exv4w1





Exhibit 4.1



EXECUTION COPY






 





U.S. GUARANTEE AND COLLATERAL AGREEMENT




made by




RSC HOLDINGS II, LLC,

RSC HOLDINGS III, LLC,

RSC EQUIPMENT RENTAL, INC.,



and



CERTAIN DOMESTIC SUBSIDIARIES OF RSC HOLDINGS III, LLC,



in favor of



DEUTSCHE BANK AG NEW YORK BRANCH,

as U.S. Administrative Agent and U.S. Collateral Agent,



Dated as of February 9, 2011



 




 









 





Table of Contents




	 	 	 	 	 
	 	 	Page	 
	ARTICLE I Defined Terms
	 	 	2	 
	 
	 	 	 	 
	Section 1.1. Definitions
	 	 	2	 
	Section 1.2. Other Definitional Provisions
	 	 	10	 
	 
	 	 	 	 
	ARTICLE II Guarantee
	 	 	11	 
	 
	 	 	 	 
	Section 2.1. Guarantee
	 	 	11	 
	Section 2.2. Right of Contribution
	 	 	12	 
	Section 2.3. No Subrogation
	 	 	12	 
	Section 2.4. Amendments, etc. with respect to the Obligations
	 	 	13	 
	Section 2.5. Guarantee Absolute and Unconditional
	 	 	13	 
	Section 2.6. Reinstatement
	 	 	15	 
	Section 2.7. Payments
	 	 	15	 
	 
	 	 	 	 
	ARTICLE III Grant of Security Interest
	 	 	15	 
	 
	 	 	 	 
	Section 3.1. Grant
	 	 	15	 
	Section 3.2. Pledged Collateral
	 	 	17	 
	Section 3.3. Certain Limited Exceptions
	 	 	17	 
	Section 3.4. Intercreditor Relations
	 	 	18	 
	 
	 	 	 	 
	ARTICLE IV Representations and Warranties
	 	 	18	 
	 
	 	 	 	 
	Section 4.1. Representations and Warranties of Each Guarantor
	 	 	19	 
	Section 4.2. Representations and Warranties of Each Grantor
	 	 	19	 
	Section 4.3. Representations and Warranties of Each Pledgor
	 	 	22	 
	 
	 	 	 	 
	ARTICLE V Covenants
	 	 	23	 
	 
	 	 	 	 
	Section 5.1. Covenants of Each Guarantor
	 	 	23	 
	Section 5.2. Covenants of Each Grantor
	 	 	23	 
	Section 5.3. Covenants of Each Pledgor
	 	 	27	 
	 
	 	 	 	 
	ARTICLE VI Remedial Provisions
	 	 	29	 
	 
	 	 	 	 
	Section 6.1. Certain Matters Relating to Accounts
	 	 	29	 
	Section 6.2. Communications with Obligors; Grantors Remain Liable
	 	 	30	 
	Section 6.3. Pledged Stock
	 	 	31	 
	Section 6.4. Proceeds to be Turned Over To U.S. Collateral Agent
	 	 	32	 
	Section 6.5. Application of Proceeds
	 	 	32	 
	Section 6.6. Code and Other Remedies
	 	 	35	 
	Section 6.7. Registration Rights
	 	 	36	 
	Section 6.8. Waiver; Deficiency
	 	 	37	 






(i)









 






Table of Contents

(continued)




	 	 	 	 	 
	 	 	Page	 
	ARTICLE VII The Collateral Agent
	 	 	37	 
	 
	 	 	 	 
	Section 7.1. U.S. Collateral Agent’s Appointment as Attorney-in-Fact, etc.
	 	 	37	 
	Section 7.2. Duty of U.S. Collateral Agent
	 	 	39	 
	Section 7.3. Financing Statements
	 	 	40	 
	Section 7.4. Authority of U.S. Collateral Agent
	 	 	40	 
	Section 7.5. Right of Inspection
	 	 	40	 
	 
	 	 	 	 
	ARTICLE VIII Non-Lender Secured Parties
	 	 	40	 
	 
	 	 	 	 
	Section 8.1. Rights to Collateral
	 	 	40	 
	Section 8.2. Appointment of Agent
	 	 	42	 
	Section 8.3. Waiver of Claims
	 	 	42	 
	 
	 	 	 	 
	ARTICLE IX Miscellaneous
	 	 	42	 
	 
	 	 	 	 
	Section 9.1. Amendments in Writing
	 	 	42	 
	Section 9.2. Notices
	 	 	43	 
	Section 9.3. No Waiver by Course of Conduct; Cumulative Remedies
	 	 	43	 
	Section 9.4. Enforcement Expenses; Indemnification
	 	 	43	 
	Section 9.5. Successors and Assigns
	 	 	44	 
	Section 9.6. Set-Off
	 	 	44	 
	Section 9.7. Counterparts
	 	 	44	 
	Section 9.8. Severability
	 	 	44	 
	Section 9.9. Section Headings
	 	 	45	 
	Section 9.10. Integration
	 	 	45	 
	Section 9.11. GOVERNING LAW
	 	 	45	 
	Section 9.12. Submission To Jurisdiction; Waivers
	 	 	45	 
	Section 9.13. Acknowledgments
	 	 	45	 
	Section 9.14. WAIVER OF JURY TRIAL
	 	 	46	 
	Section 9.15. Additional Granting Parties
	 	 	46	 
	Section 9.16. Releases
	 	 	46	 
	Section 9.17. Judgment
	 	 	47	 
	 
	 	 	 	 
	SCHEDULES
	 	 	 	 
	 
	 	 	 	 
	Schedule 1 —  Notice Addresses of Guarantors
	 	 	 	 
	Schedule 2 —  Pledged Securities
	 	 	 	 
	Schedule 3 —  Perfection Matters
	 	 	 	 
	Schedule 4 —  Location of Jurisdiction of Organization
	 	 	 	 
	Schedule 5 —  Intellectual Property
	 	 	 	 
	Schedule 6 — Contracts
	 	 	 	 






 









 






Table of Contents

(continued)




	 	 	 	 	 
	 	 	Page	 
	Schedule 7  — Commercial Tort Claims

	 

	ANNEXES

	 

	Annex 1  — Acknowledgement and Consent of Issuers who are not Granting Parties

	Annex 2  — Assumption Agreement








 











 





U.S. GUARANTEE AND COLLATERAL AGREEMENT




     U.S. GUARANTEE AND COLLATERAL AGREEMENT, dated as of February
9, 2011, made by RSC HOLDINGS II, LLC, a Delaware limited liability company (“Holdings”),
RSC HOLDINGS III, LLC, a Delaware limited liability company (in its specific capacity as
Parent Borrower, together with its successors and assigns, the “Parent Borrower”), RSC
EQUIPMENT RENTAL, INC., an Arizona corporation (“RSC”) and certain of the Parent
Borrower’s Subsidiaries that may become party hereto from time to time pursuant to Section
9.15 in favor of DEUTSCHE BANK AG NEW YORK BRANCH (“DBNY”), as collateral agent
(in such capacity, the “U.S. Collateral Agent”) and administrative agent (in such capacity, the
“U.S. Administrative Agent”) for the banks and other financial institutions (collectively, the
“Lenders”; individually, a “Lender”) from time to time party to the Credit Agreement described
below and for the other Secured Parties (as defined 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 Holdings, the Parent Borrower and RSC (together with the Parent
Borrower and any other entity that becomes a borrower thereunder pursuant to subsection 7.9(b)
of the Credit Agreement, the “U.S. Borrowers”), RSC Equipment Rental of Canada Ltd.
(together with any other entity that becomes a borrower pursuant to subsection 7.9(c) of the
Credit Agreement, the “Canadian Borrowers”), the U.S. Collateral Agent, the U.S.
Administrative Agent, Deutsche Bank AG Canada Branch, as Canadian administrative agent and
Canadian collateral agent (in such capacities, the “Canadian Administrative Agent” and
“Canadian Collateral Agent”), and the other parties party 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 (the Lenders, each Issuing Lender, the U.S. Administrative Agent, the
Canadian Administrative Agent, the U.S. Collateral Agent, the Canadian Collateral Agent and
each other Agent are herein called the “Lender Creditors”);



     WHEREAS, the Borrowers are members of an affiliated group of companies that
includes Holdings, the Borrowers, and any other Domestic Subsidiary of the Parent Borrower
that becomes a party hereto from time to time after the date hereof (all of the foregoing (other
than the Canadian Borrowers and Canadian Finco) collectively, the “Granting Parties”);



     WHEREAS, the proceeds of the extensions of credit under the Credit Agreement
will be used in part to enable the Borrowers to make valuable transfers to one or more of the
other Granting Parties in connection with the operation of their respective businesses;



     WHEREAS, the Borrowers and the other Granting Parties are engaged in related
businesses, and each such Granting Party will derive substantial direct and indirect benefit from
the making of the extensions of credit under the Credit Agreement;



 









 





     WHEREAS, it is a condition to the obligation of the Lenders to make their
respective extensions of credit under the Credit Agreement that the Granting Parties shall
execute and deliver this Agreement to the U.S. Collateral Agent for the benefit of the Secured
Parties (as defined below);



     WHEREAS, each Borrower and/or one or more of their respective Subsidiaries
may at any time and from time to time enter into one or more Interest Rate Protection
Agreements or Permitted Hedging Arrangements with one or more Lenders or any affiliate
thereof (each such Lender or affiliate, even if the respective Lender subsequently ceases to be a
Lender under the Credit Agreement for any reason, together with such Lender’s or affiliate’s
successors and assigns, if any, collectively, the “Other Creditors” and, together with the
Lender Creditors, the “Secured Parties”);



     WHEREAS, the Parent Borrower, RSC, the guarantors from time to time party
thereto, Wells Fargo Bank, National Association, as indenture trustee, and DBNY, as note
collateral agent, are parties to that certain Indenture, dated as of July 1, 2009 (the “First
Lien Last Out Note Indenture”) pursuant to which RSC and the Parent Borrower issued 10% Senior
Secured Notes due 2017; and



     WHEREAS, the U.S. Collateral Agent and the Note Collateral Agent under, and
as defined in, the First Lien Last Out Note Indenture, have entered into an Intercreditor
Agreement with the Parent Borrower, RSC and the other Granting Parties from time to time
party thereto, dated as of July 1, 2009 (as amended, amended and restated, waived, supplemented
or otherwise modified from time to time, the “Intercreditor Agreement”).



     NOW, THEREFORE, in consideration of the premises and to induce the U.S.
Administrative 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 U.S. Collateral Agent, for the benefit of the Secured Parties, as
follows:



ARTICLE I



Defined Terms



     Section 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 Code (as in effect on the date hereof)
are used herein as so defined: Chattel Paper, Commercial Tort Claims, Documents, Electronic
Chattel Paper, Deposit Accounts, Documents, Equipment, Farm Products, Fixtures, General
Intangibles, Letter-of-Credit Rights, Money, Promissory Notes, Records, Securities, Securities
Accounts, Security Entitlements, Supporting Obligations and Tangible Chattel Paper.



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




          “Accounts”: all accounts (as defined in the Code) of each Grantor, including,
without limitation, all Accounts (as defined in the Credit Agreement) and Accounts Receivable
of such Grantor.





