Exhibit 4.7.3


 




 





 


CANADIAN
GUARANTEE AND COLLATERAL AGREEMENT


 


made by


 


MATTHEWS
EQUIPMENT LIMITED


 


and


 


WESTERN
SHUT-DOWN (1995) LIMITED


 


and certain of
its Subsidiaries,


 


in favour of


 


DEUTSCHE BANK
AG, CANADA BRANCH,

as Canadian Agent and Canadian Collateral Agent


 


Dated as of
December 21, 2005


 




 





 

















 


TABLE OF
CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 1 DEFINED TERMS

  	
   

  	
  1

  
	
  1.1

  	
  Definitions

  	
   

  	
  1

  
	
  1.2

  	
  Other Definitional Provisions

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2 GUARANTEE

  	
   

  	
  9

  
	
  2.1

  	
  Guarantee

  	
   

  	
  9

  
	
  2.2

  	
  Right of Contribution

  	
   

  	
  10

  
	
  2.3

  	
  No Subrogation

  	
   

  	
  11

  
	
  2.4

  	
  Amendments, etc. with respect to the Obligations

  	
   

  	
  11

  
	
  2.5

  	
  Guarantee Absolute and Unconditional

  	
   

  	
  12

  
	
  2.6

  	
  Reinstatement

  	
   

  	
  13

  
	
  2.7

  	
  Payments

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3 GRANT OF SECURITY INTEREST

  	
   

  	
  14

  
	
  3.1

  	
  Grant

  	
   

  	
  14

  
	
  3.2

  	
  Pledged Collateral

  	
   

  	
  15

  
	
  3.3

  	
  Certain Limited Exceptions

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4 REPRESENTATIONS AND WARRANTIES

  	
   

  	
  18

  
	
  4.1

  	
  Representations and Warranties of Each Guarantor

  	
   

  	
  18

  
	
  4.2

  	
  Representations and Warranties of Each Grantor

  	
   

  	
  18

  
	
  4.3

  	
  Representations and Warranties of Each Pledgor

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5 COVENANTS

  	
   

  	
  22

  
	
  5.1

  	
  Covenants of Each Guarantor

  	
   

  	
  22

  
	
  5.2

  	
  Covenants of Each Grantor

  	
   

  	
  22

  
	
  5.3

  	
  Covenants of Each Pledgor

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6 REMEDIAL PROVISIONS

  	
   

  	
  28

  
	
  6.1

  	
  Certain Matters Relating to Accounts

  	
   

  	
  28

  
	
  6.2

  	
  Communications with Obligors; Grantors Remain Liable

  	
   

  	
  29

  
	
  6.3

  	
  Pledged Stock

  	
   

  	
  30

  
	
  6.4

  	
  Proceeds to be Turned Over To Canadian Collateral
  Agent

  	
   

  	
  31

  
	
  6.5

  	
  Application of Proceeds

  	
   

  	
  31

  
	
  6.6

  	
  PPSA and Other Remedies

  	
   

  	
  31

  
	
  6.7

  	
  Registration Rights

  	
   

  	
  33

  
	
  6.8

  	
  Waiver; Deficiency

  	
   

  	
  34

  
	
  6.9

  	
  Certain Undertakings with Respect to Special Purpose
  Subsidiaries

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7 THE CANADIAN COLLATERAL AGENT

  	
   

  	
  36

  
	
  7.1

  	
  Canadian Collateral Agent’s Appointment as
  Attorney-in-Fact, etc

  	
   

  	
  36

  
	
  7.2

  	
  Duty of Canadian Collateral Agent

  	
   

  	
  38

  
	
  7.3

  	
  Financing Statements

  	
   

  	
  38

  
	
  7.4

  	
  Authority of Canadian Collateral Agent

  	
   

  	
  38

  
	
  7.5

  	
  Right of Inspection

  	
   

  	
  39

  



 


i

















 


	
  SECTION 8 NON-LENDER SECURED PARTIES

  	
   

  	
  39

  
	
  8.1

  	
  Rights to Collateral

  	
   

  	
  39

  
	
  8.2

  	
  Appointment of Agent

  	
   

  	
  40

  
	
  8.3

  	
  Waiver of Claims

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9 MISCELLANEOUS

  	
   

  	
  41

  
	
  9.1

  	
  Amendments in Writing

  	
   

  	
  41

  
	
  9.2

  	
  Notices

  	
   

  	
  41

  
	
  9.3

  	
  No Waiver by Course of Conduct; Cumulative Remedies

  	
   

  	
  42

  
	
  9.4

  	
  Enforcement Expenses; Indemnification

  	
   

  	
  42

  
	
  9.5

  	
  Successors and Assigns

  	
   

  	
  43

  
	
  9.6

  	
  Set-Off

  	
   

  	
  43

  
	
  9.7

  	
  Counterparts

  	
   

  	
  43

  
	
  9.8

  	
  Severability

  	
   

  	
  43

  
	
  9.9

  	
  Section Headings

  	
   

  	
  44

  
	
  9.10

  	
  Integration

  	
   

  	
  44

  
	
  9.11

  	
  GOVERNING LAW

  	
   

  	
  44

  
	
  9.12

  	
  Submission To Jurisdiction; Waivers

  	
   

  	
  44

  
	
  9.13

  	
  Acknowledgments

  	
   

  	
  45

  
	
  9.14

  	
  WAIVER OF JURY TRIAL

  	
   

  	
  45

  
	
  9.15

  	
  Additional Granting Parties

  	
   

  	
  45

  
	
  9.16

  	
  Releases

  	
   

  	
  46

  
	
  9.17

  	
  Judgment Currency

  	
   

  	
  46

  
	
  9.18

  	
  Attachment of Security Interest

  	
   

  	
  47

  
	
  9.19

  	
  Copy of Agreement; Verification Statement

  	
   

  	
  47

  
	
  9.20

  	
  Amalgamation

  	
   

  	
  47

  
	
  9.21

  	
  Joint and Several Liability

  	
   

  	
  48

  
	
  9.22

  	
  Language

  	
   

  	
  48

  



 


SCHEDULE 1 - NOTICE ADDRESSES OF GUARANTORS


 


SCHEDULE 2 - PLEDGED SECURITIES


 


SCHEDULE 3 - PERFECTION MATTERS


 


SCHEDULE 4 - LOCATIONS


 


SCHEDULE 5 - INTELLECTUAL PROPERTY


 


SCHEDULE 6 - CONTRACTS


 


Annex 1 to Canadian Guarantee and Collateral
Agreement          ACKNOWLEDGEMENT AND
CONSENT*


 


Annex 2 to Canadian Guarantee and Collateral
Agreement          ASSUMPTION
AGREEMENT


 


ii

















 


CANADIAN GUARANTEE AND
COLLATERAL AGREEMENT


 


CANADIAN GUARANTEE AND COLLATERAL
AGREEMENT, dated as of December 21, 2005, made by MATTHEWS EQUIPMENT LIMITED,
an Ontario corporation (“Matthews”), WESTERN SHUT-DOWN (1995) Limited,
an Ontario corporation (“Western”) and certain of its Subsidiaries in
favour of Deutsche Bank AG, Canadian Branch (“DBCB”), as Canadian
collateral agent (in such capacity, the “Canadian Collateral Agent”) and
Canadian administrative agent (in such capacity, the “Canadian Agent”)
for the banks and other financial institutions (collectively, the “Lenders”;
individually, a “Lender”) from time to time parties to the Credit
Agreement described below.


 


W I T N E S S E T H:


 


WHEREAS, pursuant to that certain Credit
Agreement, dated as of the date hereof (as amended, amended and restated,
waived, supplemented or otherwise modified from time to time, together with any
agreement extending the maturity of, or restructuring, refunding, refinancing
or increasing the Indebtedness under such agreement or successor agreements,
the “Credit Agreement”), among The Hertz Corporation (the “Parent
Borrower”), Hertz Equipment Rental Company, Matthews and Western (collectively,
the “Borrowers”), Deutsche Bank AG, New York Branch, as Administrative
Agent (in such capacity, the “Administrative Agent”) and as Collateral
Agent (the “Collateral Agent”), the Canadian Agent, the Canadian
Collateral Agent, the Lenders and the other parties thereto, the Lenders have
severally agreed to make extensions of credit to the Borrowers upon the terms
and subject to the conditions set forth therein;


 


WHEREAS, the Borrowers are members of an
affiliated group of companies that includes CCMG Corporation, the Borrowers,
the Parent Borrower’s other Domestic Subsidiaries that are party to the Credit
Agreement and any other Subsidiary of the Parent Borrower that becomes a party
hereto from time to time after the date hereof;


 


WHEREAS, it is a condition to the
obligation of the Lenders to make their respective extensions of credit under
the Credit Agreement that Matthews, Western and any of their Subsidiaries
(collectively, the “Granting Parties”) shall execute and deliver this
Agreement to the Canadian Collateral Agent for the benefit of the Secured
Parties (as defined below);


 


NOW, THEREFORE, in consideration of the
premises and to induce the Canadian Agent and the Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective extensions
of credit to the Borrowers thereunder, each Granting Party hereby agrees with
the Canadian Collateral Agent, for the rateable benefit of the Secured Parties,
as follows:


 


SECTION 1   DEFINED TERMS


 


1.1           Definitions.


 


(a)           Unless otherwise defined herein,
terms defined in the Credit Agreement and used herein shall have the meanings
given to them in the Credit Agreement, and the


 

















 


following
terms that are defined in the PPSA (as in effect on the date hereof) are used
herein as so defined: Accounts, Chattel Paper, Documents of Title, Equipment,
Fixtures, Goods, Intangibles, Inventory, Money and Securities;


 


(b)           The following terms shall have the
following meanings:


 


“Accounts”:  all accounts (as defined in the PPSA) of each
Grantor, including, without limitation, all Accounts (as defined in the Credit
Agreement) and Accounts Receivable of such Grantor, but in any event excluding
all Accounts that have been sold or otherwise transferred (and not transferred
back to a Grantor) in connection with a Special Purpose Financing.


 


“Accounts
Receivable”:  any right to payment
for goods sold or leased or for services rendered, which is not evidenced by an
Instrument or Chattel Paper.


 


“Adjusted
Net Worth”:  of any Guarantor at any
time, shall mean the greater of (x) $0 and (y) the amount by which the fair
saleable value of such Guarantor’s assets on the date of the respective payment
hereunder exceeds its debts and other liabilities (including contingent
liabilities, but without giving effect to any of its obligations under this
Agreement or any other Loan Document, or pursuant to its guarantee with respect
to any Indebtedness then outstanding pursuant to clauses (b) and (c) of
subsection 8.2 of the Credit Agreement) on such date.


 


“Agreement”:  this Canadian Guarantee and Collateral
Agreement, as the same may be amended, restated, supplemented, waived or
otherwise modified from time to time.


 


“Bank
Products Agreement” — any agreement pursuant to which a bank or other
financial institution agrees to provide treasury or cash management services
(including, without limitation, controlled disbursement, automated
clearinghouse transactions, return items, netting, overdrafts and interstate
depository network services).


 


“Bankruptcy
Case”:  (i) CCGM Corporation or any
of its Subsidiaries commencing any case, proceeding or other action
(A) under any existing or future law of any jurisdiction, Canadian or
foreign, relating to bankruptcy, insolvency, reorganization, conservatorship or
relief of debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B) seeking
appointment of a receiver, receiver-manager, interim receiver, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or CCGM Corporation or any of its Subsidiaries
making a general assignment for the benefit of its creditors; or (ii) there
being commenced against CCGM Corporation or any of its Subsidiaries any case,
proceeding or other action of a nature referred to in clause (i) above which
(A) results in the entry of an order for relief or any such adjudication
or appointment or (B) remains undismissed, undischarged or unbonded for a
period of 60 days.


 


“Borrower
Obligations”: with respect to any Canadian Borrower, the collective
reference to: all obligations and liabilities of such Canadian Borrower in
respect of the unpaid principal of and interest on (including, without
limitation, interest accruing after the maturity of the Loans and Reimbursement
Obligations and interest accruing after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like proceeding,
relating


 


2

















 


to such Borrower, whether or not a claim
for post-filing or post-petition interest is allowed in such proceeding) the
Loans, the Reimbursement Obligations, and all other obligations and liabilities
of such Canadian Borrower to the Secured Parties, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, the Credit
Agreement, the Loans, the Letters of Credit, the other Loan Documents, any
Interest Rate Protection Agreement, Permitted Hedging Arrangement or Bank
Products Agreement entered into with any Person who was at the time of entry
into such agreement a Lender or an affiliate of any Lender and is designated to
be a Secured Party hereunder by the Parent Borrower at the time of entry, any
Guarantee Obligation of CCMG Corporation or any of its Subsidiaries referred to
in subsections 8.4 of the Credit Agreement as to which any Secured Party is a
beneficiary, the provision of cash management services by any Lender or an
Affiliate thereof to the Parent Borrower or any Subsidiary thereof, or any
other document made, delivered or given in connection therewith and the Euro
MTN Obligations, if any, of such Canadian Borrower, in each case whether on
account of principal, interest, reimbursement obligations, amounts payable in
connection with the provision of such cash management services or a termination
of any transaction entered into pursuant to any such Interest Rate Protection
Agreement or Permitted Hedging Arrangement, fees, indemnities, costs, expenses
or otherwise (including, without limitation, all reasonable fees, expenses and
disbursements of counsel to the Canadian Agent or any other Secured Party that
are required to be paid by such Borrower pursuant to the terms of the Credit
Agreement or any other Loan Document).


 


“Borrowers”:
as defined in the recitals hereto.


 


“Canadian
Agent”: as defined in the recitals hereto.


 


“Canadian
Collateral Agent”: as defined in the Preamble hereto.


 


“Canadian
Borrowers”: Matthews and Western.


 


“Collateral”:  as defined in Section 3; provided
that, for purposes of subsection 6.5, Section 8 and subsection 9.16(b),
“Collateral” shall have the meaning assigned to such term in the Credit
Agreement.


 


“Collateral
Account Bank”:  DBCB, an Affiliate
thereof or another bank which at all times is a Lender as selected by the
relevant Grantor and consented to in writing by the Canadian Collateral Agent
(such consent not to be unreasonably withheld or delayed).


 


“Collateral
Proceeds Account”:  shall mean a
non-interest bearing cash collateral account established and maintained by the
relevant Grantor at an office of the Collateral Account Bank in the name, and
in the sole dominion and control of, the Canadian Collateral Agent for the
benefit of the Secured Parties.


 


“Commitments”:
the collective reference to (i) the Revolving Credit Commitments, (ii) the
Swing Line Commitment and (iii) the obligation of the Issuing Lenders to issue
Letters of Credit to the Borrowers pursuant to subsection 3.1 of the Credit
Agreement.


 


3

















 


“Contracts”:  with respect to any Grantor, all contracts,
agreements, instruments and indentures in any form and portions thereof (except
for contracts listed on Schedule 6 hereto), to which such Grantor is a
party or under which such Grantor or any property of such Grantor is subject, as
the same may from time to time be amended, supplemented, waived or otherwise
modified, including, without limitation, (i) all rights of such Grantor to
receive moneys due and to become due to it thereunder or in connection
therewith, (ii) all rights of such Grantor to damages arising thereunder
and (iii) all rights of such Grantor to perform and to exercise all remedies
thereunder.


 


“Copyright
Licenses”:  with respect to any
Grantor, all written license agreements of such Grantor providing for the grant
by or to such Grantor of any right under any copyright of such Grantor, other
than agreements with any Person who is an Affiliate or a Subsidiary of the
Parent Borrower or such Grantor, including, without limitation, any material
license agreements listed on Schedule 5 hereto, subject, in each case,
to the terms of such license agreements, and the right to prepare for sale,
sell and advertise for sale, all Inventory now or hereafter covered by such
licenses.


 


“Copyrights”:  with respect to any Grantor, all of such
Grantor’s right, title and interest in and to all Canadian and foreign
copyrights, whether or not the underlying works of authorship have been
published or registered, all Canadian and foreign copyright registrations and
copyright applications, including, without limitation, any copyright
registrations and copyright applications listed on Schedule 5 hereto,
and (i) all renewals thereof, (ii) all income, royalties, damages and payments
now and hereafter due and/or payable with respect thereto, including, without
limitation, payments under all licenses entered into in connection therewith,
and damages and payments for past or future infringements thereof and (iii) the
right to sue or otherwise recover for past, present and future infringements
and misappropriations thereof.


 


“Credit
Agreement”:  has the meaning provided
in the Preamble hereto.


 


“Downgrade
Event”: there occurs a downgrading in the credit rating assigned by either
S&P or Moody’s to the Indebtedness of the Parent Borrower incurred pursuant
to the Credit Agreement (including, without limitation, any Reimbursement
Obligations).


 


“Euro MTNs”:
as defined in the Intercreditor Agreement as in effect on the date hereof.


 


“Euro MTN
Fiscal Agency Agreement”: as defined in the Intercreditor Agreement as in
effect on the date hereof.


 


“Euro MTN
Obligations”: as defined in the Intercreditor Agreement as in effect on the
date hereof.


 


“Euro MTN
Secured Parties”: as defined in the Intercreditor Agreement as in effect on
the date hereof.


 


“Excluded
Assets”: as defined in Section 3.3.


 


“General
Fund Account”: the general fund account of the relevant Grantor established
at the same office of the Collateral Account Bank as the Collateral Proceeds
Account.


 


4

















 


“Granting
Parties”:  as defined in the recitals
hereto.


 


“Grantor”:  the Canadian Borrowers and any Subsidiary of
any Canadian Borrower that becomes a party hereto from time to time after the
date hereof.


