory or
disparaging statements about the Company or its Related Companies or the
officers or directors of the Company or its Related Companies. During and after
Executive's employment with the Company or its Related Companies, the Company
agrees on behalf of itself and its Related Companies that neither the officers
nor the directors of the Company or its Related Companies shall make any false,
defamatory or disparaging statements about Executive.

          (f) Specific Performance. Each of the parties hereto agree that their
rights under this Section 8 are special and unique and that violation thereof
would not be adequately compensated by money damages and each grants the others
the right to specifically enforce (including injunctive relief where
appropriate) the terms of this Section 8.

     9. Resolution of Disputes. Any disputes arising under or in connection with
this Agreement, other than Section 8, shall first be addressed by third-party
mediation and, if such mediation fails to resolve such dispute within sixty
days, by binding arbitration in each case, to be held in New York. The
arbitration shall be conducted according to the rules and procedures of the
American Arbitration Association. Judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.

     10. Definitions. For purposes of this Agreement, the following terms shall
have the corresponding meanings:

                                       6


          (a) "Business" means the business of leasing, financing, selling and
managing shipping containers and any other business that the Company engages in
during the Term.

          (b) "Cause" means (i) Executive's conviction for embezzlement or any
other offense involving misuse or misappropriation of money or other property of
the Company; (ii) Executive's continued and repeated refusal to perform specific
directives of the Board, which directives are consistent with the scope and
nature of Executive's duties and responsibilities to the Company; or (iii)
Executive's conviction of fraud, conviction of a felony involving moral
turpitude, habitual drunkenness or habitual use of illegal substances.

          (c) "Confidential Information" means any confidential information
including, without limitation, any study, data, calculations, software storage
media or other compilation of information, patent, patent application,
copyright, trademark, trade name, service mark, service name, trade secrets,
supplier lists and contacts, customer lists and contacts, the fact of and terms
of (including without limitation, pricing terms) supplier, customer or
consultant contracts, pricing policies, business techniques, operational
methods, marketing plans or strategies, product development techniques or plans,
business acquisition plans or any portion or phase of any scientific or
technical information, ideas, discoveries, designs, computer programs (including
source of object codes), processes, procedures, formulas, improvements or other
proprietary or intellectual property of the Company or its subsidiaries, whether
or not in written or tangible form, and whether or not registered, and including
all files, records, manuals, books, catalogues, memoranda, notes, summaries,
plans, reports, records, documents and other evidence thereof. The term
"Confidential Information" does not include, and there shall be no obligation
hereunder with respect to, information that becomes generally available to the
public other than as a result of a disclosure by Executive that is prohibited
hereunder.

          (d) "Good Reason" means, without Executive's express written consent,
the occurrence of any of the following events: (i) any change in Executive's
title, duties or responsibilities (including reporting responsibilities) that is
adverse in any material respect, which is not remedied within 10 business days
following receipt by the Board of written notice by Executive to the Company of
such change; (ii) a reduction by the Company in Executive's base salary or
failure by the Company to pay Executive compensation due under the terms of this
Agreement, which is not remedied within 10 business days following receipt by
the Board of written notice by Executive to the Company of such reduction or
failure; (iii) any requirement of the Company that Executive be based anywhere
more than fifty (50) miles from the office where Executive is located on the
date hereof, if such relocation increases Executive's commute by more than
twenty (20) miles; (iv) any willful material breach of the terms of this
Agreement by the Company, which is not remedied within 10 business days
following receipt by the Board of written notice by Executive to the Company of
such breach; or (v) the Company elects not to renew this Agreement.

                                       7


          (e) "Market" means any county in the United States of America and each
similar jurisdiction in any other country in which (i) the Business was
conducted by or engaged in by the Company or its subsidiaries or in which the
Company sought to conduct the Business on or prior to the date hereof or (ii)
the Business is conducted by or engaged in by the Company or its subsidiaries or
in which the Company seeks to conduct the Business at any time during
Executive's employment by the Company or its subsidiaries.

          (f) "Related Company" means all direct and indirect subsidiaries of
the Company.

     11. Designated Event Bonus.

          (a) General. If upon the consummation of a Designated Event, the
holders of all of the outstanding shares of Series A Preferred Stock receive
cash equal to the Liquidation Preference (as defined in the Certificate of
Incorporation) plus accrued but unpaid dividends as of the redemption date on
each outstanding share of Series A Preferred Stock (such aggregate amount, the
"Series A Redemption Amount"), then the Company shall pay to Executive the Bonus
Amount. For the avoidance of doubt, any payments under this Section 11 shall be
subordinate to all rights of payment of the Series A Preferred Stock.

          (b) Payment of the Bonus Amount. The Bonus Amount shall be payable in
cash. Notwithstanding the foregoing, if the Designated Event is a Public
Offering, the Company may, in its sole discretion, issue Common Stock or other
securities that are exercisable for or convertible into Common Stock in lieu of
cash payment of the Bonus Amount. The number of securities issued in payment of
the Bonus Amount would be based on the price per share of the securities sold in
the Public Offering.

          (c) Definitions. For purposes of this Agreement, the following terms
shall have the corresponding meanings:

               (i) "Bonus Amount" shall mean an amount equal to the difference
          between (i) all accrued but unpaid dividends on all of the shares of
          Series A Preferred Stock outstanding immediately prior to the
          Designated Event divided by the difference between of (A) one minus
          (B) the Fully-Diluted Equity Factor and (ii) all accrued but unpaid
          dividends on all of the shares of Series A Preferred Stock outstanding
          immediately prior to the Designated Event.

               (ii) "Certificate of Incorporation" shall mean the Amended and
          Restated Certificate of Incorporation of the Company, as filed with
          the Secretary of State of Delaware on the date hereof.

               (iii) "Common Stock" shall mean the Common Stock, par value
          $0.001 per share, of the Company.

                                       8


               (iv) "Designated Event" shall mean a Change of Control (as
          defined in the Certificate of Incorporation) or a Public Offering, in
          each case in which the entire Series A Redemption Amount is paid in
          full in cash.

               (v) "Executive Shares" shall mean 2,500 shares of Common Stock,
          subject to adjustment for stock splits, combinations, stock dividends,
          recapitalizations and similar transactions.

               (vi) "Fully-Diluted Common Stock" shall mean all of the Common
          Stock, assuming conversion, exercise or exchange of all outstanding
          convertible, exercisable or exchangeable securities, options, warrants
          and similar securities or instruments into or for Common Stock
          (regardless of whether such convertible, exercisable or exchangeable
          securities, options, warrants or similar securities or instruments are
          then convertible, exercisable or exchangeable).

               (vii) "Fully-Diluted Equity Factor" shall mean the fraction
          obtained by dividing (i) the Executive Shares by (ii) the
          Fully-Diluted Common Stock immediately prior to the Designated Event.

               (viii) "Public Offering" shall mean a public offering and sale of
          equity securities by the Company pursuant to an effective Registration
          Statement under the Securities Act of 1933, as amended (the
          "Securities Act") for gross proceeds of at least $50 million.

               (ix) "Registration Statement" means any registration statement of
          the Company filed with, or to be filed with, the Securities and
          Exchange Commission under the rules and regulations promulgated under
          the Securities Act, including the related prospectus, amendments and
          supplements to such registration statement, including post-effective
          amendments, and all exhibits and all material incorporated by
          reference in such registration statement other than a registration
          statement (and related prospectus) filed on Form S-8 or any successor
          form thereto.

               (x) "Series A Preferred Stock" shall mean the Series A Preferred
          Stock, par value $0.001 per share, of the Company.

     12. Miscellaneous.

          (a) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.

          (b) Entire Agreement/Amendments. This Agreement contains the entire
understanding of the parties with respect to the employment of Executive by the
Company. There are no restrictions, agreements, promises, warranties, covenants
or undertakings between the parties with respect to the subject matter herein
other than those expressly set forth herein. This Agreement may not be altered,
modified, or amended except by written instrument signed by the parties hereto.

                                       9


          (c) No Waiver. The failure of a party to insist upon strict adherence
to any term of this Agreement on any occasion shall not be considered a waiver
of such party's rights or deprive such party of the right thereafter to insist
upon strict adherence to that term or any other term of this Agreement.

          (d) Severability. In the event that any one or more of the provisions
of this Agreement shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
of this Agreement shall not be affected thereby.

          (e) Assignment. This Agreement shall not be assignable by Executive.
This Agreement may be assigned by the Company to a Related Company. Furthermore,
subject to Executive's consent, which shall not be unreasonably withheld,
delayed or conditioned, this Agreement may be assigned by the Company to a
company which is a successor in interest to substantially all of the business
operations of the Company. Any such assignment shall become effective when the
Company notifies Executive of such assignment or at such later date as may be
specified in such notice. Upon such assignment, the rights and obligations of
the Company hereunder shall become the rights and obligations of such successor
company, provided that any assignee expressly assumes the obligations, rights
and privileges of this Agreement.

          (f) Mitigation. Executive shall not be required to mitigate the amount
of any payment provided for pursuant to this Agreement by seeking other
employment.

          (g) Successors; Binding Agreement. This Agreement shall inure to the
benefit of and be binding upon personal or legal representatives, executors,
administrators, successors, heirs, distributes, devises and legatees.

          (h) Notice. 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 registered mail,
return receipt requested, postage prepaid, addressed to the respective addresses
set forth on the execution page of this Agreement 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 receipt,
provided that all notices to the Company shall be directed to the attention of
attention of the Board.

          (i) Withholding Taxes. The Company may withhold from any amounts
payable under this Agreement such Federal, state and local taxes as may be
required to be withheld pursuant to any applicable law or regulation.

          (j) Counterparts. This Agreement may be signed in counterparts, each
of which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.

                            [Signature Page Follows]



                                       10




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


                                         TAL INTERNATIONAL GROUP, INC.



                                         By:  /s/ A. Richard Caputo, Jr.
                                            --------------------------------
                                         Name:  A. Richard Caputo, Jr.
                                         Title: Vice President

                                         c/o The Jordan Company, L.P.
                                         767 Fifth Avenue
                                         New York, NY 10153



                                           /s/ BRIAN M. SONDEY
                                         -----------------------------------
                                         BRIAN M. SONDEY

                                         341 West 12th Street
                                         Apartment 1
                                         New York, New York 10014













                                                                   EXHIBIT 10.14


                          TAL INTERNATIONAL GROUP, INC.
                           2004 MANAGEMENT STOCK PLAN
                           --------------------------


                                    SECTION 1
                                     GENERAL
                                     -------

         1.1    Purpose. The TAL International Group, Inc. 2004 Management Stock
Plan (the "Plan") has been established by TAL International Group, Inc. (the
"Company") to (i) attract and retain persons eligible to participate in the
Plan; (ii) motivate Participants, by means of appropriate incentives, to achieve
long-range goals; (iii) provide incentive compensation opportunities that are
competitive with those of other similar companies; and (iv) further align
Participants' interests with those of the Company's other shareholders through
compensation that is based on the Company's common stock; and thereby promote
the long-term financial interest of the Company and the Subsidiaries, including
the growth in value of the Company's equity and enhancement of long-term
shareholder return.

         1.2    Participation. Subject to the terms and conditions of the Plan,
the Committee shall determine and designate, from time to time, from among the
Eligible Individuals, those persons who will be granted one or more Awards under
the Plan, and thereby become "Participants" in the Plan.

         1.3    Operation, Administration, and Definitions. The operation and
administration of the Plan, including the Awards made under the Plan, shall be
subject to the provisions of Section 4 (relating to operation and
administration). Capitalized terms in the Plan shall be defined as set forth in
the Plan (including the definition provisions of Section 8).

                                   SECTION 2
                                OPTIONS AND SARS
                                ----------------

         2.1    Definitions.
                ------------
(a)      The grant of an "Option" entitles the Participant to purchase shares of
         Stock at an Exercise Price established by the Committee. Any Option
         granted under this Section 2 may be either an incentive stock option
         (an "ISO") or a non-qualified option (an "NQO"), as determined in the
         discretion of the Committee. An "ISO" is an Option that is intended to
         satisfy the requirements applicable to an "incentive stock option"
         described in section 422(b) of the Code. An "NQO" is an Option that is
         not intended to be an "incentive stock option" as that term is
         described in section 422(b) of the Code.

(b)      A stock appreciation right (an "SAR") entitles the Participant to
         receive, in cash or Stock (as determined in accordance with subsection
         2.5), value equal to (or otherwise based on) the excess of: (a) the
         Fair Market Value of a specified number of shares of Stock at the time
         of exercise; over (b) an Exercise Price established by the Committee.

         2.2    Exercise Price. The "Exercise Price" of each Option and SAR
granted under this Section 2 shall be established






by the Committee or shall be determined by a method established by the Committee
at the time the Option or SAR is granted; provided that, for NQOs and SARs, the
Exercise Price shall not be less than 85% of the Fair Market Value of a share of
Stock on the date of grant, and for ISOs, the Exercise Price shall not be less
than 100% of the Fair Market Value of a share of Stock on the date of grant; and
further provided that the Exercise Price for an Option or SAR with respect to a
share of Stock shall not be less than the par value of a share of Stock.

         2.3    Exercise. An Option and an SAR shall be exercisable in
accordance with such terms and conditions and during such periods as may be
established by the Committee.

         2.4    Payment of Option Exercise Price. The payment of the Exercise
Price of an Option granted under this Section 2 shall be subject to the
following:

(a)      Subject to the following provisions of this subsection 2.4, the full
         Exercise Price for shares of Stock purchased upon the exercise of any
         Option shall be paid at the time of such exercise (except that, in the
         case of an exercise arrangement approved by the Committee and described
         in paragraph 2.4(c), payment may be made as soon as practicable after
         the exercise).

(b)      The Exercise Price shall be payable in cash or by tendering, by either
         actual delivery of shares or by attestation, shares of Stock valued at
         Fair Market Value as of the day of exercise, or in any combination
         thereof, as determined by the Committee. Except as otherwise provided
         by the Committee, payments made with shares of Stock shall be limited
         to shares held by the Participant for not less than six months prior to
         the payment date.

(c)      The Committee may permit a Participant to elect to pay the Exercise
         Price upon the exercise of an Option by irrevocably authorizing a third
         party to sell shares of Stock (or a sufficient portion of the shares)
         acquired upon exercise of the Option and remit to the Company a
         sufficient portion of the sale proceeds to pay the entire Exercise
         Price and any tax withholding resulting from such exercise.

(d)      The Committee may permit a Participant to elect to pay the Exercise
         Price upon the exercise of an Option by delivery of a promissory note
         containing such terms as the Committee shall establish.

         2.5    Settlement of Award. Settlement of Options and SARs is subject
to subsection 4.7.


                                   SECTION 3
                               OTHER STOCK AWARDS
                               ------------------

         3.1    Definitions.
                ------------

(a)      A "Bonus Stock" Award is a grant of shares of Stock in return for
         previously performed services, or in return for the Participant
         surrendering other compensation that may be due, or in return for
         amounts paid by the Participant.



                                       2



(b)      A "Stock Unit" Award is the grant of a right to receive shares of Stock
         in the future.

(c)      A "Performance Share" Award is a grant of a right to receive shares of
         Stock or Stock Units which is contingent on the achievement of
         performance or other objectives during a specified period.

(d)      A "Restricted Stock" Award is a grant of shares of Stock, and a
         "Restricted Stock Unit" Award is the grant of a right to receive shares
         of Stock in the future, with such shares of Stock or right to future
         delivery of such shares of Stock subject to a risk of forfeiture or
         other restrictions that will lapse upon the achievement of one or more
         goals relating to completion of service by the Participant, or
         achievement of performance or other objectives, as determined by the
         Committee.

         3.2    Restrictions on Awards. Each Bonus Stock Award, Stock Unit
Award, Restricted Stock Award, Restricted Stock Unit Award, and Performance
Share Award shall be subject to such conditions, restrictions and contingencies
as the Committee shall determine.


                                   SECTION 4
                          OPERATION AND ADMINISTRATION
                          ----------------------------

         4.1    Effective Date. Subject to the approval of the shareholders of
the Company, the Plan shall be effective as of November 3, 2004 (the "Effective
Date"); provided, however, that to the extent that Awards are granted under the
Plan prior to its approval by shareholders, the Awards shall be contingent on
approval of the Plan by the shareholders of the Company. The Plan shall be
unlimited in duration and, in the event of Plan termination, shall remain in
effect as long as any Awards under it are outstanding; provided, however, that
no Awards may be granted under the Plan after the ten-year anniversary of the
Effective Date (except for Awards granted pursuant to commitments entered into
prior to such ten-year anniversary).

         4.2    Shares Subject to Plan. The shares of Stock for which Awards may
be granted under the Plan shall be subject to the following:

(a)      The shares of Stock with respect to which Awards may be made under the
         Plan shall be shares currently authorized but unissued or currently
         held or, to the extent permitted by applicable law, subsequently
         acquired by the Company as treasury shares, including shares purchased
         in the open market or in private transactions.

(b)      Subject to the following provisions of this subsection 4.2, the maximum
         number of shares of Stock that may be delivered to Participants and
         their beneficiaries under the Plan shall be equal to (i) 5,265 shares
         of Stock.

(c)      To the extent provided by the Committee, any Award may be settled in
         cash rather than Stock. To the extent any shares of Stock covered by an
         Award are not delivered to a Participant or beneficiary because the
         Award is forfeited or canceled, or the shares of Stock are not
         delivered because the Award is settled in cash or used to satisfy the
         applicable tax withholding obligation, such shares shall not be deemed
         to have been delivered for purposes of determining the maximum number
         of shares of Stock available for delivery under the Plan.



                                       3




(d)      If the exercise price of any stock option granted under the Plan is
         satisfied by tendering shares of Stock to the Company (by either actual
         delivery or by attestation), only the number of shares of Stock issued
         net of the shares of Stock tendered shall be deemed delivered for
         purposes of determining the maximum number of shares of Stock available
         for delivery under the Plan.

(e)      Subject to paragraph 4.2(f), the maximum number of shares of Stock that
         may be issued pursuant to Options intended to be ISOs shall be 5,265
         shares.

(f)      In the event of a corporate transaction involving the Company
         (including, without limitation, any stock dividend, stock split,
         extraordinary cash dividend, recapitalization, reorganization, merger,
         consolidation, split-up, spin-off, combination or exchange of shares),
         the Committee may adjust Awards to preserve the benefits or potential
         benefits of the Awards. Action by the Committee may include: (i)
         adjustment of the number and kind of shares which may be delivered
         under the Plan; (ii) adjustment of the number and kind of shares
         subject to outstanding Awards; (iii) adjustment of the Exercise Price
         of outstanding Options and SARs; and (iv) any other adjustments that
         the Committee determines to be equitable (which may include, without
         limitation, (I) replacement of Awards with other Awards which the
         Committee determines have comparable value and which are based on
         stock of a company resulting from the transaction, and (II)
         cancellation of the Award in return for cash payment of the current
         value of the Award, determined as though the Award is fully vested at
         the time of payment, provided that in the case of an Option, the
         amount of such payment may be the excess of value of the Stock subject
         to the Option at the time of the transaction over the exercise price).
         In determining what action, if any, is necessary or appropriate under
         the foregoing provisions of this paragraph (f), the Committee shall
         act in a manner that it determines to be consistent with the purpose
         of the Plan and of the affected Awards and, where applicable or
         otherwise appropriate, in a manner that it determines to be necessary
         to preserve the benefits and potential benefits of the affected Awards
         for the Participants and the Company.

         4.3    General Restrictions. Delivery of shares of Stock or other
amounts under the Plan shall be subject to the following:

(a)      Notwithstanding any other provision of the Plan, the Company shall have
         no liability to deliver any shares of Stock under the Plan or make any
         other distribution of benefits under the Plan unless such delivery or
         distribution would comply with all applicable laws (including, without
         limitation, the requirements of the Securities Act of 1933 (the
         "Securities Act")), and the applicable requirements of any securities
         exchange or similar entity.

(b)      To the extent that the Plan provides for issuance of stock certificates
         to reflect the issuance of shares of Stock, the issuance may be
         effected on a non-certificated basis, to the extent not prohibited by
         applicable law or the applicable rules of any stock exchange.

         4.4    Tax Withholding. All distributions under the Plan are subject to
withholding of all applicable taxes, and the Committee may condition the
delivery of any shares or other


                                       4



benefits under the Plan on satisfaction of the applicable withholding
obligations. Except as otherwise provided by the Committee, such withholding
obligations may be satisfied (i) through cash payment by the Participant, (ii)
through the surrender of shares of Stock which the Participant already owns
(provided, however, that to the extent shares described in this clause (ii) are
used to satisfy more than the minimum statutory withholding obligation, as
described below, then, except as otherwise provided by the Committee, payments
made with shares of Stock in accordance with this clause (ii) above shall be
limited to shares held by the Participant for not less than six months prior to
the payment date), or (iii) through the surrender of shares of Stock to which
the Participant is otherwise entitled under the Plan; provided, however, that
such shares under this clause (iii) may be used to satisfy not more than the
Company's minimum statutory withholding obligation (based on minimum statutory
withholding rates for Federal and state tax purposes, including payroll taxes,
that are applicable to such supplemental taxable income).

         4.5    Grant and Use of Awards. In the discretion of the Committee, a
Participant may be granted any Award permitted under the provisions of the Plan,
and more than one Award may be granted to a Participant. Awards may be granted
as alternatives to or replacement of awards granted or outstanding under the
Plan, or any other plan or arrangement of the Company or a Subsidiary (including
a plan or arrangement of a business or entity, all or a portion of which is
acquired by the Company or a Subsidiary). Subject to the overall limitation on
the number of shares of Stock that may be delivered under the Plan, the
Committee may use available shares of Stock as the form of payment for
compensation, grants or rights earned or due under any other compensation plans
or arrangements of the Company or a Subsidiary, including the plans and
arrangements of the Company or a Subsidiary assumed in business combinations.

         4.6    Dividends and Dividend Equivalents. An Award (including without
limitation an Option or SAR Award) may provide the Participant with the right to
receive dividend payments or dividend equivalent payments with respect to Stock
subject to the Award (both before and after the Stock subject to the Award is
earned, vested, or acquired), which payments may be either made currently or
credited to an account for the Participant, and may be settled in cash or Stock,
as determined by the Committee. Any such settlements, and any such crediting of
dividends or dividend equivalents or reinvestment in shares of Stock, may be
subject to such conditions, restrictions and contingencies as the Committee
shall establish, including the reinvestment of such credited amounts in Stock
equivalents.

         4.7    Settlement of Awards. The obligation to make payments and
distributions with respect to Awards may be satisfied through cash payments, the
delivery of shares of Stock, the granting of replacement Awards, or combination
thereof as the Committee shall determine. Satisfaction of any such obligations
under an Award, which is sometimes referred to as "settlement" of the Award, may
be subject to such conditions, restrictions and contingencies as the Committee
shall determine. The Committee may permit or require the deferral of any Award
payment, subject to such rules and procedures as it may establish, which may
include provisions for the payment or crediting of interest or dividend
equivalents, and may include converting such credits into deferred Stock
equivalents. Each Subsidiary shall be liable for payment of cash due under the
Plan with respect to any Participant to the extent that such benefits are
attributable to the services rendered for that Subsidiary by the Participant.
Any disputes relating to liability of a Subsidiary for cash payments shall be
resolved by the Committee.




                                       5



         4.8    Transferability. Except as otherwise provided by the Committee,
Awards under the Plan are not transferable except as designated by the
Participant by will or by the laws of descent and distribution.

         4.9    Form and Time of Elections. Unless otherwise specified herein,
each election required or permitted to be made by any Participant or other
person entitled to benefits under the Plan, and any permitted modification, or
revocation thereof, shall be in writing filed with the Committee at such times,
in such form, and subject to such restrictions and limitations, not inconsistent
with the terms of the Plan, as the Committee shall require.

         4.10   Agreement With Company. An Award under the Plan shall be subject
to such terms and conditions, not inconsistent with the Plan, as the Committee
shall, in its sole discretion, prescribe. The terms and conditions of any Award
to any Participant shall be reflected in such form of written document as is
determined by the Committee. A copy of such document shall be provided to the
Participant, and the Committee may, but need not require that the Participant
sign a copy of such document. Such document is referred to in the Plan as an
"Award Agreement" regardless of whether any Participant signature is required.

         4.11   Action by Company or Subsidiary. Any action required or
permitted to be taken by the Company or any Subsidiary shall be by resolution of
its board of directors, or by action of one or more members of the board
(including a committee of the board) who are duly authorized to act for the
board, or (except to the extent prohibited by applicable law or applicable rules
of any stock exchange) by a duly authorized officer of such company.

         4.12   Gender and Number. Where the context admits, words in any gender
shall include any other gender, words in the singular shall include the plural
and the plural shall include the singular.

         4.13   Limitation of Implied Rights.

(a)      Neither a Participant nor any other person shall, by reason of
         participation in the Plan, acquire any right in or title to any
         assets, funds or property of the Company or any Subsidiary whatsoever,
         including, without limitation, any specific funds, assets, or other
         property which the Company or any Subsidiary, in its sole discretion,
         may set aside in anticipation of a liability under the Plan. A
         Participant shall have only a contractual right to the Stock or
         amounts, if any, payable under the Plan, unsecured by any assets of
         the Company or any Subsidiary, and nothing contained in the Plan shall
         constitute a guarantee that the assets of the Company or any
         Subsidiary shall be sufficient to pay any benefits to any person.

(b)      The Plan does not constitute a contract of employment, and selection
         as a Participant will not give any participating employee or other
         individual the right to be retained in the employ of the Company or
         any Subsidiary or the right to continue to provide services to the
         Company or any Subsidiary, nor any right or claim to any benefit under
         the Plan, unless such right or claim has specifically accrued under
         the terms of the Plan. Except as otherwise provided in the Plan, no
         Award under the Plan shall confer upon the holder



                                       6




         thereof any rights as a shareholder of the Company prior to the date
         on which the individual fulfills all conditions for receipt of such
         rights.

         4.14   Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person acting on
it considers pertinent and reliable, and signed, made or presented by the proper
party or parties.


                                   SECTION 5
                                CHANGE IN CONTROL
                                -----------------

         Subject to the provisions of paragraph 4.2(f) (relating to the
adjustment of shares), and except as otherwise provided in the Plan or the Award
Agreement reflecting the applicable Award, the effect of a Change in Control
upon an Award under this Plan, if any, shall be determined by the Committee.


                                    SECTION 6
                                    COMMITTEE
                                    ---------

         6.1    Administration. The authority to control and manage the
operation and administration of the Plan shall be vested in a committee (the
"Committee") in accordance with this Section 6. The Committee shall be selected
by the Board. If the Committee does not exist, or for any other reason
determined by the Board, the Board may take any action under the Plan that would
otherwise be the responsibility of the Committee.

         6.2    Powers of Committee. The Committee's administration of the Plan
shall be subject to the following:

(a)      Subject to the provisions of the Plan, the Committee will have the
         authority and discretion to select from among the Eligible Individuals
         those persons who shall receive Awards, to determine the time or times
         of receipt, to determine the types of Awards and the number of shares
         covered by the Awards, to establish the terms, conditions, performance
         criteria, restrictions, and other provisions of such Awards, and
         (subject to the restrictions imposed by Section 7) to cancel or suspend
         Awards.

(b)      To the extent that the Committee determines that the restrictions
         imposed by the Plan preclude the achievement of the material purposes
         of the Awards in jurisdictions outside the United States, the Committee
         will have the authority and discretion to modify those restrictions as
         the Committee determines to be necessary or appropriate to conform to
         applicable requirements or practices of jurisdictions outside of the
         United States.