2









 








          “Accounts Receivable”: any right to payment for goods sold or leased or for
services rendered, which is not evidenced by an instrument (as defined in the Code) 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), (d), (e) and (f) of subsection 8.2 of the Credit Agreement) on such date.




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




          “Asset Sales Proceeds Account”: one or more Deposit Accounts or Securities
Accounts holding only the proceeds of any sale or disposition of any Collateral and the proceeds
or investment thereof.




          “Bankruptcy Case”: (i) Holdings or any of its Subsidiaries commencing any case,
proceeding or other action (A) under any existing or future law of any jurisdiction, domestic 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, trustee, custodian, conservator or other similar official for it or for
all
or any substantial part of its assets, or Holdings or any of its Subsidiaries making a general
assignment for the benefit of its creditors; or (ii) there being commenced against Holdings 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 Loan Document Obligations”: as defined in the definition of
“Borrower Obligations” in this subsection 1.1(b).




          “Borrower Obligations”: with respect to any Borrower, the collective reference
to: all obligations and liabilities of such Borrower in respect of (i) the unpaid principal of,
premium (if any) 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 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 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 (all such obligations, liabilities and indebtedness under this clause (i),
except to the extent consisting of obligations and indebtedness with respect to Interest Rate
Protection Agreement or Permitted Hedging Arrangements, being herein collectively called the





3









 







“Borrower Loan Document Obligations”) and (ii) any Interest Rate Protection Agreement or
Permitted Hedging Arrangement entered into with any Person who was at the time of entry into
such agreement a Lender or an affiliate of any Lender (all such obligations, liabilities and
indebtedness
under this clause (ii) being herein collectively called the “Borrower Other Obligations”);
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
Administrative 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).




          “Borrower Other Obligations”: as defined in the definition of “Borrower
Obligations” in this subsection 1.1(b).




          “Borrowers”: the U.S. Borrowers, the Canadian Borrower and, from and after the
date on which it executes and delivers to the U.S. Administrative Agent a Borrower Joinder
Agreement, Canadian Finco.




          “Canadian Borrower Obligations”: all Obligations of the Canadian Borrowers and
any guarantees thereof (including by U.S. Loan Parties) pursuant to the Canadian Guarantee
Agreement or pursuant to any other Loan Document.




          “Code”: the Uniform Commercial Code as from time to time in effect in the State
of New York.




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




          “Commercial Tort Action” any action, other than (i) an action primarily seeking
declaratory or injunctive relief with respect to claims asserted or expected to be asserted by
Persons other than the Grantors or (ii) an action arising out of or related to PL/PD Claims, that
is commenced by a Grantor in the courts of the United States of America, any state or territory
thereof or any political subdivision of any such state or territory, in which any Grantor seeks
damages arising out of torts committed against it that would reasonably be expected to result in a
damage award to it exceeding $40,000,000.




          “Commitments”: the collective reference to (i) the Incremental Term Loan
Commitments, (ii) the RCF Commitments 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.




          “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





4









 







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 United States and foreign copyrights, whether or not the underlying works
of authorship have been published or registered, all United States 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.




          “Excess Foreign Subsidiary Capital Stock” as defined in subsection 3.1.




          “Excluded Assets”: as defined in subsection 3.3.




          “First Lien Last Out Collateral Agreement”: that certain Collateral Agreement,
dated as of July 1, 2009, among the Parent Borrower, RSC, certain domestic subsidiaries of the
Parent Borrower from time to time party thereto and DBNY, as note collateral agent, as
amended, amended and restated, waived, supplemented or otherwise modified from time to time.




          “First Lien Last Out Note Indenture”: as defined in the recitals hereto.




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




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




          “Grantor”: Holdings, the U.S. Borrowers, and any other Domestic Subsidiary of
the Parent 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 Article 2 and (ii) (A) 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 (all such obligations,





5









 







liabilities and indebtedness under this clause (ii)(A), except to the extent consisting of
obligations and indebtedness with respect to Interest Rate Protection Agreement or Permitted
Hedging Arrangements, being herein collectively called the “Guarantor Loan Document
Obligations,” and, together with the Borrower Loan Obligations, the “Loan Document
Obligations”) and (B) any Interest Rate Protection Agreement or Permitted Hedging
Arrangement entered into with any Person who was at the time of entry into such agreement a
Lender or an affiliate of any Lender (all such obligations, liabilities and indebtedness under this
clause (ii)(B) being herein collectively called the “Guarantor Other Obligations,” and,
together
with the Borrower Other Obligations, the “Other Obligations”); 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 U.S.
Administrative Agent, to the Lead Arrangers 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 other than
Holdings; provided that, when referring to the U.S. Borrowers as Guarantors, such reference
shall be a reference solely to a guaranty of the Obligations of the Canadian Borrowers and
Canadian Finco.




          “Instruments”: has the meaning specified in Article IX of the Code, but
excluding
the Pledged Securities.




          “Intellectual Property”: with respect to any Grantor, the collective reference to
such Grantor’s Copyrights, Copyright Licenses, Patents, Patent Licenses, Trade Secrets, Trade
Secret Licenses, Trademarks and Trademark Licenses.




          “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 Holdings or
any of its Subsidiaries.




          “Intercreditor Agreement”: as defined in the recitals hereto.




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




          “Investment Property”: the collective reference to (i) all “investment property” as
such term is defined in Section 9-102(a)(49) of the Uniform Commercial Code in effect in the
State of New York on the date hereof (other than any Capital Stock of any Foreign Subsidiary
excluded from the definition of “Pledged Stock”) and (ii) whether or not constituting
“investment property” as so defined, all Pledged Securities.




          “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).




          “Lender Creditors”: as defined in the recitals hereto.





6









 








          “Loan Document Obligations”: as defined in the definition of “Guarantor
 Obligations” in this subsection 1.1(b).




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




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




          “Other Creditors”: as defined in the recitals hereto.




          “Other Obligations”: as defined in the definition of “Guarantor Obligations” in
this subsection 1.1(b).




          “Parent Borrower”: as defined in the Preamble 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
application, 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 United States 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, substitutes, renewals, and extensions thereof, all improvements thereon,
and all other rights of any kind whatsoever of such Grantor accruing thereunder or pertaining
thereto.




          “Permitted Hedging Arrangement”: as defined in subsection 8.17 of the Credit
Agreement.




          “PL/PD Claims” means all claims that (i) arise out of or are related to damage to
the property of the Parent Borrower or any of its Subsidiaries or out of bodily injury (including
death) or damage to the property of Persons other than the Parent Borrower and its Subsidiaries
and are classified as “public liability and property damage” claims for purposes of the
consolidated financial statements of the Parent Borrower and its Subsidiaries and (ii) arise
out of





7









 







or are related to any policy of insurance under which the Parent Borrower or any of its
Subsidiaries is an insured or otherwise a beneficiary.




          “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 promissory notes issued to or
held by any Grantor in a principal amount in excess of $3,500,000 (other than promissory notes
issued in connection with an extension of trade credit by any Grantor in the ordinary course of
business) and 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 7.9 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 (provided that in no event shall there be pledged, nor shall any
Pledgor be
required to pledge, directly or indirectly, (i) any of the Capital Stock of Subsidiaries of Foreign
Subsidiaries or (ii) de minimis shares of a Foreign Subsidiary held by any Pledgor as a nominee
or in a similar capacity).




          “Pledgor”: Holdings (with respect to the Pledged Stock of the Parent Borrower
and all other Pledged Collateral of the Parent Borrower), the U.S. Borrowers (with respect to
Pledged Stock of the entities listed on Schedule 2 hereto under the name of such applicable
Borrower and all other Pledged Collateral of such applicable Borrower) and each other Granting
Party (with respect to Pledged Securities held by such Granting Party and all other Pledged
Collateral of such Granting Party).




          “Primary Canadian Borrower Obligations”: as defined in subsection 6.5.2.




          “Primary Obligations”: as defined in subsection 6.5.2.




          “Primary U.S. Borrower Obligations”: as defined in subsection 6.5.2.




          “Pro Rata Share”: as defined in subsection 6.5.2.




          “Proceeds”: all “proceeds” as such term is defined in Section 9-102(a)(64) of the
Uniform Commercial Code in effect in the State of New York on the date hereof 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.




          “Representative”: as defined in subsection 6.5.4.




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





8












 





          “RSC”: as defined in the recitals hereto.




          “Secondary Canadian Borrower Obligations”: as defined in subsection 6.5.2.




          “Secondary
Obligations”: as defined in subsection 6.5.2.




          “Secondary U.S. Borrower Obligations”: as defined in subsection 6.5.2.




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




          “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 United States and foreign 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.




          “Trademark 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
trademarks, 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.




          “Trademarks”: with respect to any Grantor, all of such Grantor’s right, title and
interest in and to all United States and foreign trademarks, service marks, trade names, trade
dress or other indicia of trade origin or business identifiers, trademark and service mark
registrations, and applications for trademark or service mark registrations (except for “intent to
use” applications for trademark or service mark registrations filed pursuant to Section l(b) of the






9









 








Lanham Act, 15 U.S.C. § 1051, unless and until an Amendment to Allege Use or a Statement of Use
under Sections l(c) and l(d) of said Act has been filed, it being understood and agreed that the
carve out in this parenthetical shall be applicable only if and for so long as a grant of a
security interest in such intent to use application would invalidate or otherwise jeopardize
Grantor’s rights therein), 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 of any
kind whatsoever of such Grantor accruing thereunder or pertaining thereto in the United States,
together in each case with the goodwill of the business connected with the use of, and symbolized
by, each such trademark, service mark, trade name, trade dress or other indicia of trade origin or
business identifiers.



          “ULC Shares”: shares in any unlimited company, incorporated or organized under the laws of
Canada or any province or territory thereof, at any time owned or otherwise held by the Grantor.




          “U.S. Administrative Agent”: as defined in the recitals hereto. “U.S. Borrowers”: as defined in the
recitals hereto.



          “U.S. Borrower Obligations” shall mean all Obligations of the U.S. Borrowers (but not as a
Guarantor of any Canadian Borrower or any Canadian Subsidiary Guarantor) and any guarantees of such
Obligations pursuant to this Agreement or pursuant to any other Loan Document.




          “U.S. Collateral Account Bank”: Deutsche Bank AG New York Branch, 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 U.S. Collateral Agent (such consent not to be unreasonably withheld or delayed).




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




     Section 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.






10









 








          (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.




ARTICLE II




Guarantee



     Section 2.1. Guarantee. (a) (i) Each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantees to the U.S. Administrative Agent, for the benefit of
the applicable Secured Parties, the prompt and complete payment and performance by each U.S.
Borrower and Canadian Finco when due and payable (whether at the stated maturity, by acceleration
or otherwise) of the Borrower Obligations of such U.S. Borrower and Canadian Finco owed to the
applicable Secured Parties and (ii) each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantees to the U.S. Administrative Agent, for the 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
federal and state 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 following subsection 2.2 be included as an asset of the
respective Guarantor in determining the maximum liability of such Guarantor hereunder.




          (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 Article 2 or affecting the rights and remedies of
the U.S. Administrative Agent or any other Secured Party hereunder.




          (d) The guarantee contained in this Article 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 Article 2 then due and owing shall have
been





11









 







satisfied by payment in full in cash, no Letter of Credit shall be outstanding and the Commitments
shall have been 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 Holdings, the Parent Borrower or a Subsidiary of either) as permitted under the Credit
Agreement.