 


“Guarantor
Obligations”:  with respect to any
Guarantor, the collective reference to (i) the Obligations guaranteed by such
Guarantor pursuant to Section 2 and (ii) all obligations and liabilities
of such Guarantor that may arise under or in connection with this Agreement or
any other Loan Document to which such Guarantor is a party, any Interest Rate
Protection Agreement, Permitted Hedging Arrangement or Bank Products Agreement
entered into with any Person who was at the time of entry into such agreement a
Lender or an affiliate of any Lender and is designated to be a Secured Party
hereunder by such Guarantor at the time of entry, any Guarantee Obligation of
CCMG Corporation or any of its Subsidiaries referred to in subsections 8.4 of
the Credit Agreement as to which any Secured Party is a beneficiary, the provision
of cash management services by any Lender or an Affiliate thereof to the Parent
Borrower or any Subsidiary thereof, or any other document made, delivered or
given in connection therewith and the Euro MTN Obligations, if any, of such
Guarantor, in each case whether on account of guarantee obligations,
reimbursement obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to the
Canadian Agent, to the Other Representatives or to the Lenders that are
required to be paid by such Guarantor pursuant to the terms of this Agreement
or any other Loan Document).


 


“Guarantors”:  the collective reference to each Granting
Party.


 


“Industrial
Design License”: with respect to any Grantor, all written agreements, now
or hereafter in effect, granting to any third party that is not an Affiliate or
a Subsidiary of the Parent Borrower any right to make, use or sell any
Industrial Design, now or hereafter owned by any Grantor or that any Grantor otherwise
has the right to license, is in existence, or granting to any Grantor any right
to make, use or sell any Industrial Design, now or hereafter owned by any third
party, is in existence, and all rights of any Grantor under any such agreement
including, without limitation, the license agreements listed on Schedule 5
hereto, subject, in each case, to the terms of such license agreements, and the
right to prepare for sale, sell and advertise for sale, all Inventory now or
hereafter covered by such licenses.


 


“Industrial
Designs”: all of the following, now owned or hereafter acquired by any
Grantor: (a) all industrial designs, design patents and other designs that the
Grantor now or hereafter owns or uses, including but not limited to all
industrial designs, design patents and other designs listed on Schedule 5
hereto and all renewals and extensions thereof, (b) all registrations and
recordings thereof and all applications that have been or shall be made or
filed Canada or any other country or political subdivision thereof and all
records thereof and all reissues, extensions or renewals thereof, and (c) all
common law and other rights in the above.


 


“Instruments”:  has the meaning specified in the PPSA, but
excluding the Pledged Securities.


 


5

















 


“Intellectual
Property”:  with respect to any
Grantor, the collective reference to such Grantor’s Copyrights, Copyright
Licenses, Patents, Patent Licenses, Trade Secrets, Trade-marks, Trade-mark
Licenses, Industrial Designs and Industrial Design Licences.


 


“Intercompany
Note”: with respect to any Grantor, any promissory note in a
principal amount in excess of $3,500,000 evidencing loans made by such Grantor
to CCMG Corporation or any of its Subsidiaries.


 


“Inventory”:
with respect to any Grantor, all inventory (as defined in the PPSA) of such
Grantor, including, without limitation, all Inventory (as defined in the Credit
Agreement) of such Grantor.


 


“Issuers”:  the collective reference to the Persons
identified on Schedule 2 as the issuers of Pledged Stock, together with
any successors to such companies (including, without limitation, any successors
contemplated by subsection 8.5 of the Credit Agreement).


 


“Management
Loans”: Indebtedness (including any extension, renewal or refinancing
thereof) to the extent such Indebtedness is entitled to the benefit of
Guarantee Obligations provided for in subsection 8.4(b) of the Credit
Agreement.


 


“Non-Lender
Secured Parties”:  the collective
reference to (i) any person who, at the time of entering into any Interest
Rate Protection Agreement or Permitted Hedging Arrangement or Bank Products
Agreement or Management Loan secured hereby, was a Lender or an affiliate of
any Lender and their respective successors and assigns and (ii) the Euro MTN
Secured Parties.


 


“Obligations”:  (i) in the case of each Canadian Borrower,
its Borrower Obligations and (ii) in the case of each Guarantor, its Guarantor
Obligations.


 


“Parent
Borrower”:  as defined in the
recitals hereto.


 


“Patent
Licenses”:  with respect to any
Grantor, all written license agreements of such Grantor providing for the grant
by or to such Grantor of any right under any patent, patent applicable or
patentable invention other than agreements with any Person who is an Affiliate
or a Subsidiary of the Parent Borrower or such Grantor, including, without
limitation, the material license agreements listed on Schedule 5 hereto,
subject, in each case, to the terms of such license agreements, and the right
to prepare for sale, sell and advertise for sale, all Inventory now or
hereafter covered by such licenses.


 


“Patents”:  with respect to any Grantor, all of such
Grantor’s right, title and interest in and to all Canadian and foreign patents,
patent applications and patentable inventions and all reissues and extensions
thereof, including, without limitation, all patents and patent applications
identified in Schedule 5 hereto, and including, without limitation, (i)
all inventions and improvements described and claimed therein, (ii) the right
to sue or otherwise recover for any and all past, present and future
infringements and misappropriations thereof, (iii) all income, royalties,
damages and other payments now and hereafter due and/or payable with respect
thereto (including, without limitation, payments under all licenses entered
into in connection therewith, and damages and payments for past, present or
future infringements thereof), and (iv) all other rights corresponding thereto
and all reissues, divisions, continuations, continuations-in-part,


 


6

















 


substitutes, renewals, and extensions
thereof, all improvements thereon, and all other rights of any kind whatsoever
of such Grantor accruing thereunder or pertaining thereto.


 


“Pledged
Collateral”:  as to any Pledgor, the
Pledged Securities now owned or at any time hereafter acquired by such Pledgor,
and any Proceeds thereof.


 


“Pledged
Notes”: with respect to any Pledgor, all Intercompany Notes at any time
issued to, or held or owned by, such Pledgor.


 


“Pledged
Securities”:  the collective
reference to the Pledged Notes and the Pledged Stock.


 


“Pledged
Stock”:  with respect to any Pledgor,
the shares of Capital Stock listed on Schedule 2 as held by such
Pledgor, together with any other shares of Capital Stock required to be pledged
by such Pledgor pursuant to subsection 6.1(m) of the Credit Agreement, as well
as any other shares, stock certificates, options or rights of any nature
whatsoever in respect of the Capital Stock of any Person that may be issued or
granted to, or held by, such Pledgor while this Agreement is in effect.


 


“Pledgor”:  each Granting Party (with respect to Pledged
Securities held by such Granting Party and all other Pledged Collateral of such
Granting Party).


 


“PPSA”
means the Personal Property Security Act (Ontario),
including the regulations thereto, provided that, if perfection or the effect
of perfection or non-perfection or the priority of any Lien created hereunder
on the Collateral is governed by the personal property security legislation or
other applicable legislation with respect to personal property security as in
effect in a jurisdiction other than Ontario, “PPSA” means the Personal Property Security Act or such
other applicable legislation as in effect from time to time in such other
jurisdiction for purposes of the provisions hereof relating to such perfection,
effect of perfection or non-perfection or priority.


 


“Proceeds”:  all “proceeds” as such term is defined in the
PPSA and, in any event, Proceeds of Pledged Securities shall include, without
limitation, all dividends or other income from the Pledged Securities,
collections thereon or distributions or payments with respect thereto.


 


“Restrictive
Agreements”: as defined in subsection 3.3(a).


 


“Secured
Parties”:  the collective reference
to (i) the Administrative Agent, the Collateral Agent, the Canadian Agent, the
Canadian Collateral Agent and each Other Representative, (ii) the Lenders
(including, without limitation, the Issuing Lender and the Swing Line Lender),
(iii) with respect to any Interest Rate Protection Agreement, Permitted Hedging
Arrangement or Bank Products Agreement with CCMG Corporation or any of its
Subsidiaries, any counterparty thereto that, at the time such agreement or
arrangement was entered into, was a Lender or an Affiliate of any Lender and
was designated to be a Secured Party hereunder by the relevant Granting Party
at the time of entry, (iv) the Euro MTN Secured Parties, (v) with respect
to any Management Loans, any lender thereof that, at the time such Indebtedness
was extended (or agreement to extend such Indebtedness was entered into), was a
Lender or an Affiliate of any


 


7

















 


Lender and (vi) their respective successors
and assigns and their permitted transferees and endorsees.


 


“Security
Collateral”:  with respect to any
Granting Party, means, collectively, the Collateral (if any) and the Pledged
Collateral (if any) of such Granting Party.


 


“Specified
Asset”: as defined in subsection 4.2.2 hereof.


 


“Trade
Secret Licenses”: with respect to any Grantor, all written license
agreements of such Grantor providing for the grant by or to such Grantor of any
right under any trade secrets, including, without limitation, know how,
processes, formulae, compositions, designs, and confidential business and
technical information, and all rights of any kind whatsoever accruing
thereunder or pertaining thereto, other than agreements with any Person who is
an Affiliate or a Subsidiary of the Parent Borrower or such Grantor, subject,
in each case, to the terms of such license agreements, and the right to prepare
for sale, sell and advertise for sale, all Inventory now or hereafter covered
by such licenses.


 


“Trade
Secrets”:  with respect to any
Grantor, all of such Grantor’s right, title and interest in and to all Canadian
trade secrets, including, without limitation, know-how, processes, formulae,
compositions, designs, and confidential business and technical information, and
all rights of any kind whatsoever accruing thereunder or pertaining thereto,
including, without limitation, (i) all income, royalties, damages and payments
now and hereafter due and/or payable with respect thereto, including, without
limitation, payments under all licenses, non-disclosure agreements and
memoranda of understanding entered into in connection therewith, and damages
and payments for past or future misappropriations thereof, and (ii) the right
to sue or otherwise recover for past, present or future misappropriations
thereof.


 


“Trade-mark
Licenses”:  with respect to any
Grantor, all written license agreements of such Grantor providing for the grant
by or to such Grantor of any right under any trade-marks, service marks, trade
names, trade dress or other indicia of trade origin or business identifiers,
and all rights of any kind whatsoever accruing thereunder or pertaining
thereto, other than agreements with any Person who is an Affiliate or a
Subsidiary of the Parent Borrower or such Grantor, including, without
limitation, the material license agreements listed on Schedule 5 hereto,
subject, in each case, to the terms of such license agreements, and the right
to prepare for sale, sell and advertise for sale, all Inventory now or
hereafter covered by such licenses.


 


“Trade-marks”:  with respect to any Grantor, all of such
Grantor’s right, title and interest in and to all Canadian and foreign
Trade-marks, service marks, trade names, trade dress or other indicia of trade
origin or business identifiers, Trade-mark and service mark registrations, and applications
for Trade-mark or service mark registrations (except for “intent to use”
applications for Trade-mark or service mark registrations filed and any
renewals thereof, including, without limitation, each registration and
application identified in Schedule 5 hereto, and including, without
limitation, (i) the right to sue or otherwise recover for any and all past,
present and future infringements or dilutions thereof, (ii) all income,
royalties, damages and other payments now and hereafter due and/or payable with
respect thereto (including, without limitation, payments under all licenses
entered into in connection therewith, and damages and payments for past or
future infringements thereof), and (iii) all other rights corresponding
thereto and all other rights


 


8

















 


of any kind whatsoever of such Grantor
accruing thereunder or pertaining thereto in the Canada, together in each case
with the goodwill of the business connected with the use of, and symbolized by,
each such Trade-mark, service mark, trade name, trade dress or other indicia of
trade origin or business identifiers.


 


1.2           Other
Definitional Provisions.


 


(a)           The words “hereof”, “herein”, “hereto”
and “hereunder” and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section, Schedule and Annex references are to this Agreement
unless otherwise specified.


 


(b)           The meanings given to terms defined
herein shall be equally applicable to both the singular and plural forms of
such terms.


 


(c)           Where the context requires, terms
relating to the Collateral, Pledged Collateral or Security Collateral, or any
part thereof, when used in relation to a Granting Party shall refer to such
Granting Party’s Collateral, Pledged Collateral or Security Collateral or the
relevant part thereof.


 


(d)           All references in this Agreement to
any of the property described in the definition of the term “Collateral” or “Pledged
Collateral”, or to any Proceeds thereof, shall be deemed to be references
thereto only to the extent the same constitute Collateral or Pledged
Collateral, respectively.


 


SECTION 2 GUARANTEE


 


2.1           Guarantee.


 


(a)           Each of the Guarantors hereby,
jointly and severally, unconditionally and irrevocably, guarantees to the
Canadian Agent for the rateable benefit of the applicable Secured Parties, the
prompt and complete payment and performance by each Canadian Borrower when due
and payable (whether at the stated maturity, by acceleration or otherwise) of
the Borrower Obligations of such Canadian Borrower owed to the applicable
Secured Parties.


 


(b)           Anything herein or in any other Loan
Document to the contrary notwithstanding, the maximum liability of each
Guarantor hereunder and under the other Loan Documents shall in no event exceed
the amount that can be guaranteed by such Guarantor under applicable law,
including applicable Canadian federal, provincial and territorial laws relating
to the insolvency of debtors; provided that, to the maximum extent
permitted under applicable law, it is the intent of the parties hereto that (x)
the amount of the liability of any of the Guarantors or any guarantee in
respect of Indebtedness permitted pursuant to clause (b) of subsection 8.2 of
the Credit Agreement shall be reduced before the amount of the liability of the
respective Guarantor is reduced hereunder and (y) the rights of contribution of
each Guarantor provided in the following subsection 2.2 be included as an
asset of the respective Guarantor in determining the maximum liability of such
Guarantor hereunder.


 


9

















 


(c)           Each Guarantor agrees that the
Borrower Obligations guaranteed by it hereunder may at any time and from time
to time exceed the amount of the liability of such Guarantor hereunder without
impairing the guarantee contained in this Section 2 or affecting the
rights and remedies of the Canadian Agent or any other Secured Party hereunder.


 


(d)           The guarantee contained in this Section 2
shall remain in full force and effect until the earlier to occur of (i) the
first date on which all the Loans, any Reimbursement Obligations, all other
Borrower Obligations then due and owing, and the obligations of each Guarantor
under the guarantee contained in this Section 2 then due and owing shall
have been satisfied by payment in full in cash, no Letter of Credit shall be
outstanding and the Commitments shall be terminated, notwithstanding that from
time to time during the term of the Credit Agreement any of the Borrowers may
be free from any Borrower Obligations, or (ii) as to any Guarantor, the sale or
other disposition of all of the Capital Stock of such Guarantor (to a Person
other than CCMG Corporation, the Parent Borrower or a Subsidiary of either) as
permitted under the Credit Agreement.


 


(e)           No payment made by any Canadian
Borrower, any of the Guarantors, any other guarantor or any other Person or
received or collected by the Canadian Agent or any other Secured Party from any
of the Canadian Borrowers, any of the Guarantors, any other guarantor or any
other Person by virtue of any action or proceeding or any set-off or
appropriation or application at any time or from time to time in reduction of
or in payment of any of the Borrower Obligations shall be deemed to modify,
reduce, release or otherwise affect the liability of any Guarantor hereunder
which shall, notwithstanding any such payment (other than any payment made by
such Guarantor in respect of the Borrower Obligations or any payment received
or collected from such Guarantor in respect of any of the Borrower
Obligations), remain liable for the Borrower Obligations of each Canadian
Borrower guaranteed by it hereunder up to the maximum liability of such
Guarantor hereunder until the earlier to occur of (i) the first date on which
all the Loans, any Reimbursement Obligations, and all other Borrower
Obligations then due and owing, are paid in full in cash, no Letter of Credit
shall be outstanding  (except for Letters
of Credit that have been cash collateralized in a manner satisfactory to the
Issuing Lender) and the Commitments are terminated or (ii) the sale or other
disposition of all of the Capital Stock of such Guarantor (to a Person other
than CCMG Corporation, the Parent Borrower or a Subsidiary of either) as
permitted under the Credit Agreement.


 


2.2           Right
of Contribution.


 


Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share
(based, to the maximum extent permitted by law, on the respective Adjusted Net
Worths of the Guarantors on the date the respective payment is made) of any
payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder that has not paid its
proportionate share of such payment. Each Guarantor’s right of contribution
shall be subject to the terms and conditions of subsection 2.3. The
provisions of this subsection 2.2 shall in no respect limit the
obligations and liabilities of any Guarantor to the Canadian Agent and the
other Secured Parties, and each Guarantor shall remain liable to the Canadian
Agent and the other Secured Parties for the full amount guaranteed by such
Guarantor hereunder.


 


10

















 


2.3           No
Subrogation.


 


Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor by
the Canadian Agent or any other Secured Party, no Guarantor shall be entitled
to be subrogated to any of the rights of the Canadian Agent or any other
Secured Party against any Canadian Borrower or any other Guarantor or any
collateral security or guarantee or right of offset held by the Canadian Agent
or any other Secured Party for the payment of the Borrower Obligations, nor
shall any Guarantor seek or be entitled to seek any contribution or
reimbursement from the Canadian Borrower or any other Guarantor in respect of
payments made by such Guarantor hereunder, until all amounts owing to the
Canadian Agent and the other Secured Parties by the Borrowers on account of the
Borrower Obligations are paid in full in cash, no Letter of Credit shall be
outstanding and the Commitments are terminated. If any amount shall be paid to
any Guarantor on account of such subrogation rights at any time when all of the
Borrower Obligations shall not have been paid in full in cash or any Letter of
Credit shall remain outstanding (and shall not have been cash collateralized in
a manner satisfactory to the Issuing Lender) or any of the Commitments shall
remain in effect, such amount shall be held by such Guarantor in trust for the
Canadian Agent and the other Secured Parties, segregated from other funds of
such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned
over to the Canadian Agent in the exact form received by such Guarantor (duly
endorsed by such Guarantor to the Canadian Agent, if required), to be held as
collateral security for all of the Borrower Obligations (whether matured or
unmatured) guaranteed by such Guarantor and/or then or at any time thereafter
may be applied against any Borrower Obligations, whether matured or unmatured,
in such order as the Canadian Agent may determine.