(c)      The Committee will have the authority and discretion to interpret the
         Plan, to establish, amend, and rescind any rules and regulations
         relating to the Plan, to determine the terms and provisions of any
         Award Agreement made pursuant to the Plan, and to make all other
         determinations that may be necessary or advisable for the
         administration of the Plan.

(d)      Any interpretation of the Plan by the Committee made in good faith and
         any decision made by it in good faith under the Plan is final and
         binding on all persons.



                                       7



(e)      In controlling and managing the operation and administration of the
         Plan, the Committee shall take action in a manner that conforms to the
         Certificate of Incorporation and By-laws of the Company, and applicable
         state corporate law.

         6.3    Delegation by Committee. Except to the extent prohibited by
applicable law or the applicable rules of a stock exchange, the Committee may
allocate all or any portion of its responsibilities and powers to any one or
more of its members and may delegate all or any part of its responsibilities and
powers to any person or persons selected by it. Any such allocation or
delegation may be revoked by the Committee at any time.

         6.4    Information to be Furnished to Committee. The Company and
Subsidiaries shall furnish the Committee with such data and information as it
determines may be required for it to discharge its duties. The records of the
Company and Subsidiaries as to an employee's or Participant's employment (or
other provision of services), termination of employment (or cessation of the
provision of services), leave of absence, reemployment and compensation shall be
conclusive on all persons unless determined to be incorrect. Participants and
other persons entitled to benefits under the Plan must furnish the Committee
such evidence, data or information as the Committee considers desirable to carry
out the terms of the Plan.


                                    SECTION 7
                            AMENDMENT AND TERMINATION
                            -------------------------

         The Board may, at any time, amend or terminate the Plan, provided that
no amendment or termination may, in the absence of written consent to the change
by the affected Participant (or, if the Participant is not then living, the
affected beneficiary), adversely affect the rights of any Participant or
beneficiary under any Award granted under the Plan prior to the date such
amendment is adopted by the Board; and further provided that adjustments
pursuant to paragraph 4.2(f) shall not be subject to the foregoing limitations
of this Section 7.


                                   SECTION 8
                                  DEFINED TERMS
                                  -------------

         In addition to the other definitions contained herein, the following
definitions shall apply:

(a)      Award. The term "Award" shall mean any award or benefit granted under
         the Plan, including, without limitation, the grant of Options, SARs,
         Bonus Stock Awards, Stock Unit Awards, Restricted Stock Awards,
         Restricted Stock Unit Awards, and Performance Share Awards.

(b)      Board. The term "Board" shall mean the Board of Directors of the
         Company.

(c)      Change in Control. The term "Change in Control" shall be as defined in
         the Award Agreement, or as otherwise provided by the Committee.

(d)      Code. The term "Code" means the Internal Revenue Code of 1986, as
         amended. A reference to any provision of the Code shall include
         reference to any successor provision of the Code.



                                       8



(e)      Eligible Individual. The term "Eligible Individual" shall mean any
         employee of the Company or a Subsidiary and any consultant, director,
         or other person providing services to the Company or a Subsidiary;
         provided however, that an ISO may only be granted to an employee of the
         Company or a Subsidiary. An Award may be granted to an individual, in
         connection with hiring, retention or otherwise, prior to the date the
         individual first performs services for the Company or the Subsidiaries,
         provided that such Awards shall not become vested prior to the date the
         individual first performs such services.

(f)      Fair Market Value. For purposes of determining the "Fair Market Value"
         of a share of Stock as of any date, the following rules shall apply:

         (i)    If, at that time, the principal market for the Stock is a
         national securities exchange or the Nasdaq stock market, then the
         "Fair Market Value" shall be the mean between the lowest and highest
         reported sale prices of the Stock on that date on the principal
         exchange or market on which the Stock is then listed or admitted to
         trading.

         (ii)   If, at that time, the sale prices are not available or the
         principal market for the Stock is not a national securities exchange
         and the Stock is not quoted on the Nasdaq stock market, then the "Fair
         Market Value" shall be the mean between the highest bid and lowest
         asked prices for the Stock on such day as reported on the Nasdaq OTC
         Bulletin Board Service or by the National Quotation Bureau,
         Incorporated or a comparable service.

         (iii)  If the day is not a business day, and as a result, paragraphs
         (i) and (ii) next above are inapplicable, the Fair Market Value of the
         Stock shall be determined as of the next earlier business day.

         (iv)   If, in accordance with rules established by the Committee, a
         determination of "Fair Market Value" is required as of any date and,
         as of that date, paragraphs (i) and (ii) next above are inapplicable
         for reasons other than those specified in paragraph (iii) next above,
         then the "Fair Market Value" as of that date shall be determined by a
         nationally-recognized appraisal or investment banking firm experienced
         in appraising businesses, or by such other person, employee or entity
         as shall be determined by the Committee from time to time or such
         other method as the Committee may decide in its sole discretion, with
         such valuation to be performed in accordance with such rules and
         considerations as are established by the Committee. The Company shall
         bear the fees and expenses of such valuation.

(g)      Subsidiaries. The term "Subsidiary" means any company during any period
         in which it is a "subsidiary corporation" (as that term is defined in
         Code section 424(f)) with respect to the Company.

(h)      Stock. The term "Stock" shall mean shares of Common Stock, par value
         $0.001 per share, of the Company.


                                      * * *


                                       9




                                    EXHIBIT I

                           NON-QUALIFIED STOCK OPTION
                               TERMS FOR EMPLOYEES

         The Participant has been granted an Option by TAL International Group,
Inc. (the "Company") under the terms of the TAL International Group, Inc. 2004
Management Stock Plan (the "Plan"). The Option shall be subject to the following
Non-Qualified Stock Option Terms (sometimes referred to as the "Option Terms"):

         1.     Terms of Award. The following words and phrases used in the
Option Terms shall have the meanings set forth in this paragraph 1:

(a)      The "Participant" is __________________________.

(b)      The "Grant Date" is __________________________.

(c)      The number of "Covered Shares" is ______shares of Stock.

(d)      The "Exercise Price" is $ __________per share.

Other words and phrases used in the Option Terms are defined in the Plan or
elsewhere in the Option Terms. Except where the context clearly implies or
indicates the contrary, a word, term, or phrase used in the Plan is similarly
used in the Option Terms.

         2.     Non-Qualified Stock Option. The Option is a Non-Qualified Stock
Option and is not intended to constitute an "incentive stock option" as that
term is used in Code section 422.

         3.     Date of Exercise.
                -----------------

(a)      [Except as may otherwise be provided in an applicable employment
         agreement between the Participant and the Company or a Subsidiary,
         and,] Subject to the limitations of the Option Terms, [and unless,
         pursuant to paragraph 3A,] the Participant chooses to exercise the
         Option prior to vesting, the Option shall become exercisable with
         respect to one-fourth (1/4) of the Covered Shares on the one-year
         anniversary of the Grant Date (the "Initial Vesting Date") (but only
         if the Date of Termination has not occurred prior to the Initial
         Vesting Date). After the Initial Vesting Date, the Option shall become
         exercisable with respect to an additional one fourth (1/4) of the
         Covered Shares at each anniversary of the Initial Vesting Date (but
         only if the Date of Termination has not occurred prior to the such
         anniversary), until such time as this Option is fully exercisable.
         [Covered Shares as to which the Option is exercisable in accordance
         with this paragraph 3 (regardless of whether the Option has been
         exercised with respect to those shares) are sometimes referred to as
         "vested shares," and Covered Shares as to which the Option is not
         exercisable in accordance with this paragraph 3, until such time as
         the Option would have become exercisable with respect to those shares
         (regardless of whether the Option has been exercised with respect to
         those shares in accordance with paragraph 3A) are sometimes referred
         to as "unvested shares."]



                                       10



(b)      The Option may be exercised on or after the Date of Termination only as
         to that portion of the Covered Shares for which it was exercisable (or
         became exercisable) immediately prior to such date.

         [3A. Exercise Prior to Vesting. Prior to the date on which the Option
would otherwise be exercisable in accordance with paragraph 3 and subject to the
provisions of the Option, the Participant may elect, prior to the Date of
Termination, to exercise the Option as to any part or all of the Covered Shares
subject to this Option; provided, however, that:

(a)      A partial exercise of the Option shall be deemed to cover first vested
         shares and then the earliest vesting installment of unvested shares.

(b)      Any shares so purchased from installments which have not vested as of
         the date of exercise shall be subject to the purchase option in favor
         of the Company as described in the Early Exercise Stock Purchase
         Agreement (as set forth in Exhibit C).

(c)      The Participant shall be required to enter into an Early Exercise Stock
         Purchase Agreement in the form provided by the Company with a vesting
         schedule that will result in the same vesting as if no early exercise
         had occurred.

The Participant's right provided in this paragraph 3A to purchase shares upon
the exercise of the Option with respect to unvested shares shall cease upon the
Date of Termination.]

         4.     Expiration. The Option shall not be exercisable after the
Company's close of business on the last business day that occurs prior to the
Expiration Date. The "Expiration Date" shall be the earliest to occur of:

(a)      the ten-year anniversary of the Grant Date;

(b)      if the Date of Termination occurs by reason of the Participant's death
         or Disability, the one-year anniversary of such Date of Termination;

(c)      if the Date of Termination occurs by reason of termination of the
         Participant by the employer for Cause, or by the Participant other than
         for Good Reason, such Date of Termination; or

(d)      if the Date of Termination occurs for reasons other than (i) the
         Participant's death, (ii) the Participant's Disability, (iii)
         termination of the Participant by the employer for Cause, or (iv)
         termination by the Participant other than for Good Reason, the 90-day
         anniversary of such Date of Termination.

         5.     Method of Option Exercise. Subject to the Option Terms and the
Plan, the Option may be exercised in whole or in part by filing an option
exercise notice in the form attached as Exhibit A (the "Exercise Notice") with
the Secretary of the Company at its corporate headquarters prior to the
Company's close of business on the last business day that occurs prior to the
Expiration Date. Such notice shall specify the number of shares of Stock which
the Participant elects to purchase and such other representations and agreements
as may be required by the Company, and shall be accompanied by payment of the
Exercise Price. This Option may



                                        2




not be exercised until such time as the Plan has been approved by the
shareholders of the Company. The Option shall not be exercisable if and to the
extent the Company determines that such exercise would violate applicable state
or Federal securities laws or the rules and regulations of any securities
exchange on which the Stock is traded. If the Company makes such a
determination, it shall use all reasonable efforts to obtain compliance with
such laws, rules and regulations. In making any determination hereunder, the
Company may rely on the opinion of counsel for the Company.

         6.     Payment of Exercise Price. Payment of the Exercise Price may be
made by any of the following methods or any combination thereof:

(a)      By cash or by check payable to the Company.

(b)      Except as otherwise provided by the Committee before the Option is
         exercised and provided that the Company's common stock is publicly
         traded and quoted regularly in the Wall Street Journal, by delivery of
         shares of Stock owned by the Participant having an aggregate Fair
         Market Value (valued as of the date of exercise) that is equal to the
         amount of cash that would otherwise be required. Except as otherwise
         provided by the Committee, payments made with shares of Stock shall be
         limited to shares held by the Participant for not less than six months
         prior to the payment date.

(c)      Except as otherwise provided by the Committee before the Option is
         exercised and provided that the Company's common stock is publicly
         traded and quoted regularly in the Wall Street Journal, by authorizing
         a third party to sell shares of Stock (or a sufficient portion of the
         shares) acquired upon exercise of the Option and remit to the Company a
         sufficient portion of the sale proceeds to pay the entire Exercise
         Price and any tax withholding resulting from such exercise

(d)      By delivery of a duly executed full-recourse promissory note in the
         form attached to the Option Terms as Exhibit D (the "Note") made to
         the Company. The Note shall become payable one year following the Date
         of Termination that occurs for reasons of death or Disability, and
         thirty (30) days following the Date of Termination that occurs for any
         other reason. As security for the repayment of the amount owing under
         the Note, the Participant shall deliver to the Secretary of the
         Company, acting as escrow holder, or such other escrow holder as
         designated by the Company (the "Escrow Holder"), all certificates
         representing the Stock and an executed blank stock assignment, in the
         form attached hereto as Exhibit E, for use in transferring all or a
         portion of said Stock to the Company, as required under this paragraph
         (d) or under any other provision of the Option Terms. As security for
         the payment of the Note and any renewal, extension or modification
         thereof, the Participant hereby grants to the Company, pursuant to the
         Security Agreement attached hereto as Exhibit F, a security interest
         in and pledges with and delivers to the Company the certificate or
         certificates representing the Stock.

7.       Change in Control. Subject to the provisions of paragraph 4.2(f) of the
         Plan (relating to the adjustment of shares), and except as otherwise
         provided in the Plan, upon the occurrence of a Change in Control:



                                       3



(a)      If the Date of Termination has not occurred prior to the time of a
         Change in Control, the Options and any Stock purchased by the
         Participant under paragraph 3A shall vest in full.

(b)      If the Participant's Date of Termination has not occurred prior to the
         time of a Change in Control, and prior to the one-year anniversary of
         the Change in Control (i) the Participant's employment is terminated
         for reasons other than Cause or (ii) the Participant resigns for Good
         Reason, the Participant shall become fully vested in the Option as of
         the Date of Termination and shall have the greater of (i) 90 days from
         the Date of Termination or (ii) the period otherwise specified for
         exercise after the Date of Termination had the Participant been fully
         vested in the Option on the Date of Termination to exercise the
         Option; provided, however, that in no event shall the Option be
         exercisable at a date that is later than the date it would have been
         exercisable if the Participant had remained employed by the Company or
         a Subsidiary.

         8.     Withholding. All deliveries and distributions under the Option
Terms are subject to withholding of all applicable taxes. At the election of the
Participant, and subject to such rules and limitations as may be established by
the Committee from time to time, such withholding obligations may be satisfied
through the surrender of shares of Stock which the Participant already owns, or
to which the Participant is otherwise entitled under the Plan; provided,
however, that such shares may be used to satisfy not more than the Company's
minimum statutory withholding obligation (based on minimum statutory withholding
rates for Federal and state tax purposes, including payroll taxes, that are
applicable to such supplemental taxable income).

         9.     Participant's Representations and Shareholders Agreement. In the
event the Shares have not been registered under the Securities Act, at the time
this Option is exercised, the Participant shall, if required by the Company,
concurrently with the exercise of all or any portion of this Option (i) deliver
to the Company his or her Investment Representation Statement in the form
attached hereto as Exhibit B; and (ii) agree to execute and become a party to
the Shareholders Agreement, as may be in effect on such date.

         10.    Lock-Up Period. The Participant hereby agrees that, if so
requested by the Company or any representative of the underwriters (the
"Managing Underwriter") in connection with any registration of the offering of
any securities of the Company under the Securities Act, the Participant shall
not sell or otherwise transfer any Shares or other securities of the Company
during the 180-day period, or such other period as may be requested in writing
by the Managing Underwriter and agreed to in writing by the Company (the "Market
Standoff Period") following the effective date of a registration statement of
the Company filed under the Securities Act. Such restriction shall apply only to
the first registration statement of the Company to become effective under the
Securities Act that includes securities to be sold on behalf of the Company to
the public in an underwritten public offering under the Securities Act. The
Company may impose stop-transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such Market Standoff Period.

         11.    Non-Transferability of Option. This Option may not be
transferred in any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of the Participant only by
the Participant. The terms of the Plan and the Option Terms


                                       4



shall be binding upon the executors, administrators, heirs, successors and
assigns of the Participant.

         12.    All Terms. The Plan is incorporated herein by reference. The
Plan and the Option Terms, including all Exhibits hereto, as applicable,
constitute all of the terms with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the Company
and the Participant with respect to the subject matter hereof. The Option Terms
may be amended by written agreement of the Company and the Participant without
the consent of any other person.

         13.    Definitions. For purposes of the Option Terms, words and phrases
used in this Agreement shall be defined as follows:

(a)      Cause. [If the Participant is subject to an employment agreement (or
         other similar agreement) with the Company or a Subsidiary that
         provides a definition of termination for "cause," then, for purposes
         of this Award, the term "Cause" shall have meaning set forth in such
         agreement. In the absence of such a definition,] the term "Cause"
         shall mean any of the following: (1) the willful and continued failure
         by the Participant to substantially perform his duties, other than by
         reason of his being Disabled (as defined below), (2) the willful
         engaging by the Participant in conduct which is demonstrably and
         materially injurious to the Company or its Affiliates, (3) conduct by
         the Participant that involves theft or fraud or, dishonesty in
         connection with his duties, (4) the Participant's violation of a
         non-compete or confidentiality agreement with the Company or an
         Affiliate, or (5) conviction of felony involving moral turpitude.

(b)      Change in Control. The term "Change in Control" means any of the
         following: (i) the closing of any merger, combination, consolidation
         or similar business transaction involving the Company in which the
         holders of Stock immediately prior to such closing are not the
         holders, directly or indirectly, of a majority of the ordinary voting
         securities of the surviving person in such transaction immediately
         after such closing, (ii) the closing of any sale or transfer by the
         Company of all or substantially all of its assets to an acquiring
         person in which the holders of Stock immediately prior to such closing
         are not the holders of a majority of the ordinary voting securities of
         the acquiring person immediately after such closings, (iii) the
         closing of any sale by the holders of Stock of an amount of Stock that
         equals or exceeds a majority of the shares of Stock immediately prior
         to such closing to a person in which the holders of the Stock
         immediately prior to such closing are not the holders of a majority of
         the ordinary voting securities of such person immediately after such
         closing or (iv) the consummation of a registered public offering of
         Common Stock by the Company pursuant to the Securities Act of 1933, as
         amended, for gross proceeds of at least $50 million.

(c)      Date of Termination. The "Date of Termination" shall be the first day
         occurring on or after the Grant Date on which the Participant ceases to
         be an Employee of, or Service Provider to, the Company or any
         Subsidiary, regardless of the reason for such cessation, subject to the
         following:



                                       5



         (i)    The Participant's cessation as an Employee and Service Provider
         shall not be deemed to occur by reason of the transfer of the
         Participant between the Company and a Subsidiary or between two
         Subsidiaries.

         (ii)   The Participant's cessation as an Employee and Service Provider
         shall not be deemed to occur by reason of the Participant's being on a
         leave of absence from the Company or a Subsidiary approved by the
         Company or Subsidiary otherwise receiving the Participant's services.

         (iii)  If, as a result of a sale or other transaction, the Subsidiary
         for whom Participant is employed (or to whom the Participant is
         providing services as a Service Provider) ceases to be a Subsidiary
         (and the entity for whom the Participant is employed or to whom the
         Participant is providing services is or becomes an entity that is
         separate from the Company), and the Participant is not, at the end of
         the 30-day period following the transaction, an Employee of or Service
         Provider to the Company or an entity that is then a Subsidiary, then
         the occurrence of such transaction shall be treated as the
         Participant's Date of Termination caused by the Participant being
         discharged by the entity for whom the Participant is employed or to
         whom the Participant is providing services.

         (iv)   A Service Provider whose services to the Company or a Subsidiary
         are governed by a written agreement with the Service Provider will
         cease to be a Service Provider at the time the term of such written
         agreement ends (without renewal); and a Service Provider whose
         services to the Company or a Subsidiary are not governed by a written
         agreement with the Service Provider will cease to be a Service
         Provider on the date that is 90 days after the date the Service
         Provider last provides services requested by Company or Subsidiary (as
         determined by the Committee).

         It should be understood that if the Option is exercised more than
         three months after the date on which the Participant ceases to be an
         Employee of the Company or a Subsidiary (including by reason of
         becoming a Service Provider rather than an Employee), applicable tax
         rules may require that the Option be treated as a non-qualified stock
         option rather than an incentive stock option.

(d)      Director. "Director" means a member of the Board of Directors of the
         Company or any Subsidiary.

(e)      Disability. [If the participant is subject to an employment (or other
         similar agreement) with the Company or a Subsidiary that provides a
         definition of termination for "disability" then for purpose of this
         Award, the term "Disability" shall have the meaning set forth in such
         agreement. In the absence of such a definition,] the Participant shall
         be considered to have a "Disability" during the period in which the
         Participant is unable, by reason of a medically determinable physical
         or mental impairment, to engage in any substantial gainful activity,
         which condition, in the opinion of a physician selected by the
         Committee, is expected to have a duration of not less than 120 days.

(f)      Employee. The term "Employee" means any person, including Officers and
         Directors, employed by the Company or any Subsidiary.



                                       6



(g)      Good Reason. [If the Participant is subject to an employment agreement
         (or other similar agreement) with the Company or a Subsidiary that
         provides a definition of termination for "good reason," then, for
         purposes of this Award, the term "Good Reason" shall have meaning set
         forth in such agreement. In the absence of such a definition,] the
         term "Good Reason" shall mean either of (1) a reduction in the
         Participant's salary rate; or (2) a reduction in the Participant's
         rank which occur without the Participant's consent and which are not
         corrected by the Company within 10 days of delivery of a written
         notice to the Company by the Participant which identifies the
         circumstances which the Participant believes constitute a reduction in
         salary rate or rank.

(h)      Service Provider. The term "Service Provider" means any person that is
         engaged by the Company or any Subsidiary to provide consulting or
         advisory service to the Company or a Subsidiary as an independent
         contractor.

(i)      Shareholders Agreement. The term "Shareholders Agreement" means the
         agreement governing the rights and obligations with respect to shares
         of Stock and to holders of Stock (including, without limitation, voting
         and sale rights), which agreement shall be in such form as the Company
         determines.

         IN WITNESS WHEREOF, the Company has caused these presents to be
executed in its name and on its behalf, all as of the Grant Date.

TAL INTERNATIONAL GROUP, INC.



By:                                       Its:
   ---------------------------------          ---------------------------------


                                       7




                                   EXHIBIT II

                        NON-QUALIFIED STOCK OPTION TERMS
                      [FOR NON-EMPLOYEE SERVICE PROVIDERS]

         The Participant has been granted an Option by TAL International Group,
Inc. (the "Company") under the terms of the TAL International Group, Inc. 2004
Management Stock Plan (the "Plan"). The Option shall be subject to the following
Non-Qualified Stock Option Terms (sometimes referred to as the "Option Terms"):

         1.     Terms of Award. The following words and phrases used in the
Option Terms shall have the meanings set forth in this paragraph 1:

(a)      The "Participant" is __________________________.

(b)      The "Grant Date" is __________________________.

(c)      The number of "Covered Shares" is ____________ shares of Stock.

(d)      The "Exercise Price" is $ ______________per share.

Other words and phrases used in the Option Terms are defined in the Plan or
elsewhere in the Option Terms. Except where the context clearly implies or
indicates the contrary, a word, term, or phrase used in the Plan is similarly
used in the Option Terms.

         2.     Non-Qualified Stock Option. The Option is a Non-Qualified Stock
Option and is not intended to constitute an "incentive stock option" as that
term is used in Code section 422.

         3.     Date of Exercise.
                -----------------

(a)      Subject to the limitations of the Option Terms, [and unless, pursuant
         to paragraph 3A, the Participant chooses to exercise the Option prior
         to vesting,] the Option shall become exercisable with respect to
         one-fourth (1/4) of the Covered Shares on the one-year anniversary of
         the Grant Date (the "Initial Vesting Date") (but only if the Date of
         Termination has not occurred prior to the Initial Vesting Date). After
         the Initial Vesting Date, the Option shall become exercisable with
         respect to an additional one fourth (1/4) of the Covered Shares at
         each anniversary of the Initial Vesting Date (but only if the Date of
         Termination has not occurred prior to such anniversary), until such
         time as this Option is fully exercisable. [Covered Shares as to which
         the Option is exercisable in accordance with this paragraph 3
         (regardless of whether the Option has been exercised with respect to
         those shares) are sometimes referred to as "vested shares," and
         Covered Shares as to which the Option is not exercisable in accordance
         with this paragraph 3, until such time as the Option would have become
         exercisable with respect to those shares (regardless of whether the
         Option has been exercised with respect to those shares in accordance
         with paragraph 3A) are sometimes referred to as "unvested shares."]







(b)      The Option may be exercised on or after the Date of Termination only as
         to that portion of the Covered Shares for which it was exercisable (or
         became exercisable) immediately prior to such date.

         [3A. Exercise Prior to Vesting. Prior to the date on which the Option
would otherwise be exercisable in accordance with paragraph 3 and subject to the
provisions of the Option, the Participant may elect, prior to the Date of
Termination, to exercise the Option as to any part or all of the Covered Shares
subject to this Option; provided, however, that:

(a)      A partial exercise of the Option shall be deemed to cover first vested
         shares and then the earliest vesting installment of unvested shares.

(b)      Any shares so purchased from installments which have not vested as of
         the date of exercise shall be subject to the purchase option in favor
         of the Company as described in the Early Exercise Stock Purchase
         Agreement (as set forth in Exhibit C).

(c)      The Participant shall be required to enter into an Early Exercise Stock
         Purchase Agreement in the form provided by the Company with a vesting
         schedule that will result in the same vesting as if no early exercise
         had occurred.

The Participant's right provided in this paragraph 3A to purchase shares upon
the exercise of the Option with respect to unvested shares shall cease upon the
Date of Termination.]

         4.     Expiration. The Option shall not be exercisable after the
Company's close of business on the last business day that occurs prior to the
Expiration Date. The "Expiration Date" shall be the earliest to occur of:

(a)      the ten-year anniversary of the Grant Date;

(b)      if the Date of Termination occurs by reason of the Participant's death,
         the one-year anniversary of such Date of Termination;

(c)      if the Date of Termination occurs by reason of termination of the
         Participant by the Company or a Subsidiary for Cause, such Date of
         Termination; or

(d)      if the Date of Termination occurs for reasons other than the
         Participant's death, or termination of the Participant by the Company
         or a Subsidiary for Cause, the 90-day anniversary of such Date of
         Termination.

         5.     Method of Option Exercise. Subject to the Option Terms and the
Plan, the Option may be exercised in whole or in part by filing an option
exercise notice in the form attached as Exhibit A (the "Exercise Notice") with
the Secretary of the Company at its corporate headquarters prior to the
Company's close of business on the last business day that occurs prior to the
Expiration Date. Such notice shall specify the number of shares of Stock which
the Participant elects to purchase and such other representations and agreements
as may be required by the Company, and shall be accompanied by payment of the
Exercise Price. This Option may not be exercised until such time as the Plan has
been approved by the shareholders of the Company. The Option shall not be
exercisable if and to the extent the Company determines that



                                       2




such exercise would violate applicable state or Federal securities laws or the
rules and regulations of any securities exchange on which the Stock is traded.
If the Company makes such a determination, it shall use all reasonable efforts
to obtain compliance with such laws, rules and regulations. In making any
determination hereunder, the Company may rely on the opinion of counsel for the
Company.

         6.     Payment of Exercise Price. Payment of the Exercise Price may be
made by any of the following methods or any combination thereof:

(a)      By cash or by check payable to the Company.

(b)      Except as otherwise provided by the Committee before the Option is
         exercised and provided that the Company's common stock is publicly
         traded and quoted regularly in the Wall Street Journal, by delivery of
         shares of Stock owned by the Participant having an aggregate Fair
         Market Value (valued as of the date of exercise) that is equal to the
         amount of cash that would otherwise be required. Except as otherwise
         provided by the Committee, payments made with shares of Stock shall be
         limited to shares held by the Participant for not less than six months
         prior to the payment date.