          (e) No payment made by any Borrower, any of the Guarantors, any other guarantor or any other
Person or received or collected by the U.S. Administrative Agent or any other Secured Party from
any of the 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 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 Holdings, the Parent Borrower or a Subsidiary of either) as permitted under the Credit
Agreement.




     Section 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 U.S. Administrative Agent and the
other Secured Parties, and each Guarantor shall remain liable to the U.S. Administrative Agent and
the other Secured Parties for the full amount guaranteed by such Guarantor hereunder.



     Section 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 U.S.
Administrative Agent or any other Secured Party, no Guarantor shall be entitled to be subrogated to
any of the rights of the U.S. Administrative Agent or any other Secured Party against any Borrower
or any other Guarantor or any collateral security or guarantee or right of offset held by the U.S.
Administrative 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 Borrower
or any other Guarantor in respect of payments made by such Guarantor hereunder, until all amounts
owing to the U.S. Administrative 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



12









 




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 U.S. Administrative 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 U.S. Administrative Agent in the exact form received by such Guarantor (duly indorsed by
such Guarantor to the U.S. Administrative 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 U.S. Administrative Agent may determine.




     Section 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 U.S. Collateral
Agent, the U.S. Administrative Agent or any other Secured Party may be rescinded by the U.S.
Collateral Agent, the U.S. Administrative 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
U.S. Collateral Agent, the U.S. Administrative 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
U.S. Collateral Agent or the U.S. Administrative 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 U.S. Collateral Agent, the U.S. Administrative
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 U.S. Collateral Agent, the U.S.
Administrative 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
or for the guarantee contained in this Section 2 or any property subject thereto, except to
the extent required by applicable law.



     Section 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
U.S. Collateral Agent, the U.S. Administrative Agent or any other Secured Party upon the guarantee
contained in this Article 2 or acceptance of the guarantee contained in this Article
 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 Article 2; and all dealings between any of
the Borrowers and any of the Guarantors, on the one hand, and the U.S. Collateral Agent, the U.S.
Administrative 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



13









 



contained in this Article 2. Each Guarantor waives, to the maximum extent permitted by
applicable law, diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon any 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 Article 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 U.S. Collateral Agent, the U.S. Administrative 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 U.S. Collateral
Agent, the U.S. Administrative 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 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 U.S. Collateral Agent, the U.S. Administrative 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,
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 Borrowers for the Borrower
Obligations, or of such Guarantor under the guarantee contained in this Article 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 U.S. Collateral Agent, the U.S.
Administrative 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
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





14









 







failure by the U.S. Collateral Agent, the U.S. Administrative Agent or any other Secured Party to
make any such demand, to pursue such other rights or remedies or to collect any payments from the
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 the 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
U.S. Collateral Agent, the U.S. Administrative Agent or any other Secured Party against any
Guarantor. For the purposes hereof “demand” shall include the commencement and continuance of any
legal proceedings.




     Section 2.6. Reinstatement. The guarantee of any Guarantor contained in this
Article 2 shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Borrower Obligations guaranteed by such Guarantor
hereunder is rescinded or must otherwise be restored or returned by the U.S. Collateral Agent, the
U.S. Administrative Agent or any other Secured Party upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of any Borrower or any Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, any Borrower or any Guarantor or any substantial part of its
property, or otherwise, all as though such payments had not been made.



     Section 2.7. Payments. Each Guarantor hereby guarantees that payments hereunder will
be paid to the U.S. Administrative Agent without set-off or counterclaim, in 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 U.S. Administrative Agent’s office specified in subsection 11.2 of the Credit Agreement or
such other address as may be designated in writing by the U.S. Administrative Agent to such
Guarantor from time to time in accordance with subsection 11.2 of the Credit Agreement.



ARTICLE III




Grant of Security Interest



     Section 3.1. Grant. Each Grantor hereby grants, subject to existing licenses to use
the Copyrights, Patents, Trademarks and Trade Secrets granted by such Grantor in the ordinary
course of business, to the U.S. Collateral Agent, for the benefit of the Secured Parties, 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;





15









 









     (c) all Money (including all cash);




     (d) all Cash Equivalents;




     (e) all Chattel Paper;




     (f) all Contracts;




     (g) all Deposit Accounts (including DDAs);




     (h) all Documents;




     (i) all Equipment;




     (j) all General Intangibles;




     (k) all Instruments;




     (l) all insurance proceeds;




     (m) all Intellectual Property;




     (n) all Inventory;




     (o) all Investment Property;




     (p) all Letter of Credit Rights;




     (q) all Rental Fleet;




     (r) all Fixtures;




     (s) all Commercial Tort Claims constituting Commercial Tort Actions
described in Schedule 7  (together with any Commercial Tort Actions subject to a further
writing provided in accordance with subsection 5.2.12);




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




     (u) the U.S. Collateral Proceeds Account; and




     (v) 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, (w) Collateral
shall not include any Pledged Collateral, or any property or assets specifically excluded from
Pledged Collateral, (x) to the extent any Capital Stock of any Foreign Subsidiary is pledged
hereunder which represents more than 65% of any class of voting Capital Stock
of the respective Foreign Subsidiary (with all Capital Stock of the respective Foreign Subsidiary
in excess of said 65% limit being herein





16









 







called “Excess Foreign Subsidiary Capital Stock”), such Excess Foreign Subsidiary Capital Stock
shall secure Borrower Obligations of the respective Grantor only as a guarantor of the Borrower
Obligations of the Canadian Borrowers, and shall not secure any direct or other Obligations of the
U.S. Borrowers (or guarantees of such Obligations by the respective Grantor) and (y) each Grantor
shall be required to pledge hereunder 65% of each class of voting Capital Stock and 100% of each
class of nonvoting Capital Stock of each Foreign Subsidiary at any time and from time to time
acquired by such Grantor, which Capital Stock shall not be subject to the limitations described in
preceding clause (x).




     Section 3.2. Pledged Collateral. Each Granting Party that is a Pledgor, hereby grants
to the U.S. Collateral Agent, for the benefit of the Secured Parties, 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 payment and
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, which security interest shall be
subject to the limitations described in clause (x) of the proviso to subsection 3.1.



     Section 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, General Intangibles, Copyright Licenses, Patent
Licenses, Trademark Licenses, Trade Secret Licenses or other contracts or agreements with or issued
by Persons other than Holdings, a Subsidiary of Holdings 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 Code 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);




     (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 Sale and Leaseback Transaction permitted under subsection 8.11 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 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;



17









 






     (d) any Intellectual Property governed by the laws of a jurisdiction in which a security
interest or similar lien of any kind is prohibited under that jurisdiction’s laws, for so long as
the laws of that jurisdiction so provide;




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




     (f) Capital Stock issued by Canadian Finco and any other ULC Shares. If the Grantor
acquires any ULC Shares, it shall promptly notify the U.S. Collateral Agent. Upon the request of
the U.S. Collateral Agent, such Grantor shall execute and deliver all such agreements and deliver
all such other documents, opinions and certificates (including without limitation share
certificates evidencing such ULC Shares) as the U.S. Collateral Agent may reasonably require to
receive a perfected, first ranking priority security interest in the ULC Shares, in each case, in
form and substance reasonably acceptable to the U.S. Collateral Agent; provided that such
security interest shall be subject to the limitations applicable to pledges described in clause (x)
of the proviso to subsection 3.1;




     (g) Any forward contracts between RSC and RSC Canada entered into
in connection with the loan made by Canadian Finco to RSC Canada; or




     (h) any Money, cash, checks,
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 any Granting Party
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.



     Section 3.4. Intercreditor Relations.
Notwithstanding anything
herein to
the
contrary, it is the understanding of the parties that the Liens granted pursuant to this Agreement
shall with respect to all Security Collateral, be senior to the Liens granted to the First Lien
Last Out Collateral Agent (as defined in the Intercreditor Agreement) for the benefit of the
holders of the First Lien Last Out Obligations (as defined in the Intercreditor Agreement) to
secure the First Lien Last Out Obligations pursuant to the First Lien Last Out Security Documents
(as defined in the Intercreditor Agreement). Notwithstanding anything herein to the contrary, the
Liens and security interest granted to the U.S. Collateral Agent pursuant to this Agreement and the
exercise of any right or remedy by the U.S. Collateral Agent hereunder are subject to the
provisions of the Intercreditor Agreement. In the event of any conflict between the terms of the
Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern
and control.



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ARTICLE IV




Representations and Warranties



     Section 4.1. Representations and Warranties of Each Guarantor. To induce the U.S.
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 U.S. 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 U.S. 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.



     Section 4.2. Representations and Warranties of Each Grantor. To induce the U.S.
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 U.S. 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 U.S. Collateral Agent for the 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 favor of the U.S. Collateral Agent for the 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 termination statements 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 favor of the U.S. Collateral Agent for the benefit of the Secured
Parties, except (i) with respect to all Intellectual Property that is an Excluded Asset or (ii) as
enforceability may be affected by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditor’s 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 favor
of the United States government as required by law (if any), upon the completion of the Filings
and, with respect to Instruments, Chattel Paper and Documents upon the earlier of such Filing or
the delivery to and continuing possession by the U.S. Collateral Agent, of all Instruments, Chattel
Paper and Documents a security interest in which is perfected by possession, and the obtaining and
maintenance of “control” (as described in the Code) by the U.S. Collateral Agent, the Canadian
Collateral Agent, the



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U.S. Administrative Agent, as applicable (or their respective agents appointed for purposes of
perfection), in accordance with the Intercreditor Agreement of all Deposit Accounts, the U.S.
Collateral Proceeds Account, Electronic Chattel Paper and Letter of Credit Rights a security
interest in which is perfected by “control” and in the case of Commercial Tort Actions (other than
such Commercial Tort Actions listed on Schedule 7 on the date of this Agreement), 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 favor of the U.S. 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 U.S. Collateral Agent or the recording of other applicable documents in the United
States Patent and Trademark Office or United States Copyright 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
favor of the U.S. Collateral Agent hereunder, subject to certificate of title statutes and (iv) 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 U.S. Collateral
Agent by such Grantor on the Closing Date for filing in the
jurisdictions listed in Schedule 4.




     “Ordinary Course Transferees”: (i) with respect to goods only, buyers in the ordinary course
of business and lessees in the ordinary course of business to the extent provided in Section
9-320(a) and 9-321 of the Uniform Commercial Code as in effect from time to time in the relevant
jurisdiction, (ii) with respect to general intangibles only, licensees in the ordinary course of
business to the extent provided in Section 9-321 of the Uniform Commercial Code as in effect from
time to time in the relevant jurisdiction and (iii) any other Person who is entitled to take free
of the Lien pursuant to the Uniform Commercial Code as in effect from time to time in the relevant
jurisdiction.




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




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



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     (1) Patents, Patent Licenses, Trademarks and Trademark Licenses to the extent that (a) Liens
thereon cannot be perfected by the filing of financing statements under the Uniform Commercial Code
or by the filing and acceptance thereof in the United States Patent and Trademark Office (including
Liens on such Patents, Patent Licenses, Trademarks and Trademark Licenses that are non-U.S.
Patents, Patent Licenses, Trademarks and Trademark Licenses) or (b) such Patents, Patent Licenses,
Trademarks and Trademark Licenses are not, individually or in the aggregate, material to the
business of the Parent 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
Uniform Commercial Code as in effect from time to time in the relevant jurisdiction 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
the United States of America, any State, territory or dependency
thereof or the District of Columbia;




     (4) goods included in Collateral received by any Person from
any Grantor for “sale or return” within the meaning of Section 2-326 of the Uniform Commercial Code
of the applicable jurisdiction, 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 U.S. 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.
On the
date hereof,
such Grantor’s
jurisdiction of organization is specified on Schedule 4.