 


2.4           Amendments,
etc. with respect to the Obligations. 


 


To the maximum extent permitted by law,
each Guarantor shall remain obligated hereunder notwithstanding that, without
any reservation of rights against any Guarantor and without notice to or
further assent by any Guarantor, any demand for payment of any of the Borrower
Obligations made by the Canadian Collateral Agent, the Canadian Agent or any
other Secured Party may be rescinded by the Canadian Collateral Agent, the
Canadian Agent or such other Secured Party and any of the Borrower Obligations
continued, and the Borrower Obligations, or the liability of any other Person
upon or for any part thereof, or any collateral security or guarantee therefor
or right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, waived, modified, accelerated,
compromised, subordinated, waived, surrendered or released by the Canadian
Collateral Agent, the Canadian Agent or any other Secured Party, and the Credit
Agreement and the other Loan Documents and any other documents executed and
delivered in connection therewith may be amended, waived, modified,
supplemented or terminated, in whole or in part, as the Canadian Collateral
Agent or the Canadian Agent (or the Required Lenders or the applicable
Lenders(s), as the case may be) may deem advisable from time to time, and any
collateral security, guarantee or right of offset at any time held by the
Canadian Collateral Agent, the  Canadian
Collateral Agent or any other Secured Party for the payment of any of the Borrower
Obligations may be sold, exchanged, waived, surrendered or released. None of
the Canadian Collateral Agent, the Canadian Collateral Agent and each other
Secured Party shall have any obligation to protect, secure, perfect or insure
any Lien at any time held by it as security for any of the Borrower Obligations


 


11

















 


or for
the guarantee contained in this Section 2 or any property subject thereto,
except to the extent required by applicable law.


 


2.5           Guarantee
Absolute and Unconditional.


 


Each Guarantor waives, to the maximum
extent permitted by applicable law, any and all notice of the creation,
renewal, extension or accrual of any of the Borrower Obligations and notice of
or proof of reliance by the Canadian Collateral Agent, the Canadian Agent or
any other Secured Party upon the guarantee contained in this Section 2 or
acceptance of the guarantee contained in this Section 2; each of the
Borrower Obligations, and any obligation contained therein, shall conclusively
be deemed to have been created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon the guarantee contained in this Section 2;
and all dealings between any of the Canadian Borrowers and any of the
Guarantors, on the one hand, and Canadian Collateral Agent, the Canadian Agent
and the other Secured Parties, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 2. Each Guarantor waives, to the
maximum extent permitted by applicable law, diligence, presentment, protest,
demand for payment and notice of default or non-payment to or upon any Canadian
Borrower or any of the other Guarantors with respect to any of the Borrower
Obligations. Each Guarantor understands and agrees, to the extent permitted by
law, that the guarantee contained in this Section 2 shall be construed as
a continuing, absolute and unconditional guarantee of payment and not of
collection. Each Guarantor hereby waives, to the maximum extent permitted by
applicable law, any and all defenses (other than any suit for breach of a
contractual provision of any of the Loan Documents) that it may have arising
out of or in connection with any and all of the following:  (a) the validity or enforceability of the Credit
Agreement or any other Loan Document, any of the Borrower Obligations or any
other collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Canadian Collateral Agent,
the Canadian Agent or any other Secured Party, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) that may at any
time be available to or be asserted by any of the Borrowers against the
Canadian Collateral Agent or any other Secured Party, (c) any change in the
time, place, manner or place of payment, amendment, or waiver or increase in
any of the Obligations, (d) any exchange, taking, or release of Security
Collateral, (e) any change in the structure or existence of any of the Canadian
Borrowers, (f) any application of Security Collateral to any of the
Obligations, (g) any law, regulation or order of any jurisdiction, or any other
event, affecting any term of any Obligation or the rights of the Canadian
Collateral Agent, the Canadian Agent or any other Secured Party with respect
thereto, including, without limitation: (i) the application of any such law,
regulation, decree or order, including any prior approval, which would prevent
the exchange of any currency (other than Dollars) for Dollars or the remittance
of funds outside of such jurisdiction or the unavailability of Dollars in any
legal exchange market in such jurisdiction in accordance with normal commercial
practice, (ii) a declaration of banking moratorium or any suspension of
payments by banks in such jurisdiction or the imposition by such jurisdiction
or any Governmental Authority thereof of any moratorium on, the required
rescheduling or restructuring of, or required 
approval of payments on, any indebtedness in such jurisdiction, (iii)
any expropriation, confiscation, nationalization or requisition by such country
or any Governmental Authority that directly or indirectly deprives any Borrower
of any assets or their use, or of the ability to operate its business or a material
part thereof, or (iv) any war (whether or not declared), insurrection,


 


12

















 


revolution,
hostile act, civil strife or similar events occurring in such jurisdiction
which has the same effect as the events described in clause (i), (ii) or (iii)
above (in each of the cases contemplated in clauses (i) through (iv) above, to
the extent occurring or existing on or at any time after the date of this
Agreement), or (h) any other circumstance whatsoever (other than payment in
full in cash of the Borrower Obligations guaranteed by it hereunder) (with or
without notice to or knowledge of any of the Borrowers or such Guarantor) that
constitutes, or might be construed to constitute, an equitable or legal
discharge of any of the Canadian Borrowers for the Borrower Obligations, or of
such Guarantor under the guarantee contained in this Section 2, in
bankruptcy or in any other instance. When making any demand hereunder or
otherwise pursuing its rights and remedies hereunder against any Guarantor, the
Canadian Collateral Agent, the Canadian Agent and any other Secured Party may,
but shall be under no obligation to, make a similar demand on or otherwise
pursue such rights and remedies as it may have against any of the Canadian Borrowers,
any other Guarantor or any other Person or against any collateral security or
guarantee for the Borrower Obligations guaranteed by such Guarantor hereunder
or any right of offset with respect thereto, and any failure by the Canadian
Collateral Agent, Canadian Agent or any other Secured Party to make any such
demand, to pursue such other rights or remedies or to collect any payments from
any Borrower, any other Guarantor or any other Person or to realize upon any
such collateral security or guarantee or to exercise any such right of offset,
or any release of any of such Borrower, any other Guarantor or any other Person
or any such collateral security, guarantee or right of offset, shall not
relieve any Guarantor of any obligation or liability hereunder, and shall not
impair or affect the rights and remedies, whether express, implied or available
as a matter of law, of the Canadian Collateral Agent, Canadian Agent or any
other Secured Party against any Guarantor. For the purposes hereof “demand”
shall include the commencement and continuance of any legal proceedings.


 


2.6           Reinstatement.


 


This Guarantee shall remain in full force
and effect and continue to be effective should any petition or other proceeding
be filed by or against any Canadian Borrower for liquidation or reorganization,
should any Canadian Borrower become insolvent or make an assignment for the
benefit of any creditor or creditors or should an interim receiver, receiver,
receiver and manager or trustee be appointed for all or any significant part of
any Canadian Borrower’s assets, and shall continue to be effective or to be
reinstated, as the case may be, if at any time payment and performance of the
Obligations, or any part thereof, is, pursuant to applicable law, rescinded or
reduced in amount, or must otherwise be restored or returned by any obligee of
the Obligations, whether as a fraudulent preference, reviewable transaction or
otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Obligations shall be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.


 


2.7           Payments.


 


Each Guarantor hereby guarantees that
payments hereunder will be paid to the Canadian Agent without set-off or
counterclaim, in Canadian Dollars (or in the case of any amount required to be
paid in any other currency pursuant to the requirements of the Credit Agreement
or other agreement relating to the respective Obligations, such other
currency), at the


 


13

















 


Canadian
Agent’s office specified in subsection 11.2 of the Credit Agreement or
such other address as may be designated in writing by the Canadian Agent to
such Guarantor from time to time in accordance with subsection 11.2 of the
Credit Agreement.


 


SECTION 3 GRANT OF SECURITY
INTEREST


 


3.1           Grant.


 


Each Grantor hereby assigns, grants,
hypothecates and pledges, subject to existing licenses to use the Copyrights,
Patents, Trade-marks, Industrial Designs and Trade Secrets granted by such
Grantor in the ordinary course of business, to the Canadian Collateral Agent,
for the rateable benefit of the Secured Parties (subject to the priority of the
Euro MTN Lien to the extent provided by the Euro MTN Fiscal Agency Agreement or
the Euro MTNs), a security interest in all of the Collateral of such Grantor,
as collateral security for the prompt and complete payment and performance when
due (whether at the stated maturity, by acceleration or otherwise) of the
Obligations of such Grantor, except as provided in subsection 3.3. The
term “Collateral”, as to any Grantor, means the following property (wherever
located) now owned or at any time hereafter acquired by such Grantor or in
which such Grantor now has or at any time in the future may acquire any right,
title or interest, except as provided in subsection 3.3:


 


(a)           all Accounts;


 


(b)           all Accounts Receivable;


 


(c)           all Money (including all cash);


 


(d)           all Cash Equivalents;


 


(e)           all Chattel Paper;


 


(f)            all Contracts (including contracts
with any “qualified intermediaries” with respect to the HERC LKE Program);


 


(g)           all demand, time, savings, passbook
or similar account maintained with a bank (collectively, the “Deposit Accounts”)
(including DDAs);


 


(h)           all Documents of Title;


 


(i)            all Equipment;


 


(j)            all Intangibles;


 


(k)           all Instruments;


 


(l)            all insurance proceeds;


 


(m)          all Intellectual Property;


 


14

















 


(n)           all Inventory;


 


(o)           all Securities;


 


(p)           all Rental Equipment;


 


(q)           all Vehicles (other than Rental Car
Vehicles);


 


(r)            all Fixtures;


 


(s)           all books and records pertaining to
any of the foregoing;


 


(t)            the Collateral Proceeds Account; and


 


(u)           to
the extent not otherwise included, all Proceeds and products of any and all of
the foregoing and all collateral security and guarantees given by any Person
with respect to any of the foregoing;


 


provided that, in
the case of each Grantor, Collateral shall not include any Pledged Collateral,
or any property or assets specifically excluded from Pledged Collateral.


 


3.2           Pledged
Collateral.


 


Each Granting Party that is a Pledgor,
hereby grants to the Canadian Collateral Agent, for the rateable benefit of the
Secured Parties (subject to the priority of the Euro MTN Lien to the extent
provided by the Euro MTN Fiscal Agency Agreement or the Euro MTNs), a security
interest in all of the Pledged Collateral of such Pledgor now owned or at any
time hereafter acquired by such Pledgor, and any Proceeds thereof, as
collateral security for the prompt and complete performance when due (whether
at the stated maturity, by acceleration or otherwise) of the Obligations of
such Pledgor, except as provided in subsection 3.3.


 


3.3           Certain
Limited Exceptions.


 


No security interest is or will be granted
pursuant hereto in any right, title or interest of any Granting Party under or
in (collectively, the “Excluded Assets”):


 


(a)           any Instruments, Contracts, Chattel
Paper, Intangibles, Copyright Licenses, Patent Licenses, Trade-mark Licenses,
Industrial Design Licenses or other contracts or agreements with or issued by
Persons other than CCMC Corporation, a Subsidiary of CCMG Corporation or an
Affiliate thereof, (collectively, “Restrictive Agreements”) that would otherwise
be included in the Security Collateral (and such Restrictive Agreements shall
not be deemed to constitute a part of the Security Collateral) for so long as,
and to the extent that, the granting of such a security interest pursuant
hereto would result in a breach, default or termination of such Restrictive
Agreements (in each case, except to the extent that, pursuant to the PPSA or
other applicable law, the granting of security interests therein can be made
without resulting in a breach, default or termination of such Restrictive
Agreements);


 


15

















 


(b)           any Equipment that would otherwise be
included in the Security Collateral (and such Equipment shall not be deemed to
constitute a part of the Security Collateral) if such Equipment is subject to a
Lien permitted by subsection 8.3(h) of the Credit Agreement (but only for so
long as such Liens are in place);


 


(c)           any property that would otherwise be
included in the Security Collateral (and such property shall not be deemed to
constitute a part of the Security Collateral) if such property has been sold or
otherwise transferred in connection with a Special Purpose Financing or a Sale
and Leaseback Transaction permitted under subsection 8.12 of the Credit Agreement,
or is subject to any Liens permitted under subsection 8.3(n) of the Credit
Agreement. Notwithstanding the foregoing, the security interest of the Canadian
Collateral Agent shall attach to any money, securities or other consideration
received by any Grantor as consideration for the sale or other disposition of
such property;


 


(d)           Capital Stock which is specifically
excluded from the definition of Pledged Stock by virtue of the proviso
contained in the parenthetical to such definition;


 


(e)           Vehicle Rental Concession Rights;


 


(f)            for the avoidance of doubt, any
Deposit Account and any Money, cash, cheques, other negotiable instrument,
funds and other evidence of payment therein held by any ‘qualified intermediary’
in connection with the HERC LKE Program or Rental Car LKE Program;


 


(g)           any Money, cash, cheques, other
negotiable instrument, funds and other evidence of payment held in any Deposit
Account of the Parent Borrower or any of its Subsidiaries (i) for the benefit
of customers of Hertz Claim Management Corporation or any of its Subsidiaries
in the ordinary course of business and (ii) in the nature of security deposit
with respect to obligations for the benefit of the Parent Borrower or any of
its Subsidiaries, which must be held for or returned to the applicable
counterparty under applicable law or pursuant to Contractual Obligations;


 


(h)           any property that would otherwise be
included in the Security Collateral (and such property shall not be deemed to
constitute a part of the Security Collateral) if such property is subject to
other Liens permitted by subsection 8.3(t)(i) of the Credit Agreement to the
extent that, prior to or simultaneously with such property being excluded from,
and/or ceasing to constitute a part of, the Security Collateral, one or more of
the Borrowers shall have repaid amounts outstanding under the Credit Agreement
such that (x) the sum of (A) the aggregate U.S. Facility Revolving Credit
Lender Exposure plus (B) the aggregate unpaid balance of all other Extensions
of Credit to, or for the account of the U.S. Borrowers plus (C) the amount of
the aggregate unpaid Extensions of Credit made to the Canadian Borrowers, does
not exceed (y) the sum of (A) the Canadian Borrowing Base (as set forth in a
Borrowing Base Certificate delivered on the date of such prepayment (with
appropriate adjustments to the form thereof) calculating the Canadian Borrowing
Base after giving effect to the exclusion of such property from the Security
Collateral and (B) the U.S. Borrowing Base (as set forth in a Borrowing Base
Certificate delivered on the date of such prepayment (with appropriate
adjustments to the form thereof)


 


16

















 


calculating
the U.S. Borrowing Base after giving effect to the exclusion of such property
from the Security Collateral);


 


(i)            notwithstanding the grant of
security interest made by the Grantors in favour of the Canadian Collateral
Agent, for the rateable benefit of the Secured Parties, of all of its Pledged
Stock, any Grantor that controls any interest (for the purposes of this
Section 3.3(h), “ULC Interests”) in any unlimited liability company
(for the purposes of this Section 3.3(h), a “ULC”) pledged
hereunder shall remain registered as the sole registered and beneficial owner
of such ULC Interests and will remain as registered and beneficial owner until
such time as such ULC Interests are effectively transferred into the name of
the Canadian Collateral Agent or any other person on the books and records of
such ULC. Nothing in this Agreement is intended to or shall constitute the
Canadian Collateral Agent or any person as a shareholder or member of any ULC
until such time as notice is given to such ULC and further steps are taken
thereunder so as to register the Canadian Collateral Agent or any other person
as the holder of the ULC Interests of such ULC. To the extent any provision
hereof would have the effect of constituting the Canadian Collateral Agent or
any other person as a shareholder or member of a ULC prior to such time, such
provision shall be severed therefrom and ineffective with respect to the ULC
Interests of such ULC without otherwise invalidating or rendering unenforceable
this Agreement or invalidating or rendering unenforceable such provision
insofar as it relates to Pledged Stock which are not ULC Interests. Except upon
the exercise of rights to sell or otherwise dispose of ULC Interests following
the occurrence and during the continuance of an Event of Default hereunder, no
Grantor shall cause or permit, or enable any ULC in which it holds ULC
Interests to cause or permit, the Canadian Collateral Agent to: (a) be
registered as shareholders or members of such ULC; (b) have any notation
entered in its favour in the share register of such ULC; (c) be held out as a
shareholder or member of such ULC; (d) receive, directly or indirectly, any
dividends, property or other distributions from such ULC by reason of the
Canadian Collateral Agent holding a security interest in such ULC; or (e) act
as a shareholder or member of such ULC, or exercise any rights of a shareholder
or member of such ULC including the right to attend a meeting of, or to vote
the shares of, such ULC;


 


(j)            the Collateral shall not include the
last day of the term of any lease or agreement therefor but upon the enforcement
of the security interest granted hereby in the Collateral, the Grantors or any
of them shall stand possessed of such last day in trust to assign the same to
any person acquiring such term;


 


(k)           the term “Goods” when used in this
Agreement shall not include “consumer goods” of any Grantor as that term is
defined in the PPSA;


 


(l)            notwithstanding Section 3.1,
any Grantor’s grant of security in Trade-marks (as defined in the Trade-marks Act (Canada)) under this
Agreement shall be limited to a grant by such Grantor of a security interest in
all of such Grantor’s right, title and interest in such Trade-marks;


 


(m)          each Grantor and the Canadian
Collateral Agent hereby acknowledge that (a) value has been given in respect of
the security interests granted herein; (b) such Grantor has rights in the
Collateral in which it has granted a security interest; and (c) this Agreement
constitutes a security agreement as that term is defined in the PPSA; or


 


17

















 


(n)           if the Collateral is realized upon
and the security interest in the Collateral is not sufficient to satisfy all of
the Borrower Obligations, each Grantor acknowledges and agrees that, subject to
the provisions of the PPSA, such Grantor shall continue to be liable for any
Borrower Obligations remaining outstanding and the Canadian Collateral Agent
shall be entitled to pursue full payment thereof.