(c)      Except as otherwise provided by the Committee before the Option is
         exercised and provided that the Company's common stock is publicly
         traded and quoted regularly in the Wall Street Journal, by authorizing
         a third party to sell shares of Stock (or a sufficient portion of the
         shares) acquired upon exercise of the Option and remit to the Company a
         sufficient portion of the sale proceeds to pay the entire Exercise
         Price and any tax withholding resulting from such exercise.

(d)      By delivery of a duly executed full-recourse promissory note in the
         form attached to the Option Terms as Exhibit D (the "Note") made to
         the Company. The Note shall become payable one year following the Date
         of Termination that occurs for reasons of death or Disability, and
         thirty (30) days following the Date of Termination that occurs for any
         other reason. As security for the repayment of the amount owing under
         the Note, the Participant shall deliver to the Secretary of the
         Company, acting as escrow holder, or such other escrow holder as
         designated by the Company (the "Escrow Holder"), all certificates
         representing the Stock and an executed blank stock assignment, in the
         form attached hereto as Exhibit E, for use in transferring all or a
         portion of said Stock to the Company, as required under this paragraph
         (d) or under any other provision of the Option Terms. As security for
         the payment of the Note and any renewal, extension or modification
         thereof, the Participant hereby grants to the Company, pursuant to the
         Security Agreement attached hereto as Exhibit F, a security interest
         in and pledges with and delivers to the Company the certificate or
         certificates representing the Stock.

         7.     Change in Control. Subject to the provisions of paragraph 4.2(f)
of the Plan (relating to the adjustment of shares), and except as otherwise
provided in the Plan, upon the occurrence of a Change in Control:



                                       3



(a)      If the Date of Termination has not occurred prior to the time of a
         Change in Control, all of the Options of any Stock purchased by the
         Participant under paragraph 3A shall vest in full.

(b)      If the Participant's Date of Termination has not occurred prior to the
         time of a Change in Control, and prior to the one-year anniversary of
         the Change in Control the Participant's engagement is terminated by
         the Company for reasons other than Cause, the Participant shall become
         fully vested in the Option and shall have the greater of (i) 90 days
         from the date of such termination or (ii) the period otherwise
         specified for exercise after termination had the Participant been
         fully vested in the Option on the Date of Termination to exercise the
         Option; provided, however, that in no event shall the Option be
         exercisable at a date that is later than the date it would have been
         exercisable if the Participant had continued as a Service Provider for
         the Company or a Subsidiary.

         8.     Withholding. All deliveries and distributions under the Option
Terms are subject to withholding of all applicable taxes. At the election of the
Participant, and subject to such rules and limitations as may be established by
the Committee from time to time, such withholding obligations may be satisfied
through the surrender of shares of Stock which the Participant already owns, or
to which the Participant is otherwise entitled under the Plan; provided,
however, that such shares may be used to satisfy not more than the Company's
minimum statutory withholding obligation (based on minimum statutory withholding
rates for Federal and state tax purposes, including payroll taxes, that are
applicable to such supplemental taxable income).

         9.     Participant's Representations and Shareholders Agreement. In the
event the Shares have not been registered under the Securities Act, at the time
this Option is exercised, the Participant shall, if required by the Company,
concurrently with the exercise of all or any portion of this Option (i) deliver
to the Company his or her Investment Representation Statement in the form
attached hereto as Exhibit B; and (ii) agree to execute and become a party to
the Shareholders Agreement, as may be in effect on such date.

         10.    Lock-Up Period. The Participant hereby agrees that, if so
requested by the Company or any representative of the underwriters (the
"Managing Underwriter") in connection with any registration of the offering of
any securities of the Company under the Securities Act, the Participant shall
not sell or otherwise transfer any Shares or other securities of the Company
during the 180-day period, or such other period as may be requested in writing
by the Managing Underwriter and agreed to in writing by the Company (the "Market
Standoff Period") following the effective date of a registration statement of
the Company filed under the Securities Act. Such restriction shall apply only to
the first registration statement of the Company to become effective under the
Securities Act that includes securities to be sold on behalf of the Company to
the public in an underwritten public offering under the Securities Act. The
Company may impose stop-transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such Market Standoff Period.

         11.    Non-Transferability of Option. This Option may not be
transferred in any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of the Participant only by
the Participant. The terms of the Plan and the Option Terms



                                       4




shall be binding upon the executors, administrators, heirs, successors and
assigns of the Participant.

         12.    All Terms. The Plan is incorporated herein by reference. The
Plan and the Option Terms, including all Exhibits hereto, as applicable,
constitute all of the terms with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the Company
and the Participant with respect to the subject matter hereof. The Option Terms
may be amended by written agreement of the Company and the Participant without
the consent of any other person.

         13.    Definitions. For purposes of the Option Terms, words and phrases
used in this Agreement shall be defined as follows:

(a)      Cause. The term "Cause" shall mean any of the following: (1) the
         willful and continued failure by the Participant to substantially
         perform the duties as required by the applicable consulting
         arrangement, (2) the willful engaging by the Participant in conduct
         which is demonstrably and materially injurious to the Company or its
         Affiliates, (3) conduct by the Participant that involves theft or fraud
         or, dishonesty in connection with the consulting arrangement, (4) the
         Participant's violation of a non-compete agreement, confidentiality
         agreement, or other agreement with the Company or an Affiliate.

(b)      Change in Control. The term "Change in Control" means any of the
         following: (i) the closing of any merger, combination, consolidation
         or similar business transaction involving the Company in which the
         holders of Stock immediately prior to such closing are not the
         holders, directly or indirectly, of a majority of the ordinary voting
         securities of the surviving person in such transaction immediately
         after such closing, (ii) the closing of any sale or transfer by the
         Company of all or substantially all of its assets to an acquiring
         person in which the holders of Stock immediately prior to such closing
         are not the holders of a majority of the ordinary voting securities of
         the acquiring person immediately after such closings, (iii) the
         closing of any sale by the holders of Stock of an amount of Stock that
         equals or exceeds a majority of the shares of Stock immediately prior
         to such closing to a person in which the holders of the Stock
         immediately prior to such closing are not the holders of a majority of
         the ordinary voting securities of such person immediately after such
         closing or (iv) the consummation of a registered public offering of
         Common Stock by the Company pursuant to the Securities Act of 1933, as
         amended, for gross proceeds of at least $50 million.

(c)      Date of Termination. The "Date of Termination" shall be the first day
         occurring on or after the Grant Date on which the Participant ceases to
         be an Employee of, or Service Provider to, the Company or any
         Subsidiary, regardless of the reason for such cessation, subject to the
         following:

         (i)    The Participant's cessation as an Employee and Service Provider
         shall not be deemed to occur by reason of the transfer of the
         Participant between the Company and a Subsidiary or between two
         Subsidiaries.



                                       5



         (ii)   The Participant's cessation as an Employee and Service Provider
         shall not be deemed to occur by reason of the Participant's being on a
         leave of absence from the Company or a Subsidiary approved by the
         Company or Subsidiary otherwise receiving the Participant's services.

         (iii)  If, as a result of a sale or other transaction, the Subsidiary
         for whom Participant is employed (or to whom the Participant is
         providing services as a Service Provider) ceases to be a Subsidiary
         (and the entity for whom the Participant is employed or to whom the
         Participant is providing services is or becomes an entity that is
         separate from the Company), and the Participant is not, at the end of
         the 30-day period following the transaction, an Employee of or Service
         Provider to the Company or an entity that is then a Subsidiary, then
         the occurrence of such transaction shall be treated as the
         Participant's Date of Termination caused by the Participant being
         discharged by the entity for whom the Participant is employed or to
         whom the Participant is providing services.

         (iv)   A Service Provider whose services to the Company or a Subsidiary
         are governed by a written agreement with the Service Provider will
         cease to be a Service Provider at the time the term of such written
         agreement ends (without renewal); and a Service Provider whose
         services to the Company or a Subsidiary are not governed by a written
         agreement with the Service Provider will cease to be a Service
         Provider on the date that is 90 days after the date the Service
         Provider last provides services requested by Company or Subsidiary (as
         determined by the Committee).

(d)      Employee. The term "Employee" means any person, including Officers and
         Directors, employed by the Company or any Subsidiary.

(e)      Service Provider. The term "Service Provider" means any person that is
         engaged by the Company or any Subsidiary to provide consulting or
         advisory service to the Company or a Subsidiary as an independent
         contractor.

(f)      Shareholders Agreement. The term "Shareholders Agreement" means the
         agreement governing the rights and obligations with respect to shares
         of Stock and to holders of Stock (including, without limitation, voting
         and sale rights), which agreement shall be in such form as the Company
         determines.

         IN WITNESS WHEREOF, the Company has caused these presents to be
executed in its name and on its behalf, all as of the Grant Date.

                               TAL INTERNATIONAL GROUP, INC.


                               By:
                                  ----------------------------------------------
                               Its:
                                   ---------------------------------------------


                                       6




                                   EXHIBIT III

                          INCENTIVE STOCK OPTION TERMS
                                 [FOR EMPLOYEE]

         The Participant has been granted an Option by TAL International Group,
Inc. (the "Company") under the terms of the TAL International Group, Inc. 2004
Management Stock Plan (the "Plan"). The Option shall be subject to the following
Incentive Stock Option Terms (sometimes referred to as the "Option Terms"):

         1.     Terms of Award. The following words and phrases used in the
Option Terms shall have the meanings set forth in this paragraph 1:

(a)      The "Participant" is .

(b)      The "Grant Date" is .

(c)      The number of "Covered Shares" is shares of Stock.

(d)      The "Exercise Price" is $           per share.
              --------------      ----------

Other words and phrases used in the Option Terms are defined in the Plan or
elsewhere in the Option Terms. Except where the context clearly implies or
indicates the contrary, a word, term, or phrase used in the Plan is similarly
used in the Option Terms.

         2.     Incentive Stock Option. The Option is intended to constitute an
"incentive stock option" as that term is used in Code section 422. To the extent
that the aggregate fair market value (determined at the time of grant) of
Covered Shares with respect to which incentive stock options are exercisable for
the first time by the Participant during any calendar year under all plans of
the Company and its Subsidiaries exceeds $100,000, the options or portions
thereof which exceed such limit (according to the order in which they were
granted) shall be treated as nonstatutory stock options. It should be understood
that there is no assurance that the Option will, in fact, be treated as an
incentive stock option.

         3.     Date of Exercise.
                -----------------

(a)      [Except as may otherwise be provided in an applicable employment
         agreement between the Participant and the Company or a Subsidiary,
         and] Subject to the limitations of the Option Terms, the Option shall
         become exercisable with respect to one-fourth (1/4) of the Covered
         Shares on the one-year anniversary of the Grant Date (the "Initial
         Vesting Date") (but only if the Date of Termination has not occurred
         prior to the Initial Vesting Date). After the Initial Vesting Date,
         the Option shall become exercisable with respect to an additional one
         fourth (1/4) of the Covered Shares at each anniversary the Initial
         Vesting Date (but only if the Date of Termination has not occurred
         prior to of such anniversary), until such time as this Option is fully
         exercisable.



                                       7



(b)      The Option may be exercised on or after the Date of Termination only as
         to that portion of the Covered Shares for which it was exercisable (or
         became exercisable) immediately prior to such date.

         4.     Expiration. The Option shall not be exercisable after the
Company's close of business on the last business day that occurs prior to the
Expiration Date. The "Expiration Date" shall be the earliest to occur of:

(a)      the ten-year anniversary of the Grant Date;

(b)      if the Date of Termination occurs by reason of the Participant's death
         or Disability, the one-year anniversary of such Date of Termination;

(c)      if the Date of Termination occurs by reason of termination of the
         Participant by the employer for Cause, or by the Participant other than
         for Good Reason, such Date of Termination; or

(d)      if the Date of Termination occurs for reasons other than (i) the
         Participant's death, (ii) the Participant's Disability, (iii)
         termination of the Participant by the employer for Cause, or (iv)
         termination by the Participant other than for Good Reason, the 90-day
         anniversary of such Date of Termination.

         5.     Method of Option Exercise. Subject to the Option Terms and the
Plan, the Option may be exercised in whole or in part by filing an option
exercise notice in the form attached as Exhibit A (the "Exercise Notice") with
the Secretary of the Company at its corporate headquarters prior to the
Company's close of business on the last business day that occurs prior to the
Expiration Date. Such notice shall specify the number of shares of Stock which
the Participant elects to purchase and such other representations and agreements
as may be required by the Company, and shall be accompanied by payment of the
Exercise Price. This Option may not be exercised until such time as the Plan has
been approved by the shareholders of the Company. The Option shall not be
exercisable if and to the extent the Company determines that such exercise would
violate applicable state or Federal securities laws or the rules and regulations
of any securities exchange on which the Stock is traded. If the Company makes
such a determination, it shall use all reasonable efforts to obtain compliance
with such laws, rules and regulations. In making any determination hereunder,
the Company may rely on the opinion of counsel for the Company.

         6.     Payment of Exercise Price. Payment of the Exercise Price may be
made by any of the following methods or any combination thereof:

(a)      By cash or by check payable to the Company.

(b)      Except as otherwise provided by the Committee before the Option is
         exercised and provided that the Company's common stock is publicly
         traded and quoted regularly in the Wall Street Journal, by delivery of
         shares of Stock owned by the Participant having an aggregate Fair
         Market Value (valued as of the date of exercise) that is equal to the
         amount of cash that would otherwise be required. Except as otherwise
         provided by the


                                       2




         Committee, payments made with shares of Stock shall be limited to
         shares held by the Participant for not less than six months prior to
         the payment date.

(c)      Except as otherwise provided by the Committee before the Option is
         exercised and provided that the Company's common stock is publicly
         traded and quoted regularly in the Wall Street Journal, by authorizing
         a third party to sell shares of Stock (or a sufficient portion of the
         shares) acquired upon exercise of the Option and remit to the Company a
         sufficient portion of the sale proceeds to pay the entire Exercise
         Price and any tax withholding resulting from such exercise.

         7.     Change in Control. Subject to the provisions of paragraph 4.2(f)
of the Plan (relating to the adjustment of shares), and except as otherwise
provided in the Plan, upon the occurrence of a Change in Control, all of the
options shall vest in full.

         8.     Withholding. All deliveries and distributions under the Option
Terms are subject to withholding of all applicable taxes. At the election of the
Participant, and subject to such rules and limitations as may be established by
the Committee from time to time, such withholding obligations may be satisfied
through the surrender of shares of Stock which the Participant already owns, or
to which the Participant is otherwise entitled under the Plan; provided,
however, that such shares may be used to satisfy not more than the Company's
minimum statutory withholding obligation (based on minimum statutory withholding
rates for Federal and state tax purposes, including payroll taxes, that are
applicable to such supplemental taxable income).

         9.     Participant's Representations and Shareholders Agreement. At the
time this Option is exercised, the Participant shall, if required by the
Company, concurrently with the exercise of all or any portion of this Option (i)
deliver to the Company his or her Investment Representation Statement in the
form attached hereto as Exhibit B; and (ii) agree to execute and become a party
to the Shareholders Agreement, as may be in effect on such date.

         10.    Lock-Up Period. The Participant hereby agrees that, if so
requested by the Company or any representative of the underwriters (the
"Managing Underwriter") in connection with any registration of the offering of
any securities of the Company under the Securities Act, the Participant shall
not sell or otherwise transfer any Shares or other securities of the Company
during the 180-day period, or such other period as may be requested in writing
by the Managing Underwriter and agreed to in writing by the Company (the "Market
Standoff Period") following the effective date of a registration statement of
the Company filed under the Securities Act. Such restriction shall apply only to
the first registration statement of the Company to become effective under the
Securities Act that includes securities to be sold on behalf of the Company to
the public in an underwritten public offering under the Securities Act. The
Company may impose stop-transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such Market Standoff Period.

         11.    Non-Transferability of Option. This Option may not be
transferred in any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of the Participant only by
the Participant. The terms of the Plan and the Option Terms



                                       3



shall be binding upon the executors, administrators, heirs, successors and
assigns of the Participant.

         12.    All Terms. The Plan is incorporated herein by reference. The
Plan and the Option Terms, including all Exhibits hereto, as applicable,
constitute all of the terms with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the Company
and the Participant with respect to the subject matter hereof. The Option Terms
may be amended by written agreement of the Company and the Participant without
the consent of any other person.

         13.    Definitions. For purposes of the Option Terms, words and phrases
used in this Agreement shall be defined as follows:

(a)      Cause. [If the Participant is subject to an employment agreement (or
         other similar agreement) with the Company or a Subsidiary that
         provides a definition of termination for "cause," then, for purposes
         of this Award, the term "Cause" shall have meaning set forth in such
         agreement. In the absence of such a definition,] the term "Cause"
         shall mean any of the following: (1) the willful and continued failure
         by the Participant to substantially perform his duties, other than by
         reason of his being Disabled (as defined below), (2) the willful
         engaging by the Participant in conduct which is demonstrably and
         materially injurious to the Company or its Affiliates, (3) conduct by
         the Participant that involves theft or fraud or, dishonesty in
         connection with his duties, (4) the Participant's violation of a
         non-compete or confidentiality agreement with the Company or an
         Affiliate, or (5) conviction of felony involving moral turpitude.

(b)      Change in Control. The term "Change in Control" means any of the
         following: (i) the closing of any merger, combination, consolidation
         or similar business transaction involving the Company in which the
         holders of Stock immediately prior to such closing are not the
         holders, directly or indirectly, of a majority of the ordinary voting
         securities of the surviving person in such transaction immediately
         after such closing, (ii) the closing of any sale or transfer by the
         Company of all or substantially all of its assets to an acquiring
         person in which the holders of Stock immediately prior to such closing
         are not the holders of a majority of the ordinary voting securities of
         the acquiring person immediately after such closings, (iii) the
         closing of any sale by the holders of Stock of an amount of Stock that
         equals or exceeds a majority of the shares of Stock immediately prior
         to such closing to a person in which the holders of the Stock
         immediately prior to such closing are not the holders of a majority of
         the ordinary voting securities of such person immediately after such
         closing or (iv) the consummation of a registered public offering of
         Stock by the Company pursuant to the Securities Act of 1933, as
         amended, for gross proceeds of at least $50 million.

(c)      Date of Termination. The "Date of Termination" shall be the first day
         occurring on or after the Grant Date on which the Participant ceases to
         be an Employee of, or Service Provider to, the Company or any
         Subsidiary, regardless of the reason for such cessation, subject to the
         following:



                                       4



         (i)    The Participant's cessation as an Employee and Service Provider
         shall not be deemed to occur by reason of the transfer of the
         Participant between the Company and a Subsidiary or between two
         Subsidiaries.

         (ii)   The Participant's cessation as an Employee and Service Provider
         shall not be deemed to occur by reason of the Participant's being on a
         leave of absence from the Company or a Subsidiary approved by the
         Company or Subsidiary otherwise receiving the Participant's services.

         (iii)  If, as a result of a sale or other transaction, the Subsidiary
         for whom Participant is employed (or to whom the Participant is
         providing services as a Service Provider) ceases to be a Subsidiary
         (and the entity for whom the Participant is employed or to whom the
         Participant is providing services is or becomes an entity that is
         separate from the Company), and the Participant is not, at the end of
         the 30-day period following the transaction, an Employee of or Service
         Provider to the Company or an entity that is then a Subsidiary, then
         the occurrence of such transaction shall be treated as the
         Participant's Date of Termination caused by the Participant being
         discharged by the entity for whom the Participant is employed or to
         whom the Participant is providing services.

         (iv)   A Service Provider whose services to the Company or a Subsidiary
         are governed by a written agreement with the Service Provider will
         cease to be a Service Provider at the time the term of such written
         agreement ends (without renewal); and a Service Provider whose
         services to the Company or a Subsidiary are not governed by a written
         agreement with the Service Provider will cease to be a Service
         Provider on the date that is 90 days after the date the Service
         Provider last provides services requested by Company or Subsidiary (as
         determined by the Committee).

(d)      Disability. [If Participant is subject to an employment agreement (or
         other similar agreement), with the Company or a Subsidiary that
         provides a definition of termination for "disability" then for
         purposes of this Award, the term "Disability" shall have the meaning
         set forth in such agreement. In the absence of such definition,] the
         Participant shall be considered to have a "Disability" during the
         period in which the Participant is unable, by reason of a medically
         determinable physical or mental impairment, to engage in any
         substantial gainful activity, which condition, in the opinion of a
         physician selected by the Committee, is expected to have a duration of
         not less than 120 days.

(e)      Employee. The term "Employee" means any person, including Officers and
         Directors, employed by the Company or any Subsidiary.

(f)      Good Reason. [If the Participant is subject to an employment agreement
         (or other similar agreement) with the Company or a Subsidiary that
         provides a definition of termination for "good reason," then, for
         purposes of this Award, the term "Good Reason" shall have meaning set
         forth in such agreement. In the absence of such a definition,] the
         term "Good Reason" shall mean either of (1) a reduction in the
         Participant's salary rate; or (2) a reduction in the Participant's
         rank which occur without the Participant's consent and which are not
         corrected by the Company within 10 days of delivery of a written
         notice to



                                       5



         the Company by the Participant which identifies the circumstances
         which the Participant believes constitute a reduction in salary rate
         or rank.

(g)      Shareholders Agreement. The term "Shareholders Agreement" means the
         agreement governing the rights and obligations with respect to shares
         of Stock and to holders of Stock (including, without limitation, voting
         and sale rights), which agreement shall be in such form as the Company
         determines.






















                                       6




         IN WITNESS WHEREOF, the Company has caused these presents to be
executed in its name and on its behalf, all as of the Grant Date.

TAL INTERNATIONAL GROUP, INC.



By:                                        Its:
   ----------------------------------          --------------------------------


















                                       7




                                    EXHIBIT A
                             OPTION EXERCISE NOTICE


TAL International Group, Inc.
[address]
Attention: Secretary


Ladies and Gentlemen:


         This constitutes notice that, as of the date this notice and payment of
the exercise price is received by the Secretary of TAL International Group, Inc.
(the "Company"), the Participant is electing to exercise the stock option
granted under TAL International Group, Inc. 2004 Management Stock Plan (the
"Plan") and identified below, and to purchase the number of shares for the price
set forth below:



Grant Date of stock option:                        _________________________

If both incentive stock options and nonstatutory   ___ Incentive Stock Option
stock options were granted to the Participant on
that date, indicate type of option being           ___ Non-qualified Stock
exercised:                                             Option

Number of shares as to which option
is exercised:                                      _________________

Stock certificate to be issued in name of:         ____________________________

Total exercise price:                              $____________

Cash payment delivered with this election:         $____________

Principal amount of promissory note delivered
with this election:                                $____________

Value of _____ shares of common
stock delivered with this election:(1)             $____________




--------------------
(1)       This alternative applies only if shares meet the public trading
requirements. Shares must be valued in accordance with the terms of the option
being exercised, must have been owned for the minimum period required in the
option, and must be owned free and clear of any liens, claims, encumbrances or
security interests. Certificates must be endorsed or accompanied by an executed
assignment separate from the certificate.








         By this exercise, the Participant agrees (i) to provide such additional
documents as the Company may require pursuant to the terms of the Plan, and (ii)
to provide for the payment to the Company (in the manner determined by the
Company) of amounts required to satisfy the Company's withholding obligation, if
any, relating to this option exercise. The Participant also acknowledges having
received, read and understood the Plan, and agrees to abide by and be bound by
its terms and conditions.



Submitted by Participant                   Accepted by TAL INTERNATIONAL
                                           GROUP, INC.

______________________________             By: ________________________________
Signature

_______________________________            Its: _______________________________
Print Name

Address:                                   Date Received: _____________________

_______________________________

_______________________________


_______________________________























                                       2



                                    EXHIBIT B
                       INVESTMENT REPRESENTATION STATEMENT

         [This form is to be completed at the time option is exercised,
                 unless stock is publicly traded at that time.]

         Effective as of ___________________ [insert date of option exercise]
(the "Effective Date"), the undersigned ("Participant") has elected to purchase
__________ shares of the Stock (the "Shares") of TAL International Group, Inc.
(the "Company") under and pursuant to the TAL International Group, Inc. 2004
Management Stock Plan (the "Plan") and the Non-Qualified Stock Option Terms
dated ______________ [insert grant date of option] (the "Option Terms"). The
Participant hereby makes the following certifications, representations,
warranties and agreements with respect to the purchase of the Shares:

         The Participant acknowledges that he or she is aware of the Company's
business affairs and financial condition and has acquired sufficient information
about the Company to reach an informed and knowledgeable decision to acquire the
Shares. The Participant represents and warrants to the Company that he or she is
acquiring these Shares for investment for the Participant's own account only and
not with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act").

         The Participant further acknowledges that the Shares have not been
registered under the Securities Act, are deemed to constitute "restricted
securities" under Rule 701 and Rule 144 promulgated under the Securities Act and
must be held indefinitely unless they are subsequently registered under the
Securities Act and qualified under any applicable state securities laws or an
exemption from such registration and qualification is available. The Participant
further acknowledges that the Company is under no obligation to register the
Shares.

         The Participant further acknowledges that he or she is familiar with
the provisions of Rule 701 and Rule 144, which Rules, in substance, permit
limited public resale of "restricted securities" acquired, directly or
indirectly from the issuer thereof, in a non-public offering subject to the
satisfaction of certain conditions. The Participant understands that if the
Company becomes subject to the reporting requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, the Participant will not be able to resell
the Shares under Rule 701 (i) until at least ninety (90) days after the Company
became subject to such reporting requirements (or any longer stand-off period,
as discussed below, may require) and (ii) unless such resale satisfies those
provisions of Rule 144 that are specified in Rule 701(g)(3). Even if the Company
is not subject to such reporting requirements, the Shares may be resold in
certain limited circumstances subject to satisfaction of all of the applicable
provisions of Rule 144. The Participant further acknowledges that in the event
all of the applicable requirements of Rule 144 are not satisfied, registration
under the Securities Act, compliance with Regulation A, or some other
registration exemption will be required in order to resell the Shares. The
Participant understands that no assurances can be given that any such
registration will be made or any such exemption will be available in such event.







         The Participant further acknowledges and understands that all
certificates representing any of the Shares shall have endorsed thereon
appropriate legends reflecting the foregoing limitations, as well as any legends
reflecting any other restrictions pursuant to the Company's Articles of
Incorporation, Bylaws, the Option, the Plan and/or applicable securities laws.

         The Participant further agrees that, if so requested by the Company or
any representative of the underwriters (the "Managing Underwriter") in
connection with any registration of the offering of any securities of the
Company under the Securities Act, the Participant shall not sell or otherwise
transfer any Shares or other securities of the Company during the 180-day
period, or such other period as may be requested in writing by the Managing
Underwriter and agreed to in writing by the Company (the "Market Standoff
Period"), following the effective date of a registration statement of the
Company filed under the Securities Act. Such restriction shall apply only to the
first registration statement of the Company to become effective under the
Securities Act that includes securities to be sold on behalf of the Company to
the public in an underwritten public offering under the Securities Act. The
Company may impose stop-transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such Market Standoff Period.

         The Participant further acknowledge and agrees that the Company shall
not be required (i) to transfer on its books any Shares that have been sold or
otherwise transferred in violation of any of the representations, warranties,
agreements or other provisions contained in this Notice of Exercise or (ii) to
treat as owner of such Shares or to accord the right to vote or pay dividends to
any purchaser or other transferee to whom such Shares shall have been so
transferred.