     4.2.4 Farm Products. None of such Grantor’s Collateral constitutes, or is the Proceeds
of, Farm Products.




     4.2.5 Accounts Receivable. The amounts represented by such Grantor to the U.S.
Administrative 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 U.S. Administrative Agent, each Account Receivable of such Grantor
arises out of a bona fide



21









 






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




     4.2.6 Patents, Copyrights and Trademarks. Schedule 5 lists all material
Trademarks, material Copyrights and material Patents, in each case, registered in the United States
Patent and Trademark Office or the United States Copyright Office or other equivalent foreign
office, as applicable, and owned by such Grantor in its own name as of the date hereof, and all
material Trademark Licenses, all material Copyright Licenses and all material Patent Licenses
(including, without limitation, material Trademark Licenses for registered Trademarks, material
Copyright Licenses for registered Copyrights and material Patent Licenses for registered Patents)
owned by such Grantor in its own name as of the date hereof.



     Section 4.3. Representations and Warranties of Each Pledgor. To induce the U.S.
Collateral Agent, the U.S. Administrative 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 Pledgor hereby represents and warrants to the U.S. 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 all the issued and outstanding shares of all classes of the
Capital Stock of such Subsidiary owned by such Pledgor.




     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 nonassessable (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 favor of, or claims of,
any other Person, except the security interest created by this Agreement and Liens arising by
operation of law or permitted by the Credit Agreement.




     4.3.4 Upon the delivery to the U.S. Collateral Agent of the certificates, if any, 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 U.S. Collateral Agent will constitute a valid, perfected first priority security
interest in such Pledged Securities to the extent provided in and governed by the Code, 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.



22









 






     4.3.5 Upon the earlier of (x) (to the extent a security interest 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” (as
described in the Code) by the U.S. Collateral Agent (or its agent appointed for 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 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, to the extent provided in and governed by the Code, 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.



ARTICLE V




Covenants



     Section 5.1. Covenants of Each Guarantor. Each Guarantor covenants and agrees with the
U.S. 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 Holdings, 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.



     Section 5.2. Covenants of Each Grantor. Each Grantor covenants and agrees with the
U.S. 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 Holdings, the Parent Borrower
or a Subsidiary of either) in accordance with the terms of the Credit Agreement:




     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



23









 






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 U.S. Collateral
Agent, for the benefit of the Secured Parties. In the event that an Event of Default shall have
occurred and be continuing, upon the request of the U.S. Collateral Agent, such Instrument or
Chattel Paper (other than ordinary course rental contracts for Rental Fleet) shall be promptly
delivered to the U.S. Collateral Agent, duly indorsed in a manner satisfactory to the U.S.
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 usually insured against in the same general area by companies of similar size engaged in the
same or a similar business; furnish to the U.S. Collateral Agent, upon written request, information
in reasonable detail as to the insurance carried; and ensure that at all times the U.S. Collateral
Agent shall be named as additional insureds with respect to liability policies and the U.S.
Collateral Agent shall be named 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, 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 labor, 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 U.S. 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 U.S. Collateral Agent may reasonably request in
writing, all in reasonable detail.




     (c) Except with respect to Intellectual Property that is an Excluded Asset, at any time and
from time to time, upon the written request of the U.S. Collateral Agent,



24









 






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 U.S. 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 continuation statements under the Uniform Commercial
Code (or other similar laws) in effect in any jurisdiction 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 U.S. Collateral Agent, change its
name or jurisdiction of organization (whether by merger of otherwise); provided that,
promptly after receiving a written request therefor from the U.S. Collateral Agent, such Grantor
shall deliver to the U.S. Collateral Agent all additional financing statements and other documents
reasonably requested by the U.S. 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 U.S. Administrative Agent promptly, in
reasonable detail, of:




     (a) any Lien (other than security interests created hereby or Liens
permitted under the Credit Agreement) on any of such Grantor’s Collateral which would materially
adversely affect the ability of the U.S. 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
U.S. 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
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 materially
adversely affect the value of the Accounts Receivable constituting Collateral taken as a whole.



25









 






     (b) Such Grantor will deliver to the U.S. 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 U.S. Collateral Agent of any acquisition by such
Grantor of (i) any registration of any material Copyright, Patent or Trademark or (ii) any
exclusive rights under a material Copyright License, Patent License or Trademark License
constituting Collateral, and, except with respect to Intellectual Property that is an Excluded
Asset, shall take such actions as may be reasonably requested by the U.S. Collateral Agent (but
only to the extent such actions are within such Grantor’s control) to perfect the security interest
granted to the U.S. Collateral Agent and the other Secured Parties therein, to the extent provided
herein in respect of any Copyright, Patent or Trademark 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 filings (I) of financing statements under the Uniform Commercial Code of any applicable
jurisdiction and/or (II) in the United States Patent and Trademark Office, or with respect to
Copyrights and Copyright Licenses, another applicable United States 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 Commercial Tort Actions. All Commercial Tort Actions of each Grantor in
existence on the date of this Agreement, known to such Grantor after reasonable inquiry, are
described in Schedule 7 hereto. If any Grantor shall at any time after the date of this
Agreement acquire a Commercial Tort Action, such Grantor shall promptly notify the U.S. Collateral
Agent and the U.S. Administrative Agent thereof in a writing signed by such Grantor and describing
the details thereof and shall grant to the U.S. Collateral Agent and the U.S. Administrative Agent
in such writing a security interest therein and in the proceeds thereof, all upon the terms of this
Agreement, with such writing to be in form and substance reasonably satisfactory to the U.S.
Collateral Agent and the U.S. Administrative Agent.




     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.



26









 






     5.2.14 Protection of Trademarks. Such Grantor shall not, with respect to any
Trademarks that are material to the business of any Grantor, cease the use of any of such
Trademarks or fail to maintain the level of the quality of products sold and services rendered
under any of such Trademark 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 ensure that licensees of such Trademarks 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 in accordance with Section 5-114(c) of the UCC, pursuant to an
agreement in form and substance reasonably satisfactory to the U.S. Administrative Agent.



     Section 5.3. Covenants of Each Pledgor. Each Pledgor covenants and agrees with the
U.S. 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 Holdings, 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 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 U.S. Collateral Agent and the other
Secured Parties, hold the same in trust for the U.S. Collateral Agent and the other Secured Parties
and deliver the same forthwith to the U.S. Collateral Agent (who will hold the same on behalf of
the Secured Parties) in the exact form received, duly indorsed by such Pledgor to the U.S.
Collateral Agent, if required, together with an undated stock power covering such certificate duly
executed in blank by such Grantor, to be held by the U.S. 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



27









 






liquidation or dissolution of any Subsidiary of the Parent Borrower in accordance with the Credit
Agreement) shall be paid over to the U.S. 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 favor of the U.S. Collateral Agent, be delivered to the U.S.
Collateral Agent to be held by it hereunder as additional collateral security for the Obligations
in each case except as otherwise provided by the Intercreditor Agreement. 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 U.S. 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. Notwithstanding anything to the
contrary contained above, to the extent any Excess Foreign Subsidiary Capital Stock is pledged
hereunder, such Excess Foreign Subsidiary Capital Stock shall secure Borrower Obligations of the
respective Grantor only as a guarantor of the Borrower Obligations of the Canadian Borrowers, and
shall not secure any direct or other Obligations of the U.S. Borrowers (or guarantees of such
Obligations by the respective Grantor).




     5.3.2 Maintenance of Pledged Stock.
Without the prior written consent of the
U.S. 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 favor 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 or the U.S. Collateral Agent to sell,
assign or transfer any of the Pledged Securities or Proceeds thereof. Each interest in any limited
liability company created after the Closing Date pledged hereunder shall be represented by a
certificate, shall be a “security” within the meaning of the Article VIII of the Code and
shall be governed by Article VIII of the Code. The charter documents of each such limited
liability company shall include an express provision providing that each interest
in such entity “is a security governed by Article VIII of the Uniform Commercial Code in
effect in the State of New York on the date hereof”.




     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 U.S.
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
U.S. Collateral Agent, endorsed to the U.S. Collateral Agent. Furthermore, within ten Business Days
after any Pledgor obtains a Pledged Note



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with a principal amount in excess of $5,000,000, such Pledgor shall cause such Pledged Note to be
delivered to the U.S. Collateral Agent endorsed in blank or, at the request of the U.S. Collateral
Agent endorsed to the U.S. Collateral Agent.



ARTICLE VI




Remedial Provisions



     Section 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 U.S. 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 U.S.
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
U.S. Collateral Agent’s reasonable request and at the expense of the relevant Grantor, such Grantor
shall cause independent public accountants or others reasonably satisfactory to the U.S. Collateral
Agent to furnish to the U.S. Collateral Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Accounts Receivable constituting Collateral.



          (b) The U.S. Collateral Agent hereby authorizes each Grantor to collect such Grantor’s
Accounts Receivable constituting Collateral and the U.S. 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 U.S. 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 U.S. Collateral Proceeds Account, subject to withdrawal by the
U.S. 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 U.S. 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
U.S. Collateral Account Bank (or by any Grantor in trust for the benefit of the U.S. 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 U.S. Collateral Agent’s election, each of the U.S. Collateral Agent and the
U.S. Administrative Agent may apply all or any part of the funds on deposit in the U.S. 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 U.S.
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 U.S. Collateral
Agent’s request, each Grantor shall deliver to the U.S. Collateral Agent copies or, if required by
the U.S. Collateral 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 U.S. Collateral Agent
shall instruct the U.S. Collateral Account Bank to promptly remit any funds on deposit in each
Grantor’s U.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 U.S. Collateral Agent and the Grantors
agree that the U.S. Collateral Agent, at its option, may require that each U.S. Collateral Proceeds
Account and the General Funds Account of each Grantor be established at the U.S. 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.




     Section 6.2. Communications with Obligors; Grantors Remain Liable. (a) The U.S.
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 U.S. Collateral Agent’s satisfaction the existence, amount
and terms of any Accounts Receivable or Contracts.



          (b) Upon the request of the U.S. 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 U.S. Collateral Agent, for the benefit of the Secured
Parties, and that payments in respect thereof shall be made directly to the U.S. 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 U.S. Collateral Agent, the U.S. Administrative 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
U.S. Collateral Agent or any other Secured Party of any payment relating thereto, nor shall the
U.S. 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 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





30









 







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.




     Section 6.3. Pledged Stock. (a) Unless an Event of Default shall have occurred and be
continuing and the U.S. Collateral Agent shall have given notice to the relevant Pledgor of the
U.S. 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 U.S.



     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 U.S. Collateral Agent shall
give notice of its intent to exercise such rights to the relevant Pledgor or Pledgors, (i) the U.S.
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 U.S. Collateral Agent or its nominee, as
applicable, 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 U.S.
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 U.S. Collateral Agent may reasonably determine), all without liability (other
than for its gross negligence or willful misconduct, as determined in a final non-appealable
decision issued by a court of competent jurisdiction) except to account for property actually
received by it, but the U.S. 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 U.S. 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.