 


SECTION 4 REPRESENTATIONS AND WARRANTIES


 


4.1           Representations
and Warranties of Each Guarantor.


 


To induce the Canadian Collateral Agent and
the Lenders to enter into the Credit Agreement and to induce the Lenders to
make their respective extensions of credit to the Borrowers thereunder, each
Guarantor hereby represents and warrants to the Canadian Collateral Agent and
each other Secured Party that the representations and warranties set forth in
Section 5 of the Credit Agreement as they relate to such Guarantor or to the
Loan Documents to which such Guarantor is a party, each of which
representations and warranties is hereby incorporated herein by reference, are
true and correct in all material respects, and the Canadian Collateral Agent
and each other Secured Party shall be entitled to rely on each of such
representations and warranties as if fully set forth herein; provided that
each reference in each such representation and warranty to the Parent Borrower’s
knowledge shall, for the purposes of this subsection 4.1, be deemed to be
a reference to such Guarantor’s knowledge.


 


4.2           Representations
and Warranties of Each Grantor.


 


To induce the Canadian Collateral Agent and
the Lenders to enter into the Credit Agreement and to induce the Lenders to
make their respective extensions of credit to the Borrowers thereunder, each
Grantor hereby represents and warrants to the Canadian Collateral Agent and
each other Secured Party that, in each case after giving effect to the
Transactions:


 


4.2.1        Title; No Other Liens. Except for
the security interests granted to the Canadian Collateral Agent for the
rateable benefit of the Secured Parties pursuant to this Agreement and the
other Liens permitted to exist on such Grantor’s Collateral by the Credit
Agreement (including, without limitation, subsection 8.3 thereof), such
Grantor owns each item of such Grantor’s Collateral free and clear of any and
all Liens. Except as set forth on Schedule 3, no currently effective
financing statement or other similar public notice with respect to all or any
part of such Grantor’s Collateral is on file or of record in any public office,
except such as have been filed in favour of the Canadian Collateral Agent for
the rateable benefit of the Secured Parties pursuant to this Agreement or as
are permitted by the Credit Agreement (including without limitation subsection
8.3 thereof) or any other Loan Document or for which financing change
statements or discharges will be delivered on the Closing Date.


 


4.2.2        Perfected First Priority Liens. (a) This Agreement is effective to create, as collateral
security for the Obligations of such Grantor, valid and enforceable Liens on
such Grantor’s Security Collateral in favour of the Canadian Collateral Agent
for the benefit of the Secured Parties, except as enforceability may be
affected by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditor’s


 


18

















 


rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.


 


(b)           Except with regard to (i) Liens (if
any) on Specified Assets and (ii) any rights in favour of the Canadian federal,
provincial or territorial government as required by law (if any), upon the
completion of the Filings and, with respect to Instruments, Chattel Paper and
Documents of Title upon the earlier of such Filing or the delivery to and
continuing possession by the Canadian Collateral Agent of all Instruments,
Chattel Paper and Documents of Title, a security interest in which is perfected
by possession, and the obtaining and maintenance of control by the Canadian
Agent, the Canadian Collateral Agent, the Agent and the Collateral Agent, as
applicable (or their respective agents appointed for the purposes of
perfection) of all Deposit Accounts, the Collateral Proceeds Account and
electronic chattel paper, a security interest in which is perfected by “control”
and the taking of the actions required by subsection 5.2.12 herein, the
Liens created pursuant to this Agreement will constitute valid Liens on and (to
the extent provided herein) perfected security interests in such Grantor’s
Security Collateral in favour of the Canadian Collateral Agent for the benefit
of the Secured Parties, and will be prior to all other Liens of all other
Persons other than Permitted Liens, and enforceable as such as against all
other Persons other than Ordinary Course Transferees, except to the extent that
the recording of an assignment or other transfer of title to the Canadian
Collateral Agent or the recording of other applicable documents in the Canadian
Intellectual Property Office may be necessary for perfection or enforceability,
and except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law) or by an implied
covenant of good faith and fair dealing. As used in this subsection 4.2.2(b),
the following terms shall have the following meanings:


 


“Filings”:  the filing or recording of (i) the Financing
Statements as set forth in Schedule 3, (ii) this Agreement or a notice
thereof with respect to Intellectual Property as set forth in Schedule 3,
(iii) the recordation on the certificate of title related thereto of each Lien
granted in favour of the Canadian Collateral Agent hereunder on Rental
Equipment, subject to certificate of title statutes and (v) any filings after
the Closing Date in any other jurisdiction as may be necessary under any
Requirement of Law.


 


“Financing Statements”:  the financing statements delivered to the
Canadian Collateral Agent by such Grantor on the Closing Date for filing in the
jurisdictions listed in Schedule 3.


 


“Ordinary Course Transferees”:  (i) with respect to goods only, buyers in the
ordinary course of business and lessees in the ordinary course of business,
(ii) with respect to intangibles only, licensees in the ordinary course of
business, and (iii) any other Person who is entitled to take free of the Lien.


 


“Permitted Liens”:  Liens permitted pursuant to the Credit
Documents, including without limitation those permitted to exist pursuant to
subsection 8.3 of the Credit Agreement.


 


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“Specified Assets”:  the following property and assets of such
Grantor:


 


(1)                                  Patents, Patent Licenses, Trade-marks, Trade-mark Licenses,
Industrial Designs and Industrial Design Licenses to the extent that (a) Liens
thereon cannot be perfected by the filing of financing statements under the
PPSA or by the filing and acceptance thereof in the Canadian Intellectual
Property Office (including Liens on such Patents, Patent Licenses, Trade-marks,
Trade-mark Licenses, Industrial Designs and Industrial Design Licenses that are
non-Canadian Patents, Patent Licenses, Trade-marks, Trade-mark Licenses,
Industrial Designs or Industrial Design Licenses) or (b) such Patents, Patent
Licenses, Trade-marks, Trade-mark Licenses, Industrial Designs and Industrial
Design Licenses are not, individually or in the aggregate, material to the
business of any Canadian Borrower and its Subsidiaries taken as a whole;


 


(2)                                  Copyrights and Copyright Licenses with respect thereto and Accounts
or receivables arising therefrom to the extent that the PPSA is not applicable
to the creation or perfection of Liens thereon;


 


(3)                                  Collateral for which the perfection of Liens thereon requires
filings in or other actions under the laws of jurisdictions outside of Canada,
any province or territory;


 


(4)                                  goods included in Collateral received by any Person from any Grantor
for “sale or return” to the extent of claims of creditors of such Person;


 


(5)                                  Equipment constituting fixtures (other than any such Equipment
subject to a Mortgage);


 


(6)                                  Proceeds of Accounts or Inventory which do not themselves constitute
Collateral or which have not yet been transferred to or deposited in the
Collateral Proceeds Account (if any) or to a Blocked Account; and


 


(7)                                  uncertificated securities to the extent a security interest is not
perfected by the filing of a financing statement.


 


4.2.3        Jurisdiction of Organization and
Locations of Collateral. On the date hereof, such Grantor’s jurisdiction of
incorporation or amalgamation, and the locations of its Collateral, are as
specified on Schedule 4.


 


4.2.4        Accounts Receivable. The amounts
represented by such Grantor to the Canadian Agent or the other Secured Parties
from time to time as owing by each account debtor or by all account debtors in
respect of such Grantor’s Accounts Receivable constituting Security Collateral
will at such time be the correct amount, in all material respects, actually
owing by such account debtor or debtors thereunder, except to the extent that
appropriate reserves therefor have been established on the books of such
Grantor in accordance with GAAP. Unless otherwise indicated in writing to the
Canadian Agent, each Account Receivable of such Grantor arises out of a bona fide sale and delivery of goods or
rendition of services by such Grantor. Such Grantor has not given any account
debtor any deduction in respect of the amount due under any such


 


20

















 


Account,
except in the ordinary course of business or as such Grantor may otherwise
advise the Canadian Agent in writing.


 


4.2.5        Patents, Trade-marks, Copyrights and
Industrial Designs. Schedule 5 lists all material Trade-marks,
material Copyrights, material Patents and material Industrial Designs, in each
case registered in the Canadian Intellectual Property Office and owned by such
Grantor in its own name as of the date hereof, and all material Trade-mark
Licenses, all material Copyright Licenses, all material Patent Licenses and
material Industrial Designs (including, without limitation, material Trade-mark
Licenses for registered Trade-marks, all material Copyright Licenses for
registered Copyrights, material Patent Licenses for registered Patents and
material Industrial Design Licenses for registered Industrial Designs) owned by
such Grantor in its own name as of the date hereof.


 


4.3           Representations
and Warranties of Each Pledgor.


 


To induce the Canadian Collateral Agent,
the Canadian Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the
Canadian Borrowers thereunder, each Pledgor hereby represents and warrants to
the Canadian Collateral Agent and each other Secured Party that:


 


4.3.1        Except as provided in subsection 3.3,
the shares of Pledged Stock pledged by such Pledgor hereunder constitute in the
case of shares of a Subsidiary, all the issued and outstanding shares of all
classes of the Capital Stock of such Subsidiary owned by such Pledgor as is
specified on Schedule 2.


 


4.3.2        All the shares of the Pledged Stock
pledged by such Pledgor hereunder have been duly and validly issued and are
fully paid and non-assessable (or the equivalent, if any, under applicable
foreign law).


 


4.3.3        Such Pledgor is the record and
beneficial owner of, and has good title to, the Pledged Securities pledged by
it hereunder, free of any and all Liens or options in favour of, or claims of,
any other Person, except the security interest created by this Agreement and
Liens arising by operation of law or expressly permitted by the Credit
Agreement.


 


4.3.4        Upon the delivery to the Canadian
Collateral Agent of the certificates evidencing the Pledged Securities held by
such Pledgor together with executed undated stock powers or other instruments
of transfer, the security interest created in such Pledged Securities constituting
certificated securities by this Agreement, assuming the continuing possession
of such Pledged Securities by the Canadian Collateral Agent will constitute a
valid, perfected first priority (subject, in terms of priority only, to the
priority of the Euro MTN Lien, to the extent provided by the Euro MTN Fiscal
Agency Agreement or the Euro MTNs) security interest in such Pledged Securities
to the extent provided in and governed by the PPSA, enforceable in accordance
with its terms against all creditors of such Pledgor and any Persons purporting
to purchase such Pledged Securities from such Pledgor, except as enforceability
may be affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors’ rights generally, general equitable principles (whether


 


21

















 


considered
in a proceeding in equity or at law) and an implied covenant of good faith and
fair dealing.


 


4.3.5        Upon the earlier of (x) (to the extent a
security in uncertificated securities may be perfected by the filing of a
financing statement) the filing of the financing statements listed on Schedule
3 hereto and (y) the obtaining and maintenance of control by the Canadian Collateral
Agent (or its agents appointed for the purposes of perfection) of all Pledged
Securities that constitute uncertificated securities, the security interest
created by this Agreement in such Pledged Securities that constitute
uncertificated securities, will constitute a valid, perfected first priority
(subject, in terms of priority only, to the priority of the Euro MTN Lien, to
the extent provided by the Euro MTN Fiscal Agency Agreement or the Euro MTNs)
security interest in such Pledged Securities constituting uncertificated
securities, enforceable in accordance with its terms against all creditors of
such Pledgor and any persons purporting to purchase such Pledged Securities
from such Pledgor, except as enforceability may be affected by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors’ rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.


 


SECTION 5 COVENANTS


 


5.1           Covenants
of Each Guarantor.


 


Each Guarantor covenants and agrees with
the Canadian Collateral Agent and the other Secured Parties that, from and
after the date of this Agreement until the earlier to occur of (i) the date
upon which the Loans, any Reimbursement Obligations, and all other Obligations
then due and owing, shall have been paid in full in cash, no Letter of Credit
shall be outstanding (except for Letters of Credit that have been cash collateralized
in a manner satisfactory to the Issuing Lender) and the Commitments shall have
terminated or (ii) as to any Guarantor, the date upon which all the Capital
Stock of such Guarantor shall have been sold or otherwise disposed of (to a
Person other than CCMG Corporation, the Parent Borrower or a Subsidiary of
either) in accordance with the terms of the Credit Agreement, such Guarantor
shall take, or shall refrain from taking, as the case may be, each action that
is necessary to be taken or not taken, as the case may be, so that no Default
or Event of Default is caused by the failure to take such action or to refrain
from taking such action by such Guarantor or any of its Subsidiaries.


 


5.2           Covenants
of Each Grantor.


 


Each Grantor covenants and agrees with the
Canadian Collateral Agent and the other Secured Parties that, from and after
the date of this Agreement until the earlier to occur of (i) the date upon
which the Loans, any Reimbursement Obligations and all other Obligations then
due and owing shall have been paid in full in cash, no Letter of Credit shall
be outstanding (except for Letters of Credit that have been cash collateralized
in a manner satisfactory to the Issuing Lender) and the Commitments shall have
terminated or (ii) as to any Grantor, the date upon which all the Capital Stock
of such Grantor shall have been sold or otherwise disposed of (to a Person
other than CCMG Corporation, the Parent Borrower or a Subsidiary of either) in
accordance with the terms of the Credit Agreement:


 


22

















 


5.2.1        Delivery of Instruments and Chattel
Paper. If any amount payable under or in connection with any of such
Grantor’s Collateral shall be or become evidenced by any Instrument or Chattel
Paper, such Grantor shall (except as provided in the following sentence) be
entitled to retain possession of all Collateral of such Grantor evidenced by
any Instrument or Chattel Paper, and shall hold all such Collateral in trust
for the Canadian Collateral Agent, for the rateable benefit of the Secured
Parties. In the event that an Event of Default shall have occurred and be
continuing, upon the request of the Canadian Collateral Agent, such Instrument
or Chattel Paper (other than ordinary course rental contracts for Rental
Equipment and Vehicles) shall be promptly delivered to the Canadian Collateral
Agent duly endorsed in a manner satisfactory to the Canadian Collateral Agent
to be held as Collateral pursuant to this Agreement. Such Grantor shall not
permit any other Person to possess any such Collateral at any time other than
in connection with any sale or other disposition of such Collateral in a
transaction permitted by the Credit Agreement.


 


5.2.2        Maintenance of Insurance. Such
Grantor will maintain with financially sound and reputable insurance companies
insurance on all property material to the business of the Parent Borrower and
its Subsidiaries, taken as a whole, in at least such amounts and against at
least such risks (but including in any event public liability, product liability
and business interruption) as are consistent with the past practices of the
Parent Borrower and its Subsidiaries and otherwise as are usually insured
against in the same general area by companies engaged in the same or a similar
business; furnish to the Canadian Collateral Agent, upon written request,
information in reasonable detail as to the insurance carried; and ensure that
at all times the Canadian Collateral Agent and the other Secured Parties, shall
be named as additional insureds with respect to liability policies and the
Canadian Collateral Agent shall be names as loss payee with respect to the
casualty insurance maintained by such Grantor with respect to such Grantor’s
Collateral.


 


5.2.3        Payment of Obligations. Such
Grantor will pay and discharge or otherwise satisfy at or before maturity or
before they become delinquent, as the case may be, all material taxes,
assessments and governmental charges or levies imposed upon such Grantor’s
Collateral or in respect of income or profits therefrom, as well as all
material claims of any kind (including, without limitation, material claims for
labour, materials and supplies) against or with respect to such Grantor’s
Collateral, except that no such tax, assessment, charge or levy need be paid or
satisfied if the amount or validity thereof is currently being contested in
good faith by appropriate proceedings and reserves in conformity with GAAP with
respect thereto have been provided on the books of such Grantor.


 


5.2.4        Maintenance of Perfected Security Interest;
Further Documentation. (a)  Such Grantor shall maintain the
security interest created by this Agreement in such Grantor’s Collateral as a
perfected security interest having at least the priority described in
subsection 4.2.2 and shall defend such security interest against the
claims and demands of all Persons whomsoever.


 


(b)           Such Grantor will furnish to the
Canadian Collateral Agent from time to time statements and schedules further
identifying and describing such Grantor’s Collateral and such other reports in
connection with such Grantor’s Collateral as the Canadian Collateral Agent may
reasonably request in writing, all in reasonable detail.


 


23

















 


(c)           At any time and from time to time,
upon the written request of the Canadian Collateral Agent, and at the sole
expense of such Grantor, such Grantor will promptly and duly execute and
deliver such further instruments and documents and take such further actions as
the Canadian Collateral Agent may reasonably request for the purpose of
obtaining or preserving the full benefits of this Agreement and of the rights
and powers herein granted by such Grantor, including, without limitation, the
filing of any financing or financing change statements under the PPSA with
respect to the security interests created hereby.