                                          Submitted by Participant:


                                          ------------------------------
                                          Signature

















                                       2




                                    EXHIBIT C
                     EARLY EXERCISE STOCK PURCHASE AGREEMENT

       [This form is to be completed at the time the option is exercised,
                if it is exercised before the option is vested.]

         Effective as of ___________________ [insert date of option exercise],
the undersigned ("Participant") has elected to purchase __________ shares of the
Stock (the "Shares") of TAL International Group, Inc. (the "Company") under and
pursuant to the TAL International Group, Inc. 2004 Management Stock Plan (the
"Plan") and the Non-Qualified Stock Option Terms dated ______________ [insert
grant date of option] (the "Option Terms"). All or a portion of the shares so
purchased are Unvested Shares (as that term is defined in the Option Terms). The
Unvested Shares shall be subject to the terms of this Agreement, and are to be
held in escrow by the Secretary of the Company (the "Escrow Agent") in
accordance with the escrow instructions contained herein. If, on the Date of
Termination, any shares are Unvested Shares, the Company shall have the right to
purchase such Unvested Shares (determined as of the Date of Termination) in
accordance with this Agreement.

         1.     Transfer. Unvested Shares may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution. The terms of
the Plan, the Option Terms, and this Early Exercise Stock Purchase Agreement
shall be binding upon the executors, administrators, heirs, successors and
assigns of the Participant.

         2.     Repurchase Right. The Company shall have the right to purchase
the Unvested Shares from the Participant or the Participant's personal
representative, as the case may be, at the Option Exercise Price per share
originally paid for the Shares (the "Exercise Price") or, if less, the Fair
Market Value of the Shares at the Date of Termination.

         3.     Repurchase Procedure. Within 90 days following the Date of
Termination, the Company shall notify the Participant and the Escrow Agent by
written notice delivered or mailed, as to whether it wishes to purchase the
Unvested Shares pursuant to exercise of this Agreement. If the Company (or its
assignee) elects to purchase the Unvested Shares hereunder, it shall set a date
for the closing of the transaction at a place and time specified by the Company
or, at the Company's option, such closing may be consummated by mail. At such
closing, the Company (or its assignee) shall tender payment for the Unvested
Shares to the Escrow Agent, the Escrow Agent will complete and deliver all stock
assignments necessary to effect the transfer of the Shares to the Company, and
the certificates representing the Unvested Shares so purchased shall be
canceled. The Exercise Price shall be payable, at the option of the Company, in
cash or by check.

         4.     Restrictive Legends and Stop-Transfer Orders.
                ---------------------------------------------

(a)      Legends. Participant understands and agrees that the Company shall
         cause the legend set forth below or a legend substantially equivalent
         thereto, to be placed upon any certificate(s) evidencing ownership of
         the Unvested Shares together with any other legends that may be
         required by the Company or by the state or federal securities laws:







                THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
         CERTAIN RESTRICTIONS ON TRANSFER AND A RIGHT OF REPURCHASE HELD BY THE
         ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE EARLY EXERCISE STOCK
         PURCHASE AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE
         SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE
         ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF REPURCHASE ARE BINDING
         ON TRANSFEREES OF THESE SHARES.

(b)      Stop-Transfer Notices. Participant agrees that, in order to ensure
         compliance with the restrictions referred to herein, the Company may
         issue appropriate "stop transfer" instructions to its transfer agent,
         if any, and that, if the Company transfers its own securities, it may
         make appropriate notations to the same effect in its own records.

(c)      Refusal to Transfer. The Company shall not be required (i) to transfer
         on its books any Shares that have been sold or otherwise transferred in
         violation of any of the provisions of this Agreement or (ii) to treat
         as owner of such Shares or to accord the right to vote or pay dividends
         to any purchaser or other transferee to whom such Shares shall have
         been so transferred.

5.       Certain Matters Regarding the Escrow Agent.
         -------------------------------------------

(a)      The Participant irrevocably authorizes the Company to deposit with the
         Escrow Agent any certificates evidencing the Shares to be held by the
         Escrow Agent hereunder. The Participant hereby irrevocably constitutes
         and appoints the Escrow Agent as the Participant's attorney-in-fact and
         agent for the term of the escrow arrangement created hereunder to
         execute with respect to such Shares all documents necessary or
         appropriate to make such Shares negotiable and to complete any
         transaction herein contemplated.

(b)      The Escrow Agent is a party to this Agreement only for the purpose of
         the escrow instructions contained herein. The duties of the Escrow
         Agent hereunder are limited to those expressly set forth herein, and
         may be altered, amended, modified or revoked only by a writing signed
         by all of the parties hereto. The Escrow Agent may rely and shall be
         protected in relying or refraining from acting on any instrument
         reasonably believed by the Escrow Agent to be genuine and to have been
         signed or presented by the proper party or parties. The Escrow Agent
         shall not be personally liable for any act the Escrow Agent may do or
         omit to do hereunder as Escrow Agent while acting in good faith, and
         any act done or omitted by the Escrow Agent pursuant to the advice of
         the Escrow Agent's attorneys shall be conclusive evidence of such good
         faith.

(c)      The Escrow Agent shall not be liable in any respect on account of the
         identity, authorities or rights of the parties executing or delivering
         or purporting to execute or deliver this Agreement or any documents or
         papers deposited or called for hereunder.

(d)      If the Escrow Agent reasonably requires other or further instruments in
         connection with the instructions contained in this Agreement, the
         necessary parties hereto shall join in furnishing such instruments.



                                       2



(e)      The responsibilities of the Escrow Agent hereunder shall terminate if
         the Escrow Agent ceases to be an officer or agent of the Company or if
         the Escrow Agent resigns by written notice to each party. Upon such
         termination, the Company shall appoint a successor Escrow Agent. If at
         the time of such termination, the Escrow Agent has in its possession
         any documents, securities or other property belonging to, and then
         deliverable to the Participant, it shall deliver all of the same to the
         Participant and shall be discharged of all further obligations under
         this Agreement.

(f)      In the event of any dispute with respect to the delivery and/or
         ownership or right of possession of the Shares held by the Escrow Agent
         hereunder, the Company and the Participant authorize and direct the
         Escrow Agent to retain in its possession without liability to anyone
         all or any part of such Shares until settlement or such disputes by
         mutual written agreement of the parties concerned or by a final order,
         decree or judgment of a court of competent jurisdiction after the time
         for appeal has expired and no appeal has been perfected, but the Escrow
         Agent shall be under no duty to institute or defend any such
         proceedings.

(g)      The Escrow Agent shall be entitled to employ such legal counsel as it
         deems reasonably necessary with respect to the obligations of the
         Escrow Agent hereunder, and may rely on upon the advice of such
         counsel.

(h)      The Escrow Agent shall not be liable for the outlawing of any rights
         under the statute of limitations with respect to the escrow
         instructions contained herein.

         6.     Definitions. Except where the context clearly implies or
indicates the contrary, a word, term, or phrase used in the Plan is similarly
used in this Agreement.



Submitted by Participant                    Accepted by TAL INTERNATIONAL
                                            GROUP, INC.


______________________________              By: _______________________________
Signature

_______________________________             Its: _______________________________
Print Name

Address:                                    Date Received: _____________________

_______________________________

_______________________________


_______________________________


Escrow Agent:

_______________________________
Signature
Print Name ______________________
Title: Secretary


                                       3




Address:

________________________________

________________________________

________________________________




















                                       4






                                    EXHIBIT D
                                 PROMISSORY NOTE

       [This form is to be completed at the time the option is exercised,
               if a loan is extended to pay the purchase price.]

     [insert amount of loan]                  [insert date of option exercise]

         Effective as of ___________________ [insert date of option exercise]
(the "Effective Date"), the undersigned ("Participant") has elected to purchase
__________ shares [insert number of shares purchased by option exercise] of
Stock (the "Shares") of TAL International Group, Inc. (the "Company") under and
pursuant to the TAL International Group, Inc. 2004 Management Stock Plan (the
"Plan") and the Non-Qualified Stock Option Terms dated ______________ [insert
grant date of option] (the "Option Terms").

         For value received, the Participant promises to pay to the Company, at
its principal office, the principal sum of ______________ [insert amount of
loan, which will ordinarily be the option exercise price] with interest at the
rate determined in accordance with the provisions of this paragraph, compounded
semi-annually, on the unpaid balance of the principal sum. Said principal and
any accrued but unpaid interest shall be due one year after the Date of
Termination (as that term is defined in the Option Terms) for reasons of death
or Disability, and thirty (30) days after such cessation for any other reason.
Interest shall be charged at the minimum rate of interest necessary to avoid the
treatment as interest, under any applicable provisions of the Internal Revenue
Code, of any portion of any amounts other than amounts stated to be interest
under this Note.

         This Note is secured by a pledge of the Company's Stock acquired
pursuant to the exercise of the Option Terms, is held under the terms of a
Security Agreement of even date herewith, and is subject to all the provisions
thereof.

         The holder of this Note shall have full recourse against the
Participant personally for failure to pay the Note as and when due.

         The principal is payable in lawful money of the United States of
America. The privilege is reserved to prepay any portion of Note at any time.

         Should suit be commenced to collect this Note or any portion thereof,
such sum as the Court may deem reasonable shall be added hereto as attorneys'
fees. The maker waives presentment for payment, protest, notice of protest and
notice of non-payment of this Note. This Note shall be governed by the laws of
the State of [insert applicable state] as they apply to contracts entered into
and wholly to be performed within such state.


                                      Participant

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





                                       1






                                    EXHIBIT E
                                STOCK ASSIGNMENT

[This form is to be completed at the time the option is exercised, if a loan is
extended to pay the purchase price, or if the shares are purchased pursuant to
the exercise of the option before vesting .]

         Effective as of ___________________ [insert date of option exercise]
(the "Effective Date"), the undersigned ("Participant") has elected to purchase
__________ shares [insert number of shares purchased by option exercise] of
Stock (the "Shares") of TAL International Group, Inc. (the "Company") under and
pursuant to the TAL International Group, Inc. 2004 Management Stock Plan (the
"Plan") and the Non-Qualified Stock Option Terms dated ______________ [insert
grant date of option] (the "Option Terms").

         For value received, Participant hereby sells, assigns and transfers to
the Company _________ shares of the Stock standing in the Participant's name of
the books of the Company represented by Certificate No. _______ herewith and do
hereby irrevocably constitute and appoint the Corporate Secretary of the Company
to transfer the said stock on the books of the Company with full power of
substitution in the premises.

         This Stock Assignment may be used only in accordance with the Option
Terms and the Security Agreement between the Company and the Participant of even
date.




Dated:______________________            ___________________________________
                                        (to be signed exactly as name
                                        is to appear on stock certificate)


INSTRUCTIONS TO PARTICIPANT: Please do not fill in the blanks other than the

signature line. The purpose of this assignment is to enable the Company to
exercise its rights as set forth in the Security Agreement, without requiring
additional signatures on the part of the Participant.

INSTRUCTIONS TO COMPANY: Complete blanks in first paragraph before Participant
signs form.












                                       1






                                    EXHIBIT F
                               SECURITY AGREEMENT

       [This form is to be completed at the time the option is exercised,
               if a loan is extended to pay the purchase price.]

         This Security Agreement, made as of _________________ [insert date of
option exercise] (the "Effective Date") by and among TAL International Group,
Inc. (the "Company"), _____________ [insert Participant's name] (the
"Participant"), and the Corporate Secretary of the Company, as the holder of the
Shares pledged hereunder (the "Pledgeholder");

                                Witnesseth that:
                                ----------------

         As of the Effective Date, the Participant has purchased ____________
[insert number of shares covered by option exercise] shares of the Company's
Stock (the "Shares") under the TAL International Group, Inc. 2004 Management
Stock Plan (the "Plan") and the Non-Qualified Stock Option Terms dated
______________ [insert grant date of option] (the "Option Terms"), and the
Participant has elected under the terms of the Option Terms to pay for such
shares with the Participant's promissory note (the "Note"). The Note and the
obligations thereunder are as set forth in an exhibit to this Security
Agreement.

         NOW, THEREFORE, it is agreed as follows:

         1.     Creation and Description of Security Interest.

(a)      In consideration of the transfer of the Shares to the Participant under
         the Option Terms, the Participant, pursuant to the [insert applicable
         state] Uniform Commercial Code, hereby pledges to the Company all of
         such Shares (herein sometimes referred to as the "Collateral")
         represented by certificate number _____, duly endorsed in blank or with
         an executed stock power or powers, and herewith delivers said
         certificate to Pledgeholder, who shall hold said certificate subject to
         the terms and conditions of this Security Agreement

(b)      The pledged Shares (together with an executed blank stock assignment or
         assignments for use in transferring all or a portion of the Shares to
         the Company if, as, and when required pursuant to this Security
         Agreement) shall be held by Pledgeholder as security for the repayment
         of the Note, and any extensions or renewals thereof, to be executed by
         the Participant pursuant to the terms of the Option Terms, and
         Pledgeholder shall not encumber or dispose of such Shares except in
         accordance with the provisions of this Security Agreement.

         2.     Participant's Representations and Covenants. To induce the
Company to enter into this Security Agreement, the Participant represents and
covenants to the Company, its successors and assigns, as follows:

(a)      Payment of Indebtedness. The Participant will pay the principal sum of
         the Note secured hereby, and interest thereon, at the time and in the
         manner provided in the Note.







(b)      Encumbrances. The Shares are free of all other encumbrances, defenses
         and liens (other than restrictions on transfer imposed by applicable
         securities laws), except for (i) the Company's rights to repurchase
         Shares pursuant to paragraph 3A of the Option Terms and (ii) the pledge
         of the Shares hereunder as security for payment of the Note, and the
         Participant will not further encumber the Shares without the prior
         written consent of the Company.

(c)      Margin Regulations. In the event that the Company's Stock is now or
         later becomes margin-listed by the Federal Reserve Board and the
         Company is classified as a "lender" within the meaning of the
         regulations under Part 221 of Title 12 of the Code of Federal
         Regulations ("Regulation U"), the Participant agrees to cooperate with
         the Company in making any amendments to the Note or providing any
         additional collateral as may be necessary to comply with such
         regulations.

         3.     Voting Rights. During the term of this pledge and so long as all
payments of principal and interest are made as they become due under the terms
of the Note, the Participant shall have the right to vote all of the Shares
pledged hereunder.

         4.     Stock Adjustments. In the event that during the term of the
pledge any stock dividend, reclassification, readjustment or other changes are
declared or made in the capital structure of the Company, all new, substituted
and additional shares or other securities issued by reason of any such change
shall be delivered to and held by the Company under the terms of this Security
Agreement in the same manner as the Shares originally pledged hereunder. In the
event of substitution of such securities, the Participant, the Company and the
Pledgeholder shall cooperate and execute such documents as are reasonable so as
to provide for the substitution of such Collateral and, upon such substitution,
references to "Shares" in this Security Agreement shall include the substituted
shares of capital stock of the Participant as a result thereof.

         5.     Options and Rights. In the event that, during the term of this
pledge, subscription options or other rights or options shall be issued in
connection with the pledged Shares, such rights and options shall be the
property of the Participant and, if exercised by the Participant, all new stock
or other securities so acquired by the Participant as it relates to the pledged
Shares then held by Pledgeholder shall be immediately delivered to Pledgeholder,
to be held under the terms of this Security Agreement in the same manner as the
Shares pledged.

         6.     Default. The Participant shall be deemed to be in default of the
Note and of this Security Agreement in the event:

(a)      payment of principal or interest on the Note shall be delinquent for a
         period of 10 days or more; or

(b)      the Participant fails to perform any of the covenants set forth in the
         Option Terms or contained in this Security Agreement for a period of 10
         days after written notice thereof from the Company.

In the case of an event of Default, as set forth above, the Company shall have
the right to accelerate payment of the Note upon notice to the Participant, and
the Company shall thereafter be entitled to pursue its remedies under the
[insert applicable state] Uniform Commercial Code.



                                       2



         7.     Release of Collateral. Subject to any applicable contrary rules
under Regulation U, there shall be released from this pledge a portion of the
pledged Shares held by Pledgeholder hereunder upon payments of the principal of
the Note. The number of the pledged Shares which shall be released shall be that
number of full Shares which bears the same proportion to the initial number of
Shares pledged hereunder as the payment of principal bears to the initial full
principal amount of the Note.

         8.     Withdrawal or Substitution of Collateral. The Participant shall
not sell, withdraw, pledge, substitute or otherwise dispose of all or any part
of the Collateral without the prior written consent of the Company.

         9.     Term. The within pledge of Shares shall continue until the
payment of all indebtedness secured hereby, subject to the provisions for prior
release of a portion of the Collateral as provided in paragraph 7 above.

         10.    Insolvency. The Participant agrees that if a bankruptcy or
insolvency proceeding is instituted by or against him or her, or if a receiver
is appointed for the property of the Participant, or if the Participant makes an
assignment for the benefit of creditors, the entire amount unpaid on the Note
shall become immediately due and payable, and the Company may proceed as
provided in the case of default.

         11.    Pledgeholder Liability.
                -----------------------

(a)      Pledgeholder shall not be liable to any party for any of his or her
         acts, or omissions to act, as Pledgeholder unless Pledgeholder is
         proved to have acted in bad faith. Any act done or omitted pursuant to
         the advice of legal counsel, other than an act or omission involving
         gross or willful negligence, shall be deemed to be done or omitted in
         good faith.

(b)      Pledgeholder shall be entitled to employ such legal counsel and other
         experts as Pledgeholder may deem necessary properly to advise
         Pledgeholder in connection with its obligations hereunder, and
         Pledgeholder may rely upon the advice of such counsel.

(c)      It is understood and agreed that should any dispute arise with respect
         to the delivery and/or ownership or right of possession of the Shares
         held by Pledgeholder hereunder, Pledgeholder is authorized and directed
         to retain in Pledgeholder's possession without liability to anyone all
         or any part of said Shares until such disputes shall have been settled.

         12.    Invalidity of Particular Provisions. The Participant and the
Company agree that the enforceability or invalidity of any provision or
provisions of this Security Agreement shall not render any other provision or
provisions herein contained unenforceable or invalid.

         13.    Successors or Assigns. The Participant and the Company agree
that all of the terms of this Security Agreement shall be binding on their
respective successors and assigns, and that the term "Participant" and the term
"Company" as used herein shall be deemed to include, for all purposes, the
respective designees, successors, assigns, heirs, executors and administrators.



                                       3



         14.    Governing Law. This Security Agreement shall be interpreted and
governed under the laws of the State of [insert applicable state] as they apply
to contracts entered into and wholly to be performed within such state.

         IN WITNESS WHEREOF, the parties hereto have executed this Security
Agreement as of the Effective Date.

                                      Participant: __________________________

                                      Print Name: ___________________________

                                      Address: ______________________________


                                      TAL INTERNATIONAL GROUP, INC.

                                      By: ___________________________________

                                      Its: __________________________________
                                           Secretary of the Company











                                       4





                                    EXHIBIT G

                          ELECTION UNDER SECTION 83(B)
                      OF THE INTERNAL REVENUE CODE OF 1986

         The undersigned taxpayer hereby makes an election under Section 83(b)
of the Internal Revenue Code of 1986, as amended, to include in gross income any
excess of (i) the fair market value of stock of TAL International Group, Inc.
acquired by exercise of an option granted in connection with the taxpayer's
performance of services over (ii) the amount taxpayer paid for such property.
Taxpayer hereby provides the following statement as required pursuant to
Treasury Department Regulation Section 1.83-2(e):

1.       Name:

         Address:

         Social Security Number:

2.       Description of the Property: common stock of TAL International Group,
         Inc. (the "Stock").

3.       (I)    Date on which the Stock was transferred:

         (II)   Calendar year for which election is made:

4.       The nature of the restrictions to which the Stock is subject: If
         taxpayer ceases to be a service provider to TAL International Group,
         Inc. and its subsidiaries, prior to a date specified in the option
         agreement, TAL International Group, Inc. shall have the right to
         acquire some or all of the taxpayer's Stock for the lesser of the price
         paid for the Stock or the value of the Stock at the time of repurchase.

5.       The fair market value of the Stock at the time of transfer is:
         $____________ per share, for a total of $___________________.

6.       The amount paid for the Stock: $_____________.

7.       Taxpayer states that a copy of this election has been furnished to TAL
         International Group, Inc.



                                         --------------------------------
                                         [signature of taxpayer]

The taxpayer understands that the foregoing election may not be revoked except
with the consent of the Commissioner of Internal Revenue.









                                       1




                  INSTRUCTIONS FOR ELECTION UNDER SECTION 83(b)
                          OF THE INTERNAL REVENUE CODE

o        If you decide to make an election under section 83(b) of the Internal
         Revenue Code with respect to the stock you have been purchased by
         exercise of the option granted under the TAL International Group, Inc.
         2004 Management Stock Plan, the election must be filed with the
         Internal Revenue Service Center where you file your income tax return
         no later than 30 days after the date of exercise. It should be mailed
         by certified mail or registered mail (return receipt requested) to
         establish proof of timely filing.

o        One copy of the election must also be filed with TAL International
         Group, Inc. (Attention: -------------).

o        One copy of the election must also be submitted with your tax return
         for the year in which you acquired the stock.

o        Once filed with the Internal Revenue Service, an 83(b) election is
         generally irrevocable and, in the limited cases in which it is
         revocable, such revocation requires the consent of the Commissioner of
         Internal Revenue. Accordingly, you should consult your personal tax
         advisor prior to making this election.




















                                       2














                                                                   EXHIBIT 10.15



                             STOCK OPTION AGREEMENT

         The Participant has been granted an Option by TAL International Group,
Inc. (the "Company") under the terms of the TAL International Group, Inc. 2004
Management Stock Plan (the "Plan"). The Option shall be subject to the following
Incentive Stock Option Terms (sometimes referred to as the "Option Terms"):

         1.   Terms of Award. The following words and phrases used in the Option
Terms shall have the meanings set forth in this paragraph 1:

(a)      The "Participant" is BRIAN M. SONDEY

(b)      The "Grant Date" is November 3, 2004.

(c)      The number of "Covered Shares" is 2,000 shares of Stock.

(d)      The "Exercise Price" is $1.00 per share.

Other words and phrases used in the Option Terms are defined in the Plan or
elsewhere in the Option Terms. Except where the context clearly implies or
indicates the contrary, a word, term, or phrase used in the Plan is similarly
used in the Option Terms.

         2.   Incentive Stock Option. The Option is intended to constitute an
"incentive stock option" as that term is used in Code section 422. To the extent
that the aggregate fair market value (determined at the time of grant) of
Covered Shares with respect to which incentive stock options are exercisable for
the first time by the Participant during any calendar year under all plans of
the Company and its Subsidiaries exceeds $100,000, the options or portions
thereof which exceed such limit (according to the order in which they were
granted) shall be treated as nonstatutory stock options. It should be understood
that there is no assurance that the Option will, in fact, be treated as an
incentive stock option.

         3.   Date of Exercise.

(a)      Subject to the limitations of the Option Terms, the Option shall become
         exercisable with respect to one-fourth (1/4) of the Covered Shares on
         the one-year anniversary of the Grant Date (the "Initial Vesting Date")
         (but only if the Date of Termination has not occurred prior to the
         Initial Vesting Date). After the Initial Vesting Date, the Option shall
         become exercisable with respect to an additional one forth (1/4) of the
         Covered Shares at the anniversary of the Initial Vesting Date (but only
         if the Date of Termination has not occurred prior to such anniversary),
         until such time as this Option is fully exercisable.

(b)      The Option may be exercised on or after the Date of Termination only as
         to that portion of the Covered Shares for which it was exercisable (or
         became exercisable) immediately prior to such date.

         4.   Expiration. The Option shall not be exercisable after the
Company's close of business on the last business day that occurs prior to the
Expiration Date. The "Expiration Date" shall be the earliest to occur of:

(a)      the ten-year anniversary of the Grant Date;





(b)      if the Date of Termination occurs by reason of the Participant's death
         or Disability, the one-year anniversary of such Date of Termination;

(c)      if the Date of Termination occurs by reason of termination of the
         Participant by the employer for Cause, or by the Participant other than
         for Good Reason, such Date of Termination; or

(d)      if the Date of Termination occurs for reasons other than (i) the
         Participant's death, (ii) the Participant's Disability, (iii)
         termination of the Participant by the employer for Cause, or (iv)
         termination by the Participant other than for Good Reason, the 90-day
         anniversary of such Date of Termination.

         5.   Method of Option Exercise. Subject to the Option Terms and the
Plan, the Option may be exercised in whole or in part by filing an option
exercise notice in the form attached as Exhibit A (the "Exercise Notice") with
the Secretary of the Company at its corporate headquarters prior to the
Company's close of business on the last business day that occurs prior to the
Expiration Date. Such notice shall specify the number of shares of Stock which
the Participant elects to purchase and such other representations and agreements
as may be required by the Company, and shall be accompanied by payment of the
Exercise Price. This Option may not be exercised until such time as the Plan has
been approved by the shareholders of the Company. The Option shall not be
exercisable if and to the extent the Company determines that such exercise would
violate applicable state or Federal securities laws or the rules and regulations
of any securities exchange on which the Stock is traded. If the Company makes
such a determination, it shall use all reasonable efforts to obtain compliance
with such laws, rules and regulations. In making any determination hereunder,
the Company may rely on the opinion of counsel for the Company.

         6.   Payment of Exercise Price. Payment of the Exercise Price may be
made by any of the following methods or any combination thereof:

(a)      By cash or by check payable to the Company.

(b)      Except as otherwise provided by the Committee before the Option is
         exercised and provided that the Company's common stock is publicly
         traded and quoted regularly in the Wall Street Journal, by delivery of
         shares of Stock owned by the Participant having an aggregate Fair
         Market Value (valued as of the date of exercise) that is equal to the
         amount of cash that would otherwise be required. Except as otherwise
         provided by the Committee, payments made with shares of Stock shall be
         limited to shares held by the Participant for not less than six months
         prior to the payment date.

(c)      Except as otherwise provided by the Committee before the Option is
         exercised and provided that the Company's common stock is publicly
         traded and quoted regularly in the Wall Street Journal, by authorizing
         a third party to sell shares of Stock (or a sufficient portion of the
         shares) acquired upon exercise of the Option and remit to the Company a
         sufficient portion of the sale proceeds to pay the entire Exercise
         Price and any tax withholding resulting from such exercise.

         7.   Change in Control. Subject to the provisions of paragraph 4.2(f)
of the Plan (relating to the adjustment of shares), and except as otherwise
provided in the Plan, upon the occurrence of a Change in Control, all of the
options shall vest in full.



                                       2



         8.   Withholding. All deliveries and distributions under the Option
Terms are subject to withholding of all applicable taxes. At the election of the
Participant, and subject to such rules and limitations as may be established by
the Committee from time to time, such withholding obligations may be satisfied
through the surrender of shares of Stock which the Participant already owns, or
to which the Participant is otherwise entitled under the Plan; provided,
however, that such shares may be used to satisfy not more than the Company's
minimum statutory withholding obligation (based on minimum statutory withholding
rates for Federal and state tax purposes, including payroll taxes, that are
applicable to such supplemental taxable income).

         9.   Participant's Representations and Shareholders Agreement. At the
time this Option is exercised, the Participant shall, if required by the
Company, concurrently with the exercise of all or any portion of this Option (i)
deliver to the Company his or her Investment Representation Statement in the
form attached hereto as Exhibit B; and (ii) agree to execute and become a party
to the Shareholders Agreement, as may be in effect on such date.