          (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 U.S. 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





31









 







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 U.S. Collateral Agent.




     Section 6.4. Proceeds to be Turned Over To U.S. Collateral Agent. In addition to the
rights of the U.S. 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 U.S. Collateral Agent shall have instructed any Grantor to do so,
all Proceeds of Collateral received by such Grantor consisting of cash, checks and other Cash
Equivalent items shall be held by such Grantor in trust for the U.S. Collateral Agent and the other
Secured Parties hereto or the Secured Parties (as defined in the First Lien Last Out Collateral
Agreement) as applicable, segregated from other funds of such Grantor, and shall, forthwith upon
receipt by such Grantor, be turned over to the U.S. Collateral Agent (or its agent appointed for
purposes of perfection) in the exact form received by such Grantor (duly indorsed by such Grantor
to the U.S. Collateral Agent if required). All Proceeds of Collateral received by the U.S.
Collateral Agent hereunder shall be held by the U.S. Collateral Agent in the relevant U.S.
Collateral Proceeds Account maintained under its sole dominion and control. All Proceeds of
Collateral while held by the U.S. Collateral Agent in such U.S. Collateral Proceeds Account (or by
the relevant Grantor in trust for the U.S. 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.



     Section 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 (as
defined in the Credit Agreement) received by the U.S. Collateral Agent (whether from the relevant
Granting Party or otherwise) shall be held by the U.S. 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
U.S. Collateral Agent, be applied by the U.S. Collateral Agent as follows:




     (a) first, to
the payment of all amounts owing the U.S. Collateral Agent for (i) any amounts advanced by the U.S.
Collateral Agent in order to preserve the Collateral or preserve its security interest in the
Collateral, (ii) in the event of the enforcement of any indebtedness, obligations, or liabilities
of any Grantor, after an Event of Default shall have occurred and be continuing, the reasonable
expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or
realizing on the Collateral, or of any exercise by the U.S. Collateral Agent of its rights
hereunder, together with reasonable attorneys’ fees and court costs and (iii) all amounts paid to
which the U.S. Collateral Agent has the right to reimbursement under subsection 9.4;




     (b)
second, to the extent proceeds remain after the application pursuant to the preceding
clause (a), to the payment of all amounts owing to any Agent pursuant to any of the Loan Documents
in its capacity as such;




     (c) third, but subject to the provisions of the following
subclauses 6.5.6 and 6.5.7, to the extent proceeds remain after the application pursuant to the
preceding



32









 






clauses (a) and (b), an amount equal to the outstanding Primary U.S. Borrower Obligations shall be
paid to the Secured Parties as provided in subsection 6.5.2 hereof, with each Secured Party
receiving an amount equal to its outstanding Primary U.S. Borrower Obligations or, if the proceeds
are insufficient to pay in full all such Primary U.S. Borrower Obligations, its Pro Rata Share of
the amount remaining to be distributed;




     (d) fourth, but subject to the provisions of the
following subclauses 6.5.6 and 6.5.7, to the extent proceeds remain after the application pursuant
to the preceding clauses (a) through (c), an amount equal to the outstanding Primary Canadian
Borrower Obligations shall be paid to the Secured Parties as provided in subsection 6.5.2 hereof,
with each Secured Party receiving an amount equal to its outstanding Primary Canadian Borrower
Obligations or, if the proceeds are insufficient to pay in full all such Primary Canadian Borrower
Obligations, its Pro Rata Share of the amount remaining to be distributed;




     (e) fifth, but
subject to the provisions of subclauses 6.5.6 and 6.5.7, to the extent proceeds remain after the
application pursuant to the preceding clauses (a) through (d), inclusive, an amount equal to the
outstanding Secondary U.S. Borrower Obligations shall be paid to the Secured Parties as provided in
subsection 6.5.2 hereof, with each Secured Party receiving an amount equal to its outstanding
Secondary U.S. Borrower Obligations or, if the proceeds are insufficient to pay in full all such
Secondary U.S. Borrower Obligations, its Pro Rata Share of the amount remaining to be distributed;




     (f) sixth, but subject to the provisions of subclauses 6.5.6 and 6.5.7, to the extent
proceeds remain after the application pursuant to preceding clauses (a) through (e), inclusive, an
amount equal to the outstanding Secondary Canadian Borrower Obligations shall be paid to the
Secured Parties as provided in subsection 6.5.2 hereof, with each Secured Party receiving an amount
equal to its outstanding Secondary Canadian Borrower Obligations or, if the proceeds are
insufficient to pay in full all such Secondary Canadian Borrower Obligations, its Pro Rata Share of
the amount remaining to be distributed;




     (g) seventh, but subject to the provisions of
subclauses 6.5.6 and 6.5.7, to the extent proceeds remain after the application pursuant to
preceding clauses (a) through (f), inclusive, ratably to any then remaining unpaid Obligations; and




     (h) eighth, to the extent proceeds remain after the application pursuant to the preceding
clauses (a) through (g), inclusive, and following the termination of this Agreement, to the
relevant Grantor or to whomever may be lawfully entitled to such surplus.



          6.5.2 For purposes of this Agreement, (i) “Pro Rata Share” shall mean, when calculating a
Secured Party’s portion of any distribution or amount, that amount (expressed as a percentage)
equal to a fraction the numerator of which is the then unpaid amount of such Secured Party’s
Primary U.S. Borrower Obligations, Primary Canadian Borrower Obligations, Secondary U.S. Borrower
Obligations or Secondary Canadian Borrower Obligations, as the case may be, and the denominator of
which is the then outstanding amount of all Primary U.S. Borrower








33









 








Obligations, Primary Canadian Borrower Obligations, Secondary U.S. Borrower Obligations or
Secondary Canadian Borrower Obligations, as the case may be, (ii) “Primary Obligations”
shall mean (x) in the case of the Loan Document Obligations, all unpaid principal of, premium, if
any, fees and interest on, all Loans, all Reimbursement Obligations and all fees and expenses due
and owing pursuant to the Credit Agreement and (y) in the case of the Other Obligations, all
amounts due under each Interest Rate Protection Agreement or Permitted Hedging Arrangement with an
Other Creditor (other than indemnities, fees (including, without limitation, attorneys’ fees) and
similar obligations and liabilities), (iii) “Secondary Obligations” shall mean all
Obligations other than Primary Obligations, (iv) “Primary U.S. Borrower Obligations” shall
mean all Primary Obligations which are also U.S. Borrower Obligations, (v) “Secondary U.S.
Borrower Obligations” shall mean all Secondary Obligations which are also U.S. Borrower
Obligations, (vi) “Primary Canadian Borrower Obligations” shall mean all Primary
Obligations which are also Canadian Borrower Obligations and (vii) “Secondary Canadian Borrower
Obligations” shall mean all Secondary Obligations which are also Canadian Borrower Obligations.



          6.5.3 Each of the Secured Parties, by their acceptance of the benefits hereof and of the other
Security Documents, agrees and acknowledges that if the Lender Creditors receive a distribution on
account of undrawn amounts with respect to Letters of Credit issued under the Credit Agreement
(which shall only occur after all Loans and Reimbursement Obligations constituting Primary U.S.
Borrower Obligations or Primary Canadian Borrower Obligations, as the case may be, have been paid
in full), such amounts shall be paid to the U.S. Administrative Agent under the Credit Agreement
and held by it, for the benefit of the respective Lender Creditors, as cash security for the
repayment of Obligations owing to the Lender Creditors as such. If any amounts are held as cash
security pursuant to the immediately preceding sentence, then upon the termination of all
outstanding Letters of Credit under the Credit Agreement constituting Primary U.S. Borrower
Obligations or Primary Canadian Borrower Obligations, as the case may be, and after the application
of all such cash security to the repayment of all Obligations owing to the respective Lender
Creditors after giving effect to the termination of all such Letters of Credit, if there remains
any excess cash, such excess cash shall be returned by the U.S. Administrative Agent to the U.S.
Collateral Agent for distribution in accordance with provisions set forth above in this subsection
6.5.




          6.5.4 All payments required to be made hereunder shall be made (x) if to the Lender Creditors,
to the U.S. Administrative Agent for the account of the Lender Creditors and (y) if to the Other
Creditors, to the trustee, paying agent or other similar representative (each, a
“Representative”) for the Other Creditors or, in the absence of such a Representative,
directly to the Other Creditors.




          6.5.5 For purposes of applying payments received in accordance with this subsection 6.5, the
U.S. Collateral Agent shall be entitled to rely upon (i) the Administrative Agents and (ii) the
Representative or, in the absence of such a Representative, upon the Other Creditors for a
determination (which the Administrative Agents, each Representative and the Other Creditors agree
(or shall agree) to provide upon request of the U.S. Collateral
Agent) of the outstanding Primary U.S. Borrower Obligations, Primary Canadian Borrower Obligations,
Secondary Canadian Borrower Obligations and Secondary Canadian Borrower Obligations owed to the
Lender Creditors or the Other Creditors, as the case may be. Unless it has received written notice
from a Lender Creditor or an Other Creditor to the contrary, the Administrative Agents




34









 







and each Representative, in furnishing information pursuant to the preceding sentence, and the U.S.
Collateral Agent, in acting hereunder, shall be entitled to assume that no Secondary Obligations
are outstanding. Unless it has written notice from an Other Creditor to the contrary, the U.S.
Collateral Agent, in acting hereunder, shall be entitled to assume that no Interest Rate Protection
Agreements or Permitted Hedging Arrangements with an Other Creditor are in existence.




          6.5.6 Notwithstanding anything to the contrary contained above, to the extent monies or
proceeds to be applied pursuant to this subsection 6.5 consist of proceeds received as
distributions on or from a sale or other disposition of Excess Foreign Subsidiary Capital Stock,
such proceeds will be applied as otherwise required above in this subsection 6.5, but for this
purpose treating the outstanding Obligations (including both Primary Obligations and Secondary
Obligations) as only those obligations secured by the Excess Foreign Subsidiary Capital Stock in
accordance with the provisions of clause (x) to the proviso appearing at the end of subsection 3.1
hereof.




          6.5.7 Notwithstanding anything to the contrary contained above, to the extent monies or
proceeds to be applied pursuant to this subsection 6.5 consist of proceeds received under any
Canadian Security Document, such proceeds will be applied as otherwise required above in this
subsection 6.5, but for this purpose (i) reversing clauses (c) and (d) above (thereby treating
clause (d) as if it were the third priority of distribution, and treating clause (c) as if it were
the fourth priority of distribution) and reversing clauses (e) and (f) above (thereby treating
clause (f) above as if it were the fifth priority of distribution and treating clause (e) above as
if it were the sixth priority distribution), in each case mutatis mutandis and with
any necessary reference changes (to clauses, etc.) and (ii) treating the outstanding Obligations
(including Primary Obligations and Secondary Obligations) as only those obligations secured by the
respective Canadian Security Document.




          6.5.8 It is understood that the Grantors shall remain jointly and severally liable to the
extent of any deficiency between the amount of the proceeds of the Collateral and the aggregate
amount of the Obligations.