 


5.2.5        Changes in Name, Jurisdiction of
Organization, etc. Such Grantor will not, except upon not less than 30 days’
prior written notice to the Canadian Collateral Agent, change its name or
jurisdiction of organization (whether by amalgamation or  otherwise) or move any of its Collateral to a
new jurisdiction other than disclosed in Schedule 4; provided
that, promptly after receiving a written request therefor from the Canadian
Collateral Agent, such Grantor shall deliver to the Canadian Collateral Agent
all additional financing statements or financing change statement and other
documents reasonably requested by the Canadian Collateral Agent to maintain the
validity, perfection and priority of the security interests as and to the
extent provided for herein.


 


5.2.6        Notices. Such Grantor will advise
the Canadian Agent promptly, in reasonable detail, of:


 


(a)           any Lien (other than security
interests created hereby or Liens expressly permitted under the Credit
Agreement) on any of such Grantor’s Collateral which would materially adversely
affect the ability of the Canadian Collateral Agent to exercise any of its
remedies hereunder; and


 


(b)           the occurrence of any other event
which would reasonably be expected to have a material adverse effect on the
security interests created hereby.


 


5.2.7        Pledged Stock. In the case of
each Grantor that is an Issuer, such Issuer agrees that (i) it will be bound by
the terms of this Agreement relating to the Pledged Stock issued by it and will
comply with such terms insofar as such terms are applicable to it, (ii) it will
notify the Canadian Collateral Agent promptly in writing of the occurrence of
any of the events described in subsection 5.3.1 with respect to the
Pledged Stock issued by it and (iii) the terms of subsections 6.3(c) and 6.7
shall apply to it, mutatis  mutandis, with respect to all actions
that may be required of it pursuant to subsection 6.3(c) or 6.7 with respect to
the Pledged Stock issued by it.


 


5.2.8        Accounts Receivable. (a)  With respect to the
Accounts Receivable constituting Collateral, other than in the ordinary
course of business or as permitted by the Loan Documents, such Grantor will not
(i) grant any extension of the time of payment of any of such Grantor’s
Accounts Receivable, (ii) compromise or settle any such Account Receivable for
less than the full amount thereof, (iii) release, wholly or partially, any
Person liable for the payment of any Account Receivable, (iv) allow any credit
or discount whatsoever on any such Account Receivable or (v) amend, supplement
or modify any Account Receivable unless such extensions, compromises,
settlements, releases, credits or discounts would not reasonably be expected to


 


24

















 


materially
adversely affect the value of the Accounts Receivable constituting Collateral
taken as a whole.


 


(b)           Such Grantor will deliver to the
Canadian Collateral Agent a copy of each material demand, notice or document
received by it that questions or calls into doubt the validity or
enforceability of more than 10% of the aggregate amount of the then outstanding
Accounts Receivable.


 


5.2.9        Maintenance of Records. Such
Grantor will keep and maintain at its own cost and expense reasonably
satisfactory and complete records of its Collateral, including, without
limitation, a record of all payments received and all credits granted with
respect to such Collateral, and shall mark such records to evidence this
Agreement and the Liens and the security interests created hereby.


 


5.2.10      Acquisition of Intellectual Property.
Within 90 days after the end of each calendar year, such Grantor will notify
the Canadian Collateral Agent of any acquisition by such Grantor of (i) any
registration of any material Copyright, Patent, Trade-mark or Industrial Design
or (ii) any exclusive rights under a material Copyright License, Patent
License, Trade-mark License or Industrial Design License constituting
Collateral, and shall take such actions as may be reasonably requested by the
Canadian Collateral Agent (but only to the extent such actions are within such
Grantor’s control) to perfect the security interest granted to the Canadian
Collateral Agent and the other Secured Parties therein, to the extent provided
herein in respect of any Copyright, Patent, Trade-mark or Industrial Design
constituting Collateral on the date hereof, by (x) the execution and delivery
of an amendment or supplement to this Agreement (or amendments to any such
agreement previously executed or delivered by such Grantor) and/or (y) the
making of appropriate registrations (I) of financing statements under the PPSA
and/or (II) in the Canadian Intellectual Property Office.


 


5.2.11      Protection of Trade Secrets. Such
Grantor shall take all steps which it deems commercially reasonable to preserve
and protect the secrecy of all material Trade Secrets of such Grantor.


 


5.2.12      Grant of License to Use Intellectual
Property. For the purpose of enabling the Canadian Collateral Agent to
exercise rights and remedies under this Agreement at such time as the Canadian
Collateral Agent shall be lawfully entitled to exercise such rights and
remedies, each Grantor hereby grants to the Canadian Collateral Agent an
irrevocable, non-exclusive license (exercisable without payment of royalty or
other compensation to the Grantors) to use, license or sublicense any of the
Collateral consisting of Intellectual Property now owned or hereafter acquired
by such Grantor, and wherever the same may be located, and including in such
license reasonable access to all media in which any of the licensed items may
be recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license by the Canadian
Collateral Agent may be exercised, at the option of the Canadian Collateral
Agent, upon the occurrence and during the continuation of an Event of Default,
provided that any license, sublicense or other transaction entered into by the
Canadian Collateral Agent in accordance herewith shall be binding upon the
Grantors notwithstanding any subsequent cure of an Event of Default.


 


25

















 


5.2.13      Deposit Accounts; Etc. Such Grantor shall take, or refrain from
taking, as the case may be, each action that is necessary to be taken or not
taken, as the case maybe, so that no breach of subsection 4.16 of the Credit
Agreement is caused by the failure to take such action or to refrain from
taking such action by such Grantor or any of its Subsidiaries.


 


5.2.14      Protection of Trade-marks. Such
Grantor shall not, with respect to any Trade-marks that are material to the
business of any Grantor, cease the use of any of such Trade-marks or fail to
maintain the level of the quality of products sold and services rendered under
any of such Trade-mark at a level at least substantially consistent with the
quality of such products and services as of the date hereof, and each Grantor
shall take all steps reasonably necessary to insure that licensees of such
Trade-marks use such consistent standards of quality.


 


5.2.15      Protection of Intellectual Property. Subject
to the Credit Agreement, such Grantor shall not do any act or omit to do any
act whereby any of the Intellectual Property which is material to the business
of Grantor may lapse, expire, or become abandoned, or unenforceable.


 


5.2.16      Assignment of Letter of Credit Rights.
In the case of any Letter-of-Credit Rights of any Grantor in any letter of
credit exceeding $5,000,000 in value acquired following the Closing Date, such
Grantor shall use its commercially reasonable efforts to promptly obtain the
consent of the issuer thereof and any nominated person thereon to the
assignment of the proceeds of the related letter of credit, pursuant to an
agreement in form and substance reasonably satisfactory to the Canadian Agent.


 


5.3           Covenants
of Each Pledgor.


 


Each Pledgor covenants and agrees with the
Canadian Collateral Agent and the other Secured Parties that, from and after
the date of this Agreement until the earlier to occur of (i) the Loans, any
Reimbursement Obligations, and all other Obligations then due and owing shall
have been paid in full in cash, no Letter of Credit shall be outstanding
(except for Letters of Credit that have been cash collateralized in a manner
satisfactory to the Issuing Lender) and the Commitments shall have terminated
or (ii) as to any Pledgor, all the Capital Stock of such Pledgor shall have
been sold or otherwise disposed of (to a Person other than CCMG Corporation,
the Parent Borrower or a Subsidiary of either) as permitted under the terms of
the Credit Agreement:


 


5.3.1        Additional Shares. If such
Pledgor shall, as a result of its ownership of its Pledged Stock, become
entitled to receive or shall receive any stock certificate (including, without
limitation, any stock certificate representing a stock or share dividend or a
distribution in connection with any reclassification, increase or reduction of
capital or any certificate issued in connection with any reorganization), stock
option or similar rights in respect of the Capital Stock of any Issuer, whether
in addition to, in substitution of, as a conversion of, or in exchange for, any
shares of the Pledged Stock, or otherwise in respect thereof, such Pledgor
shall accept the same as the agent of the Canadian Collateral Agent and the
other Secured Parties, hold the same in trust for the Canadian Collateral Agent
the other Secured Parties and deliver the same forthwith to the Canadian
Collateral Agent (who will hold the same on behalf of the Secured Parties) in
the exact form received, duly endorsed by such Pledgor to the Canadian
Collateral Agent, if required, together with an undated stock power covering
such certificate duly executed


 


26

















 


in
blank by such Grantor, to be held by the Canadian Collateral Agent, subject to
the terms hereof, as additional collateral security for the Obligations
(subject to subsection 3.3). Any sums paid upon or in respect of the
Pledged Stock upon the liquidation or dissolution of any Issuer (except any
liquidation or dissolution of any Subsidiary of the Parent Borrower in
accordance with the Credit Agreement) shall be paid over to the Canadian
Collateral Agent to be held by it hereunder as additional collateral security
for the Obligations, and in case any distribution of capital shall be made on
or in respect of the Pledged Stock or any property shall be distributed upon or
with respect to the Pledged Stock pursuant to the recapitalization or
reclassification of the capital of any Issuer or pursuant to the reorganization
thereof, the property so distributed shall, unless otherwise subject to a
perfected security interest in favour of the Canadian Collateral Agent, be
delivered to the Canadian Collateral Agent to be held by it hereunder as
additional collateral security for the Obligations. If any sums of money or
property so paid or distributed in respect of the Pledged Stock shall be
received by such Pledgor, such Pledgor shall, until such money or property is
paid or delivered to the Canadian Collateral Agent, hold such money or property
in trust for the Secured Parties, segregated from other funds of such Pledgor,
as additional collateral security for the Obligations.


 


5.3.2        Maintenance of Pledged Stock. Without
the prior written consent of the Canadian Collateral Agent, such Pledgor will
not (except as permitted by the Credit Agreement) (i) vote to enable, or take
any other action to permit, any Issuer to issue any stock or other equity
securities of any nature or to issue any other securities convertible into, or
granting the right to purchase or exchange for, any stock or other equity
securities of any nature of any Issuer, (ii) sell, assign, transfer, exchange,
or otherwise dispose of, or grant any option with respect to, the Pledged
Securities or Proceeds thereof, (iii) create, incur or permit to exist any Lien
or option in favour of, or any material adverse claim of any Person with
respect to, any of the Pledged Securities or Proceeds thereof, or any interest
therein, except for the security interests created by this Agreement or Liens
arising by operation of law or (iv) enter into any agreement or undertaking
restricting the right or ability of such Pledgor, the Canadian Collateral Agent
to sell, assign or transfer any of the Pledged Securities or Proceeds thereof
other than in respect of Pledged Stock of Special Purposes Subsidiaries.


 


5.3.3        Pledged Notes. Such Pledgor
shall, on the date of this Agreement (or on such later date upon which it
becomes a party hereto pursuant to subsection 9.15), deliver to the
Canadian Collateral Agent all Pledged Notes then held by such Pledgor
(excluding any Pledged Note the principal amount of which does not exceed
$3,500,000), endorsed in blank or, at the request of the Canadian Collateral Agent,
endorsed to the Canadian Collateral Agent. Furthermore, within ten Business
Days after any Pledgor obtains a Pledged Note with a principal amount in excess
of $5,000,000, such Pledgor shall cause such Pledged Note to be delivered to
the Canadian Collateral Agent, endorsed in blank or, at the request of the
Canadian Collateral Agent, endorsed to the Canadian Collateral Agent.


 


5.3.4        Maintenance of Security Interest.
Such Pledgor shall maintain the security interest created by this Agreement in
such Pledgor’s Pledged Collateral as a perfected security interest having at
least the priority described in subsection 4.3.4 or 4.3.5, as applicable, and
shall defend such security interest against the claims and demands of all
Persons whomsoever. At any time and from time to time, upon the written request
of the Canadian Collateral Agent and at the sole expense of such Pledgor, such
Pledgor will promptly and duly execute and deliver such


 


27

















 


further
instruments and documents and take such further actions as the Canadian
Collateral Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted by such Pledgor.


 


SECTION 6 REMEDIAL PROVISIONS


 


6.1           Certain
Matters Relating to Accounts.


 


(a)           At any time and from time to time
after the occurrence and during the continuance of an Event of Default, the
Canadian Collateral Agent shall have the right to make test verifications of
the Accounts Receivable constituting Collateral in any reasonable manner and
through any reasonable medium that it reasonably considers advisable, and the
relevant Grantor shall furnish all such assistance and information as the
Canadian Collateral Agent may reasonably require in connection with such test
verifications. At any time and from time to time after the occurrence and
during the continuance of an Event of Default, upon the Canadian Collateral
Agent’s reasonable request and at the expense of the relevant Grantor, such
Grantor shall cause independent public or chartered accountants or others
reasonably satisfactory to the Canadian Collateral Agent to furnish to the
Canadian Collateral Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Accounts Receivable constituting
Collateral.


 


(b)           The Canadian Collateral Agent hereby
authorizes each Grantor to collect such Grantor’s Accounts Receivable
constituting Collateral and the Canadian Collateral Agent may curtail or terminate
said authority at any time after the occurrence and during the continuance of
an Event of Default specified in subsection 9(a) of the Credit Agreement. If
required by the Canadian Collateral Agent at any time after the occurrence and
during the continuance of an Event of Default specified in subsection 9(a) of
the Credit Agreement, any Proceeds constituting payments or other cash proceeds
of Accounts Receivables constituting Collateral, when collected by such
Grantor, (i) shall be forthwith (and, in any event, within two Business Days of
receipt by such Grantor) deposited in, or otherwise transferred by such Grantor
to, the Collateral Proceeds Account, subject to withdrawal by the Canadian
Collateral Agent for the account of the Secured Parties only as provided in
subsection 6.5, and (ii) until so turned over, shall be held by such
Grantor in trust for the Canadian Collateral Agent and the other Secured
Parties, segregated from other funds of such Grantor. All Proceeds constituting
collections or other cash proceeds of Accounts Receivable constituting
Collateral while held by the Collateral Account Bank (or by any Grantor in
trust for the benefit of the Canadian Collateral Agent and the other Secured
Parties) shall continue to be collateral security for all of the Obligations
and shall not constitute payment thereof until applied as hereinafter provided.
At any time when an Event of Default specified in subsection 9(a) of the Credit
Agreement has occurred and is continuing, at the Canadian Collateral Agent’s
election, each of the Canadian Agent and the Canadian Collateral Agent may
apply all or any part of the funds on deposit in the Collateral Proceeds
Account established by the relevant Grantor to the payment of the Obligations
of such Grantor then due and owing, such application to be made as set forth in
subsection 6.5 hereof. So long as no Event of Default has occurred and is
continuing, the funds on deposit in the Collateral Proceeds Account shall be
remitted as provided in subsection 6.1(d) hereof.


 


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(c)           At any time and from time to time
after the occurrence and during the continuance of an Event of Default
specified in subsection 9(a) of the Credit Agreement, at the Canadian
Collateral Agent’s request, each Grantor shall deliver to the Canadian
Collateral Agent copies or, if required by the Canadian Agent for the
enforcement thereof or foreclosure thereon, originals of all documents held by
such Grantor evidencing, and relating to, the agreements and transactions which
gave rise to such Grantor’s Accounts Receivable constituting Collateral,
including, without limitation, all statements relating to such Grantor’s
Accounts Receivable constituting Collateral and all orders, invoices and
shipping receipts.


 


(d)           So long as no Event of Default has
occurred and is continuing, the Canadian Collateral Agent shall instruct the
Collateral Account Bank to promptly remit any funds on deposit in each Grantor’s
Collateral Proceeds Account to such Grantor’s General Fund Account. In the
event that an Event of Default has occurred and is continuing, the Canadian
Collateral Agent and the Grantors agree that the Canadian Collateral Agent, at
its option, may require that each Collateral Proceeds Account and the General
Funds Account of each Grantor be established at the Canadian Collateral Agent. Each
Grantor shall have the right, at any time and from time to time, to withdraw
such of its own funds from its own General Fund Account, and to maintain such
balances in its General Fund Account, as it shall deem to be necessary or
desirable.


 


6.2           Communications
with Obligors; Grantors Remain Liable.


 


(a)           The Canadian Collateral Agent, in its
own name or in the name of others, may at any time and from time to time after
the occurrence and during the continuance of an Event of Default specified in
subsection 9(a) of the Credit Agreement, communicate with obligors under the
Accounts Receivable constituting Collateral and parties to the Contracts (in
each case, to the extent constituting Collateral) to verify with them to the
Canadian Collateral Agent’s satisfaction the existence, amount and terms of any
Accounts Receivable constituting Collateral or Contracts.


 


(b)           Upon the request of the Canadian
Collateral Agent at any time after the occurrence and during the continuance of
an Event of Default specified in subsection 9(a) of the Credit Agreement, each
Grantor shall notify obligors on such Grantor’s Accounts Receivable and parties
to such Grantor’s Contracts (in each case, to the extent constituting
Collateral) that such Accounts Receivable and such Contracts have been assigned
to the Canadian Collateral Agent, for the rateable benefit of the Secured
Parties, and that payments in respect thereof shall be made directly to the
Canadian Collateral Agent.


 


(c)           Anything herein to the contrary
notwithstanding, each Grantor shall remain liable under each of such Grantor’s
Accounts Receivable to observe and perform all the conditions and obligations
to be observed and performed by it thereunder, all in accordance with the terms
of any agreement giving rise thereto. None of the Canadian Collateral Agent,
the Canadian Agent or any other Secured Party shall have any obligation or
liability under any Account Receivable (or any agreement giving rise thereto)
by reason of or arising out of this Agreement or the receipt by the Canadian
Collateral Agent or any other Secured Party of any payment relating thereto,
nor shall the Canadian Collateral Agent or any other Secured Party be obligated
in any manner to perform any of the obligations of any Grantor under or
pursuant to


 


29

















 


any
Account Receivable (or any agreement giving rise thereto) to make any payment,
to make any inquiry as to the nature or the sufficiency of any payment received
by it or as to the sufficiency of any performance by any party thereunder, to
present or file any claim, to take any action to enforce any performance or to
collect the payment of any amounts that may have been assigned to it or to
which it may be entitled at any time or times.