         10.  Lock-Up Period. The Participant hereby agrees that, if so
requested by the Company or any representative of the underwriters (the
"Managing Underwriter") in connection with any registration of the offering of
any securities of the Company under the Securities Act, the Participant shall
not sell or otherwise transfer any Shares or other securities of the Company
during the 180-day period, or such other period as may be requested in writing
by the Managing Underwriter and agreed to in writing by the Company (the "Market
Standoff Period") following the effective date of a registration statement of
the Company filed under the Securities Act. Such restriction shall apply only to
the first registration statement of the Company to become effective under the
Securities Act that includes securities to be sold on behalf of the Company to
the public in an underwritten public offering under the Securities Act. The
Company may impose stop-transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such Market Standoff Period.

         11.  Non-Transferability of Option. This Option may not be transferred
in any manner otherwise than by will or by the laws of descent or distribution
and may be exercised during the lifetime of the Participant only by the
Participant. The terms of the Plan and the Option Terms shall be binding upon
the executors, administrators, heirs, successors and assigns of the Participant.

         12.  All Terms. The Plan is incorporated herein by reference. The Plan
and the Option Terms, including all Exhibits hereto, as applicable, constitute
all of the terms with respect to the subject matter hereof and supersede in
their entirety all prior undertakings and agreements of the Company and the
Participant with respect to the subject matter hereof. The Option Terms may be
amended by written agreement of the Company and the Participant without the
consent of any other person.

         13.  Definitions. For purposes of the Option Terms, words and phrases
used in this Agreement shall be defined as follows:

(a)      Cause. If the Participant is subject to an employment agreement (or
         other similar agreement) with the Company or a Subsidiary that
         provides a definition of termination for "cause," then, for purposes
         of this Award, the term "Cause" shall have meaning set forth in such
         agreement. In the absence of such a definition, the term "Cause" shall
         mean any of the following: (1) the willful and continued failure by
         the Participant to substantially perform his duties, other than by
         reason of his being Disabled (as defined below), (2) the willful
         engaging by the Participant in conduct which is demonstrably and
         materially injurious to the Company or its Affiliates,



                                       3



         (3) conduct by the Participant that involves theft or fraud or,
         dishonesty in connection with his duties, (4) the Participant's
         violation of a non-compete or confidentiality agreement with the
         Company or an Affiliate, or (5) conviction of felony involving moral
         turpitude.

(b)      Change in Control. The term "Change in Control" means any of the
         following: (i) the closing of any merger, combination, consolidation
         or similar business transaction involving the Company in which the
         holders of Stock immediately prior to such closing are not the
         holders, directly or indirectly, of a majority of the ordinary voting
         securities of the surviving person in such transaction immediately
         after such closing, (ii) the closing of any sale or transfer by the
         Company of all or substantially all of its assets to an acquiring
         person in which the holders of Stock immediately prior to such closing
         are not the holders of a majority of the ordinary voting securities of
         the acquiring person immediately after such closings, (iii) the
         closing of any sale by the holders of Stock of an amount of Stock that
         equals or exceeds a majority of the shares of Stock immediately prior
         to such closing to a person in which the holders of the Stock
         immediately prior to such closing are not the holders of a majority of
         the ordinary voting securities of such person immediately after such
         closing or (iv) the consummation of a registered public offering of
         Stock by the Company pursuant to the Securities Act of 1933, as
         amended, for gross proceeds of at least $50 million.

(c)      Date of Termination. The "Date of Termination" shall be the first day
         occurring on or after the Grant Date on which the Participant ceases to
         be an Employee of, or Service Provider to, the Company or any
         Subsidiary, regardless of the reason for such cessation, subject to the
         following:

         (i)   The Participant's cessation as an Employee and Service Provider
         shall not be deemed to occur by reason of the transfer of the
         Participant between the Company and a Subsidiary or between two
         Subsidiaries.

         (ii)  The Participant's cessation as an Employee and Service Provider
         shall not be deemed to occur by reason of the Participant's being on a
         leave of absence from the Company or a Subsidiary approved by the
         Company or Subsidiary otherwise receiving the Participant's services.

         (iii) If, as a result of a sale or other transaction, the Subsidiary
         for whom Participant is employed (or to whom the Participant is
         providing services as a Service Provider) ceases to be a Subsidiary
         (and the entity for whom the Participant is employed or to whom the
         Participant is providing services is or becomes an entity that is
         separate from the Company), and the Participant is not, at the end of
         the 30-day period following the transaction, an Employee of or Service
         Provider to the Company or an entity that is then a Subsidiary, then
         the occurrence of such transaction shall be treated as the
         Participant's Date of Termination caused by the Participant being
         discharged by the entity for whom the Participant is employed or to
         whom the Participant is providing services.

         (iv)  A Service Provider whose services to the Company or a Subsidiary
         are governed by a written agreement with the Service Provider will
         cease to be a Service Provider at the time the term of such written
         agreement ends (without renewal); and a Service Provider whose
         services to the Company or a Subsidiary are not governed by a written
         agreement with the Service Provider will cease to be a Service
         Provider on the date that is 90 days after the date



                                       4



         the Service Provider last provides services requested by Company or
         Subsidiary (as determined by the Committee).

(d)      Disability. If the Participant is subject to an employment agreement
         (or other similar agreement) with the Company or a Subsidiary that
         provides a definition of termination for "disability," then, for
         purposes of this Award, the term "Disability" shall have meaning set
         forth in such agreement. In the absence of such a definition, the
         Participant shall be considered to have a "Disability" during the
         period in which the Participant is unable, by reason of a medically
         determinable physical or mental impairment, to engage in any
         substantial gainful activity, which condition, in the opinion of a
         physician selected by the Committee, is expected to have a duration of
         not less than 120 days.

(e)      Employee. The term "Employee" means any person, including Officers and
         Directors, employed by the Company or any Subsidiary.

(f)      Good Reason. If the Participant is subject to an employment agreement
         (or other similar agreement) with the Company or a Subsidiary that
         provides a definition of termination for "good reason," then, for
         purposes of this Award, the term "Good Reason" shall have meaning set
         forth in such agreement. In the absence of such a definition, the term
         "Good Reason" shall mean either of (1) a reduction in the
         Participant's salary rate; or (2) a reduction in the Participant's
         rank which occur without the Participant's consent and which are not
         corrected by the Company within 10 days of delivery of a written
         notice to the Company by the Participant which identifies the
         circumstances which the Participant believes constitute a reduction in
         salary rate or rank.

(g)      Shareholders Agreement. The term "Shareholders Agreement" means the
         agreement governing the rights and obligations with respect to shares
         of Stock and to holders of Stock (including, without limitation, voting
         and sale rights), which agreement shall be in such form as the Company
         determines.

(h)      Stock.  The term "Stock" means the Common Stock, par value $0.001 per
         share of the Company.


         14.  Designated Event Bonus.
              -----------------------

(a)      General. If upon the consummation of a Designated Event, the holders of
         all of the outstanding shares of Series A Preferred Stock receive cash
         equal to the Liquidation Preference (as defined in the Certificate of
         Incorporation) plus accrued but unpaid dividends as of the redemption
         date on each outstanding share of Series A Preferred Stock (such
         aggregate amount, the "Series A Redemption Amount"), then the Company
         shall pay to Participant the Bonus Amount. For the avoidance of doubt,
         any payments under this Section 14 shall be subordinate to all rights
         of payment of the Series A Preferred Stock.

(b)      Payment of the Bonus Amount. The Bonus Amount shall be payable in cash.
         Notwithstanding the foregoing, if the Designated Event is a Public
         Offering, the Company may, in its sole discretion, issue Stock or other
         securities that are exercisable for or convertible into Stock in lieu
         of cash payment of the Bonus Amount. The number of securities issued in
         payment of the Bonus Amount would be based on the price per share of
         the securities sold in the Public Offering.



                                       5




(c)      Definitions. For purposes of this Section 14, the following terms shall
         have the corresponding meanings:

         (i)    "Bonus Amount" shall mean an amount equal to the difference
         between (i) all accrued but unpaid dividends on all of the shares of
         Series A Preferred Stock outstanding immediately prior to the
         Designated Event divided by the difference between of (A) one minus
         (B) the Fully-Diluted Equity Factor and (ii) all accrued but unpaid
         dividends on all of the shares of Series A Preferred Stock outstanding
         immediately prior to the Designated Event.

         (ii)   "Certificate of Incorporation" shall mean the Amended and
         Restated Certificate of Incorporation of the Company, as filed with
         the Secretary of State of Delaware on the date hereof.

         (iii)  "Designated Event" shall mean a Change of Control (as defined
         in the Certificate of Incorporation) or a Public Offering, in each
         case in which the entire Series A Redemption Amount is paid in full in
         cash.

         (iv)   "Fully-Diluted Common Stock" shall mean all of the Stock,
         assuming conversion, exercise or exchange of all outstanding
         convertible, exercisable or exchangeable securities, options, warrants
         and similar securities or instruments into or for Stock (regardless of
         whether such convertible, exercisable or exchangeable securities,
         options, warrants or similar securities or instruments are then
         convertible, exercisable or exchangeable).

         (v)    "Fully-Diluted Equity Factor" shall mean the fraction obtained
         by dividing (i) the Participant Shares by (ii) the Fully-Diluted
         Common Stock immediately prior to the Designated Event.

         (vi)   "Participant Shares" shall mean the shares of Stock issuable
         upon exercise of this Option, subject to adjustment for stock splits,
         combinations, stock dividends, recapitalizations and similar
         transactions.

         (vii)  "Public Offering" shall mean a public offering and sale of
         equity securities by the Company pursuant to an effective Registration
         Statement under the Securities Act of 1933, as amended (the
         "Securities Act") for gross proceeds of at least $50 million.

         (viii)  "Registration Statement" means any registration statement of
         the Company filed with, or to be filed with, the Securities and
         Exchange Commission under the rules and regulations promulgated under
         the Securities Act, including the related prospectus, amendments and
         supplements to such registration statement, including post-effective
         amendments, and all exhibits and all material incorporated by
         reference in such registration statement other than a registration
         statement (and related prospectus) filed on Form S-8 or any successor
         form thereto.

         (ix)   "Series A Preferred Stock" shall mean the Series A Preferred
         Stock, par value $0.001 per share, of the Company.


                            [Signature Page Follows]


                                       6




         IN WITNESS WHEREOF, the Company has caused these presents to be
executed in its name and on its behalf, all as of the Grant Date.

TAL INTERNATIONAL GROUP, INC.



                                      By:  /s/ A. Richard Caputo, Jr.
                                         -----------------------------
                                      Name:  A. Richard Caputo, Jr.
                                      Title: Vice President

























                                       7





                                                                  EXHIBIT 10.16

                             STOCK OPTION AGREEMENT

         The Participant has been granted an Option by TAL International Group,
Inc. (the "Company") under the terms of the TAL International Group, Inc. 2004
Management Stock Plan (the "Plan"). The Option shall be subject to the following
Incentive Stock Option Terms (sometimes referred to as the "Option Terms"):

         1. Terms of Award. The following words and phrases used in the Option
Terms shall have the meanings set forth in this paragraph 1:

(a) The "Participant" is CHAND KHAN.

(b) The "Grant Date" is November 3, 2004.

(c) The number of "Covered Shares" is 250 shares of Stock.

(d) The "Exercise Price" is $1.00 per share.

Other words and phrases used in the Option Terms are defined in the Plan or
elsewhere in the Option Terms. Except where the context clearly implies or
indicates the contrary, a word, term, or phrase used in the Plan is similarly
used in the Option Terms.

         2. Incentive Stock Option. The Option is intended to constitute an
"incentive stock option" as that term is used in Code section 422. To the extent
that the aggregate fair market value (determined at the time of grant) of
Covered Shares with respect to which incentive stock options are exercisable for
the first time by the Participant during any calendar year under all plans of
the Company and its Subsidiaries exceeds $100,000, the options or portions
thereof which exceed such limit (according to the order in which they were
granted) shall be treated as nonstatutory stock options. It should be understood
that there is no assurance that the Option will, in fact, be treated as an
incentive stock option.

         3. Date of Exercise.

(a)      Subject to the limitations of the Option Terms, the Option shall become
         exercisable with respect to one-fourth (1/4) of the Covered Shares on
         the one-year anniversary of the Grant Date (the "Initial Vesting Date")
         (but only if the Date of Termination has not occurred prior to the
         Initial Vesting Date). After the Initial Vesting Date, the Option shall
         become exercisable with respect to an additional one forth (1/4) of the
         Covered Shares at the anniversary of the Initial Vesting Date (but only
         if the Date of Termination has not occurred prior to such anniversary),
         until such time as this Option is fully exercisable.

(b)      The Option may be exercised on or after the Date of Termination only as
         to that portion of the Covered Shares for which it was exercisable (or
         became exercisable) immediately prior to such date.

         4. Expiration. The Option shall not be exercisable after the Company's
close of business on the last business day that occurs prior to the Expiration
Date. The "Expiration Date" shall be the earliest to occur of:

(a)      the ten-year anniversary of the Grant Date;





(b)      if the Date of Termination occurs by reason of the Participant's death
         or Disability, the one-year anniversary of such Date of Termination;

(c)      if the Date of Termination occurs by reason of termination of the
         Participant by the employer for Cause, or by the Participant other than
         for Good Reason, such Date of Termination; or

(d)      if the Date of Termination occurs for reasons other than (i) the
         Participant's death, (ii) the Participant's Disability, (iii)
         termination of the Participant by the employer for Cause, or (iv)
         termination by the Participant other than for Good Reason, the 90-day
         anniversary of such Date of Termination.

         5. Method of Option Exercise. Subject to the Option Terms and the Plan,
the Option may be exercised in whole or in part by filing an option exercise
notice in the form attached as Exhibit A (the "Exercise Notice") with the
Secretary of the Company at its corporate headquarters prior to the Company's
close of business on the last business day that occurs prior to the Expiration
Date. Such notice shall specify the number of shares of Stock which the
Participant elects to purchase and such other representations and agreements as
may be required by the Company, and shall be accompanied by payment of the
Exercise Price. This Option may not be exercised until such time as the Plan has
been approved by the shareholders of the Company. The Option shall not be
exercisable if and to the extent the Company determines that such exercise would
violate applicable state or Federal securities laws or the rules and regulations
of any securities exchange on which the Stock is traded. If the Company makes
such a determination, it shall use all reasonable efforts to obtain compliance
with such laws, rules and regulations. In making any determination hereunder,
the Company may rely on the opinion of counsel for the Company.

         6. Payment of Exercise Price. Payment of the Exercise Price may be made
by any of the following methods or any combination thereof:

(a)      By cash or by check payable to the Company.

(b)      Except as otherwise provided by the Committee before the Option is
         exercised and provided that the Company's common stock is publicly
         traded and quoted regularly in the Wall Street Journal, by delivery of
         shares of Stock owned by the Participant having an aggregate Fair
         Market Value (valued as of the date of exercise) that is equal to the
         amount of cash that would otherwise be required. Except as otherwise
         provided by the Committee, payments made with shares of Stock shall be
         limited to shares held by the Participant for not less than six months
         prior to the payment date.

(c)      Except as otherwise provided by the Committee before the Option is
         exercised and provided that the Company's common stock is publicly
         traded and quoted regularly in the Wall Street Journal, by authorizing
         a third party to sell shares of Stock (or a sufficient portion of the
         shares) acquired upon exercise of the Option and remit to the Company a
         sufficient portion of the sale proceeds to pay the entire Exercise
         Price and any tax withholding resulting from such exercise.

         7. Change in Control. Subject to the provisions of paragraph 4.2(f) of
the Plan (relating to the adjustment of shares), and except as otherwise
provided in the Plan, upon the occurrence of a Change in Control, all of the
options shall vest in full.


                                       2




         8. Withholding. All deliveries and distributions under the Option Terms
are subject to withholding of all applicable taxes. At the election of the
Participant, and subject to such rules and limitations as may be established by
the Committee from time to time, such withholding obligations may be satisfied
through the surrender of shares of Stock which the Participant already owns, or
to which the Participant is otherwise entitled under the Plan; provided,
however, that such shares may be used to satisfy not more than the Company's
minimum statutory withholding obligation (based on minimum statutory withholding
rates for Federal and state tax purposes, including payroll taxes, that are
applicable to such supplemental taxable income).

         9. Participant's Representations and Shareholders Agreement. At the
time this Option is exercised, the Participant shall, if required by the
Company, concurrently with the exercise of all or any portion of this Option (i)
deliver to the Company his or her Investment Representation Statement in the
form attached hereto as Exhibit B; and (ii) agree to execute and become a party
to the Shareholders Agreement, as may be in effect on such date.

         10. Lock-Up Period. The Participant hereby agrees that, if so requested
by the Company or any representative of the underwriters (the "Managing
Underwriter") in connection with any registration of the offering of any
securities of the Company under the Securities Act, the Participant shall not
sell or otherwise transfer any Shares or other securities of the Company during
the 180-day period, or such other period as may be requested in writing by the
Managing Underwriter and agreed to in writing by the Company (the "Market
Standoff Period") following the effective date of a registration statement of
the Company filed under the Securities Act. Such restriction shall apply only to
the first registration statement of the Company to become effective under the
Securities Act that includes securities to be sold on behalf of the Company to
the public in an underwritten public offering under the Securities Act. The
Company may impose stop-transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such Market Standoff Period.

         11. Non-Transferability of Option. This Option may not be transferred
in any manner otherwise than by will or by the laws of descent or distribution
and may be exercised during the lifetime of the Participant only by the
Participant. The terms of the Plan and the Option Terms shall be binding upon
the executors, administrators, heirs, successors and assigns of the Participant.

         12. All Terms. The Plan is incorporated herein by reference. The Plan
and the Option Terms, including all Exhibits hereto, as applicable, constitute
all of the terms with respect to the subject matter hereof and supersede in
their entirety all prior undertakings and agreements of the Company and the
Participant with respect to the subject matter hereof. The Option Terms may be
amended by written agreement of the Company and the Participant without the
consent of any other person.

         13. Definitions. For purposes of the Option Terms, words and phrases
used in this Agreement shall be defined as follows:

(a)      Cause. If the Participant is subject to an employment agreement (or
         other similar agreement) with the Company or a Subsidiary that provides
         a definition of termination for "cause," then, for purposes of this
         Award, the term "Cause" shall have meaning set forth in such agreement.
         In the absence of such a definition, the term "Cause" shall mean any of
         the following: (1) the willful and continued failure by the Participant
         to substantially perform his duties, other than by reason of his being
         Disabled (as defined below), (2) the willful engaging by the
         Participant in conduct which is demonstrably and materially injurious
         to the Company or its Affiliates,

                                       3




         (3) conduct by the Participant that involves theft or fraud or,
         dishonesty in connection with his duties, (4) the Participant's
         violation of a non-compete or confidentiality agreement with the
         Company or an Affiliate, or (5) conviction of felony involving moral
         turpitude.

(b)      Change in Control. The term "Change in Control" means any of the
         following: (i) the closing of any merger, combination, consolidation or
         similar business transaction involving the Company in which the holders
         of Stock immediately prior to such closing are not the holders,
         directly or indirectly, of a majority of the ordinary voting securities
         of the surviving person in such transaction immediately after such
         closing, (ii) the closing of any sale or transfer by the Company of all
         or substantially all of its assets to an acquiring person in which the
         holders of Stock immediately prior to such closing are not the holders
         of a majority of the ordinary voting securities of the acquiring person
         immediately after such closings, (iii) the closing of any sale by the
         holders of Stock of an amount of Stock that equals or exceeds a
         majority of the shares of Stock immediately prior to such closing to a
         person in which the holders of the Stock immediately prior to such
         closing are not the holders of a majority of the ordinary voting
         securities of such person immediately after such closing or (iv) the
         consummation of a registered public offering of Stock by the Company
         pursuant to the Securities Act of 1933, as amended, for gross proceeds
         of at least $50 million.

(c)      Date of Termination. The "Date of Termination" shall be the first day
         occurring on or after the Grant Date on which the Participant ceases to
         be an Employee of, or Service Provider to, the Company or any
         Subsidiary, regardless of the reason for such cessation, subject to the
         following:

         (i) The Participant's cessation as an Employee and Service Provider
         shall not be deemed to occur by reason of the transfer of the
         Participant between the Company and a Subsidiary or between two
         Subsidiaries.

         (ii) The Participant's cessation as an Employee and Service Provider
         shall not be deemed to occur by reason of the Participant's being on a
         leave of absence from the Company or a Subsidiary approved by the
         Company or Subsidiary otherwise receiving the Participant's services.

         (iii) If, as a result of a sale or other transaction, the Subsidiary
         for whom Participant is employed (or to whom the Participant is
         providing services as a Service Provider) ceases to be a Subsidiary
         (and the entity for whom the Participant is employed or to whom the
         Participant is providing services is or becomes an entity that is
         separate from the Company), and the Participant is not, at the end of
         the 30-day period following the transaction, an Employee of or Service
         Provider to the Company or an entity that is then a Subsidiary, then
         the occurrence of such transaction shall be treated as the
         Participant's Date of Termination caused by the Participant being
         discharged by the entity for whom the Participant is employed or to
         whom the Participant is providing services.

         (iv) A Service Provider whose services to the Company or a Subsidiary
         are governed by a written agreement with the Service Provider will
         cease to be a Service Provider at the time the term of such written
         agreement ends (without renewal); and a Service Provider whose services
         to the Company or a Subsidiary are not governed by a written agreement
         with the Service Provider will cease to be a Service Provider on the
         date that is 90 days after the date

                                       4




         the Service Provider last provides services requested by Company or
         Subsidiary (as determined by the Committee).

(d)      Disability. If the Participant is subject to an employment agreement
         (or other similar agreement) with the Company or a Subsidiary that
         provides a definition of termination for "disability," then, for
         purposes of this Award, the term "Disability" shall have meaning set
         forth in such agreement. In the absence of such a definition, the
         Participant shall be considered to have a "Disability" during the
         period in which the Participant is unable, by reason of a medically
         determinable physical or mental impairment, to engage in any
         substantial gainful activity, which condition, in the opinion of a
         physician selected by the Committee, is expected to have a duration of
         not less than 120 days.

(e)      Employee. The term "Employee" means any person, including Officers and
         Directors, employed by the Company or any Subsidiary.

(f)      Good Reason. If the Participant is subject to an employment agreement
         (or other similar agreement) with the Company or a Subsidiary that
         provides a definition of termination for "good reason," then, for
         purposes of this Award, the term "Good Reason" shall have meaning set
         forth in such agreement. In the absence of such a definition, the term
         "Good Reason" shall mean either of (1) a reduction in the Participant's
         salary rate; or (2) a reduction in the Participant's rank which occur
         without the Participant's consent and which are not corrected by the
         Company within 10 days of delivery of a written notice to the Company
         by the Participant which identifies the circumstances which the
         Participant believes constitute a reduction in salary rate or rank.

(g)      Shareholders Agreement. The term "Shareholders Agreement" means the
         agreement governing the rights and obligations with respect to shares
         of Stock and to holders of Stock (including, without limitation, voting
         and sale rights), which agreement shall be in such form as the Company
         determines.

(h)      Stock. The term "Stock" means the Common Stock, par value $0.001 per
         share of the Company.

         14.      Designated Event Bonus.

(a)      General. If upon the consummation of a Designated Event, the holders of
         all of the outstanding shares of Series A Preferred Stock receive cash
         equal to the Liquidation Preference (as defined in the Certificate of
         Incorporation) plus accrued but unpaid dividends as of the redemption
         date on each outstanding share of Series A Preferred Stock (such
         aggregate amount, the "Series A Redemption Amount"), then the Company
         shall pay to Participant the Bonus Amount. For the avoidance of doubt,
         any payments under this Section 14 shall be subordinate to all rights
         of payment of the Series A Preferred Stock.

(b)      Payment of the Bonus Amount. The Bonus Amount shall be payable in cash.
         Notwithstanding the foregoing, if the Designated Event is a Public
         Offering, the Company may, in its sole discretion, issue Stock or other
         securities that are exercisable for or convertible into Stock in lieu
         of cash payment of the Bonus Amount. The number of securities issued in
         payment of the Bonus Amount would be based on the price per share of
         the securities sold in the Public Offering.

                                       5




(c)      Definitions. For purposes of this Section 14, the following terms shall
         have the corresponding meanings:

         (i) "Bonus Amount" shall mean an amount equal to the difference between
         (i) all accrued but unpaid dividends on all of the shares of Series A
         Preferred Stock outstanding immediately prior to the Designated Event
         divided by the difference between of (A) one minus (B) the
         Fully-Diluted Equity Factor and (ii) all accrued but unpaid dividends
         on all of the shares of Series A Preferred Stock outstanding
         immediately prior to the Designated Event.

         (ii) "Certificate of Incorporation" shall mean the Amended and Restated
         Certificate of Incorporation of the Company, as filed with the
         Secretary of State of Delaware on the date hereof.

         (iii) "Designated Event" shall mean a Change of Control (as defined in
         the Certificate of Incorporation) or a Public Offering, in each case in
         which the entire Series A Redemption Amount is paid in full in cash.

         (iv) "Fully-Diluted Common Stock" shall mean all of the Stock, assuming
         conversion, exercise or exchange of all outstanding convertible,
         exercisable or exchangeable securities, options, warrants and similar
         securities or instruments into or for Stock (regardless of whether such
         convertible, exercisable or exchangeable securities, options, warrants
         or similar securities or instruments are then convertible, exercisable
         or exchangeable).

         (v) "Fully-Diluted Equity Factor" shall mean the fraction obtained by
         dividing (i) the Participant Shares by (ii) the Fully-Diluted Common
         Stock immediately prior to the Designated Event.

         (vi) "Participant Shares" shall mean the shares of Stock issuable upon
         exercise of this Option, subject to adjustment for stock splits,
         combinations, stock dividends, recapitalizations and similar
         transactions.

         (vii) "Public Offering" shall mean a public offering and sale of equity
         securities by the Company pursuant to an effective Registration
         Statement under the Securities Act of 1933, as amended (the "Securities
         Act") for gross proceeds of at least $50 million.

         (viii) "Registration Statement" means any registration statement of the
         Company filed with, or to be filed with, the Securities and Exchange
         Commission under the rules and regulations promulgated under the
         Securities Act, including the related prospectus, amendments and
         supplements to such registration statement, including post-effective
         amendments, and all exhibits and all material incorporated by reference
         in such registration statement other than a registration statement (and
         related prospectus) filed on Form S-8 or any successor form thereto.

         (ix) "Series A Preferred Stock" shall mean the Series A Preferred
         Stock, par value $0.001 per share, of the Company.

                            [Signature Page Follows]


                                       6





         IN WITNESS WHEREOF, the Company has caused these presents to be
executed in its name and on its behalf, all as of the Grant Date.

TAL INTERNATIONAL GROUP, INC.



                                      By:  /s/ A. Richard Caputo, Jr.
                                         -----------------------------
                                      Name:  A. Richard Caputo, Jr.
                                      Title: Vice President








                                       7




7

                                                                   EXHIBIT 10.17

                             STOCK OPTION AGREEMENT

     The Participant has been granted an Option by TAL International Group, Inc.
(the "Company") under the terms of the TAL International Group, Inc. 2004
Management Stock Plan (the "Plan"). The Option shall be subject to the following
Incentive Stock Option Terms (sometimes referred to as the "Option Terms"):

     1. Terms of Award. The following words and phrases used in the Option Terms
shall have the meanings set forth in this paragraph 1:

(a) The "Participant" is FREDERICO BAPTISTA.

(b) The "Grant Date" is November 3, 2004.