     Section 6.6. Code and Other Remedies. If an Event of Default shall occur and be
continuing, the U.S. Collateral Agent, on behalf of the Secured Parties, may exercise, in addition
to all other rights and remedies granted to them in this 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 Code, under any
other applicable law and in equity. Without limiting the generality of the foregoing, to the extent
permitted by applicable law, the U.S. 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 U.S. Collateral Agent or any other Secured Party or elsewhere upon such



35









 




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 U.S. 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 U.S. Collateral Agent’s request, to assemble
the Security Collateral and make it available to the U.S. Collateral Agent at places which the U.S.
Collateral Agent shall reasonably select, whether at such Granting Party’s premises or elsewhere.
The U.S. 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 U.S. Collateral Agent and the
other Secured Parties hereunder, including, without limitation, reasonable attorneys’ 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 U.S. Collateral Agent of any other amount required by any
provision of law, including, without limitation, Section 9-615(a)(3) of the Code, need the U.S.
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 U.S. 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 willful misconduct of any of the U.S. Collateral Agent or
such other Secured Party (in each case as determined in a final non-appealable decision issued by a
court of competent jurisdiction) 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.




          Section 6.7. Registration Rights. (a) If the U.S. 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 U.S. 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 the Securities Act, 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 U.S. Collateral Agent, necessary or advisable to register such Pledged
Stock, or that portion thereof to be sold, under the provisions of the Securities Act, (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 Collateral Agent,
are necessary or advisable, all in conformity with the requirements of the Securities Act and the
rules and regulations of the Securities and Exchange Commission applicable thereto. Such Pledgor
agrees to use its reasonable best efforts to cause such Issuer to comply with the provisions of the
securities or “Blue Sky” laws of any and all states and the District of Columbia that the U.S.
Collateral Agent shall reasonably designate and to make available to its security





36









 







holders, as soon as practicable, an earnings statement (which need not be audited) that will
satisfy the provisions of Section 11(a) of the Securities Act.




          (b) Such Pledgor recognizes
that the U.S. Collateral Agent may be unable to effect a public sale of any or all such Pledged
Stock, by reason of certain prohibitions contained in the Securities Act and applicable state
securities laws 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 favorable 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 U.S. 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 the
Securities Act, or under applicable state securities laws, 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 U.S. Collateral Agent and the
Lenders, that the U.S. 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.




     Section 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 attorneys employed by the U.S. Collateral Agent or
any other Secured Party to collect such deficiency.



ARTICLE VII




The Collateral Agent



     Section 7.1. U.S. Collateral Agent’s Appointment as Attorney-in-Fact, etc. (a) Each
Granting Party hereby irrevocably constitutes and appoints the U.S. Collateral Agent and 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



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purposes of this Agreement to the extent permitted by applicable law, provided that the
U.S. Collateral Agent agrees 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 U.S. 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 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 U.S. 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
indorse and collect any checks, 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 U.S. Collateral
Agent for the 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, or Trademark constituting Collateral
of such Grantor, execute and deliver any and all agreements, instruments, documents and papers as
the U.S. Collateral Agent may reasonably request to such Grantor to evidence the U.S. Collateral
Agent’s and the Lenders’ security interest in such Copyright, Patent, or Trademark and the goodwill
and general 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
U.S. Collateral Agent or as the U.S. 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
indorse 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



38









 






such discharges or releases as the U.S. Collateral Agent may deem appropriate; (G) subject to any
existing reserved rights or licenses, assign any Copyright, Patent or
Trademark constituting Collateral of such Grantor (along with the goodwill of the business to which
any such Copyright, Patent or Trademark pertains), for such term or terms, on such conditions, and
in such manner, as the U.S. Collateral 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 U.S. Collateral Agent were
the absolute owner thereof for all purposes, and do, at the U.S. Collateral Agent’s option and such
Grantor’s expense, at any time, or from time to time, all acts and things which the U.S. Collateral
Agent deems necessary to protect, preserve or realize upon the Collateral of such Grantor and the
U.S. 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 U.S. Collateral Agent incurred in connection with actions
undertaken as provided in this subsection 7.1, together with interest thereon at a rate per annum
equal to the rate per annum at which interest would then be payable on past due ABR Loans that are
U.S. RCF Loans under the Credit Agreement, from the date of payment by the U.S. Collateral Agent to
the date reimbursed by the relevant Granting Party, shall be payable by such Granting Party to the
U.S. 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.




     Section 7.2. Duty of U.S. Collateral Agent. The U.S. Collateral Agent’s sole duty with
respect to the custody, safekeeping and physical preservation of the Security Collateral in its
possession, under Section 9-207 of the Code or otherwise, shall be to deal with it in the same
manner as the U.S. Collateral Agent deals with similar property for its own account. None of the
U.S. 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 U.S. Collateral Agent and
the other Secured Parties hereunder are solely to protect the U.S. Collateral Agent’s and the other
Secured Parties’ interests in the Security Collateral and shall not impose any duty upon the U.S.
Collateral Agent or any other Secured Party to exercise any such powers. The U.S. 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 willful
misconduct (as determined in a final non-appealable decision issued by a court of competent
jurisdiction).



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     Section 7.3. Financing Statements. Pursuant to any applicable law, each Granting Party
authorizes the U.S. Collateral Agent to file or record financing 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 filing offices as the U.S.
Collateral Agent reasonably determines appropriate to perfect the security interests of the U.S.
Collateral Agent under this Agreement. Each Granting Party authorizes the U.S. Collateral Agent to
use any collateral description determined by the U.S. Collateral Agent, including, without
limitation, the collateral description “all personal property” or “all assets” in any such
financing statements.



     Section 7.4. Authority of U.S. Collateral Agent. Each Granting Party acknowledges that
the rights and responsibilities of the U.S. Collateral Agent under this Agreement with respect to
any action taken by the U.S. Collateral Agent or the exercise or non-exercise by the U.S.
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 U.S. 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 U.S. Collateral Agent and the Granting Parties,
the U.S. 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.



     Section 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 U.S. Collateral Agent shall have
reasonable access during normal business hours to all the books, correspondence and records of such
Grantor, and the U.S. Collateral Agent and its 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 U.S. Collateral Agent at such Grantor’s reasonable cost and expense, such clerical
and other assistance as may be reasonably requested with regard thereto. The U.S. Collateral Agent
and its 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.



ARTICLE VIII




Non-Lender Secured Parties



          Section 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 Article 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





40









 







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 Holdings 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 which is provided by one or more Lenders among
others (including on a priming basis under Section 364(d) of the Bankruptcy Code); (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 ratable 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 U.S. Collateral Agent and the Lenders, with the consent of the U.S. 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 Uniform Commercial Code of any applicable
jurisdiction. The Non-Lender Secured Parties by their acceptance of the benefits of this Agreement
and the other Security Documents hereby agree 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 Holdings 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 U.S. 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.





41









 








     Section 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 U.S. Collateral Agent, as agent under the Credit Agreement (and
all officers, employees or agents designated by the U.S. Collateral Agent) as such Person’s true
and lawful agent and attorney-in-fact, and in such capacity, the U.S. 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 U.S. Collateral Agent 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 U.S. Collateral Agent has
appointed the U.S. Administrative 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.



     Section 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 U.S. 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 U.S. 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 willful
misconduct or gross negligence of such Person. None of the U.S. 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 Holdings,
any Subsidiary of Holdings, 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 willful misconduct or gross
negligence of such Person (as determined in a final non-appealable decision by a court of competent
jurisdiction).



ARTICLE IX




Miscellaneous



     Section 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 U.S. Collateral Agent (acting at the directions of the
Required Lenders or, if required pursuant to Section 11.1 of the Credit Agreement, all of the
Lenders), provided that (a) any provision of this Agreement imposing obligations on any
Granting Party may be waived by the U.S. Collateral Agent in a written instrument executed by the
U.S. Collateral Agent (acting at the directions of the Required Lenders or, if required pursuant to
Section 11.1 of the Credit Agreement, all of the Lenders) 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.



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     Section 9.2. Notices. All notices, requests and demands to or upon the U.S. 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 U.S. Collateral
Agent and the U.S. Administrative Agent given in accordance with subsection 11.2 of the Credit
Agreement.



     Section 9.3. No Waiver by Course of Conduct; Cumulative Remedies. None of the U.S.
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 U.S. 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 U.S.
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 U.S. 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.



     Section 9.4. Enforcement Expenses; Indemnification. (a) Each Guarantor jointly and
severally agrees to pay or reimburse each Secured Party and the U.S. Collateral Agent for all their
respective reasonable costs and expenses incurred in collecting against any Guarantor under the
guarantee contained in Article 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 U.S. Collateral Agent and the U.S. Administrative Agent.



          (b) Each Grantor jointly and severally agrees to pay, and to save the U.S. Collateral Agent,
the U.S. Administrative Agent and the other Secured Parties harmless from, (x) any and all
liabilities 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 willful
misconduct of the U.S. Collateral Agent or any other Secured Party (as determined in a final
non-appealable decision by a court of competent jurisdiction).




          (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.





43









 








     Section 9.5. Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the Granting Parties, the U.S. 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 U.S. Collateral Agent.



     Section 9.6. Set-Off. Each Guarantor hereby irrevocably authorizes each of the
Administrative Agent and the U.S. 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 U.S. 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 U.S. Collateral Agent, the U.S. Administrative 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 U.S. Collateral Agent, the U.S. Administrative Agent or such other
Secured Party may elect. The U.S. Collateral Agent, the U.S. Administrative Agent and each other
Secured Party shall notify such Guarantor promptly of any such set-off and the application made by
the U.S. Collateral Agent, the U.S. Administrative 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 U.S. Collateral Agent, the U.S.
Administrative 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 U.S.
Collateral Agent, the U.S. Administrative Agent or such other Secured Party may have.



     Section 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.



     Section 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 Foreign 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 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.



44









 





     Section 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.



     Section 9.10. Integration. This Agreement and the other Loan Documents represent the
entire agreement of the Granting Parties, the U.S. 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 U.S. 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.



     Section 9.11. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.



     Section 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 State of New York, the courts of the United States of America
located in the county of New York, and appellate courts from any thereof;




     (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 U.S. Collateral Agent and the U.S.
Administrative Agent (in the case of any other party hereto) or the Parent Borrower (in the case of
the U.S. Collateral Agent and the U.S. Administrative 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 consequential or punitive damages.



     Section 9.13. Acknowledgments.
Each Guarantor hereby acknowledges that:



45









 






     (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 U.S. Collateral
Agent, the U.S. Administrative 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 U.S.
Collateral Agent, the U.S. Administrative Agent and the other Secured Parties, on the other hand,
in connection herewith or therewith is solely that of creditor and debtor; and




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



     Section 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.



     Section 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.



     Section 9.16.
Releases. (a) At such time as the Loans, the Reimbursement Obligations and the other
Obligations 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 U.S. 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 U.S. Collateral Agent shall
deliver to such Granting Party any Security Collateral held by the U.S. Collateral Agent hereunder,
and execute and deliver to such Granting Party such documents (including without limitation UCC
termination statements) 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 Holdings, 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





46









 







Agreement, the U.S. 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 and without representation or warranty of any kind) all releases or
other documents (including without limitation UCC termination statements) 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.