 


6.3           Pledged
Stock.


 


(a)           Unless an Event of Default shall have
occurred and be continuing and the Canadian Collateral Agent shall have given
notice to the relevant Pledgor of the Canadian Collateral Agent’s intent to
exercise its corresponding rights pursuant to subsection 6.3(b), each
Pledgor shall be permitted to receive all cash dividends and distributions paid
in respect of the Pledged Stock (subject to the last two sentences of
subsection 5.3.1 of this Agreement) and all payments made in respect of
the Pledged Notes, to the extent permitted in the Credit Agreement, and to
exercise all voting and corporate rights with respect to the Pledged Stock;
provided, however, that no vote shall be cast or corporate right exercised or
such other action taken (other than in connection with a transaction expressly
permitted by the Credit Agreement) which, in the Canadian Collateral Agent’s
reasonable judgment, would materially impair the Pledged Stock or the related
rights or remedies of the Secured Parties or which would be inconsistent with
or result in any violation of any provision of the Credit Agreement, this
Agreement or any other Loan Document.


 


(b)           If an Event of Default shall occur
and be continuing and the Canadian Collateral Agent shall give notice of its
intent to exercise such rights to the relevant Pledgor or Pledgors,
(i) the Canadian Collateral Agent shall have the right to receive any and
all cash dividends, payments or other Proceeds paid in respect of the Pledged
Stock and make application thereof to the Obligations of the relevant Pledgor
in such order as is provided in subsection 6.5, and (ii) any or all of the
Pledged Stock shall be registered in the name of the Canadian Collateral Agent
or its nominee, and the Canadian Collateral Agent or its nominee may thereafter
exercise (x) all voting, corporate and other rights pertaining to such Pledged
Stock at any meeting of shareholders of the relevant Issuer or Issuers or
otherwise and (y) any and all rights of conversion, exchange, subscription
and any other rights, privileges or options pertaining to such Pledged Stock as
if it were the absolute owner thereof (including, without limitation, the right
to exchange at its discretion any and all of the Pledged Stock upon the merger,
consolidation, reorganization, recapitalization or other fundamental change in
the corporate structure of any Issuer, or upon the exercise by the relevant
Pledgor or the Canadian Collateral Agent of any right, privilege or option
pertaining to such Pledged Stock, and in connection therewith, the right to
deposit and deliver any and all of the Pledged Stock with any committee,
depositary, transfer agent, registrar or other designated agency upon such
terms and conditions as the Canadian Collateral Agent may reasonably
determine), all without liability (other than for its gross negligence or
wilful misconduct) except to account for property actually received by it, but
the Canadian Collateral Agent shall have no duty to any Pledgor to exercise any
such right, privilege or option and shall not be responsible for any failure to
do so or delay in so doing, provided that the Canadian Collateral Agent
shall not exercise any voting or other consensual rights pertaining to the
Pledged Stock in any way that would constitute an exercise of the remedies
described in subsection 6.6 other than in accordance with subsection 6.6.


 


30

















 


(c)           Each Pledgor hereby authorizes and
instructs each Issuer or maker of any Pledged Securities pledged by such
Pledgor hereunder to (i) comply with any instruction received by it from the
Canadian Collateral Agent in writing that (x) states that an Event of Default
has occurred and is continuing and (y) is otherwise in accordance with the
terms of this Agreement, without any other or further instructions from such
Pledgor, and each Pledgor agrees that each Issuer or maker shall be fully
protected in so complying, and (ii) unless otherwise expressly permitted
hereby, pay any dividends or other payments with respect to the Pledged
Securities directly to the Canadian Collateral Agent.


 


6.4           Proceeds
to be Turned Over To Canadian Collateral Agent.


 


In addition to the rights of the Canadian
Collateral Agent and the other Secured Parties specified in subsection 6.1
with respect to payments of Accounts Receivable constituting Collateral, if an
Event of Default shall occur and be continuing, and the Canadian Collateral
Agent shall have instructed any Grantor to do so, all Proceeds received by such
Grantor consisting of cash, cheques and other Cash Equivalent items shall be
held by such Grantor in trust for the Canadian Collateral Agent and the other
Secured Parties hereto, or as applicable, segregated from other funds of such
Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to
the Canadian Collateral Agent (or its agents appointed for purposes of
perfection) in the exact form received by such Grantor (duly endorsed by such
Grantor to the Canadian Collateral Agent if required). All Proceeds received by
the Canadian Collateral Agent hereunder shall be held by the Canadian
Collateral Agent in the relevant Collateral Proceeds Account maintained under
its sole dominion and control. All Proceeds while held by the Canadian
Collateral Agent in such Collateral Proceeds Account (or by the relevant
Grantor in trust for the Canadian Collateral Agent  and the other Secured Parties) shall continue
to be held as collateral security for all the Obligations of such Grantor and
shall not constitute payment thereof until applied as provided in
subsection 6.5.


 


6.5           Application
of Proceeds.


 


It is agreed that if an Event of Default
shall occur and be continuing, any and all Proceeds of the relevant Granting
Party’s Collateral received by the Canadian Collateral Agent (whether from the
relevant Granting Party or otherwise) shall be held by the Canadian Collateral
Agent for the benefit of the Secured Parties as collateral security for the
Obligations of the relevant Granting Party (whether matured or unmatured),
and/or then or at any time thereafter may, in the sole discretion of the
Canadian Collateral Agent, following the application thereof to pay any
unsatisfied Euro MTN Obligations, be applied by the Canadian Collateral Agent
against the Obligations of the relevant Granting Party then due and owing in
the order of priority set forth in the Intercreditor Agreement.


 


6.6           PPSA
and Other Remedies.


 


(a)           If an Event of Default shall occur
and be continuing, the Canadian Collateral Agent, on behalf of the Secured
Parties, may exercise, in addition to all other rights and remedies granted to
them in this Agreement, the Credit Agreement and in any other instrument or
agreement securing, evidencing or relating to the Obligations to the extent
permitted by applicable law, all rights and remedies of a secured party under
the Bankruptcy and


 


31

















 


Insolvency Act (Canada),
the Companies Creditors Arrangement Act
(Canada), the Winding-Up and Restructuring
Act (Canada) and the PPSA, under any other applicable law and in
equity. Without limiting the generality of the foregoing, to the extent
permitted by applicable law, the Canadian Collateral Agent, without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon any
Granting Party or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances,
forthwith collect, receive, appropriate and realize upon the Security
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the Security
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker’s
board or office of the Canadian Collateral Agent or any other Secured Party or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery
without assumption of any credit risk. The Canadian Collateral Agent or any
other Secured Party shall have the right, to the extent permitted by law, upon
any such sale or sales, to purchase the whole or any part of the Security
Collateral so sold, free of any right or equity of redemption in such Granting
Party, which right or equity is hereby waived and released. Each Granting Party
further agrees, at the Canadian Collateral Agent’s request, to assemble the
Security Collateral and make it available to the Canadian Collateral Agent at
places which the Canadian Collateral Agent shall reasonably select, whether at
such Granting Party’s premises or elsewhere. The Canadian Collateral Agent
shall apply the net proceeds of any action taken by it pursuant to this
subsection 6.6, after deducting all reasonable costs and expenses of every
kind incurred in connection therewith or incidental to the care or safekeeping
of any of the Security Collateral or in any way relating to the Security
Collateral or the rights of the Canadian Collateral Agent and the other Secured
Parties hereunder, including, without limitation, reasonable legal fees and
disbursements, to the payment in whole or in part of the Obligations of the
relevant Granting Party then due and owing, in the order of priority specified
in subsection 6.5 above, and only after such application and after the
payment by the Canadian Collateral Agent of any other amount required by any
provision of law, need the Canadian Collateral Agent account for the surplus,
if any, to such Granting Party. To the extent permitted by applicable law, (i)
such Granting Party waives all claims, damages and demands it may acquire
against the Canadian Collateral Agent or any other Secured Party arising out of
the repossession, retention or sale of the Security Collateral, other than any
such claims, damages and demands that may arise from the gross negligence or wilful
misconduct of any of the Canadian Collateral Agent or such other Secured Party,
and (ii) if any notice of a proposed sale or other disposition of Security
Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given at least 10 days before such sale or other disposition.


 


(b)           The Canadian Collateral Agent may
appoint, remove or reappoint by instrument in writing, any Person or Persons,
whether an officer or officers or an employee or employees of any Grantor or
not, to be an interim receiver, receiver or receivers (hereinafter called a “Receiver”, which term when used herein
shall include a receiver and manager) of such Collateral (including any
interest, income or profits therefrom). Any such Receiver shall, to the extent
permitted by applicable law, be deemed the agent of such Grantor and not of the
Canadian Collateral Agent, and the Canadian Collateral Agent shall not be in
any way responsible for any misconduct, negligence or non-feasance on the part
of any such Receiver or its servants, agents or employees. Subject to the
provisions of the instrument appointing it, any such Receiver shall


 


32

















 


(i)
have such powers as have been granted to the Canadian Collateral Agent under
this Section 6 and (ii) shall be entitled to exercise such powers at any
time that such powers would otherwise be exercisable by the Canadian Collateral
Agent under this Section 6, which powers shall include, but are not
limited to, the power to take possession of the Collateral, to preserve the
Collateral or its value, to carry on or concur in carrying on all or any part
of the business of such Grantor and to sell, lease, license or otherwise
dispose of or concur in selling, leasing, licensing or otherwise disposing of
the Collateral. To facilitate the foregoing powers, any such Receiver may, to
the exclusion of all others, including any Grantor, enter upon, use and occupy
all premises owned or occupied by such Grantor wherein the Collateral may be situate,
maintain the Collateral upon such premises, borrow money on a secured or
unsecured basis and use the Collateral directly in carrying on such Grantor’s
business or as security for loans or advances to enable the Receiver to carry
on such Grantor’s business or otherwise, as such Receiver shall, in its
reasonable discretion, determine. Except as may be otherwise directed by the
Canadian Collateral Agent, all money received from time to time by such
Receiver in carrying out his/her/its appointment shall be received in trust for
and be paid over to the Canadian Collateral Agent and any surplus shall be
applied in accordance with applicable law. Every such Receiver may, in the
discretion of the Canadian Collateral Agent, be vested with, in addition to the
rights set out herein, all or any of the rights and powers of the Canadian
Agent, the Canadian Collateral Agent described in the Credit Agreement, the
PPSA, the Bankruptcy and Insolvency Act
(Canada), the Companies Creditors
Arrangement Act (Canada) or the Winding-Up
and Restructuring Act (Canada).


 


6.7           Registration
Rights.


 


(a)           If the Canadian Collateral Agent
shall determine to exercise its right to sell any or all of the Pledged Stock
pursuant to subsection 6.6, and if in the reasonable opinion of the Canadian
Collateral Agent it is necessary or reasonably advisable to have the Pledged
Stock (other than Pledged Stock of Special Purpose Subsidiaries), or that
portion thereof to be sold, registered under the provisions of applicable
securities legislation, the relevant Pledgor will use its reasonable best
efforts to cause the Issuer thereof to (i) execute and deliver, and use its
best efforts to cause the directors and officers of such Issuer to execute and
deliver, all such instruments and documents, and do or cause to be done all
such other acts as may be, in the reasonable opinion of the  Canadian Collateral Agent necessary or
advisable to register such Pledged Stock, or that portion thereof to be sold,
under the provisions of the applicable securities legislation, (ii) use its
reasonable best efforts to cause the registration statement relating thereto to
become effective and to remain effective for a period of not more than one year
from the date of the first public offering of such Pledged Stock, or that
portion thereof to be sold, and (iii) make all amendments thereto and/or to the
related prospectus which, in the reasonable opinion of the Canadian Collateral
Agent are necessary or advisable, all in conformity with the requirements of
applicable securities legislation and the rules and regulations of any
applicable securities commission or regulation applicable thereto. Such Pledgor
agrees to use its reasonable best efforts to cause such Issuer to comply with
the provisions of the securities laws of any and all provinces and territories
that the Canadian Collateral Agent shall reasonably designate and to make
available to its security holders, as soon as practicable, any statements
(which need not be audited) that will satisfy the provisions of applicable securities
legislation.


 


33

















 


(b)           Such Pledgor recognizes that the
Canadian Collateral Agent may be unable to effect a public sale of any or all
such Pledged Stock, by reason of certain prohibitions contained in applicable
securities legislation or otherwise, and may be compelled to resort to one or
more private sales thereof to a restricted group of purchasers which will be
obliged to agree, among other things, to acquire such securities for their own
account for investment and not with a view to the distribution or resale
thereof. Such Pledgor acknowledges and agrees that any such private sale may
result in prices and other terms less favourable than if such sale were a
public sale and, notwithstanding such circumstances, to the extent permitted by
applicable law, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. The Canadian Collateral Agent shall
not be under any obligation to delay a sale of any of the Pledged Stock for the
period of time necessary to permit the Issuer thereof to register such
securities for public sale under applicable securities legislation, even if
such Issuer would agree to do so.


 


(c)           Such Pledgor agrees to use its
reasonable best efforts to do or cause to be done all such other acts as may be
necessary to make such sale or sales of all or any portion of such Pledged
Stock pursuant to this subsection 6.7 valid and binding and in compliance
with any and all other applicable Requirements of Law. Such Pledgor further
agrees that a breach of any of the covenants contained in this subsection 6.7
will cause irreparable injury to the Canadian Collateral Agent and the Lenders,
that the Canadian Collateral Agent and the Lenders have no adequate remedy at
law in respect of such breach and, as a consequence, that each and every
covenant contained in this subsection 6.7 shall be specifically
enforceable against such Pledgor, and to the extent permitted by applicable
law, such Pledgor hereby waives and agrees not to assert any defenses against
an action for specific performance of such covenants except for a defense that
no Event of Default has occurred or is continuing under the Credit Agreement.


 


6.8           Waiver;
Deficiency.


 


Each Granting Party shall remain liable for
any deficiency if the proceeds of any sale or other disposition of the Security
Collateral are insufficient to pay in full, the Loans, Reimbursement
Obligations constituting Obligations of such Granting Party and, to the extent
then due and owing, all other Obligations of such Granting Party and the
reasonable fees and disbursements of any legal counsel employed by the Canadian
Collateral Agent or any other Secured Party to collect such deficiency.


 


6.9           Certain
Undertakings with Respect to Special Purpose Subsidiaries.


 


(a)           The Canadian Collateral Agent and
each Secured Party agrees that, prior to the date that is one year and one day
after the payment in full of all the obligations of any Special Purpose
Subsidiary in connection with and under a securitization, (i) the Canadian
Collateral Agent and other Secured Parties shall not be entitled, whether
before or after the occurrence of any Event of Default, to (A) institute
against, or join any other Person in instituting against, any Special Purpose
Subsidiary any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding under the laws of Canada or any province or territory
thereof, (B) transfer and register the capital stock of any Special Purposes
Subsidiary or any other instrument in the name of the Canadian Collateral Agent
or a Secured Party or any designee or nominee thereof, (C) foreclose such
security interest regardless of the bankruptcy or


 


34

















 


insolvency
of any Borrower or any other Subsidiary, (D) exercise any voting rights granted
or appurtenant to such capital stock of any Special Purpose Subsidiary or any
other instrument or (E) enforce any right that the holder of any such capital
stock of any Special Purpose Subsidiary or any other instrument might otherwise
have to liquidate, consolidate, combine, collapse or disregard the entity
status of such Special Purpose Subsidiary and (ii) the Canadian Collateral
Agent and other Secured Parties hereby waive and release any right to require
(A) that any Special Purpose Subsidiary be in any manner merged, combined,
collapsed or consolidated with or into any Borrower or any other Subsidiary,
including by way of substantive consolidation in a bankruptcy case or (B) that
the status of any Special Purpose Subsidiary as a separate entity be in any
respect disregarded. The Canadian Collateral Agent and each Secured Party agree
and acknowledge that each of (x) BNY Midwest Trust Company, as trustee
(together with its successors and assigns, the “ABS Trustee”) under that
certain Amended and Restated Base Indenture, dated as of December 21, 2005 (as
the same may be amended from time to time, the “ABS Base Indenture”), by
and between Hertz Vehicle Financing LLC (“HVF”) and the ABS Trustee, and
under that certain Amended and Restated Collateral Agency Agreement, dated as
of December 21, 2005 (as the same may be amended from time to time, the “ABS
Collateral Agency Agreement”), by and among HVF, Hertz General Interest
LLC, the Parent Borrower, as servicer and a secured party, the Trustee and BNY
Midwest Trust Company, as collateral agent (together with its successors and
assigns, the “ABS Collateral Agent”), acting on behalf of the holders of
securitization indebtedness of any Special Purpose Subsidiary, (y) each
Enhancement Provider (as defined in the ABS Base Indenture on the date hereof)
that has an express right to the collateral under the ABS Base Indenture or the
ABS Collateral Agency Agreement and (z) the agent acting on behalf of the holders
of securitization indebtedness of any Special Purpose Subsidiary is an express
third party beneficiary with respect to this subsection 6.9(a) and each such
person shall have the right to enforce compliance by the Collateral Agent and
any other Secured Party with this subsection 6.9.