(c) The number of "Covered Shares" is 400 shares of Stock.

(d) The "Exercise Price" is $1.00 per share.

Other words and phrases used in the Option Terms are defined in the Plan or
elsewhere in the Option Terms. Except where the context clearly implies or
indicates the contrary, a word, term, or phrase used in the Plan is similarly
used in the Option Terms.

     2. Incentive Stock Option. The Option is intended to constitute an
"incentive stock option" as that term is used in Code section 422. To the extent
that the aggregate fair market value (determined at the time of grant) of
Covered Shares with respect to which incentive stock options are exercisable for
the first time by the Participant during any calendar year under all plans of
the Company and its Subsidiaries exceeds $100,000, the options or portions
thereof which exceed such limit (according to the order in which they were
granted) shall be treated as nonstatutory stock options. It should be understood
that there is no assurance that the Option will, in fact, be treated as an
incentive stock option.

     3. Date of Exercise.

(a)  Subject to the limitations of the Option Terms, the Option shall become
     exercisable with respect to one-fourth (1/4) of the Covered Shares on the
     one-year anniversary of the Grant Date (the "Initial Vesting Date") (but
     only if the Date of Termination has not occurred prior to the Initial
     Vesting Date). After the Initial Vesting Date, the Option shall become
     exercisable with respect to an additional one forth (1/4) of the Covered
     Shares at the anniversary of the Initial Vesting Date (but only if the Date
     of Termination has not occurred prior to such anniversary), until such time
     as this Option is fully exercisable.

(b)  The Option may be exercised on or after the Date of Termination only as to
     that portion of the Covered Shares for which it was exercisable (or became
     exercisable) immediately prior to such date.

     4. Expiration. The Option shall not be exercisable after the Company's
close of business on the last business day that occurs prior to the Expiration
Date. The "Expiration Date" shall be the earliest to occur of:

(a)  the ten-year anniversary of the Grant Date;



(b)  if the Date of Termination occurs by reason of the Participant's death or
     Disability, the one-year anniversary of such Date of Termination;

(c)  if the Date of Termination occurs by reason of termination of the
     Participant by the employer for Cause, or by the Participant other than for
     Good Reason, such Date of Termination; or

(d)  if the Date of Termination occurs for reasons other than (i) the
     Participant's death, (ii) the Participant's Disability, (iii) termination
     of the Participant by the employer for Cause, or (iv) termination by the
     Participant other than for Good Reason, the 90-day anniversary of such Date
     of Termination.

     5. Method of Option Exercise. Subject to the Option Terms and the Plan, the
Option may be exercised in whole or in part by filing an option exercise notice
in the form attached as Exhibit A (the "Exercise Notice") with the Secretary of
the Company at its corporate headquarters prior to the Company's close of
business on the last business day that occurs prior to the Expiration Date. Such
notice shall specify the number of shares of Stock which the Participant elects
to purchase and such other representations and agreements as may be required by
the Company, and shall be accompanied by payment of the Exercise Price. This
Option may not be exercised until such time as the Plan has been approved by the
shareholders of the Company. The Option shall not be exercisable if and to the
extent the Company determines that such exercise would violate applicable state
or Federal securities laws or the rules and regulations of any securities
exchange on which the Stock is traded. If the Company makes such a
determination, it shall use all reasonable efforts to obtain compliance with
such laws, rules and regulations. In making any determination hereunder, the
Company may rely on the opinion of counsel for the Company.

     6. Payment of Exercise Price. Payment of the Exercise Price may be made by
any of the following methods or any combination thereof:

(a)  By cash or by check payable to the Company.

(b)  Except as otherwise provided by the Committee before the Option is
     exercised and provided that the Company's common stock is publicly traded
     and quoted regularly in the Wall Street Journal, by delivery of shares of
     Stock owned by the Participant having an aggregate Fair Market Value
     (valued as of the date of exercise) that is equal to the amount of cash
     that would otherwise be required. Except as otherwise provided by the
     Committee, payments made with shares of Stock shall be limited to shares
     held by the Participant for not less than six months prior to the payment
     date.

(c)  Except as otherwise provided by the Committee before the Option is
     exercised and provided that the Company's common stock is publicly traded
     and quoted regularly in the Wall Street Journal, by authorizing a third
     party to sell shares of Stock (or a sufficient portion of the shares)
     acquired upon exercise of the Option and remit to the Company a sufficient
     portion of the sale proceeds to pay the entire Exercise Price and any tax
     withholding resulting from such exercise.

     7. Change in Control. Subject to the provisions of paragraph 4.2(f) of the
Plan (relating to the adjustment of shares), and except as otherwise provided in
the Plan, upon the occurrence of a Change in Control, all of the options shall
vest in full.



                                       2



     8. Withholding. All deliveries and distributions under the Option Terms are
subject to withholding of all applicable taxes. At the election of the
Participant, and subject to such rules and limitations as may be established by
the Committee from time to time, such withholding obligations may be satisfied
through the surrender of shares of Stock which the Participant already owns, or
to which the Participant is otherwise entitled under the Plan; provided,
however, that such shares may be used to satisfy not more than the Company's
minimum statutory withholding obligation (based on minimum statutory withholding
rates for Federal and state tax purposes, including payroll taxes, that are
applicable to such supplemental taxable income).

     9. Participant's Representations and Shareholders Agreement. At the time
this Option is exercised, the Participant shall, if required by the Company,
concurrently with the exercise of all or any portion of this Option (i) deliver
to the Company his or her Investment Representation Statement in the form
attached hereto as Exhibit B; and (ii) agree to execute and become a party to
the Shareholders Agreement, as may be in effect on such date.

     10. Lock-Up Period. The Participant hereby agrees that, if so requested by
the Company or any representative of the underwriters (the "Managing
Underwriter") in connection with any registration of the offering of any
securities of the Company under the Securities Act, the Participant shall not
sell or otherwise transfer any Shares or other securities of the Company during
the 180-day period, or such other period as may be requested in writing by the
Managing Underwriter and agreed to in writing by the Company (the "Market
Standoff Period") following the effective date of a registration statement of
the Company filed under the Securities Act. Such restriction shall apply only to
the first registration statement of the Company to become effective under the
Securities Act that includes securities to be sold on behalf of the Company to
the public in an underwritten public offering under the Securities Act. The
Company may impose stop-transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such Market Standoff Period.

     11. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of the Participant only by the Participant.
The terms of the Plan and the Option Terms shall be binding upon the executors,
administrators, heirs, successors and assigns of the Participant.

     12. All Terms. The Plan is incorporated herein by reference. The Plan and
the Option Terms, including all Exhibits hereto, as applicable, constitute all
of the terms with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and the
Participant with respect to the subject matter hereof. The Option Terms may be
amended by written agreement of the Company and the Participant without the
consent of any other person.

     13. Definitions. For purposes of the Option Terms, words and phrases used
in this Agreement shall be defined as follows:

(a)  Cause. If the Participant is subject to an employment agreement (or other
     similar agreement) with the Company or a Subsidiary that provides a
     definition of termination for "cause," then, for purposes of this Award,
     the term "Cause" shall have meaning set forth in such agreement. In the
     absence of such a definition, the term "Cause" shall mean any of the
     following: (1) the willful and continued failure by the Participant to
     substantially perform his duties, other than by reason of his being
     Disabled (as defined below), (2) the willful engaging by the Participant in
     conduct which is demonstrably and materially injurious to the Company or
     its Affiliates,

                                       3


     (3) conduct by the Participant that involves theft or fraud or, dishonesty
     in connection with his duties, (4) the Participant's violation of a
     non-compete or confidentiality agreement with the Company or an Affiliate,
     or (5) conviction of felony involving moral turpitude.

(b)  Change in Control. The term "Change in Control" means any of the following:
     (i) the closing of any merger, combination, consolidation or similar
     business transaction involving the Company in which the holders of Stock
     immediately prior to such closing are not the holders, directly or
     indirectly, of a majority of the ordinary voting securities of the
     surviving person in such transaction immediately after such closing, (ii)
     the closing of any sale or transfer by the Company of all or substantially
     all of its assets to an acquiring person in which the holders of Stock
     immediately prior to such closing are not the holders of a majority of the
     ordinary voting securities of the acquiring person immediately after such
     closings, (iii) the closing of any sale by the holders of Stock of an
     amount of Stock that equals or exceeds a majority of the shares of Stock
     immediately prior to such closing to a person in which the holders of the
     Stock immediately prior to such closing are not the holders of a majority
     of the ordinary voting securities of such person immediately after such
     closing or (iv) the consummation of a registered public offering of Stock
     by the Company pursuant to the Securities Act of 1933, as amended, for
     gross proceeds of at least $50 million.

(c)  Date of Termination. The "Date of Termination" shall be the first day
     occurring on or after the Grant Date on which the Participant ceases to be
     an Employee of, or Service Provider to, the Company or any Subsidiary,
     regardless of the reason for such cessation, subject to the following:

     (i) The Participant's cessation as an Employee and Service Provider shall
     not be deemed to occur by reason of the transfer of the Participant between
     the Company and a Subsidiary or between two Subsidiaries.

     (ii) The Participant's cessation as an Employee and Service Provider shall
     not be deemed to occur by reason of the Participant's being on a leave of
     absence from the Company or a Subsidiary approved by the Company or
     Subsidiary otherwise receiving the Participant's services.

     (iii) If, as a result of a sale or other transaction, the Subsidiary for
     whom Participant is employed (or to whom the Participant is providing
     services as a Service Provider) ceases to be a Subsidiary (and the entity
     for whom the Participant is employed or to whom the Participant is
     providing services is or becomes an entity that is separate from the
     Company), and the Participant is not, at the end of the 30-day period
     following the transaction, an Employee of or Service Provider to the
     Company or an entity that is then a Subsidiary, then the occurrence of such
     transaction shall be treated as the Participant's Date of Termination
     caused by the Participant being discharged by the entity for whom the
     Participant is employed or to whom the Participant is providing services.

     (iv) A Service Provider whose services to the Company or a Subsidiary are
     governed by a written agreement with the Service Provider will cease to be
     a Service Provider at the time the term of such written agreement ends
     (without renewal); and a Service Provider whose services to the Company or
     a Subsidiary are not governed by a written agreement with the Service
     Provider will cease to be a Service Provider on the date that is 90 days
     after the date

                                       4



     the Service Provider last provides services requested by Company or
     Subsidiary (as determined by the Committee).

(d)  Disability. If the Participant is subject to an employment agreement (or
     other similar agreement) with the Company or a Subsidiary that provides a
     definition of termination for "disability," then, for purposes of this
     Award, the term "Disability" shall have meaning set forth in such
     agreement. In the absence of such a definition, the Participant shall be
     considered to have a "Disability" during the period in which the
     Participant is unable, by reason of a medically determinable physical or
     mental impairment, to engage in any substantial gainful activity, which
     condition, in the opinion of a physician selected by the Committee, is
     expected to have a duration of not less than 120 days.

(e)  Employee. The term "Employee" means any person, including Officers and
     Directors, employed by the Company or any Subsidiary.

(f)  Good Reason. If the Participant is subject to an employment agreement (or
     other similar agreement) with the Company or a Subsidiary that provides a
     definition of termination for "good reason," then, for purposes of this
     Award, the term "Good Reason" shall have meaning set forth in such
     agreement. In the absence of such a definition, the term "Good Reason"
     shall mean either of (1) a reduction in the Participant's salary rate; or
     (2) a reduction in the Participant's rank which occur without the
     Participant's consent and which are not corrected by the Company within 10
     days of delivery of a written notice to the Company by the Participant
     which identifies the circumstances which the Participant believes
     constitute a reduction in salary rate or rank.

(g)  Shareholders Agreement. The term "Shareholders Agreement" means the
     agreement governing the rights and obligations with respect to shares of
     Stock and to holders of Stock (including, without limitation, voting and
     sale rights), which agreement shall be in such form as the Company
     determines.

(h)  Stock. The term "Stock" means the Common Stock, par value $0.001 per share
     of the Company.

     14. Designated Event Bonus.

(a)  General. If upon the consummation of a Designated Event, the holders of all
     of the outstanding shares of Series A Preferred Stock receive cash equal to
     the Liquidation Preference (as defined in the Certificate of Incorporation)
     plus accrued but unpaid dividends as of the redemption date on each
     outstanding share of Series A Preferred Stock (such aggregate amount, the
     "Series A Redemption Amount"), then the Company shall pay to Participant
     the Bonus Amount. For the avoidance of doubt, any payments under this
     Section 14 shall be subordinate to all rights of payment of the Series A
     Preferred Stock.

(b)  Payment of the Bonus Amount. The Bonus Amount shall be payable in cash.
     Notwithstanding the foregoing, if the Designated Event is a Public
     Offering, the Company may, in its sole discretion, issue Stock or other
     securities that are exercisable for or convertible into Stock in lieu of
     cash payment of the Bonus Amount. The number of securities issued in
     payment of the Bonus Amount would be based on the price per share of the
     securities sold in the Public Offering.

                                       5


(c)  Definitions. For purposes of this Section 14, the following terms shall
     have the corresponding meanings:

     (i) "Bonus Amount" shall mean an amount equal to the difference between (i)
     all accrued but unpaid dividends on all of the shares of Series A Preferred
     Stock outstanding immediately prior to the Designated Event divided by the
     difference between of (A) one minus (B) the Fully-Diluted Equity Factor and
     (ii) all accrued but unpaid dividends on all of the shares of Series A
     Preferred Stock outstanding immediately prior to the Designated Event.

     (ii) "Certificate of Incorporation" shall mean the Amended and Restated
     Certificate of Incorporation of the Company, as filed with the Secretary of
     State of Delaware on the date hereof.

     (iii) "Designated Event" shall mean a Change of Control (as defined in the
     Certificate of Incorporation) or a Public Offering, in each case in which
     the entire Series A Redemption Amount is paid in full in cash.

     (iv) "Fully-Diluted Common Stock" shall mean all of the Stock, assuming
     conversion, exercise or exchange of all outstanding convertible,
     exercisable or exchangeable securities, options, warrants and similar
     securities or instruments into or for Stock (regardless of whether such
     convertible, exercisable or exchangeable securities, options, warrants or
     similar securities or instruments are then convertible, exercisable or
     exchangeable).

     (v) "Fully-Diluted Equity Factor" shall mean the fraction obtained by
     dividing (i) the Participant Shares by (ii) the Fully-Diluted Common Stock
     immediately prior to the Designated Event.

     (vi) "Participant Shares" shall mean the shares of Stock issuable upon
     exercise of this Option, subject to adjustment for stock splits,
     combinations, stock dividends, recapitalizations and similar transactions.

     (vii) "Public Offering" shall mean a public offering and sale of equity
     securities by the Company pursuant to an effective Registration Statement
     under the Securities Act of 1933, as amended (the "Securities Act") for
     gross proceeds of at least $50 million.

     (viii) "Registration Statement" means any registration statement of the
     Company filed with, or to be filed with, the Securities and Exchange
     Commission under the rules and regulations promulgated under the Securities
     Act, including the related prospectus, amendments and supplements to such
     registration statement, including post-effective amendments, and all
     exhibits and all material incorporated by reference in such registration
     statement other than a registration statement (and related prospectus)
     filed on Form S-8 or any successor form thereto.

     (ix) "Series A Preferred Stock" shall mean the Series A Preferred Stock,
     par value $0.001 per share, of the Company.

                            [Signature Page Follows]



                                       6




IN WITNESS WHEREOF, the Company has caused these presents to be executed in
           its name and on its behalf, all as of the Grant Date.


TAL INTERNATIONAL GROUP, INC.






                                      By:  /s/ A. Richard Caputo, Jr.
                                         -----------------------------
                                      Name:  A. Richard Caputo, Jr.
                                      Title: Vice President










                                       7






                                                                   EXHIBIT 10.18
                             STOCK OPTION AGREEMENT

     The Participant has been granted an Option by TAL International Group, Inc.
(the "Company") under the terms of the TAL International Group, Inc. 2004
Management Stock Plan (the "Plan"). The Option shall be subject to the following
Incentive Stock Option Terms (sometimes referred to as the "Option Terms"):

     1. Terms of Award. The following words and phrases used in the Option Terms
shall have the meanings set forth in this paragraph 1:

(a)  The "Participant" is JOHN C. BURNS.

(b)  The "Grant Date" is November 3, 2004.

(c)  The number of "Covered Shares" is 400 shares of Stock.

(d)  The "Exercise Price" is $1.00 per share.

Other words and phrases used in the Option Terms are defined in the Plan or
elsewhere in the Option Terms. Except where the context clearly implies or
indicates the contrary, a word, term, or phrase used in the Plan is similarly
used in the Option Terms.

     2. Incentive Stock Option. The Option is intended to constitute an
"incentive stock option" as that term is used in Code section 422. To the extent
that the aggregate fair market value (determined at the time of grant) of
Covered Shares with respect to which incentive stock options are exercisable for
the first time by the Participant during any calendar year under all plans of
the Company and its Subsidiaries exceeds $100,000, the options or portions
thereof which exceed such limit (according to the order in which they were
granted) shall be treated as nonstatutory stock options. It should be understood
that there is no assurance that the Option will, in fact, be treated as an
incentive stock option.

     3. Date of Exercise.

(a)  Subject to the limitations of the Option Terms, the Option shall become
     exercisable with respect to one-fourth (1/4) of the Covered Shares on the
     one-year anniversary of the Grant Date (the "Initial Vesting Date") (but
     only if the Date of Termination has not occurred prior to the Initial
     Vesting Date). After the Initial Vesting Date, the Option shall become
     exercisable with respect to an additional one forth (1/4) of the Covered
     Shares at the anniversary of the Initial Vesting Date (but only if the Date
     of Termination has not occurred prior to such anniversary), until such time
     as this Option is fully exercisable.

(b)  The Option may be exercised on or after the Date of Termination only as to
     that portion of the Covered Shares for which it was exercisable (or became
     exercisable) immediately prior to such date.

     4. Expiration. The Option shall not be exercisable after the Company's
close of business on the last business day that occurs prior to the Expiration
Date. The "Expiration Date" shall be the earliest to occur of:

(a)  the ten-year anniversary of the Grant Date;



(b)  if the Date of Termination occurs by reason of the Participant's death or
     Disability, the one-year anniversary of such Date of Termination;

(c)  if the Date of Termination occurs by reason of termination of the
     Participant by the employer for Cause, or by the Participant other than for
     Good Reason, such Date of Termination; or

(d)  if the Date of Termination occurs for reasons other than (i) the
     Participant's death, (ii) the Participant's Disability, (iii) termination
     of the Participant by the employer for Cause, or (iv) termination by the
     Participant other than for Good Reason, the 90-day anniversary of such Date
     of Termination.

     5. Method of Option Exercise. Subject to the Option Terms and the Plan, the
Option may be exercised in whole or in part by filing an option exercise notice
in the form attached as Exhibit A (the "Exercise Notice") with the Secretary of
the Company at its corporate headquarters prior to the Company's close of
business on the last business day that occurs prior to the Expiration Date. Such
notice shall specify the number of shares of Stock which the Participant elects
to purchase and such other representations and agreements as may be required by
the Company, and shall be accompanied by payment of the Exercise Price. This
Option may not be exercised until such time as the Plan has been approved by the
shareholders of the Company. The Option shall not be exercisable if and to the
extent the Company determines that such exercise would violate applicable state
or Federal securities laws or the rules and regulations of any securities
exchange on which the Stock is traded. If the Company makes such a
determination, it shall use all reasonable efforts to obtain compliance with
such laws, rules and regulations. In making any determination hereunder, the
Company may rely on the opinion of counsel for the Company.

     6. Payment of Exercise Price. Payment of the Exercise Price may be made by
any of the following methods or any combination thereof:

(a)  By cash or by check payable to the Company.

(b)  Except as otherwise provided by the Committee before the Option is
     exercised and provided that the Company's common stock is publicly traded
     and quoted regularly in the Wall Street Journal, by delivery of shares of
     Stock owned by the Participant having an aggregate Fair Market Value
     (valued as of the date of exercise) that is equal to the amount of cash
     that would otherwise be required. Except as otherwise provided by the
     Committee, payments made with shares of Stock shall be limited to shares
     held by the Participant for not less than six months prior to the payment
     date.

(c)  Except as otherwise provided by the Committee before the Option is
     exercised and provided that the Company's common stock is publicly traded
     and quoted regularly in the Wall Street Journal, by authorizing a third
     party to sell shares of Stock (or a sufficient portion of the shares)
     acquired upon exercise of the Option and remit to the Company a sufficient
     portion of the sale proceeds to pay the entire Exercise Price and any tax
     withholding resulting from such exercise.

     7. Change in Control. Subject to the provisions of paragraph 4.2(f) of the
Plan (relating to the adjustment of shares), and except as otherwise provided in
the Plan, upon the occurrence of a Change in Control, all of the options shall
vest in full.

                                       2


     8. Withholding. All deliveries and distributions under the Option Terms are
subject to withholding of all applicable taxes. At the election of the
Participant, and subject to such rules and limitations as may be established by
the Committee from time to time, such withholding obligations may be satisfied
through the surrender of shares of Stock which the Participant already owns, or
to which the Participant is otherwise entitled under the Plan; provided,
however, that such shares may be used to satisfy not more than the Company's
minimum statutory withholding obligation (based on minimum statutory withholding
rates for Federal and state tax purposes, including payroll taxes, that are
applicable to such supplemental taxable income).

     9. Participant's Representations and Shareholders Agreement. At the time
this Option is exercised, the Participant shall, if required by the Company,
concurrently with the exercise of all or any portion of this Option (i) deliver
to the Company his or her Investment Representation Statement in the form
attached hereto as Exhibit B; and (ii) agree to execute and become a party to
the Shareholders Agreement, as may be in effect on such date.

     10. Lock-Up Period. The Participant hereby agrees that, if so requested by
the Company or any representative of the underwriters (the "Managing
Underwriter") in connection with any registration of the offering of any
securities of the Company under the Securities Act, the Participant shall not
sell or otherwise transfer any Shares or other securities of the Company during
the 180-day period, or such other period as may be requested in writing by the
Managing Underwriter and agreed to in writing by the Company (the "Market
Standoff Period") following the effective date of a registration statement of
the Company filed under the Securities Act. Such restriction shall apply only to
the first registration statement of the Company to become effective under the
Securities Act that includes securities to be sold on behalf of the Company to
the public in an underwritten public offering under the Securities Act. The
Company may impose stop-transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such Market Standoff Period.

     11. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of the Participant only by the Participant.
The terms of the Plan and the Option Terms shall be binding upon the executors,
administrators, heirs, successors and assigns of the Participant.

     12. All Terms. The Plan is incorporated herein by reference. The Plan and
the Option Terms, including all Exhibits hereto, as applicable, constitute all
of the terms with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and the
Participant with respect to the subject matter hereof. The Option Terms may be
amended by written agreement of the Company and the Participant without the
consent of any other person.

     13. Definitions. For purposes of the Option Terms, words and phrases used
in this Agreement shall be defined as follows:

(a)  Cause. If the Participant is subject to an employment agreement (or other
     similar agreement) with the Company or a Subsidiary that provides a
     definition of termination for "cause," then, for purposes of this Award,
     the term "Cause" shall have meaning set forth in such agreement. In the
     absence of such a definition, the term "Cause" shall mean any of the
     following: (1) the willful and continued failure by the Participant to
     substantially perform his duties, other than by reason of his being
     Disabled (as defined below), (2) the willful engaging by the Participant in
     conduct which is demonstrably and materially injurious to the Company or
     its Affiliates,


                                       3


     (3) conduct by the Participant that involves theft or fraud or, dishonesty
     in connection with his duties, (4) the Participant's violation of a
     non-compete or confidentiality agreement with the Company or an Affiliate,
     or (5) conviction of felony involving moral turpitude.

(b)  Change in Control. The term "Change in Control" means any of the following:
     (i) the closing of any merger, combination, consolidation or similar
     business transaction involving the Company in which the holders of Stock
     immediately prior to such closing are not the holders, directly or
     indirectly, of a majority of the ordinary voting securities of the
     surviving person in such transaction immediately after such closing, (ii)
     the closing of any sale or transfer by the Company of all or substantially
     all of its assets to an acquiring person in which the holders of Stock
     immediately prior to such closing are not the holders of a majority of the
     ordinary voting securities of the acquiring person immediately after such
     closings, (iii) the closing of any sale by the holders of Stock of an
     amount of Stock that equals or exceeds a majority of the shares of Stock
     immediately prior to such closing to a person in which the holders of the
     Stock immediately prior to such closing are not the holders of a majority
     of the ordinary voting securities of such person immediately after such
     closing or (iv) the consummation of a registered public offering of Stock
     by the Company pursuant to the Securities Act of 1933, as amended, for
     gross proceeds of at least $50 million.

(c)  Date of Termination. The "Date of Termination" shall be the first day
     occurring on or after the Grant Date on which the Participant ceases to be
     an Employee of, or Service Provider to, the Company or any Subsidiary,
     regardless of the reason for such cessation, subject to the following:

     (i) The Participant's cessation as an Employee and Service Provider shall
     not be deemed to occur by reason of the transfer of the Participant between
     the Company and a Subsidiary or between two Subsidiaries.

     (ii) The Participant's cessation as an Employee and Service Provider shall
     not be deemed to occur by reason of the Participant's being on a leave of
     absence from the Company or a Subsidiary approved by the Company or
     Subsidiary otherwise receiving the Participant's services.

     (iii) If, as a result of a sale or other transaction, the Subsidiary for
     whom Participant is employed (or to whom the Participant is providing
     services as a Service Provider) ceases to be a Subsidiary (and the entity
     for whom the Participant is employed or to whom the Participant is
     providing services is or becomes an entity that is separate from the
     Company), and the Participant is not, at the end of the 30-day period
     following the transaction, an Employee of or Service Provider to the
     Company or an entity that is then a Subsidiary, then the occurrence of such
     transaction shall be treated as the Participant's Date of Termination
     caused by the Participant being discharged by the entity for whom the
     Participant is employed or to whom the Participant is providing services.

     (iv) A Service Provider whose services to the Company or a Subsidiary are
     governed by a written agreement with the Service Provider will cease to be
     a Service Provider at the time the term of such written agreement ends
     (without renewal); and a Service Provider whose services to the Company or
     a Subsidiary are not governed by a written agreement with the Service
     Provider will cease to be a Service Provider on the date that is 90 days
     after the date


                                       4


     the Service Provider last provides services requested by Company or
     Subsidiary (as determined by the Committee).

(d)  Disability. If the Participant is subject to an employment agreement (or
     other similar agreement) with the Company or a Subsidiary that provides a
     definition of termination for "disability," then, for purposes of this
     Award, the term "Disability" shall have meaning set forth in such
     agreement. In the absence of such a definition, the Participant shall be
     considered to have a "Disability" during the period in which the
     Participant is unable, by reason of a medically determinable physical or
     mental impairment, to engage in any substantial gainful activity, which
     condition, in the opinion of a physician selected by the Committee, is
     expected to have a duration of not less than 120 days.

(e)  Employee. The term "Employee" means any person, including Officers and
     Directors, employed by the Company or any Subsidiary.

(f)  Good Reason. If the Participant is subject to an employment agreement (or
     other similar agreement) with the Company or a Subsidiary that provides a
     definition of termination for "good reason," then, for purposes of this
     Award, the term "Good Reason" shall have meaning set forth in such
     agreement. In the absence of such a definition, the term "Good Reason"
     shall mean either of (1) a reduction in the Participant's salary rate; or
     (2) a reduction in the Participant's rank which occur without the
     Participant's consent and which are not corrected by the Company within 10
     days of delivery of a written notice to the Company by the Participant
     which identifies the circumstances which the Participant believes
     constitute a reduction in salary rate or rank.