     Section 9.17. Judgment. (a) If for the purpose of obtaining judgment in any court it
is necessary to convert a sum due hereunder in one currency into another currency, the parties
hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used
shall be that at which in accordance with normal banking procedures the U.S. Collateral Agent could
purchase the first currency with such other currency on the Business Day preceding the day on which
final judgment is given.



          (b) The obligations of any Guarantor in respect of this Agreement to the U.S. Collateral
Agent, for the benefit of each holder of Secured Obligations, shall, notwithstanding any judgment
in a currency (the “judgment currency”) other than the currency in which the sum originally
due to such holder is denominated (the “original currency”), be discharged only to the
extent that on the Business Day following receipt by the U.S. Collateral Agent of any sum adjudged
to be so due in the judgment currency, the U.S. Collateral Agent may in accordance with normal
banking procedures purchase the original currency with the judgment currency; if the amount of the
original currency so purchased is less than the sum originally due to such holder in the original
currency, such Guarantor agrees, as a separate obligation and notwithstanding any such judgment, to
indemnify the U.S. Collateral Agent for the benefit of such holder, against such loss, and if the
amount of the original currency so purchased exceeds the sum originally due to the U.S. Collateral
Agent, the U.S. Collateral Agent agrees to remit to the Parent Borrower, such excess.
This covenant shall survive the termination of this Agreement and payment of the Obligations and
all other amounts payable hereunder.




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




47














 





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




	 	 	 	 	 
	 	RSC HOLDINGS II, LLC

 	 
	 	By:  	/s/ Kevin J. Groman
 	 
	 	 	Name:  	Kevin J. Groman 	 
	 	 	Title:  	Senior Vice President, General
  Counsel and Corporate Secretary 	 
	 
	 	RSC HOLDINGS III, LLC

 	 
	 	By:  	/s/ Kevin J. Groman
 	 
	 	 	Name:  	Kevin J. Groman 	 
	 	 	Title:  	Senior Vice President, General
  Counsel and Corporate Secretary 	 
	 
	 	RSC EQUIPMENT RENTAL, INC.

 	 
	 	By:  	/s/ Kevin J. Groman
 	 
	 	 	Name:  	Kevin J. Groman 	 
	 	 	Title:  	Senior Vice President, General
  Counsel and Corporate Secretary 	 
	 



Signature page to RSC ABL US Guarantee & Collateral Agreement







 









 








	 	 	 	 	 
	 	Acknowledged and Agreed to as

of the date hereof by:


DEUTSCHE BANK AG NEW YORK BRANCH,

        as U.S. Collateral Agent and U.S.

        Administrative Agent

 	 
	 	By:  	/s/ Marguerite Sutton
 	 
	 	 	Name:  	Marguerite Sutton 	 
	 	 	Title:  	Director 	 
	 
	 	 	 
	 	By:  	/s/ Carin Keegan
 	 
	 	 	Name:  	Carin Keegan 	 
	 	 	Title:  	Director 	 
	 



Signature
page to RSC ABL US Guarantee & Collateral Agreement





 











 





SCHEDULE 1




NOTICE ADDRESSES OF GUARANTORS1




          Notices, requests or demands to or upon any Guarantor under the U.S. Guarantee and Collateral
Agreement shall be made to such Guarantor:




c/o RSC EQUIPMENT RENTAL, INC.

6929 East Greenway Parkway

Scottsdale, Arizona 85254

Attention: Scott Huckins, Vice President and Treasurer

Facsimile: 480-905-3405

Telephone: 480-281-6956




with copies to:




Oak Hill Capital Management, LLC

65 East 55th Street, 36th Floor

New York, New York 10022

Attention: John R. Monsky, Esq.

Facsimile: (212) 758-3572

Telephone: (212) 326-1590




Debevoise & Plimpton LLP

919 Third Avenue

New York, New York 10022

Attention: David A. Brittenham, Esq.

Facsimile: (212) 521-7347

Telephone: (212) 909-6347






 




			
	1	 	RSC to deliver updated versions of all schedules.





 









 





SCHEDULE 2




PLEDGED SECURITIES




I. Pledged Stock




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Number of	 	% of All Issued
	 	 	 	 	Class of	 	 	 	 	 	 	 	Shares or	 	Capital or Other
	 	 	 	 	Stock or	 	 	 	Certificate	 	Interests	 	Equity Interests of
	Pledgor	 	Issuer	 	Interests	 	Par Value	 	No(s).	 	Pledged	 	Issuer Pledged
	RSC Holdings II, LLC

	 	RSC Holdings III, LLC
	 	N/A
	 	N/A
	 	Uncertificated
	 	 	N/A	 	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	RSC Holdings III, LLC

	 	RSC Equipment
Rental, Inc.
(formerly known
as Rental Service
Corporation)
	 	Common
	 	No par value.
	 	 	2	 	 	 	1,000	 	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	RSC Equipment
Rental, Inc.

	 	RSC Equipment
Rental of Canada
Ltd. (formerly
known as Rental
Service
Corporation of
Canada Ltd.)
	 	Common
	 	No par value.
	 	 	8	 	 	 	715	 	 	 	65	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	RSC Equipment
Rental, Inc.

	 	RSC Equipment
Rental of Canada
Ltd.
	 	Common
	 	No par value.
	 	 	9	 	 	 	385	 	 	35%2







II. Pledged Notes




     None.





 




			
	2	 	The pledge of this stock will be subject to clause (x) of the proviso of Section 3.1.




 









 










SCHEDULE 3




PERFECTION MATTERS




Existing Security Interests




None.




UCC Filings




	 	 	 	 	 	 	 
	Granting Party	 	State	 	Filing Office	 	Document Filed
	1. RSC Holdings II, LLC

	 	Delaware
	 	Secretary of State
	 	Form UCC-1
	2. RSC Holdings III, LLC

	 	Delaware
	 	Secretary of State
	 	Form UCC-1
	3. RSC Equipment Rental, Inc.

	 	Arizona
	 	Secretary of State
	 	Form UCC-1






Intellectual Property Filings




A. Filings with the U.S. Patent and Trademark Office



Filing of a Notice of Grant of Security Interest in Trademarks owned by RSC Equipment Rental, Inc.



Filing of a Notice of Grant of Security Interest in Patents owned by RSC Equipment Rental, Inc.




B. Filings with the U.S. Copyright Office



Filing of a Notice of Grant of Security Interest in Copyrights owned by RSC Equipment Rental, Inc.






 









 








SCHEDULE 4




LOCATION OF JURISDICTION OF ORGANIZATION




	 	 	 
	Granting Party	 	Jurisdiction of Incorporation
	RSC Holdings II, LLC

	 	Delaware, United States
	RSC Holdings III, LLC

	 	Delaware, United States
	RSC Equipment Rental, Inc.

	 	Arizona, United States






 









 






SCHEDULE 5




INTELLECTUAL PROPERTY




A. Patents and Patent Licenses




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Owner of
	Patent	 	App. No.	 	App. Date	 	Reg. No.	 	Reg. Date	 	Status	 	Record
	SYSTEM AND 

METHOD FOR 

UTILIZATION-

BASED COMPUTING 

OF EMISSIONS 

ATTRIBUTABLE TO 

SPECIFIC 

EQUIPMENT

	 	 	61390901	 	 	10/7/2010
	 	 	 	 	 	Pending
	 	RSC






B. Trademarks and Trademark Licenses



1. U.S. Trademarks




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Owner of
	Trademark	 	App. No.	 	App. Date	 	Reg. No.	 	Reg. Date	 	Status	 	Record
	BRAND ON
COMMAND

	 	 	78757357	 	 	11/18/2005
	 	 	3219696	 	 	3/20/2007
	 	Registered 3/20/07
	 	RSC
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	E2T

	 	 	77859863	 	 	10/28/2009
	 	 	3840358	 	 	8/31/2010
	 	Registered 8/31/10
	 	RSC
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5S and design

	 	 	78599527	 	 	3/31/2005
	 	 	3353413	 	 	12/11/2007
	 	Registered 12/11/07
	 	RSC
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	RENT OUR 

    EQUIPMENT CUT  YOUR COSTS

	 	 	78570582	 	 	2/18/2005
	 	 	3147687	 	 	9/26/06
	 	Registration
9/26/06
RSC
elected
not to
pursue
further
	 	RSC
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	RENT OUR 

    EQUIPMENT RAISE YOUR PROFITS

	 	 	78560196	 	 	2/3/2005
	 	 	3191151	 	 	1/2/2007
	 	Registered 1/2/07
RSC
elected
not to
pursue
further
	 	RSC
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	RSC

	 	 	78795158	 	 	1/19/2006
	 	 	3249167	 	 	6/5/2007
	 	Registered 6/5/07
	 	RSC






 









 





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Owner of
	Trademark	 	App. No.	 	App. Date	 	Reg. No.	 	Reg. Date	 	Status	 	Record
	RSC and design

	 	 	75319879	 	 	7/7/1997
	 	 	2264049	 	 	7/27/1999
Renewed
8/10/2010
	 	Sec. 8 &
15
Accepted
1/14/05
	 	RSC
	RSC

	 	 	78654302	 	 	6/20/2005
	 	 	3403076	 	 	3/25/2008
	 	Registered
3/25/08
	 	RSC
	RSC EQUIPMENT
RENTAL

	 	 	78492564	 	 	9/30/2004
	 	 	3136868	 	 	8/29/2006
	 	Registered
8/29/06
	 	RSC
	RSC EQUIPMENT
RENTAL

	 	 	78492574	 	 	9/30/2004
	 	 	3313502	 	 	10/16/2007
	 	Registered
10/16/07
	 	RSC
	RSC ONLINE

	 	 	78534413	 	 	12/17/2004
	 	 	3111367	 	 	7/4/2006
	 	Registration
7/4/06
	 	RSC
	RSC RENTAL
SERVICE
CORPORATION
	 	 	74709781	 	 	8/1/1995
	 	 	2028379	 	 	1/7/1997
Renewed
3/9/2007
	 	Sec. 8 &
15
Accepted
3/28/03
	 	RSC
	RSC’S BRAND ON
COMMAND
	 	 	78757380	 	 	11/18/2005
	 	 	3217309	 	 	3/13/2007
	 	Registered
3/13/07
	 	RSC
	TOTAL CONTROL

	 	 	76510869	 	 	4/30/2003
	 	 	2850473	 	 	6/8/2004
	 	Registered 6/8/04
	 	RSC






2.
State Trademarks




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Owner of
	State	 	Trademark	 	App. No.	 	App. Date	 	Reg. No.	 	Reg. Date	 	Status	 	Record
	New
Mexico†

	 	VALLEY
RENTALS
	 	 	 	 	 	TK98082101
	 	August 21, 1998
	 	Registered
	 	RSC
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	New
Mexico†

	 	CENTER
RENTAL,
SALES,
SERVICE
	 	 	 	 	 	TK980802102
	 	August 21, 1998
	 	Registered
	 	RSC








 




			
	†	 	These are state trademark registrations which RSC does not intend to renew.





3. Foreign Trademarks




None




          4. Trademark Licenses




None




7









 





C. Copyrights and Copyright Licenses




     1.
U.S. Registered Copyrights




	 	 	 	 	 	 	 	 	 	 	 	 	 
	Title	 	Reg. No.	 	 	Reg. Date	 	 	Owner of Record	 
	Main — Industrial Air Tools tool rental system (Total Control)
	 	TX-5-866-708	 	 	10/28/2003	 	 	RSC
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Total Control (2010 ed)
	 	Pending	 	 	10/04/2010	 	 	RSC






2. Copyright Licenses1





	 	1.	 	AT&T Master Agreement Version IX MA Reference
No. 120681 dated May 27, 2003 with AT&T,
together with any Amendments, Addendum,
Supplement, or Annex thereto.
	 