 


(b)           Upon the transfer or purported
transfer by any Borrower or any Subsidiary (other than a Special Purpose
Subsidiary) of securitization assets to a Special Purpose Subsidiary in a
securitization, any Liens with respect to such securitization assets arising
under the Credit Agreement or any Security Documents shall automatically be
released (and the Canadian Collateral Agent is hereby authorized to execute and
enter into any such releases and other documents as the Parent Borrower may
reasonably request in order to give effect thereto).


 


(c)           The Collateral Agent, the Canadian
Collateral Agent and the Lenders shall take no action related to the Collateral
that would cause HVF to breach any of its covenants in its certificate of
formation, limited liability company agreement or in any other Related Document
(as defined in the ABS Base Indenture on the date hereof).


 


(d)           The Collateral Agent, the Canadian
Collateral Agent and the Lenders acknowledge that they have no interest in, and
will not assert any interest in, the assets owned by HVF (including without
limitation any Rental Car Vehicle subject to the HVF Lease (as in effect and as
defined in the ABS Base Indenture on the date hereof) or any other Indenture
Collateral (as defined in the ABS Base Indenture on the date hereof) or any HVF
Vehicle Collateral (as defined in the Amended and Restated Collateral Agency
Agreement, dated as of December 21, 2005, by and among the Parent Borrower, as
servicer and as a secured party, HVF, as a grantor, Hertz General Interest LLC,
as a grantor, the Trustee, as a secured party, and BNY Midwest


 


35

















 


Trust
Company, as collateral agent (the “Collateral Agency Agreement”))) other
than, following a transfer of any pledged equity interest or pledged stock to
the Collateral Agent in connection with any exercise of remedies pursuant to
this Agreement, the right to receive lawful dividends or other distributions
when paid by HVF  from lawful sources and
in accordance with the Related Documents (as defined in the ABS Base Indenture
on the date hereof) and the rights of a member of HVF.


 


(e)           The Canadian Collateral Agent and the
Lenders agree, to the extent required by Moody’s, S&P or any rating agency in
connection with a Special Purpose Financing involving a Special Purpose
Subsidiary the Capital Stock of which constitutes Pledged Collateral hereunder,
to act in accordance with clauses (c) and (d) above with respect to such
Capital Stock and such Special Purpose Financing.


 


(f)            Notwithstanding anything to the
contrary contained herein, this subsection 6.9 may not be amended, waived or
otherwise modified in any manner adverse to the ABS Collateral Agent, the agent
acting on behalf of the holders of securitization indebtedness of any Special
Purpose Subsidiary or the holders of the related securitization indebtedness
without the written consent of the ABS Trustee or such other agent.


 


SECTION 7 THE CANADIAN COLLATERAL AGENT


 


7.1           Canadian
Collateral Agent’s Appointment as Attorney-in-Fact, etc.


 


(a)           Each Granting Party hereby
irrevocably constitutes and appoints the Canadian Collateral Agent or any
authorized officer or agent thereof, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of such Granting Party and in the name of such Granting
Party or in its own name, for the purpose of carrying out the terms of this
Agreement, to take any and all appropriate action and to execute any and all
documents and instruments that may be reasonably necessary or desirable to
accomplish the purposes of this Agreement to the extent permitted by applicable
law, provided that the Canadian Collateral Agent agree not to exercise
such power except upon the occurrence and during the continuance of any Event
of Default. Without limiting the generality of the foregoing, at any time when
an Event of Default has occurred and is continuing (in each case to the extent
permitted by applicable law), (x) each Pledgor hereby gives the Canadian
Collateral Agent the power and right, on behalf of such Pledgor, without notice
or assent by such Pledgor, to execute, in connection with any sale provided for
in subsection 6.6(a) or 6.7, any endorsements, assessments or other
instruments of conveyance or transfer with respect to such Pledgor’s Pledged
Collateral, and (y) each Grantor hereby gives the Canadian Collateral Agent the
power and right, on behalf of such Grantor, without notice to or assent by such
Grantor, to do any or all of the following:


 


(i)            in
the name of such Grantor or its own name, or otherwise, take possession of and
endorse and collect any cheques, drafts, notes, acceptances or other
instruments for the payment of moneys due under any Account Receivable of such
Grantor that constitutes Collateral or with respect to any other Collateral of
such Grantor and file any claim or take any other action or institute any
proceeding in any court of law or equity or otherwise deemed appropriate by the
Canadian Collateral Agent for the


 


36

















 


purpose
of collecting any and all such moneys due under any Account Receivable of such
Grantor that constitutes Collateral or with respect to any other Collateral of
such Grantor whenever payable;


 


(ii)           in
the case of any Copyright, Patent, Trade-mark, or Industrial Design
constituting Collateral of such Grantor, execute and deliver any and all
agreements, instruments, documents and papers as the Canadian Collateral Agent
may reasonably request to such Grantor to evidence the Canadian Collateral
Agent’s and the Lenders’ security interest in such Copyright, Patent,
Trade-mark or Industrial Design and the goodwill and intangibles of such
Grantor relating thereto or represented thereby;


 


(iii)          pay
or discharge taxes and Liens, other than Liens permitted under this Agreement
or the other Loan Documents, levied or placed on the Collateral of such
Grantor, effect any repairs or any insurance called for by the terms of this
Agreement and pay all or any part of the premiums therefor and the costs
thereof; and


 


(iv)          (A)
direct any party liable for any payment under any of the Collateral of such
Grantor to make payment of any and all moneys due or to become due thereunder
directly to the Canadian Collateral Agent or as the Canadian Collateral Agent
shall direct; (B) ask or demand for, collect, receive payment of and receipt
for, any and all moneys, claims and other amounts due or to become due at any
time in respect of or arising out of any Collateral of such Grantor; (C) sign
and endorse any invoices, freight or express bills, bills of lading, storage or
warehouse receipts, drafts against debtors, assignments, verifications, notices
and other documents in connection with any of the Collateral of such Grantor;
(D) commence and prosecute any suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect the Collateral of such
Grantor or any portion thereof and to enforce any other right in respect of any
Collateral of such Grantor; (E) defend any suit, action or proceeding brought
against such Grantor with respect to any Collateral of such Grantor; (F)
settle, compromise or adjust any such suit, action or proceeding described in
clause (E) above and, in connection therewith, to give such discharges or
releases as the Canadian Collateral Agent may deem appropriate; (G) subject to
any existing reserved rights or licenses, assign any Copyright, Patent,
Trade-mark or Industrial Design constituting Collateral of such Grantor (along
with the goodwill of the business to which any such Copyright, Patent,
Trade-mark or Industrial Design pertains), for such term or terms, on such
conditions, and in such manner, as the Canadian Agent shall in its sole
discretion determine; and (H) generally, sell, transfer, pledge and make any
agreement with respect to or otherwise deal with any of the Collateral of such
Grantor as fully and completely as though the Canadian Collateral Agent were
the absolute owner thereof for all purposes, and do, at the Canadian Collateral
Agent’s option and such Grantor’s expense, at any time, or from time to time,
all acts and things which the Canadian Collateral Agent deems necessary to
protect, preserve or realize upon the Collateral of such Grantor and the
Canadian Collateral Agent’s and the other Secured Parties’ security interests
therein and to effect the intent of this Agreement, all as fully and
effectively as such Grantor might do.


 


(b)           The reasonable expenses of the
Canadian Collateral Agent incurred in connection with actions undertaken as
provided in this subsection 7.1, together with interest


 


37

















 


thereon
at a rate per annum equal to the rate per annum at which interest would then be
payable on past due Loans that are Revolving Credit Loans under the Credit
Agreement, from the date of payment by the Canadian Collateral Agent to the
date reimbursed by the relevant Granting Party, shall be payable by such
Granting Party to the Canadian Collateral Agent on demand.


 


(c)           Each Granting Party hereby ratifies
all that said attorney shall lawfully do or cause to be done by virtue hereof. All
powers, authorizations and agencies contained in this Agreement are coupled
with an interest and are irrevocable as to the relevant Granting Party until
this Agreement is terminated as to such Granting Party, and the security
interests in the Security Collateral of such Granting Party created hereby are
released.


 


7.2           Duty
of Canadian Collateral Agent.


 


The Canadian Collateral Agent’s sole duty
with respect to the custody, safekeeping and physical preservation of the
Security Collateral in its possession, shall be to deal with it in the same
manner as the Canadian Collateral Agent deals with similar property for its own
account. None of the Canadian Collateral Agent or any other Secured Party nor
any of their respective officers, directors, employees or agents shall be
liable for failure to demand, collect or realize upon any of the Security
Collateral or for any delay in doing so or shall be under any obligation to
sell or otherwise dispose of any Security Collateral upon the request of any
Granting Party or any other Person or, except as otherwise provided herein, to
take any other action whatsoever with regard to the Security Collateral or any
part thereof. The powers conferred on the Canadian Collateral Agent and the
other Secured Parties hereunder are solely to protect the Canadian Collateral
Agent’s and the other Secured Parties’ interests in the Security Collateral and
shall not impose any duty upon the Canadian Collateral Agent or any other
Secured Party to exercise any such powers. The Canadian Collateral Agent and
the other Secured Parties shall be accountable only for amounts that they
actually receive as a result of the exercise of such powers, and neither they
nor any of their officers, directors, employees or agents shall be responsible
to any Granting Party for any act or failure to act hereunder, except as
otherwise provided herein or for their own gross negligence or wilful
misconduct.


 


7.3           Financing
Statements.


 


Pursuant to any applicable law, each
Granting Party authorizes the Canadian Collateral Agent to file or record
financing statements, financing change statements and other filing or recording
documents or instruments with respect to such Granting Party’s Security
Collateral without the signature of such Granting Party in such form and in
such offices as the Canadian Collateral Agent reasonably determine appropriate
to perfect the security interests of the Canadian Collateral Agent under this
Agreement. Each Granting Party authorizes the Canadian Collateral Agent to use
any collateral description determined by the Canadian Collateral Agent,
including, without limitation, the collateral description “all personal
property” or “all assets” in any such financing statements or financing change
statements.


 


7.4           Authority
of Canadian Collateral Agent.


 


Each Granting Party acknowledges that the
rights and responsibilities of the Canadian Collateral Agent under this
Agreement with respect to any action taken by the


 


38

















 


Canadian
Collateral Agent or the exercise or non-exercise by the Canadian Collateral
Agent of any option, voting right, request, judgment or other right or remedy
provided for herein or resulting or arising out of this Agreement or any
amendment, supplement or other modification of this Agreement shall, as between
the Canadian Collateral Agent and the Secured Parties, be governed by the
Credit Agreement and by such other agreements with respect thereto as may exist
from time to time among them, but, as between the Canadian Collateral Agent and
the Granting Parties, the Canadian Collateral Agent shall be conclusively
presumed to be acting as agent for the Secured Parties with full and valid
authority so to act or refrain from acting, and no Granting Party shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.


 


7.5           Right
of Inspection.


 


Upon reasonable written advance notice to
any Grantor and as often as may reasonably be desired, or at any time and from
time to time after the occurrence and during the continuation of an Event of
Default, the Canadian Collateral Agent shall have reasonable access during
normal business hours to all the books, correspondence and records of such
Grantor, and the Canadian Collateral Agent and their respective representatives
may examine the same, and to the extent reasonable take extracts therefrom and
make photocopies thereof, and such Grantor agrees to render to the  Canadian Collateral Agent at such Grantor’s
reasonable cost and expense, such clerical and other assistance as may be
reasonably requested with regard thereto. The Canadian Collateral Agent and
their respective representatives shall also have the right, upon reasonable
advance written notice to such Grantor subject to any lease restrictions, to
enter during normal business hours into and upon any premises owned, leased or
operated by such Grantor where any of such Grantor’s Inventory or Equipment is
located for the purpose of inspecting the same, observing its use or otherwise
protecting its interests therein.


 


SECTION 8 NON-LENDER SECURED PARTIES


 


8.1           Rights
to Collateral.


 


(a)           The Non-Lender Secured Parties shall
not have any right whatsoever to do any of the following:  (i) exercise any rights or remedies with
respect to the Collateral (such term, as used in this Section 8, having
the meaning assigned to it in the Credit Agreement), including, without
limitation, the right to (A) enforce any Liens or sell or otherwise foreclose
on any portion of the Collateral, (B) request any action, institute any
proceedings, exercise any voting rights, give any instructions, make any
election, notice account debtors or make collections with respect to all or any
portion of the Collateral or (C) release any Guarantor under this Agreement or
release any Collateral from the Liens of any Security Document or consent to or
otherwise approve any such release; (ii) demand, accept or obtain any Lien on
any Collateral (except for Liens arising under, and subject to the terms of,
this Agreement); (iii) vote in any Bankruptcy Case or similar proceeding in
respect of CCMG Corporation or any of its Subsidiaries (any such proceeding,
for purposes of this clause (a), a “Bankruptcy”) with respect to, or
take any other actions concerning the Collateral; (iv) receive any proceeds
from any sale, transfer or other disposition of any of the Collateral (except
in accordance with this Agreement); (v) oppose any sale, transfer or other
disposition of the Collateral; (vi) object to any debtor-in-possession
financing in any Bankruptcy Case which is provided by one or more Lenders among


 


39

















 


others;
(vii) object to the use of cash collateral in respect of the Collateral in any
Bankruptcy; or (viii) seek, or object to the Lenders seeking on an equal and
rateable basis, any adequate protection or relief from the automatic stay with
respect to the Collateral in any Bankruptcy.


 


(b)           Each Non-Lender Secured Party, by its
acceptance of the benefits of this Agreement and the other Security Documents,
agrees that in exercising rights and remedies with respect to the Collateral,
the Canadian Collateral Agent and the Lenders, with the consent of the Canadian
Collateral Agent, may enforce the provisions of the Security Documents and
exercise remedies thereunder and under any other Loan Documents (or refrain
from enforcing rights and exercising remedies), all in such order and in such
manner as they may determine in the exercise of their sole business judgment. Such
exercise and enforcement shall include, without limitation, the rights to
collect, sell, dispose of or otherwise realize upon all or any part of the
Collateral, to incur expenses in connection with such collection, sale,
disposition or other realization and to exercise all the rights and remedies of
a secured lender under the PPSA of any applicable jurisdiction. The Non-Lender
Secured Parties hereby agree by their acceptance of the benefits of this
Agreement and the other Security Documents not to contest or otherwise
challenge any such collection, sale, disposition or other realization of or
upon all or any of the Collateral. Whether or not a Bankruptcy Case has been
commenced, the Non-Lender Secured Parties shall be deemed to have consented to
any sale or other disposition of any property, business or assets of CCMG
Corporation or any of its Subsidiaries and the release of any or all of the
Collateral from the Liens of any Security Document in connection therewith.


 


(c)           Notwithstanding any provision of this
subsection 8.1, the Non-Lender Secured Parties shall be entitled to file
any necessary responsive or defensive pleadings in opposition to any motion,
claim, adversary proceeding or other pleadings (A) in order to prevent any
Person from seeking to foreclose on the Collateral or supersede the Non-Lender
Secured Parties’ claim thereto or (B) in opposition to any motion, claim,
adversary proceeding or other pleading made by any Person objecting to or
otherwise seeking the disallowance of the claims of the Non-Lender Secured
Parties.


 


(d)           Each Non-Lender Secured Party, by its
acceptance of the benefit of this Agreement, agrees that the Canadian
Collateral Agent and the Lenders may deal with the Collateral, including any
exchange, taking or release of Collateral, may change or increase the amount of
the Borrower Obligations and/or the Guarantor Obligations, and may release any
Guarantor from its Obligations hereunder, all without any liability or
obligation (except as may be otherwise expressly provided herein) to the
Non-Lender Secured Parties.


 


8.2           Appointment
of Agent.


 


Each Non-Lender Secured Party, by its
acceptance of the benefits of this Agreement and the other Security Documents,
shall be deemed irrevocably to make, constitute and appoint the Canadian
Collateral Agent as agent under the Credit Agreement (and all officers,
employees or agents designated by the Canadian Collateral Agent) as such Person’s
true and lawful agent and attorney-in-fact, and in such capacity, the Canadian
Collateral Agent shall have the right, with power of substitution for the
Non-Lender Secured Parties and in each such Person’s name or otherwise, to
effectuate any sale, transfer or other disposition of the Collateral. It is
understood and agreed that the appointment of the Canadian Collateral Agent


 


40

















 


as the
agent and attorney-in-fact of the Non-Lender Secured Parties for the purposes
set forth herein is coupled with an interest and is irrevocable. It is
understood and agreed that the Canadian Collateral Agent has appointed the
Canadian Agent as its agent for purposes of perfecting certain of the security
interests created hereunder and for otherwise carrying out certain of its
obligations hereunder.


 


8.3           Waiver
of Claims.


 


To the maximum extent permitted by law,
each Non-Lender Secured Party waives any claim it might have against the
Canadian Collateral Agent or the Lenders with respect to, or arising out of,
any action or failure to act or any error of judgment, negligence, or mistake
or oversight whatsoever on the part of the Canadian Collateral Agent or the
Lenders or their respective directors, officers, employees or agents with
respect to any exercise of rights or remedies under the Loan Documents or any
transaction relating to the Collateral (including, without limitation, any such
exercise described in subsection 8.1(b) above), except for any such action
or failure to act which constitutes wilful misconduct or gross negligence of
such Person. None of the Canadian Collateral Agent or any Lender or any of
their respective directors, officers, employees or agents shall be liable for
failure to demand, collect or realize upon any of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose
of any Collateral upon the request of CCMG Corporation, any Subsidiary of CCMG
Corporation, any Non-Lender Secured Party or any other Person or to take any
other action or forbear from doing so whatsoever with regard to the Collateral
or any part thereof, except for any such action or failure to act which
constitutes wilful misconduct or gross negligence of such Person.