(g)  Shareholders Agreement. The term "Shareholders Agreement" means the
     agreement governing the rights and obligations with respect to shares of
     Stock and to holders of Stock (including, without limitation, voting and
     sale rights), which agreement shall be in such form as the Company
     determines.

(h)  Stock. The term "Stock" means the Common Stock, par value $0.001 per share
     of the Company.

     14. Designated Event Bonus.

(a)  General. If upon the consummation of a Designated Event, the holders of all
     of the outstanding shares of Series A Preferred Stock receive cash equal to
     the Liquidation Preference (as defined in the Certificate of Incorporation)
     plus accrued but unpaid dividends as of the redemption date on each
     outstanding share of Series A Preferred Stock (such aggregate amount, the
     "Series A Redemption Amount"), then the Company shall pay to Participant
     the Bonus Amount. For the avoidance of doubt, any payments under this
     Section 14 shall be subordinate to all rights of payment of the Series A
     Preferred Stock.

(b)  Payment of the Bonus Amount. The Bonus Amount shall be payable in cash.
     Notwithstanding the foregoing, if the Designated Event is a Public
     Offering, the Company may, in its sole discretion, issue Stock or other
     securities that are exercisable for or convertible into Stock in lieu of
     cash payment of the Bonus Amount. The number of securities issued in
     payment of the Bonus Amount would be based on the price per share of the
     securities sold in the Public Offering.

                                       5


(c)  Definitions. For purposes of this Section 14, the following terms shall
     have the corresponding meanings:

     (i) "Bonus Amount" shall mean an amount equal to the difference between (i)
     all accrued but unpaid dividends on all of the shares of Series A Preferred
     Stock outstanding immediately prior to the Designated Event divided by the
     difference between of (A) one minus (B) the Fully-Diluted Equity Factor and
     (ii) all accrued but unpaid dividends on all of the shares of Series A
     Preferred Stock outstanding immediately prior to the Designated Event.

     (ii) "Certificate of Incorporation" shall mean the Amended and Restated
     Certificate of Incorporation of the Company, as filed with the Secretary of
     State of Delaware on the date hereof.

     (iii) "Designated Event" shall mean a Change of Control (as defined in the
     Certificate of Incorporation) or a Public Offering, in each case in which
     the entire Series A Redemption Amount is paid in full in cash.

     (iv) "Fully-Diluted Common Stock" shall mean all of the Stock, assuming
     conversion, exercise or exchange of all outstanding convertible,
     exercisable or exchangeable securities, options, warrants and similar
     securities or instruments into or for Stock (regardless of whether such
     convertible, exercisable or exchangeable securities, options, warrants or
     similar securities or instruments are then convertible, exercisable or
     exchangeable).

     (v) "Fully-Diluted Equity Factor" shall mean the fraction obtained by
     dividing (i) the Participant Shares by (ii) the Fully-Diluted Common Stock
     immediately prior to the Designated Event.

     (vi) "Participant Shares" shall mean the shares of Stock issuable upon
     exercise of this Option, subject to adjustment for stock splits,
     combinations, stock dividends, recapitalizations and similar transactions.

     (vii) "Public Offering" shall mean a public offering and sale of equity
     securities by the Company pursuant to an effective Registration Statement
     under the Securities Act of 1933, as amended (the "Securities Act") for
     gross proceeds of at least $50 million.

     (viii) "Registration Statement" means any registration statement of the
     Company filed with, or to be filed with, the Securities and Exchange
     Commission under the rules and regulations promulgated under the Securities
     Act, including the related prospectus, amendments and supplements to such
     registration statement, including post-effective amendments, and all
     exhibits and all material incorporated by reference in such registration
     statement other than a registration statement (and related prospectus)
     filed on Form S-8 or any successor form thereto.

     (ix) "Series A Preferred Stock" shall mean the Series A Preferred Stock,
     par value $0.001 per share, of the Company.

                            [Signature Page Follows]


                                       6



         IN WITNESS WHEREOF, the Company has caused these presents to be
executed in its name and on its behalf, all as of the Grant Date.

TAL INTERNATIONAL GROUP, INC.



                                      By:  /s/ A. Richard Caputo, Jr.
                                         -----------------------------
                                      Name:  A. Richard Caputo, Jr.
                                      Title: Vice President









                                       7





                                                                   EXHIBIT 10.19


                             STOCK OPTION AGREEMENT

         The Participant has been granted an Option by TAL International Group,
Inc. (the "Company") under the terms of the TAL International Group, Inc. 2004
Management Stock Plan (the "Plan"). The Option shall be subject to the following
Incentive Stock Option Terms (sometimes referred to as the "Option Terms"):

         1.   Terms of Award. The following words and phrases used in the Option
Terms shall have the meanings set forth in this paragraph 1:

(a)      The "Participant" is BERND SCHACKIER.

(b)      The "Grant Date" is November 3, 2004.

(c)      The number of "Covered Shares" is 250 shares of Stock.

(d)      The "Exercise Price" is $1.00 per share.

Other words and phrases used in the Option Terms are defined in the Plan or
elsewhere in the Option Terms. Except where the context clearly implies or
indicates the contrary, a word, term, or phrase used in the Plan is similarly
used in the Option Terms.

         2.   Incentive Stock Option. The Option is intended to constitute an
"incentive stock option" as that term is used in Code section 422. To the extent
that the aggregate fair market value (determined at the time of grant) of
Covered Shares with respect to which incentive stock options are exercisable for
the first time by the Participant during any calendar year under all plans of
the Company and its Subsidiaries exceeds $100,000, the options or portions
thereof which exceed such limit (according to the order in which they were
granted) shall be treated as nonstatutory stock options. It should be understood
that there is no assurance that the Option will, in fact, be treated as an
incentive stock option.

         3.   Date of Exercise.

(a)      Subject to the limitations of the Option Terms, the Option shall become
         exercisable with respect to one-fourth (1/4) of the Covered Shares on
         the one-year anniversary of the Grant Date (the "Initial Vesting Date")
         (but only if the Date of Termination has not occurred prior to the
         Initial Vesting Date). After the Initial Vesting Date, the Option shall
         become exercisable with respect to an additional one forth (1/4) of the
         Covered Shares at the anniversary of the Initial Vesting Date (but only
         if the Date of Termination has not occurred prior to such anniversary),
         until such time as this Option is fully exercisable.

(b)      The Option may be exercised on or after the Date of Termination only as
         to that portion of the Covered Shares for which it was exercisable (or
         became exercisable) immediately prior to such date.

         4.   Expiration. The Option shall not be exercisable after the
Company's close of business on the last business day that occurs prior to the
Expiration Date. The "Expiration Date" shall be the earliest to occur of:

(a)      the ten-year anniversary of the Grant Date;





(b)      if the Date of Termination occurs by reason of the Participant's death
         or Disability, the one-year anniversary of such Date of Termination;

(c)      if the Date of Termination occurs by reason of termination of the
         Participant by the employer for Cause, or by the Participant other than
         for Good Reason, such Date of Termination; or

(d)      if the Date of Termination occurs for reasons other than (i) the
         Participant's death, (ii) the Participant's Disability, (iii)
         termination of the Participant by the employer for Cause, or (iv)
         termination by the Participant other than for Good Reason, the 90-day
         anniversary of such Date of Termination.

         5.   Method of Option Exercise. Subject to the Option Terms and the
Plan, the Option may be exercised in whole or in part by filing an option
exercise notice in the form attached as Exhibit A (the "Exercise Notice") with
the Secretary of the Company at its corporate headquarters prior to the
Company's close of business on the last business day that occurs prior to the
Expiration Date. Such notice shall specify the number of shares of Stock which
the Participant elects to purchase and such other representations and agreements
as may be required by the Company, and shall be accompanied by payment of the
Exercise Price. This Option may not be exercised until such time as the Plan has
been approved by the shareholders of the Company. The Option shall not be
exercisable if and to the extent the Company determines that such exercise would
violate applicable state or Federal securities laws or the rules and regulations
of any securities exchange on which the Stock is traded. If the Company makes
such a determination, it shall use all reasonable efforts to obtain compliance
with such laws, rules and regulations. In making any determination hereunder,
the Company may rely on the opinion of counsel for the Company.

         6.   Payment of Exercise Price. Payment of the Exercise Price may be
made by any of the following methods or any combination thereof:

(a)      By cash or by check payable to the Company.

(b)      Except as otherwise provided by the Committee before the Option is
         exercised and provided that the Company's common stock is publicly
         traded and quoted regularly in the Wall Street Journal, by delivery of
         shares of Stock owned by the Participant having an aggregate Fair
         Market Value (valued as of the date of exercise) that is equal to the
         amount of cash that would otherwise be required. Except as otherwise
         provided by the Committee, payments made with shares of Stock shall be
         limited to shares held by the Participant for not less than six months
         prior to the payment date.

(c)      Except as otherwise provided by the Committee before the Option is
         exercised and provided that the Company's common stock is publicly
         traded and quoted regularly in the Wall Street Journal, by authorizing
         a third party to sell shares of Stock (or a sufficient portion of the
         shares) acquired upon exercise of the Option and remit to the Company a
         sufficient portion of the sale proceeds to pay the entire Exercise
         Price and any tax withholding resulting from such exercise.

         7.   Change in Control. Subject to the provisions of paragraph 4.2(f)
of the Plan (relating to the adjustment of shares), and except as otherwise
provided in the Plan, upon the occurrence of a Change in Control, all of the
options shall vest in full.


                                       2




         8.   Withholding. All deliveries and distributions under the Option
Terms are subject to withholding of all applicable taxes. At the election of the
Participant, and subject to such rules and limitations as may be established by
the Committee from time to time, such withholding obligations may be satisfied
through the surrender of shares of Stock which the Participant already owns, or
to which the Participant is otherwise entitled under the Plan; provided,
however, that such shares may be used to satisfy not more than the Company's
minimum statutory withholding obligation (based on minimum statutory withholding
rates for Federal and state tax purposes, including payroll taxes, that are
applicable to such supplemental taxable income).

         9.   Participant's Representations and Shareholders Agreement. At the
time this Option is exercised, the Participant shall, if required by the
Company, concurrently with the exercise of all or any portion of this Option (i)
deliver to the Company his or her Investment Representation Statement in the
form attached hereto as Exhibit B; and (ii) agree to execute and become a party
to the Shareholders Agreement, as may be in effect on such date.

         10.  Lock-Up Period. The Participant hereby agrees that, if so
requested by the Company or any representative of the underwriters (the
"Managing Underwriter") in connection with any registration of the offering of
any securities of the Company under the Securities Act, the Participant shall
not sell or otherwise transfer any Shares or other securities of the Company
during the 180-day period, or such other period as may be requested in writing
by the Managing Underwriter and agreed to in writing by the Company (the "Market
Standoff Period") following the effective date of a registration statement of
the Company filed under the Securities Act. Such restriction shall apply only to
the first registration statement of the Company to become effective under the
Securities Act that includes securities to be sold on behalf of the Company to
the public in an underwritten public offering under the Securities Act. The
Company may impose stop-transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such Market Standoff Period.

         11.  Non-Transferability of Option. This Option may not be transferred
in any manner otherwise than by will or by the laws of descent or distribution
and may be exercised during the lifetime of the Participant only by the
Participant. The terms of the Plan and the Option Terms shall be binding upon
the executors, administrators, heirs, successors and assigns of the Participant.

         12.  All Terms. The Plan is incorporated herein by reference. The Plan
and the Option Terms, including all Exhibits hereto, as applicable, constitute
all of the terms with respect to the subject matter hereof and supersede in
their entirety all prior undertakings and agreements of the Company and the
Participant with respect to the subject matter hereof. The Option Terms may be
amended by written agreement of the Company and the Participant without the
consent of any other person.

         13.  Definitions. For purposes of the Option Terms, words and phrases
used in this Agreement shall be defined as follows:

(a)      Cause. If the Participant is subject to an employment agreement (or
         other similar agreement) with the Company or a Subsidiary that
         provides a definition of termination for "cause," then, for purposes
         of this Award, the term "Cause" shall have meaning set forth in such
         agreement. In the absence of such a definition, the term "Cause" shall
         mean any of the following: (1) the willful and continued failure by
         the Participant to substantially perform his duties, other than by
         reason of his being Disabled (as defined below), (2) the willful
         engaging by the Participant in conduct which is demonstrably and
         materially injurious to the Company or its Affiliates,



                                       3




         (3) conduct by the Participant that involves theft or fraud or,
         dishonesty in connection with his duties, (4) the Participant's
         violation of a non-compete or confidentiality agreement with the
         Company or an Affiliate, or (5) conviction of felony involving moral
         turpitude.

(b)      Change in Control. The term "Change in Control" means any of the
         following: (i) the closing of any merger, combination, consolidation
         or similar business transaction involving the Company in which the
         holders of Stock immediately prior to such closing are not the
         holders, directly or indirectly, of a majority of the ordinary voting
         securities of the surviving person in such transaction immediately
         after such closing, (ii) the closing of any sale or transfer by the
         Company of all or substantially all of its assets to an acquiring
         person in which the holders of Stock immediately prior to such closing
         are not the holders of a majority of the ordinary voting securities of
         the acquiring person immediately after such closings, (iii) the
         closing of any sale by the holders of Stock of an amount of Stock that
         equals or exceeds a majority of the shares of Stock immediately prior
         to such closing to a person in which the holders of the Stock
         immediately prior to such closing are not the holders of a majority of
         the ordinary voting securities of such person immediately after such
         closing or (iv) the consummation of a registered public offering of
         Stock by the Company pursuant to the Securities Act of 1933, as
         amended, for gross proceeds of at least $50 million.

(c)      Date of Termination. The "Date of Termination" shall be the first day
         occurring on or after the Grant Date on which the Participant ceases to
         be an Employee of, or Service Provider to, the Company or any
         Subsidiary, regardless of the reason for such cessation, subject to the
         following:

         (i)       The Participant's cessation as an Employee and Service
         Provider shall not be deemed to occur by reason of the transfer of the
         Participant between the Company and a Subsidiary or between two
         Subsidiaries.

         (ii)      The Participant's cessation as an Employee and Service
         Provider shall not be deemed to occur by reason of the Participant's
         being on a leave of absence from the Company or a Subsidiary approved
         by the Company or Subsidiary otherwise receiving the Participant's
         services.

         (iii)     If, as a result of a sale or other transaction, the
         Subsidiary for whom Participant is employed (or to whom the
         Participant is providing services as a Service Provider) ceases to be
         a Subsidiary (and the entity for whom the Participant is employed or
         to whom the Participant is providing services is or becomes an entity
         that is separate from the Company), and the Participant is not, at the
         end of the 30-day period following the transaction, an Employee of or
         Service Provider to the Company or an entity that is then a
         Subsidiary, then the occurrence of such transaction shall be treated
         as the Participant's Date of Termination caused by the Participant
         being discharged by the entity for whom the Participant is employed or
         to whom the Participant is providing services.

         (iv)      A Service Provider whose services to the Company or a
         Subsidiary are governed by a written agreement with the Service
         Provider will cease to be a Service Provider at the time the term of
         such written agreement ends (without renewal); and a Service Provider
         whose services to the Company or a Subsidiary are not governed by a
         written agreement with the Service Provider will cease to be a Service
         Provider on the date that is 90 days after the date



                                       4




         the Service Provider last provides services requested by Company or
         Subsidiary (as determined by the Committee).

(d)      Disability. If the Participant is subject to an employment agreement
         (or other similar agreement) with the Company or a Subsidiary that
         provides a definition of termination for "disability," then, for
         purposes of this Award, the term "Disability" shall have meaning set
         forth in such agreement. In the absence of such a definition, the
         Participant shall be considered to have a "Disability" during the
         period in which the Participant is unable, by reason of a medically
         determinable physical or mental impairment, to engage in any
         substantial gainful activity, which condition, in the opinion of a
         physician selected by the Committee, is expected to have a duration of
         not less than 120 days.

(e)      Employee. The term "Employee" means any person, including Officers and
         Directors, employed by the Company or any Subsidiary.

(f)      Good Reason. If the Participant is subject to an employment agreement
         (or other similar agreement) with the Company or a Subsidiary that
         provides a definition of termination for "good reason," then, for
         purposes of this Award, the term "Good Reason" shall have meaning set
         forth in such agreement. In the absence of such a definition, the term
         "Good Reason" shall mean either of (1) a reduction in the
         Participant's salary rate; or (2) a reduction in the Participant's
         rank which occur without the Participant's consent and which are not
         corrected by the Company within 10 days of delivery of a written
         notice to the Company by the Participant which identifies the
         circumstances which the Participant believes constitute a reduction in
         salary rate or rank.

(g)      Shareholders Agreement. The term "Shareholders Agreement" means the
         agreement governing the rights and obligations with respect to shares
         of Stock and to holders of Stock (including, without limitation, voting
         and sale rights), which agreement shall be in such form as the Company
         determines.

(h)      Stock.  The term "Stock" means the Common Stock, par value $0.001 per
         share of the Company.


         14.  Designated Event Bonus.
              -----------------------

(a)      General. If upon the consummation of a Designated Event, the holders of
         all of the outstanding shares of Series A Preferred Stock receive cash
         equal to the Liquidation Preference (as defined in the Certificate of
         Incorporation) plus accrued but unpaid dividends as of the redemption
         date on each outstanding share of Series A Preferred Stock (such
         aggregate amount, the "Series A Redemption Amount"), then the Company
         shall pay to Participant the Bonus Amount. For the avoidance of doubt,
         any payments under this Section 14 shall be subordinate to all rights
         of payment of the Series A Preferred Stock.

(b)      Payment of the Bonus Amount. The Bonus Amount shall be payable in cash.
         Notwithstanding the foregoing, if the Designated Event is a Public
         Offering, the Company may, in its sole discretion, issue Stock or other
         securities that are exercisable for or convertible into Stock in lieu
         of cash payment of the Bonus Amount. The number of securities issued in
         payment of the Bonus Amount would be based on the price per share of
         the securities sold in the Public Offering.




                                       5



(c)      Definitions. For purposes of this Section 14, the following terms shall
         have the corresponding meanings:

          (i) "Bonus Amount" shall mean an amount equal to the difference
          between (i) all accrued but unpaid dividends on all of the shares of
          Series A Preferred Stock outstanding immediately prior to the
          Designated Event divided by the difference between of (A) one minus
          (B) the Fully-Diluted Equity Factor and (ii) all accrued but unpaid
          dividends on all of the shares of Series A Preferred Stock outstanding
          immediately prior to the Designated Event.

         (ii)      "Certificate of Incorporation" shall mean the Amended and
         Restated Certificate of Incorporation of the Company, as filed with
         the Secretary of State of Delaware on the date hereof.

         (iii)     "Designated Event" shall mean a Change of Control (as defined
         in the Certificate of Incorporation) or a Public Offering, in each
         case in which the entire Series A Redemption Amount is paid in full in
         cash.

         (iv)      "Fully-Diluted Common Stock" shall mean all of the Stock,
         assuming conversion, exercise or exchange of all outstanding
         convertible, exercisable or exchangeable securities, options, warrants
         and similar securities or instruments into or for Stock (regardless of
         whether such convertible, exercisable or exchangeable securities,
         options, warrants or similar securities or instruments are then
         convertible, exercisable or exchangeable).

         (v)       "Fully-Diluted Equity Factor" shall mean the fraction
          obtained by dividing (i) the Participant Shares by (ii) the
          Fully-Diluted Common Stock immediately prior to the Designated Event.

         (vi)      "Participant Shares" shall mean the shares of Stock issuable
          upon exercise of this Option, subject to adjustment for stock splits,
          combinations, stock dividends, recapitalizations and similar
          transactions.

         (vii)     "Public Offering" shall mean a public offering and sale of
         equity securities by the Company pursuant to an effective Registration
         Statement under the Securities Act of 1933, as amended (the
         "Securities Act") for gross proceeds of at least $50 million.

         (viii)    "Registration Statement" means any registration statement of
         the Company filed with, or to be filed with, the Securities and
         Exchange Commission under the rules and regulations promulgated under
         the Securities Act, including the related prospectus, amendments and
         supplements to such registration statement, including post-effective
         amendments, and all exhibits and all material incorporated by
         reference in such registration statement other than a registration
         statement (and related prospectus) filed on Form S-8 or any successor
         form thereto.

         (ix)      "Series A Preferred Stock" shall mean the Series A Preferred
         Stock, par value $0.001 per share, of the Company.


                            [Signature Page Follows]


                                       6



         IN WITNESS WHEREOF, the Company has caused these presents to be
executed in its name and on its behalf, all as of the Grant Date.

TAL INTERNATIONAL GROUP, INC.




                                      By:  /s/ A. Richard Caputo, Jr.
                                         -----------------------------
                                      Name:  A. Richard Caputo, Jr.
                                      Title: Vice President












                                       7
















                                                                   EXHIBIT 10.20

                             STOCK OPTION AGREEMENT

     The Participant has been granted an Option by TAL International Group, Inc.
(the "Company") under the terms of the TAL International Group, Inc. 2004
Management Stock Plan (the "Plan"). The Option shall be subject to the following
Incentive Stock Option Terms (sometimes referred to as the "Option Terms"):

     1. Terms of Award. The following words and phrases used in the Option Terms
shall have the meanings set forth in this paragraph 1:

(a)  The "Participant" is JOHN PEARSON.

(b)  The "Grant Date" is November 3, 2004.

(c)  The number of "Covered Shares" is 250 shares of Stock.

(d)  The "Exercise Price" is $1.00 per share.

Other words and phrases used in the Option Terms are defined in the Plan or
elsewhere in the Option Terms. Except where the context clearly implies or
indicates the contrary, a word, term, or phrase used in the Plan is similarly
used in the Option Terms.

     2. Incentive Stock Option. The Option is intended to constitute an
"incentive stock option" as that term is used in Code section 422. To the extent
that the aggregate fair market value (determined at the time of grant) of
Covered Shares with respect to which incentive stock options are exercisable for
the first time by the Participant during any calendar year under all plans of
the Company and its Subsidiaries exceeds $100,000, the options or portions
thereof which exceed such limit (according to the order in which they were
granted) shall be treated as nonstatutory stock options. It should be understood
that there is no assurance that the Option will, in fact, be treated as an
incentive stock option.

     3. Date of Exercise.

(a)  Subject to the limitations of the Option Terms, the Option shall become
     exercisable with respect to one-fourth (1/4) of the Covered Shares on the
     one-year anniversary of the Grant Date (the "Initial Vesting Date") (but
     only if the Date of Termination has not occurred prior to the Initial
     Vesting Date). After the Initial Vesting Date, the Option shall become
     exercisable with respect to an additional one forth (1/4) of the Covered
     Shares at the anniversary of the Initial Vesting Date (but only if the Date
     of Termination has not occurred prior to such anniversary), until such time
     as this Option is fully exercisable.

(b)  The Option may be exercised on or after the Date of Termination only as to
     that portion of the Covered Shares for which it was exercisable (or became
     exercisable) immediately prior to such date.

     4. Expiration. The Option shall not be exercisable after the Company's
close of business on the last business day that occurs prior to the Expiration
Date. The "Expiration Date" shall be the earliest to occur of:

(a)  the ten-year anniversary of the Grant Date;




(b)  if the Date of Termination occurs by reason of the Participant's death or
     Disability, the one-year anniversary of such Date of Termination;

(c)  if the Date of Termination occurs by reason of termination of the
     Participant by the employer for Cause, or by the Participant other than for
     Good Reason, such Date of Termination; or

(d)  if the Date of Termination occurs for reasons other than (i) the
     Participant's death, (ii) the Participant's Disability, (iii) termination
     of the Participant by the employer for Cause, or (iv) termination by the
     Participant other than for Good Reason, the 90-day anniversary of such Date
     of Termination.

     5. Method of Option Exercise. Subject to the Option Terms and the Plan, the
Option may be exercised in whole or in part by filing an option exercise notice
in the form attached as Exhibit A (the "Exercise Notice") with the Secretary of
the Company at its corporate headquarters prior to the Company's close of
business on the last business day that occurs prior to the Expiration Date. Such
notice shall specify the number of shares of Stock which the Participant elects
to purchase and such other representations and agreements as may be required by
the Company, and shall be accompanied by payment of the Exercise Price. This
Option may not be exercised until such time as the Plan has been approved by the
shareholders of the Company. The Option shall not be exercisable if and to the
extent the Company determines that such exercise would violate applicable state
or Federal securities laws or the rules and regulations of any securities
exchange on which the Stock is traded. If the Company makes such a
determination, it shall use all reasonable efforts to obtain compliance with
such laws, rules and regulations. In making any determination hereunder, the
Company may rely on the opinion of counsel for the Company.

     6. Payment of Exercise Price. Payment of the Exercise Price may be made by
any of the following methods or any combination thereof:

(a)  By cash or by check payable to the Company.

(b)  Except as otherwise provided by the Committee before the Option is
     exercised and provided that the Company's common stock is publicly traded
     and quoted regularly in the Wall Street Journal, by delivery of shares of
     Stock owned by the Participant having an aggregate Fair Market Value
     (valued as of the date of exercise) that is equal to the amount of cash
     that would otherwise be required. Except as otherwise provided by the
     Committee, payments made with shares of Stock shall be limited to shares
     held by the Participant for not less than six months prior to the payment
     date.

(c)  Except as otherwise provided by the Committee before the Option is
     exercised and provided that the Company's common stock is publicly traded
     and quoted regularly in the Wall Street Journal, by authorizing a third
     party to sell shares of Stock (or a sufficient portion of the shares)
     acquired upon exercise of the Option and remit to the Company a sufficient
     portion of the sale proceeds to pay the entire Exercise Price and any tax
     withholding resulting from such exercise.

     7. Change in Control. Subject to the provisions of paragraph 4.2(f) of the
Plan (relating to the adjustment of shares), and except as otherwise provided in
the Plan, upon the occurrence of a Change in Control, all of the options shall
vest in full.



                                       2



     8. Withholding. All deliveries and distributions under the Option Terms are
subject to withholding of all applicable taxes. At the election of the
Participant, and subject to such rules and limitations as may be established by
the Committee from time to time, such withholding obligations may be satisfied
through the surrender of shares of Stock which the Participant already owns, or
to which the Participant is otherwise entitled under the Plan; provided,
however, that such shares may be used to satisfy not more than the Company's
minimum statutory withholding obligation (based on minimum statutory withholding
rates for Federal and state tax purposes, including payroll taxes, that are
applicable to such supplemental taxable income).

     9. Participant's Representations and Shareholders Agreement. At the time
this Option is exercised, the Participant shall, if required by the Company,
concurrently with the exercise of all or any portion of this Option (i) deliver
to the Company his or her Investment Representation Statement in the form
attached hereto as Exhibit B; and (ii) agree to execute and become a party to
the Shareholders Agreement, as may be in effect on such date.

     10. Lock-Up Period. The Participant hereby agrees that, if so requested by
the Company or any representative of the underwriters (the "Managing
Underwriter") in connection with any registration of the offering of any
securities of the Company under the Securities Act, the Participant shall not
sell or otherwise transfer any Shares or other securities of the Company during
the 180-day period, or such other period as may be requested in writing by the
Managing Underwriter and agreed to in writing by the Company (the "Market
Standoff Period") following the effective date of a registration statement of
the Company filed under the Securities Act. Such restriction shall apply only to
the first registration statement of the Company to become effective under the
Securities Act that includes securities to be sold on behalf of the Company to
the public in an underwritten public offering under the Securities Act. The
Company may impose stop-transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such Market Standoff Period.