	 	2.	 	Kronos Sales Agreement and Software License
dated as of May 14, 2004 with Kronos
Incorporated together with any Amendments,
Addendum, Supplement, or Annex thereto.
	 
	 	3.	 	Non-Exclusive License Agreement dated August
31, 1994 with Lawson Associates Inc.,
together with any Amendments, Addendum,
Supplement, or Annex thereto.
	 
	 	4.	 	Master Agreement dated August 31, 1994 with
Wynne Systems, Inc. together with any
Amendments, Addendum, Supplement, or Annex
thereto.
	 
	 	5.	 	License and Services Agreement dated December
15, 2005 with PROS Revenue Management, L.P.
dba PROS Pricing Solutions, together with
together with any Amendments, Addendum,
Supplement, or Annex thereto.
	 
	 	6.	 	Services and Software License Agreement dated
as of December 17, 2002 with ProBusiness
Services, Inc., together with any Amendments,
Addendum, Supplement, or Annex thereto.
	 
	 	7.	 	Qualcomm — Omnitracs and Omniexpress
Contract, dated September 26, 2003, together
with any Amendments, Addendum, Supplement, or
Annex thereto.
	 
	 	8.	 	Taleo Application Service Provider Agreement,
dated June 20, 2005 together with any
Amendments, Addendum, Supplement, or Annex
thereto.
	 
	 	9.	 	Multivendor Information Technology Recovery
Services Contract, together with Statement of
Work for Services — IBM Business Continuity
and Recovery Services for Operating System
Restore, effective October 7, 2006, with IBM
Corporation together with any Amendments,
Addendum, Supplement, or Annex thereto.
	 
	 	10.	 	IBM Global Technology Service Master
Agreement, dated Juny 30, 2010, together with
any Amendments, Addendum, Supplement, or
Annex.
	 
	 	11.	 	Relavis Corporation Consulting Services
Agreement, effective as of May 19, 2004, and
Relavis E-Sales Agreement, with Relavis
Corporation together with any Amendments,
Addendum, Supplement, or Annex thereto.
	 
	 	12.	 	Sprint Customer Service Agreement together
with any Amendments, Addendum, Supplement, or
Annex thereto.







 




			
	1	 	Other agreements (including licenses) with any Grantor with respect
to other software or incidental use of trademarks or technology are not listed.




8









 











	 	13.	 	Qwest ISDN PRS, and/or DSS advanced and/or UAS Bulk Rated
Agreement together with any Amendments, Addendum, Supplement, or
Annex thereto.
	 
	 	14.	 	Boomerang Software License Agreement with Acceleron, Inc.
together with any Amendments, Addendum, Supplement, or Annex
thereto.
	 
	 	15.	 	Pembrooke Contract for Services together with any Amendments,
Addendum, Supplement, or Annex thereto.
	 
	 	16.	 	Quadrant Software’s FastFax (integrated fax/email solution in
conjunction with Wynne), together with any Amendments, Addendum,
Supplement, or Annex thereto.
	 
	 	17.	 	VeriFone’s Go JavaCard Credit Card Payment Processing Agreement,
together with any Amendments, Addendum, Supplement, or Annex
thereto.
	 
	 	18.	 	CyberShift’s Boomerang Employee Travel Expense Agreement,
together with any Amendments, Addendum, Supplement, or Annex
thereto.
	 
	 	19.	 	Agreement with ImageNow, together with any Amendments, Addendum,
Supplement, or Annex thereto.
	 
	 	20.	 	Agreement with MaxIT, together with any Amendments, Addendum,
Supplement, or Annex thereto.
	 
	 	21.	 	Agreement with STARS, together with any Amendments, Addendum,
Supplement, or Annex thereto.
	 
	 	22.	 	Agreement with ICertainty, together with any Amendments,
Addendum, Supplement or Annex thereto.
	 
	 	.23.	 	The Company’s Total Control software is licensed to certain customers in the ordinary course
of business.
	 
	 	24.	 	The Company’s proprietary version of Wynne System’s RentalMan software.
	 
	 	25.	 	RSC Online, which is licensed to certain customers in the ordinary
course of business.
	 
	 	26.	 	Licenses for the following software: IBM Lotus Notes CEO, Symantec
Anti-Virus Enterprise Edition and Microsoft MS Enterprise Agreement
(Windows and MS Office).




In addition, the company licenses commercially available software in the ordinary course of
business.




9









 








SCHEDULE 6




CONTRACTS



None.




10









 








SCHEDULE 7




COMMERCIAL TORT CLAIMS



None.




 









 








ANNEX 1

to

U.S. Guarantee and Collateral Agreement




ACKNOWLEDGEMENT AND CONSENT*




          The undersigned hereby acknowledges receipt of a copy of the U.S. Guarantee and Collateral
Agreement, dated as of February 9, 2011 (the “Agreement”), made by the Granting Parties
thereto for the benefit of Deutsche Bank AG New York Branch, as U.S. Collateral Agent and U.S.
Administrative Agent. The undersigned agrees for the benefit of the U.S. Collateral Agent, the U.S.
Administrative Agent and the Lenders as follows:



          
 The undersigned will be bound by the terms of the
Agreement and will comply with such terms insofar as such terms are applicable to the undersigned.




          The undersigned will notify the U.S. Collateral Agent promptly in writing of the occurrence of
any of the events described in subsection 5.3.1 of the Agreement.




          The terms of subsections 6.3(c) and 6.7 of the Agreement 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 of the Agreement.




	 	 	 	 	 
	 	[NAME OF ISSUER]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Address for Notices:
 	 
	 	
 	 
	 	 	 
	 	
 	 
	 	 	 
	 	
 	 
	 	Fax: 	 
	 	 	 
	 





 




			
	*	 	This consent is necessary only with respect to any Issuer which is not
also a Granting Party.




 









 











ANNEX 2

to

U.S. Guarantee and Collateral Agreement




ASSUMPTION AGREEMENT




          ASSUMPTION AGREEMENT, dated as of
__________
__, ____, made by
_____________________________, a
___________
corporation (the “Additional Granting Party”), in favor of DEUTSCHE BANK AG NEW YORK
BRANCH, as U.S. collateral agent (in such capacity, the “U.S. Collateral Agent”) and as U.S.
administrative agent (in such capacity, the “U.S. Administrative Agent”) for the banks and other
financial institutions (the “Lenders”) from time to time parties to the Credit Agreement referred
to below and the other Secured Parties (as defined below). All capitalized terms not defined herein
shall have the meaning ascribed to them in such the U.S. Guarantee and Collateral Agreement
referred to below, or if not defined therein, in the Credit Agreement.




W I T N E S S E T H:



WHEREAS, RSC HOLDINGS II, LLC (“Holdings”), RSC HOLDINGS III, LLC (the “Parent Borrower”),
RSC EQUIPMENT RENTAL, INC. (“RSC”), RSC EQUIPMENT RENTAL OF CANADA LTD., the other Borrowers
parties thereto, DEUTSCHE BANK AG NEW YORK BRANCH, as U.S. administrative agent and U.S. collateral
agent, DEUTSCHE BANK AG CANADA BRANCH, as Canadian agent and Canadian collateral agent, and the
other parties party thereto are parties to a Credit Agreement, dated as of February 9, 2011 (as
amended, supplemented, waived or otherwise modified from time to time, the “Credit Agreement”);




          WHEREAS, in connection with the Credit Agreement, Holdings, the Parent Borrower, RSC and certain of
its Subsidiaries are, or are to become, parties to the U.S. Guarantee and Collateral Agreement,
dated as of February 9, 2011 (as amended, supplemented, waived or otherwise modified from time to
time, the “U.S. Guarantee and Collateral Agreement”), in favor of the Collateral Agent, for the
benefit of the Secured Parties (as defined in the U.S. Guarantee and Collateral Agreement);




          WHEREAS, the Additional Granting Party is a member of an affiliated group of companies that
includes the Parent Borrower and each other Granting Party; the
proceeds of the extensions of credit under the Credit Agreement will be used in part to enable the
Borrowers to make valuable transfers to one or more of the other Granting Parties (including the
Additional Granting Party) in connection with the operation of their respective businesses; and the
Borrowers and the other Granting Parties (including the Additional Granting Party) are engaged in
related businesses, and each such Granting Party (including the Additional Granting Party) will
derive substantial direct and indirect benefit from the making of the extensions of credit under
the Credit Agreement;




          WHEREAS, the Credit Agreement requires the Additional Granting Party to
become a party to the U.S. Guarantee and Collateral Agreement; and





 









 








          WHEREAS, the Additional Granting Party has agreed to execute and deliver this Assumption
Agreement in order to become a party to the U.S. Guarantee and Collateral Agreement;




          NOW, THEREFORE, IT IS AGREED:




          1. U.S. Guarantee and Collateral Agreement. By executing and delivering this
Assumption Agreement, the Additional Granting Party, as provided in subsection 9.15 of the U.S.
Guarantee and Collateral Agreement, hereby becomes a party to the U.S. Guarantee and Collateral
Agreement as a Granting Party thereunder with the same force and effect as if originally named
therein as a Guarantor, Grantor and Pledgor and, without limiting the generality of the foregoing,
hereby expressly assumes all obligations and liabilities of a Guarantor, Grantor and Pledgor
thereunder. The information set forth in Annex 1-A hereto is hereby added to the
information set forth in Schedules
____________
to the U.S. Guarantee and Collateral Agreement, and such Schedules are hereby amended and modified
to include such information. The Additional Granting Party hereby represents and warrants that each
of the representations and warranties of such Additional Granting Party, in its capacities as a
Guarantor, Grantor and Pledgor, contained in Article 4 of the U.S. Guarantee and Collateral
Agreement is true and correct in all material respects on and as the date hereof (after giving
effect to this Assumption Agreement) as if made on and as of such date.




          2. GOVERNING LAW. THIS ASSUMPTION 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 STATE OF NEW
YORK.




Signature page to RSC ABL US Guarantee & Collateral Agreement






 









 









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




	 	 	 	 	 
	 	[ADDITIONAL GRANTING PARTY]	 
	 	 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	 	Acknowledged and Agreed to as
of the date hereof by:



DEUTSCHE BANK AG NEW YORK BRANCH 

as U.S. Collateral Agent and U.S. Administrative Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



Signature page to RSC ABL US Guarantee & Collateral Agreement




 









 








ANNEX 1-A

to

Assumption Agreement




Supplement to

Guarantee and Collateral Agreement

Schedule 1




Supplement to

Guarantee and Collateral Agreement

Schedule 2



Supplement to

Guarantee and Collateral Agreement

Schedule 3



Supplement to

Guarantee and Collateral Agreement

Schedule 4



Supplement to

Guarantee and Collateral Agreement

Schedule 5



Supplement to

Guarantee and Collateral Agreement

Schedule 6



Supplement to

Guarantee and Collateral Agreement

Schedule 7



Supplement to

Guarantee and Collateral Agreement



Signature page to RSC ABL US Guarantee & Collateral Agreement