 


SECTION 9 MISCELLANEOUS


 


9.1           Amendments
in Writing.


 


None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except by
a written instrument executed by each affected Granting Party and the Canadian
Collateral Agent, provided that (a) any provision of this Agreement
imposing obligations on any Granting Party may be waived by the Canadian
Collateral Agent in a written instrument executed by the Canadian Collateral
Agent and (b) notwithstanding anything to the contrary in subsection 11.1 of
the Credit Agreement, no such waiver and no such amendment or modification
shall amend, modify or waive the definition of “Secured Party” or
subsection 6.5 if such waiver, amendment, or modification would adversely
affect a Secured Party without the written consent of each such affected
Secured Party.


 


9.2           Notices.


 


All notices, requests and demands to or
upon the Canadian Collateral Agent or any Granting Party hereunder shall be
effected in the manner provided for in subsection 11.2 of the Credit Agreement;
provided that any such notice, request or demand to or upon any
Guarantor shall be addressed to such Guarantor at its notice address set forth
on Schedule 1, unless and until such Guarantor shall change such
address by notice to the Canadian Collateral


 


41

















 


Agent
and the Canadian Agent given in accordance with subsection 11.2 of the Credit
Agreement.


 


9.3           No
Waiver by Course of Conduct; Cumulative Remedies.


 


None of the Canadian Collateral Agent or
any other Secured Party shall by any act (except by a written instrument
pursuant to subsection 9.1), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in
any Default or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Canadian Collateral Agent or any other Secured
Party, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Canadian Collateral
Agent or any other Secured Party of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
Canadian Collateral Agent or such other Secured Party would otherwise have on
any future occasion. The rights and remedies herein provided are cumulative,
may be exercised singly or concurrently and are not exclusive of any other
rights or remedies provided by law.


 


9.4           Enforcement
Expenses; Indemnification.


 


(a)           Each Guarantor jointly and severally
agrees to pay or reimburse each Secured Party and the Canadian Collateral Agent
for all their respective reasonable costs and expenses incurred in collecting
against any Guarantor under the guarantee contained in Section 2 or
otherwise enforcing or preserving any rights under this Agreement against such
Guarantor and the other Loan Documents to which such Guarantor is a party,
including, without limitation, the reasonable fees and disbursements of counsel
to the Secured Parties, the Canadian Collateral Agent and the Canadian Agent.


 


(b)           Each Grantor jointly and severally
agrees to pay, and to save the Canadian Collateral Agent, the Canadian Agent
and the other Secured Parties harmless from, (x) any and all liabilities,
costs, losses and expenses of whatever kind with respect to, or resulting from
any delay in paying, any and all stamp, excise, sales or other similar taxes
which may be payable or determined to be payable with respect to any of the
Security Collateral or in connection with any of the transactions contemplated
by this Agreement and (y) any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement (collectively,
the “indemnified liabilities”), in each case to the extent the Parent
Borrower would be required to do so pursuant to subsection 11.5 of the Credit
Agreement, and in any event excluding any taxes or other indemnified
liabilities arising from gross negligence or wilful misconduct of the Canadian
Collateral Agent or any other Secured Party.


 


(c)           The agreements in this
subsection 9.4 shall survive repayment of the Obligations and all other
amounts payable under the Credit Agreement and the other Loan Documents.


 


42

















 


9.5           Successors
and Assigns.


 


This Agreement shall be binding upon and
shall enure to the benefit of the Granting Parties, the Canadian Collateral
Agent and the Secured Parties and their respective successors and assigns; provided
that no Granting Party may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Canadian Collateral Agent.


 


9.6           Set-Off.


 


Each Guarantor hereby irrevocably
authorizes each of the Canadian Agent 
and the Canadian Collateral Agent and each other Secured Party at any
time and from time to time without notice to such Guarantor, any other
Guarantor or any of the Borrowers, any such notice being expressly waived by
each Guarantor and by each Borrower, to the extent permitted by applicable law,
upon the occurrence and during the continuance of an Event of Default under
subsection 9(a) of the Credit Agreement so long as any amount remains
unpaid after it becomes due and payable by such Guarantor hereunder, to set-off
and appropriate and apply against any such amount any and all deposits (general
or special, time or demand, provisional or final) (other than the Collateral
Proceeds Account), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by the Canadian
Collateral Agent , the Canadian Agent or such other Secured Party to or for the
credit or the account of such Guarantor, or any part thereof in such amounts as
the Canadian Collateral Agent, the Canadian Agent or such other Secured Party
may elect. The Canadian Collateral Agent, the Canadian Agent and each other
Secured Party shall notify such Guarantor promptly of any such set-off and the
application made by the Canadian Collateral Agent, the Canadian Agent or such
other Secured Party of the proceeds thereof; provided that the failure
to give such notice shall not affect the validity of such set-off and
application. The rights of the Canadian Collateral Agent, the Canadian Agent
and each other Secured Party under this subsection 9.6 are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which the Canadian Collateral Agent, the Canadian Agent or such other
Secured Party may have.


 


9.7           Counterparts.


 


This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument.


 


9.8           Severability.


 


Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction; provided that,
with respect to any Pledged Stock issued by a Subsidiary, all rights, powers
and remedies provided in this Agreement may be exercised only to the extent
that they do not violate any provision of any law, rule or regulation of any
Governmental


 


43

















 


Authority
applicable to any such Pledged Stock or affecting the legality, validity or
enforceability of any of the provisions of this Agreement against the Pledgor
(such laws, rules or regulations, “Applicable Law”) and are intended to
be limited to the extent necessary so that they will not render this Agreement
invalid, unenforceable or not entitled to be recorded, registered or filed
under the provisions of any Applicable Law.


 


9.9           Section
Headings.


 


The Section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.


 


9.10         Integration.


 


This Agreement and the other Loan Documents
represent the entire agreement of the Granting Parties, the Canadian Collateral
Agent and the other Secured Parties with respect to the subject matter hereof,
and there are no promises, undertakings, representations or warranties by the
Granting Parties, the Canadian Collateral Agent or any other Secured Party
relative to subject matter hereof not expressly set forth or referred to herein
or in the other Loan Documents.


 


9.11         GOVERNING
LAW.


 


THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND ANY CLAIM OR CONTROVERSY RELATING
HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE LAW OF THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE
THEREIN.


 


9.12         Submission
To Jurisdiction; Waivers.


 


Each party hereto hereby irrevocably and
unconditionally:


 


(a)           submits for itself and its property
in any legal action or proceeding relating to this Agreement and the other Loan
Documents to which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of the
courts of the Province of Ontario;


 


(b)           consents that any such action or
proceeding may be brought in such courts and waives any objection that it may
now or hereafter have to the venue of any such action or proceeding in any such
court or that such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same;


 


(c)           agrees that service of process in any
such action or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of mail),
postage prepaid, to such party at its address referred to in subsection 9.2
or at such other address of which the Canadian Collateral Agent and the
Canadian Agent (in the case of any


 


44

















 


other
party hereto) or the Parent Borrower (in the case of the Canadian Collateral
Agent and the Canadian Agent) shall have been notified pursuant thereto;


 


(d)           agrees that nothing herein shall
affect the right to effect service of process in any other manner permitted by
law or shall limit the right to sue in any other jurisdiction; and


 


(e)           waives, to the maximum extent not
prohibited by law, any right it may have to claim or recover in any legal
action or proceeding referred to in this Section any punitive damages.


 


9.13         Acknowledgments.


 


Each Guarantor hereby acknowledges that:


 


(a)           it has been advised by counsel in the
negotiation, execution and delivery of this Agreement and the other Loan
Documents to which it is a party;


 


(b)           none of the Canadian Collateral
Agent, the Canadian Agent or any other Secured Party has any fiduciary
relationship with or duty to any Guarantor arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Guarantors, on the one hand, and the Canadian Collateral Agent, the
Canadian Agent and the other Secured Parties, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and


 


(c)           no joint venture is created hereby or
by the other Loan Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Secured Parties or among the Guarantors and the
Secured Parties.


 


9.14         WAIVER
OF JURY TRIAL.


 


EACH PARTY HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.


 


9.15         Additional
Granting Parties.


 


Each new Subsidiary of the Parent Borrower
that is required to become a party to this Agreement pursuant to subsection
7.9(b) of the Credit Agreement shall become a Granting Party for all purposes
of this Agreement upon execution and delivery by such Subsidiary of an
Assumption Agreement in the form of Annex 2 hereto. Each existing Granting Party
that is required to become a Pledgor with respect to Capital Stock of any new
Subsidiary of the Parent Borrower pursuant to subsection 7.9(b) of the Credit
Agreement shall become a Pledgor with respect thereto upon execution and
delivery by such Granting Party of a Supplemental Agreement substantially in
the form of Annex 2 hereto.


 


45

















 


9.16         Releases.


 


(a)           At such time as the Loans, the
Reimbursement Obligations and the other Obligations (other than any Obligations
owing to a Non-Lender Secured Party in respect of the provision of cash
management services) then due and owing shall have been paid in full, the
Commitments have been terminated and no Letters of Credit shall be outstanding,
all Security Collateral shall be released from the Liens created hereby, and
this Agreement and all obligations (other than those expressly stated to
survive such termination) of the Canadian Collateral Agent and each Granting
Party hereunder shall terminate, all without delivery of any instrument or
performance of any act by any party, and all rights to the Security Collateral
shall revert to the Granting Parties. At the request and sole expense of any
Granting Party following any such termination, the Canadian Collateral Agent
shall deliver to such Granting Party any Security Collateral held by the
Canadian Collateral Agent hereunder, and execute and deliver to such Granting
Party such documents (including without limitation, PPSA financing change
statements and discharges) as such Granting Party shall reasonably request to
evidence such termination.


 


(b)           In connection with any sale or other
disposition of Security Collateral permitted by the Credit Agreement (other
than any sale or disposition to another Grantor), the Lien pursuant to this
Agreement on such sold or disposed of Security Collateral shall be
automatically released. In connection with the sale or other disposition of all
of the Capital Stock of any Guarantor (other than to CCMG Corporation, the
Parent Borrower or a Subsidiary of either) or the sale or other disposition of
Security Collateral (other than a sale or disposition to another Grantor)
permitted under the Credit Agreement, the Canadian Collateral Agent shall, upon
receipt from the Parent Borrower of a written request for the release of such
Guarantor from its Guarantee or the release of the Security Collateral subject
to such sale or other disposition, identifying such Guarantor or the relevant
Security Collateral and the terms of the sale or other disposition in
reasonable detail, including the price thereof and any expenses in connection
therewith, together with a certification by the Parent Borrower stating that
such transaction is in compliance with the Credit Agreement and the other Loan
Documents, execute and deliver to the relevant Granting Party (at the sole cost
and expense of such Granting Party) all releases or other documents (including
without limitation, PPSA financing change statements or discharges) necessary
or reasonably desirable for the release of such Guarantee or the Liens created
hereby on such Security Collateral, as applicable, as such Granting Party may
reasonably request.


 


9.17         Judgment
Currency.


 


(a)           The obligations of any Grantor
hereunder and under the other Loan Documents to make payments in Dollars or in
Canadian Dollars, as the case may be (for the purposes of this Section 9.17,
the “Obligation Currency”), shall not be discharged or satisfied by any
tender or recovery pursuant to any judgment expressed in or converted into any
currency other than the Obligation Currency, except to the extent that such
tender or recovery results in the effective receipt by the Canadian Collateral
Agent or a Lender of the full amount of the Obligation Currency expressed to be
payable to the Canadian Collateral Agent or a Lender under this Agreement or
the other Loan Documents. If, for the purpose of obtaining or enforcing
judgment against any Grantor or any other Loan Party in any court or in any
jurisdiction, it becomes necessary to convert into or from any currency other
than the Obligation Currency (for the purposes of this Section 9.17, such
other currency being hereinafter referred to as the


 


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“Judgment
Currency”) an amount due in the Obligation Currency, the conversion shall
be made, at the rate of exchange prevailing, in each case, as of the date
immediately preceding the day on which the judgment is given (for the purposes
of this Section 9.17, such Business Day being hereinafter referred to as
the “Judgment Currency Conversion Date”).


 


(b)           If there is a change in the rate of
exchange prevailing between the Judgment Currency Conversion Date and the date
of actual payment of the amount due, each Grantor covenants and agrees to pay,
or cause to be paid, such additional amounts, if any (but in any event not a
lesser amount), as may be necessary to ensure that the amount paid in the
Judgment Currency, when converted at the rate of exchange prevailing on the
date of payment, will produce the amount of the Obligation Currency which could
have been purchased with the amount of Judgment Currency stipulated in the
judgment or judicial award at the rate of exchange prevailing on the Judgment
Currency Conversion Date.


 


(c)           For purposes of determining the prevailing
rate of exchange, such amounts shall include any premium and costs payable in
connection with the purchase of the Obligation Currency.


 


9.18         Attachment
of Security Interest.


 


The security interest created hereby is
intended to attach, in respect of Collateral in which any Grantor has rights at
the time this Agreement is signed by such Grantor and delivered to the Canadian
Collateral Agent and, in respect of Collateral in which any Grantor
subsequently acquires rights, at the time such Grantor subsequently acquires
such rights. The Grantors acknowledge and confirm that the Canadian Collateral
Agent and the Lenders have given value to the Grantors.


 


9.19         Copy
of Agreement; Verification Statement.


 


The Grantors hereby acknowledge receipt of
a signed copy of this Agreement and hereby waive the requirement to be provided
with a copy of any verification statement issued in respect of a financing
statement or financing change statement filed under the PPSA in connection with
this Agreement to perfect the security interest created herein.


 


9.20         Amalgamation.


 


Each Granting Party acknowledges and agrees
that, in the event it amalgamates with any other company or companies, it is
the intention of the parties hereto that the term “Grantor” or “Pledgor”, when
used herein, shall apply to each of the amalgamating corporations and to the
amalgamated corporation, such that the lien granted hereby:


 


(a)           shall extend to Collateral owned by
each of the amalgamating corporations and the amalgamated corporations at the
time of amalgamation and to any Collateral thereafter owned or acquired by the
amalgamated corporation, and


 


(b)           shall secure all Obligations of each
of the amalgamating corporations and the amalgamated corporations to the
Canadian Collateral Agent and the Lenders at the time of amalgamation and all
Obligations of the amalgamated corporation to the Canadian Collateral


 


47

















 


Agent
and the Lenders thereafter arising. The Lien shall attach to all Collateral
owned by each corporation amalgamating with Granting Party, and by the
amalgamated corporation, at the time of the amalgamation, and shall attach to
all Collateral thereafter owned or acquired by the amalgamated corporation when
such becomes owned or is acquired.


 


9.21         Joint
and Several Liability.


 


The obligations of the Granting Parties
hereunder shall be joint and several and, as such, each Granting Party shall be
liable for all of the Obligations of the other Granting Party under this
Agreement. Subject to the immediately preceding sentence, the liability of each
Granting Party for the obligations of the other applicable Granting Party under
this Agreement shall be absolute, unconditional and irrevocable, without regard
to (i) the validity or enforceability of this Agreement, any of the obligations
hereunder or thereunder or any other collateral security therefor or guarantee
or right of offset with respect thereto at any time or from time to time held
by any applicable Secured Party, (ii) any defense, set-off or counterclaim
(other than a defense of payment or performance hereunder) which may at any
time be available to or be asserted by such other applicable Granting Party or
any other Person against any Secured Party or (iii) any other circumstance
whatsoever (with or without notice to or knowledge of such other applicable
Granting Party or such Granting Party) which constitutes, or might be construed
to constitute, an equitable or legal discharge of such other applicable
Granting Party for the obligations hereunder, or of such Granting Party under
this Section, in bankruptcy or in any other instance.


 


9.22         Language.
The parties hereto confirm that it is their wish that this Agreement, as well
as any other documents relating to this Agreement, including notices, schedules
and authorizations, have been and shall be drawn up in the English language
only. Les signataires conferment leur
volonté que la présente convention, de même que tous les documents s’y
rattachant, y compris tout avis, annexe et autorisation, soient rédigés en
anglais seulement.


 


 [Remainder of page left blank intentionally;
Signature page to follow.]


 


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IN WITNESS
WHEREOF, each of the undersigned has caused this Guarantee and Collateral
Agreement to be duly executed and delivered as of the date first above written.


 


 


	
   

  	
  MATTHEWS EQUIPMENT LIMITED

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John R. Samuelson

  
	
   

  	
   

  	
  Name:

  	
  John R. Samuelson

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  



 


 


	
   

  	
  WESTERN SHUT-DOWN (1995) LIMITED

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John R. Samuelson

  
	
   

  	
   

  	
  Name:

  	
  John R. Samuelson

  
	
   

  	
   

  	
  Title:

  	
  Authorized Signatory

  



 


Acknowledged and Agreed to as


of the date hereof by:


 


	
  DEUTSCHE BANK AG, CANADA

  BRANCH, as Canadian Agent and Canadian

  Collateral Agent

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Marcellus Leung

  	
   

  
	
   

  	
  Name:

  	
  Marcellus Leung

  	
   

  
	
   

  	
  Title:

  	
  Assistant Vice President

  	
   

  



 


 


	
  DEUTSCHE BANK AG, CANADA

  BRANCH, as Canadian Agent and Canadian

  Collateral Agent

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ David Gynn

  	
   

  
	
   

  	
  Name:

  	
  David Gynn

  	
   

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  	
   

  



 


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