     11. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of the Participant only by the Participant.
The terms of the Plan and the Option Terms shall be binding upon the executors,
administrators, heirs, successors and assigns of the Participant.

     12. All Terms. The Plan is incorporated herein by reference. The Plan and
the Option Terms, including all Exhibits hereto, as applicable, constitute all
of the terms with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and the
Participant with respect to the subject matter hereof. The Option Terms may be
amended by written agreement of the Company and the Participant without the
consent of any other person.

     13. Definitions. For purposes of the Option Terms, words and phrases used
in this Agreement shall be defined as follows:

(a)  Cause. If the Participant is subject to an employment agreement (or other
     similar agreement) with the Company or a Subsidiary that provides a
     definition of termination for "cause," then, for purposes of this Award,
     the term "Cause" shall have meaning set forth in such agreement. In the
     absence of such a definition, the term "Cause" shall mean any of the
     following: (1) the willful and continued failure by the Participant to
     substantially perform his duties, other than by reason of his being
     Disabled (as defined below), (2) the willful engaging by the Participant in
     conduct which is demonstrably and materially injurious to the Company or
     its Affiliates,


                                       3


     (3) conduct by the Participant that involves theft or fraud or, dishonesty
     in connection with his duties, (4) the Participant's violation of a
     non-compete or confidentiality agreement with the Company or an Affiliate,
     or (5) conviction of felony involving moral turpitude.

(b)  Change in Control. The term "Change in Control" means any of the following:
     (i) the closing of any merger, combination, consolidation or similar
     business transaction involving the Company in which the holders of Stock
     immediately prior to such closing are not the holders, directly or
     indirectly, of a majority of the ordinary voting securities of the
     surviving person in such transaction immediately after such closing, (ii)
     the closing of any sale or transfer by the Company of all or substantially
     all of its assets to an acquiring person in which the holders of Stock
     immediately prior to such closing are not the holders of a majority of the
     ordinary voting securities of the acquiring person immediately after such
     closings, (iii) the closing of any sale by the holders of Stock of an
     amount of Stock that equals or exceeds a majority of the shares of Stock
     immediately prior to such closing to a person in which the holders of the
     Stock immediately prior to such closing are not the holders of a majority
     of the ordinary voting securities of such person immediately after such
     closing or (iv) the consummation of a registered public offering of Stock
     by the Company pursuant to the Securities Act of 1933, as amended, for
     gross proceeds of at least $50 million.

(c)  Date of Termination. The "Date of Termination" shall be the first day
     occurring on or after the Grant Date on which the Participant ceases to be
     an Employee of, or Service Provider to, the Company or any Subsidiary,
     regardless of the reason for such cessation, subject to the following:

     (i) The Participant's cessation as an Employee and Service Provider shall
     not be deemed to occur by reason of the transfer of the Participant between
     the Company and a Subsidiary or between two Subsidiaries.

     (ii) The Participant's cessation as an Employee and Service Provider shall
     not be deemed to occur by reason of the Participant's being on a leave of
     absence from the Company or a Subsidiary approved by the Company or
     Subsidiary otherwise receiving the Participant's services.

     (iii) If, as a result of a sale or other transaction, the Subsidiary for
     whom Participant is employed (or to whom the Participant is providing
     services as a Service Provider) ceases to be a Subsidiary (and the entity
     for whom the Participant is employed or to whom the Participant is
     providing services is or becomes an entity that is separate from the
     Company), and the Participant is not, at the end of the 30-day period
     following the transaction, an Employee of or Service Provider to the
     Company or an entity that is then a Subsidiary, then the occurrence of such
     transaction shall be treated as the Participant's Date of Termination
     caused by the Participant being discharged by the entity for whom the
     Participant is employed or to whom the Participant is providing services.

     (iv) A Service Provider whose services to the Company or a Subsidiary are
     governed by a written agreement with the Service Provider will cease to be
     a Service Provider at the time the term of such written agreement ends
     (without renewal); and a Service Provider whose services to the Company or
     a Subsidiary are not governed by a written agreement with the Service
     Provider will cease to be a Service Provider on the date that is 90 days
     after the date


                                       4


     the Service Provider last provides services requested by Company or
     Subsidiary (as determined by the Committee).

(d)  Disability. If the Participant is subject to an employment agreement (or
     other similar agreement) with the Company or a Subsidiary that provides a
     definition of termination for "disability," then, for purposes of this
     Award, the term "Disability" shall have meaning set forth in such
     agreement. In the absence of such a definition, the Participant shall be
     considered to have a "Disability" during the period in which the
     Participant is unable, by reason of a medically determinable physical or
     mental impairment, to engage in any substantial gainful activity, which
     condition, in the opinion of a physician selected by the Committee, is
     expected to have a duration of not less than 120 days.

(e)  Employee. The term "Employee" means any person, including Officers and
     Directors, employed by the Company or any Subsidiary.

(f)  Good Reason. If the Participant is subject to an employment agreement (or
     other similar agreement) with the Company or a Subsidiary that provides a
     definition of termination for "good reason," then, for purposes of this
     Award, the term "Good Reason" shall have meaning set forth in such
     agreement. In the absence of such a definition, the term "Good Reason"
     shall mean either of (1) a reduction in the Participant's salary rate; or
     (2) a reduction in the Participant's rank which occur without the
     Participant's consent and which are not corrected by the Company within 10
     days of delivery of a written notice to the Company by the Participant
     which identifies the circumstances which the Participant believes
     constitute a reduction in salary rate or rank.

(g)  Shareholders Agreement. The term "Shareholders Agreement" means the
     agreement governing the rights and obligations with respect to shares of
     Stock and to holders of Stock (including, without limitation, voting and
     sale rights), which agreement shall be in such form as the Company
     determines.

(h)  Stock. The term "Stock" means the Common Stock, par value $0.001 per share
     of the Company.

     14. Designated Event Bonus.

(a)  General. If upon the consummation of a Designated Event, the holders of all
     of the outstanding shares of Series A Preferred Stock receive cash equal to
     the Liquidation Preference (as defined in the Certificate of Incorporation)
     plus accrued but unpaid dividends as of the redemption date on each
     outstanding share of Series A Preferred Stock (such aggregate amount, the
     "Series A Redemption Amount"), then the Company shall pay to Participant
     the Bonus Amount. For the avoidance of doubt, any payments under this
     Section 14 shall be subordinate to all rights of payment of the Series A
     Preferred Stock.

(b)  Payment of the Bonus Amount. The Bonus Amount shall be payable in cash.
     Notwithstanding the foregoing, if the Designated Event is a Public
     Offering, the Company may, in its sole discretion, issue Stock or other
     securities that are exercisable for or convertible into Stock in lieu of
     cash payment of the Bonus Amount. The number of securities issued in
     payment of the Bonus Amount would be based on the price per share of the
     securities sold in the Public Offering.

                                       5


(c)  Definitions. For purposes of this Section 14, the following terms shall
     have the corresponding meanings:

     (i) "Bonus Amount" shall mean an amount equal to the difference between (i)
     all accrued but unpaid dividends on all of the shares of Series A Preferred
     Stock outstanding immediately prior to the Designated Event divided by the
     difference between of (A) one minus (B) the Fully-Diluted Equity Factor and
     (ii) all accrued but unpaid dividends on all of the shares of Series A
     Preferred Stock outstanding immediately prior to the Designated Event.

     (ii) "Certificate of Incorporation" shall mean the Amended and Restated
     Certificate of Incorporation of the Company, as filed with the Secretary of
     State of Delaware on the date hereof.

     (iii) "Designated Event" shall mean a Change of Control (as defined in the
     Certificate of Incorporation) or a Public Offering, in each case in which
     the entire Series A Redemption Amount is paid in full in cash.

     (iv) "Fully-Diluted Common Stock" shall mean all of the Stock, assuming
     conversion, exercise or exchange of all outstanding convertible,
     exercisable or exchangeable securities, options, warrants and similar
     securities or instruments into or for Stock (regardless of whether such
     convertible, exercisable or exchangeable securities, options, warrants or
     similar securities or instruments are then convertible, exercisable or
     exchangeable).

     (v) "Fully-Diluted Equity Factor" shall mean the fraction obtained by
     dividing (i) the Participant Shares by (ii) the Fully-Diluted Common Stock
     immediately prior to the Designated Event.

     (vi) "Participant Shares" shall mean the shares of Stock issuable upon
     exercise of this Option, subject to adjustment for stock splits,
     combinations, stock dividends, recapitalizations and similar transactions.

     (vii) "Public Offering" shall mean a public offering and sale of equity
     securities by the Company pursuant to an effective Registration Statement
     under the Securities Act of 1933, as amended (the "Securities Act") for
     gross proceeds of at least $50 million.

     (viii) "Registration Statement" means any registration statement of the
     Company filed with, or to be filed with, the Securities and Exchange
     Commission under the rules and regulations promulgated under the Securities
     Act, including the related prospectus, amendments and supplements to such
     registration statement, including post-effective amendments, and all
     exhibits and all material incorporated by reference in such registration
     statement other than a registration statement (and related prospectus)
     filed on Form S-8 or any successor form thereto.

     (ix) "Series A Preferred Stock" shall mean the Series A Preferred Stock,
     par value $0.001 per share, of the Company.

                            [Signature Page Follows]


                                       6



         IN WITNESS WHEREOF, the Company has caused these presents to be
executed in its name and on its behalf, all as of the Grant Date.


TAL INTERNATIONAL GROUP, INC.




                                      By:  /s/ A. Richard Caputo, Jr.
                                         -----------------------------
                                      Name:  A. Richard Caputo, Jr.
                                      Title: Vice President









                                       7










                                                                   EXHIBIT 10.21


                             STOCK OPTION AGREEMENT

         The Participant has been granted an Option by TAL International Group,
Inc. (the "Company") under the terms of the TAL International Group, Inc. 2004
Management Stock Plan (the "Plan"). The Option shall be subject to the following
Incentive Stock Option Terms (sometimes referred to as the "Option Terms"):

         1.   Terms of Award. The following words and phrases used in the Option
Terms shall have the meanings set forth in this paragraph 1:

(a)      The "Participant" is ADRIAN DUNNER.

(b)      The "Grant Date" is November 3, 2004.

(c)      The number of "Covered Shares" is 400 shares of Stock.

(d)      The "Exercise Price" is $ 1.00 per share.

Other words and phrases used in the Option Terms are defined in the Plan or
elsewhere in the Option Terms. Except where the context clearly implies or
indicates the contrary, a word, term, or phrase used in the Plan is similarly
used in the Option Terms.

         2.   Incentive Stock Option. The Option is intended to constitute an
"incentive stock option" as that term is used in Code section 422. To the extent
that the aggregate fair market value (determined at the time of grant) of
Covered Shares with respect to which incentive stock options are exercisable for
the first time by the Participant during any calendar year under all plans of
the Company and its Subsidiaries exceeds $100,000, the options or portions
thereof which exceed such limit (according to the order in which they were
granted) shall be treated as nonstatutory stock options. It should be understood
that there is no assurance that the Option will, in fact, be treated as an
incentive stock option.

         3.   Date of Exercise.

(a)      Subject to the limitations of the Option Terms, the Option shall become
         exercisable with respect to one-fourth (1/4) of the Covered Shares on
         the one-year anniversary of the Grant Date (the "Initial Vesting Date")
         (but only if the Date of Termination has not occurred prior to the
         Initial Vesting Date). After the Initial Vesting Date, the Option shall
         become exercisable with respect to an additional one forth (1/4) of the
         Covered Shares at the anniversary of the Initial Vesting Date (but only
         if the Date of Termination has not occurred prior to such anniversary),
         until such time as this Option is fully exercisable.

(b)      The Option may be exercised on or after the Date of Termination only as
         to that portion of the Covered Shares for which it was exercisable (or
         became exercisable) immediately prior to such date.

         4.   Expiration. The Option shall not be exercisable after the
Company's close of business on the last business day that occurs prior to the
Expiration Date. The "Expiration Date" shall be the earliest to occur of:

(a)      the ten-year anniversary of the Grant Date;






(b)      if the Date of Termination occurs by reason of the Participant's death
         or Disability, the one-year anniversary of such Date of Termination;

(c)      if the Date of Termination occurs by reason of termination of the
         Participant by the employer for Cause, or by the Participant other than
         for Good Reason, such Date of Termination; or

(d)      if the Date of Termination occurs for reasons other than (i) the
         Participant's death, (ii) the Participant's Disability, (iii)
         termination of the Participant by the employer for Cause, or (iv)
         termination by the Participant other than for Good Reason, the 90-day
         anniversary of such Date of Termination.

         5.   Method of Option Exercise. Subject to the Option Terms and the
Plan, the Option may be exercised in whole or in part by filing an option
exercise notice in the form attached as Exhibit A (the "Exercise Notice") with
the Secretary of the Company at its corporate headquarters prior to the
Company's close of business on the last business day that occurs prior to the
Expiration Date. Such notice shall specify the number of shares of Stock which
the Participant elects to purchase and such other representations and agreements
as may be required by the Company, and shall be accompanied by payment of the
Exercise Price. This Option may not be exercised until such time as the Plan has
been approved by the shareholders of the Company. The Option shall not be
exercisable if and to the extent the Company determines that such exercise would
violate applicable state or Federal securities laws or the rules and regulations
of any securities exchange on which the Stock is traded. If the Company makes
such a determination, it shall use all reasonable efforts to obtain compliance
with such laws, rules and regulations. In making any determination hereunder,
the Company may rely on the opinion of counsel for the Company.

         6.   Payment of Exercise Price. Payment of the Exercise Price may be
made by any of the following methods or any combination thereof:

(a)      By cash or by check payable to the Company.

(b)      Except as otherwise provided by the Committee before the Option is
         exercised and provided that the Company's common stock is publicly
         traded and quoted regularly in the Wall Street Journal, by delivery of
         shares of Stock owned by the Participant having an aggregate Fair
         Market Value (valued as of the date of exercise) that is equal to the
         amount of cash that would otherwise be required. Except as otherwise
         provided by the Committee, payments made with shares of Stock shall be
         limited to shares held by the Participant for not less than six months
         prior to the payment date.

(c)      Except as otherwise provided by the Committee before the Option is
         exercised and provided that the Company's common stock is publicly
         traded and quoted regularly in the Wall Street Journal, by authorizing
         a third party to sell shares of Stock (or a sufficient portion of the
         shares) acquired upon exercise of the Option and remit to the Company a
         sufficient portion of the sale proceeds to pay the entire Exercise
         Price and any tax withholding resulting from such exercise.

         7.   Change in Control. Subject to the provisions of paragraph 4.2(f)
of the Plan (relating to the adjustment of shares), and except as otherwise
provided in the Plan, upon the occurrence of a Change in Control, all of the
options shall vest in full.



                                       2




         8.   Withholding. All deliveries and distributions under the Option
Terms are subject to withholding of all applicable taxes. At the election of the
Participant, and subject to such rules and limitations as may be established by
the Committee from time to time, such withholding obligations may be satisfied
through the surrender of shares of Stock which the Participant already owns, or
to which the Participant is otherwise entitled under the Plan; provided,
however, that such shares may be used to satisfy not more than the Company's
minimum statutory withholding obligation (based on minimum statutory withholding
rates for Federal and state tax purposes, including payroll taxes, that are
applicable to such supplemental taxable income).

         9.   Participant's Representations and Shareholders Agreement. At the
time this Option is exercised, the Participant shall, if required by the
Company, concurrently with the exercise of all or any portion of this Option (i)
deliver to the Company his or her Investment Representation Statement in the
form attached hereto as Exhibit B; and (ii) agree to execute and become a party
to the Shareholders Agreement, as may be in effect on such date.

         10.  Lock-Up Period. The Participant hereby agrees that, if so
requested by the Company or any representative of the underwriters (the
"Managing Underwriter") in connection with any registration of the offering of
any securities of the Company under the Securities Act, the Participant shall
not sell or otherwise transfer any Shares or other securities of the Company
during the 180-day period, or such other period as may be requested in writing
by the Managing Underwriter and agreed to in writing by the Company (the "Market
Standoff Period") following the effective date of a registration statement of
the Company filed under the Securities Act. Such restriction shall apply only to
the first registration statement of the Company to become effective under the
Securities Act that includes securities to be sold on behalf of the Company to
the public in an underwritten public offering under the Securities Act. The
Company may impose stop-transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such Market Standoff Period.

         11.  Non-Transferability of Option. This Option may not be transferred
in any manner otherwise than by will or by the laws of descent or distribution
and may be exercised during the lifetime of the Participant only by the
Participant. The terms of the Plan and the Option Terms shall be binding upon
the executors, administrators, heirs, successors and assigns of the Participant.

         12.  All Terms. The Plan is incorporated herein by reference. The Plan
and the Option Terms, including all Exhibits hereto, as applicable, constitute
all of the terms with respect to the subject matter hereof and supersede in
their entirety all prior undertakings and agreements of the Company and the
Participant with respect to the subject matter hereof. The Option Terms may be
amended by written agreement of the Company and the Participant without the
consent of any other person.

         13.  Definitions. For purposes of the Option Terms, words and phrases
used in this Agreement shall be defined as follows:

(a)      Cause. If the Participant is subject to an employment agreement (or
         other similar agreement) with the Company or a Subsidiary that
         provides a definition of termination for "cause," then, for purposes
         of this Award, the term "Cause" shall have meaning set forth in such
         agreement. In the absence of such a definition, the term "Cause" shall
         mean any of the following: (1) the willful and continued failure by
         the Participant to substantially perform his duties, other than by
         reason of his being Disabled (as defined below), (2) the willful
         engaging by the Participant in conduct which is demonstrably and
         materially injurious to the Company or its Affiliates,



                                       3




         (3) conduct by the Participant that involves theft or fraud or,
         dishonesty in connection with his duties, (4) the Participant's
         violation of a non-compete or confidentiality agreement with the
         Company or an Affiliate, or (5) conviction of felony involving moral
         turpitude.

(b)      Change in Control. The term "Change in Control" means any of the
         following: (i) the closing of any merger, combination, consolidation
         or similar business transaction involving the Company in which the
         holders of Stock immediately prior to such closing are not the
         holders, directly or indirectly, of a majority of the ordinary voting
         securities of the surviving person in such transaction immediately
         after such closing, (ii) the closing of any sale or transfer by the
         Company of all or substantially all of its assets to an acquiring
         person in which the holders of Stock immediately prior to such closing
         are not the holders of a majority of the ordinary voting securities of
         the acquiring person immediately after such closings, (iii) the
         closing of any sale by the holders of Stock of an amount of Stock that
         equals or exceeds a majority of the shares of Stock immediately prior
         to such closing to a person in which the holders of the Stock
         immediately prior to such closing are not the holders of a majority of
         the ordinary voting securities of such person immediately after such
         closing or (iv) the consummation of a registered public offering of
         Stock by the Company pursuant to the Securities Act of 1933, as
         amended, for gross proceeds of at least $50 million.

(c)      Date of Termination. The "Date of Termination" shall be the first day
         occurring on or after the Grant Date on which the Participant ceases to
         be an Employee of, or Service Provider to, the Company or any
         Subsidiary, regardless of the reason for such cessation, subject to the
         following:

         (i)     The Participant's cessation as an Employee and Service Provider
         shall not be deemed to occur by reason of the transfer of the
         Participant between the Company and a Subsidiary or between two
         Subsidiaries.

         (ii)    The Participant's cessation as an Employee and Service Provider
         shall not be deemed to occur by reason of the Participant's being on a
         leave of absence from the Company or a Subsidiary approved by the
         Company or Subsidiary otherwise receiving the Participant's services.

         (iii)   If, as a result of a sale or other transaction, the Subsidiary
         for whom Participant is employed (or to whom the Participant is
         providing services as a Service Provider) ceases to be a Subsidiary
         (and the entity for whom the Participant is employed or to whom the
         Participant is providing services is or becomes an entity that is
         separate from the Company), and the Participant is not, at the end of
         the 30-day period following the transaction, an Employee of or Service
         Provider to the Company or an entity that is then a Subsidiary, then
         the occurrence of such transaction shall be treated as the
         Participant's Date of Termination caused by the Participant being
         discharged by the entity for whom the Participant is employed or to
         whom the Participant is providing services.

         (iv)    A Service Provider whose services to the Company or a
         Subsidiary are governed by a written agreement with the Service
         Provider will cease to be a Service Provider at the time the term of
         such written agreement ends (without renewal); and a Service Provider
         whose services to the Company or a Subsidiary are not governed by a
         written agreement with the Service Provider will cease to be a Service
         Provider on the date that is 90 days after the date




                                       4



         the Service Provider last provides services requested by Company or
         Subsidiary (as determined by the Committee).

(d)      Disability. If the Participant is subject to an employment agreement
         (or other similar agreement) with the Company or a Subsidiary that
         provides a definition of termination for "disability," then, for
         purposes of this Award, the term "Disability" shall have meaning set
         forth in such agreement. In the absence of such a definition, the
         Participant shall be considered to have a "Disability" during the
         period in which the Participant is unable, by reason of a medically
         determinable physical or mental impairment, to engage in any
         substantial gainful activity, which condition, in the opinion of a
         physician selected by the Committee, is expected to have a duration of
         not less than 120 days.

(e)      Employee. The term "Employee" means any person, including Officers and
         Directors, employed by the Company or any Subsidiary.

(f)      Good Reason. If the Participant is subject to an employment agreement
         (or other similar agreement) with the Company or a Subsidiary that
         provides a definition of termination for "good reason," then, for
         purposes of this Award, the term "Good Reason" shall have meaning set
         forth in such agreement. In the absence of such a definition, the term
         "Good Reason" shall mean either of (1) a reduction in the
         Participant's salary rate; or (2) a reduction in the Participant's
         rank which occur without the Participant's consent and which are not
         corrected by the Company within 10 days of delivery of a written
         notice to the Company by the Participant which identifies the
         circumstances which the Participant believes constitute a reduction in
         salary rate or rank.

(g)      Shareholders Agreement. The term "Shareholders Agreement" means the
         agreement governing the rights and obligations with respect to shares
         of Stock and to holders of Stock (including, without limitation, voting
         and sale rights), which agreement shall be in such form as the Company
         determines.

(h)      Stock.  The term "Stock" means the Common Stock, par value $0.001 per
         share of the Company.


         14.     Designated Event Bonus.
                 -----------------------

(a)      General. If upon the consummation of a Designated Event, the holders of
         all of the outstanding shares of Series A Preferred Stock receive cash
         equal to the Liquidation Preference (as defined in the Certificate of
         Incorporation) plus accrued but unpaid dividends as of the redemption
         date on each outstanding share of Series A Preferred Stock (such
         aggregate amount, the "Series A Redemption Amount"), then the Company
         shall pay to Participant the Bonus Amount. For the avoidance of doubt,
         any payments under this Section 14 shall be subordinate to all rights
         of payment of the Series A Preferred Stock.

(b)      Payment of the Bonus Amount. The Bonus Amount shall be payable in cash.
         Notwithstanding the foregoing, if the Designated Event is a Public
         Offering, the Company may, in its sole discretion, issue Stock or other
         securities that are exercisable for or convertible into Stock in lieu
         of cash payment of the Bonus Amount. The number of securities issued in
         payment of the Bonus Amount would be based on the price per share of
         the securities sold in the Public Offering.



                                       5



(c)      Definitions. For purposes of this Section 14, the following terms shall
         have the corresponding meanings:

         (i)     "Bonus Amount" shall mean an amount equal to the difference
         between (i) all accrued but unpaid dividends on all of the shares of
         Series A Preferred Stock outstanding immediately prior to the
         Designated Event divided by the difference between of (A) one minus
         (B) the Fully-Diluted Equity Factor and (ii) all accrued but unpaid
         dividends on all of the shares of Series A Preferred Stock outstanding
         immediately prior to the Designated Event.

         (ii)    "Certificate of Incorporation" shall mean the Amended and
         Restated Certificate of Incorporation of the Company, as filed with
         the Secretary of State of Delaware on the date hereof.

         (iii)   "Designated Event" shall mean a Change of Control (as defined
         in the Certificate of Incorporation) or a Public Offering, in each
         case in which the entire Series A Redemption Amount is paid in full in
         cash.

         (iv)    "Fully-Diluted Common Stock" shall mean all of the Stock,
         assuming conversion, exercise or exchange of all outstanding
         convertible, exercisable or exchangeable securities, options, warrants
         and similar securities or instruments into or for Stock (regardless of
         whether such convertible, exercisable or exchangeable securities,
         options, warrants or similar securities or instruments are then
         convertible, exercisable or exchangeable).

         (v)     "Fully-Diluted Equity Factor" shall mean the fraction obtained
         by dividing (i) the Participant Shares by (ii) the Fully-Diluted
         Common Stock immediately prior to the Designated Event.

         (vi)    "Participant Shares" shall mean the shares of Stock issuable
         upon exercise of this Option, subject to adjustment for stock splits,
         combinations, stock dividends, recapitalizations and similar
         transactions.

         (vii)   "Public Offering" shall mean a public offering and sale of
         equity securities by the Company pursuant to an effective Registration
         Statement under the Securities Act of 1933, as amended (the
         "Securities Act") for gross proceeds of at least $50 million.

         (viii)  "Registration Statement" means any registration statement of
         the Company filed with, or to be filed with, the Securities and
         Exchange Commission under the rules and regulations promulgated under
         the Securities Act, including the related prospectus, amendments and
         supplements to such registration statement, including post-effective
         amendments, and all exhibits and all material incorporated by
         reference in such registration statement other than a registration
         statement (and related prospectus) filed on Form S-8 or any successor
         form thereto.

         (ix)    "Series A Preferred Stock" shall mean the Series A Preferred
         Stock, par value $0.001 per share, of the Company.


                            [Signature Page Follows]


                                       6



IN WITNESS WHEREOF, the Company has caused these presents to be executed in its
                          name and on its behalf, all as of the Grant Date.





TAL INTERNATIONAL GROUP, INC.




                                      By:  /s/ A. Richard Caputo, Jr.
                                         -----------------------------
                                      Name:  A. Richard Caputo, Jr.
                                      Title: Vice President




























                                       7







                                                                    EXHIBIT 21.1


         Name                                               Jurisdiction
         ----                                               ------------

         TAL International Container Corporation            Delaware
         Trans Ocean Ltd.                                   Delaware
         Trans Ocean Container Corporation                  Delaware
         Trans Ocean Regional Corporate Holdings            Delaware
         Spacewise Inc.                                     Delaware
         Transamerica Leasing Pty. Ltd.                     Australia
         Transamerica Leasing do Brasil Ltda.               Brazil
         Transamerica Leasing GmbH                          Germany
         Transamerica Leasing (HK) Ltd.                     Hong Kong
         Greybox Logistics Services Inc.                    Delaware
         Intermodal Equipment Inc.                          Delaware
         Transamerica Leasing N.V.                          Belgium
         Transamerica Leasing SRL                           Italy
         Greybox Services Limited                           United Kingdom
         Transamerica Leasing Limited                       United Kingdom
         ICS Terminals (UK) Limited                         United Kingdom






























Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the reference to our firm under the caption "Experts" and to the use of our reports dated June 24, 2005, in the Registration Statement (Form S-1) and related Prospectus of TAL International Group, Inc. for the registration of shares of its common stock.

Stamford, Connecticut
June 27, 2005

/s/ Ernst & Young LLP