<PAGE>
 
                                                                   EXHIBIT 10.20

                   RENTAL SERVICE CORPORATION OF CANADA LTD.

                                  AS BORROWER

                                      AND

                       THE FINANCIAL INSTITUTIONS LISTED
                             ON THE SIGNATURE PAGES

                                   as Lenders

                                      and

                               BT BANK OF CANADA

                                    as Agent


________________________________________________________________________________

                                CREDIT AGREEMENT

                                August 21, 1998

________________________________________________________________________________


                               STIKEMAN, ELLIOTT
<PAGE>
 
                               TABLE OF CONTENTS

                               BT BANK OF CANADA

                                CREDIT AGREEMENT

                                   ARTICLE 1
                                 INTERPRETATION

<TABLE>
<S>                                                                    <C> 
Section 1.1     Defined Terms........................................   1 
Section 1.2     Gender and Number....................................  29
Section 1.3     Headings, etc........................................  29
Section 1.4     Currency.............................................  29
Section 1.5     Certain Phrases, etc.................................  29
Section 1.6     Accounting Terms.....................................  29
Section 1.7     Rateable Portion of Accommodations...................  29
Section 1.8     Incorporation of Schedules...........................  29
Section 1.9     Conflict.............................................  30
Section 1.10    Certificates.........................................  30

                                   ARTICLE 2
                                CREDIT FACILITY

Section 2.1     Availability.........................................  30
Section 2.2     Commitments and Facility Limits......................  31
Section 2.3     Use of Proceeds......................................  31
Section 2.4     Mandatory Repayments and Reductions of Commitments...  31
Section 2.5     Mandatory Prepayment Where Borrowing Base Deficiency.  32
Section 2.6     Optional Prepayments and Reductions of Commitments...  32
Section 2.7     Fees.................................................  33
Section 2.8     Maintenance of Loan Account; Statements of Account...  33
Section 2.9     Payment Procedures...................................  33
Section 2.10    Defaulting Lenders...................................  37
Section 2.11    Sharing of Payments..................................  38
Section 2.12    Collection of Accounts...............................  38
Section 2.13    Computations of Interest and Fees....................  40

                                   ARTICLE 3
                                   ADVANCES

Section 3.1     The Advances.........................................  40
Section 3.2     Disbursement of Advances.............................  42
Section 3.3     Notices of Borrowing.................................  42
Section 3.4     Periodic Settlement of Agent Advances and Repayments.  43
Section 3.5     Authorized Officers and Agents.......................  44
Section 3.6     Conversions and Elections Regarding Advances.........  44
Section 3.7     Circumstances Requiring Prime Rate Pricing...........  45
Section 3.8     Interest on Advances.................................  46 
</TABLE>

                                      (i)
<PAGE>
 
                                   ARTICLE 4
                             BANKERS' ACCEPTANCES

<TABLE>
<S>                                                                          <C>
Section 4.1    Acceptances and Drafts......................................  47
Section 4.2    Form of Drafts..............................................  48
Section 4.3    Procedure for Drawing.......................................  48
Section 4.4    Presigned Draft Forms.......................................  49
Section 4.5    Payment, Conversion or Renewal of BA Instruments............  49
Section 4.6    Circumstances Making Bankers' Acceptances Unavailable.......  50

                                   ARTICLE 5
                               LETTERS OF CREDIT

Section 5.1    Letters of Credit...........................................  50
Section 5.2    Procedure for Issue.........................................  50
Section 5.3    Form of Letters of Credit...................................  51
Section 5.4    Revolving Credit Lenders' Participation.....................  51
Section 5.5    Reimbursements of Amounts Drawn.............................  51
Section 5.6    Payment by Lenders..........................................  52
Section 5.7    Risk of Letters of Credit...................................  52
Section 5.8    Fees........................................................  53
Section 5.9    Repayments..................................................  54

                                   ARTICLE 6
                             CONDITIONS OF LENDING

Section 6.1    Conditions Precedent to the Initial Accommodation...........  55
Section 6.2    Conditions Precedent to Accommodations and Conversions......  58
Section 6.3    No Waiver...................................................  59

                                   ARTICLE 7
                         REPRESENTATIONS AND WARRANTIES

Section 7.1    Representations and Warranties..............................  59
Section 7.2    Survival of Representations and Warranties..................  65
Section 7.3    Representations and Warranties of the Agent and Lenders.....  65

                                   ARTICLE 8
                           COVENANTS OF THE BORROWER

Section 8.1    Affirmative Covenants.......................................  65
Section 8.2    Negative Covenants..........................................  76
Section 8.3    Security Covenants..........................................  90

                                   ARTICLE 9
                               EVENTS OF DEFAULT

Section 9.1    Events of Default...........................................  91
Section 9.2    Acceleration and Cash Collateralization.....................  93
Section 9.3    Rescission of Acceleration and Termination..................  94
Section 9.4    Remedies....................................................  94
</TABLE> 

                                     (ii)
<PAGE>
 
<TABLE> 
<S>                                                                          <C>
Section 9.5    Right of Setoff.............................................   95
Section 9.6    License for Use of Software and Other Intellectual Property.   96
Section 9.7    No Marshalling; Deficiencies; Remedies Cumulative...........   96

                                   ARTICLE 10
                           THE AGENT AND THE LENDERS

Section 10.1    Authorization and Action...................................   97
Section 10.2    No Liability...............................................   98
Section 10.3    Accommodations by Agent....................................   98
Section 10.4    Holding of Security; Sharing of Payments, etc..............   98
Section 10.5    Lender Credit Decisions....................................   99
Section 10.6    Indemnification............................................  100
Section 10.7    Liability of the Lenders inter se..........................  100
Section 10.8    Successor Agents...........................................  100

                                   ARTICLE 11
                                 MISCELLANEOUS

Section 11.1     Amendments, etc...........................................  100
Section 11.2     Waiver....................................................  101
Section 11.3     Evidence of Debt and Accommodation Notices................  102
Section 11.4     Notices, etc..............................................  102
Section 11.5     Confidentiality...........................................  104
Section 11.6     Costs, Expenses and Indemnity.............................  105
Section 11.7     Taxes and Other Taxes.....................................  107
Section 11.8     Successors and Assigns....................................  108
Section 11.9     Obligation of Lenders to Mitigate: Replacement of Lenders.  109
Section 11.10    Accommodations by Lenders.................................  111
Section 11.11    Rateable Payments.........................................  111
Section 11.12    Judgment Currency.........................................  112
Section 11.13    Interest on Amounts.......................................  112
Section 11.14    Governing Law.............................................  113
Section 11.15    Counterparts..............................................  113
</TABLE>

                                     (iii)
<PAGE>
 
                               CREDIT AGREEMENT

     Credit Agreement dated August 21, 1998 among Rental Service Corporation of
Canada Ltd. as Borrower, the financial institutions that are listed on the
signature pages as Lenders, and BT Bank of Canada as Agent.

                                   ARTICLE 1

                                INTERPRETATION

SECTION 1.1    DEFINED TERMS.

     As used in this Agreement, the following terms have the following meanings:

     "ACCOMMODATION" means (i) an Advance made by a Lender on the occasion of
     any Borrowing, (ii) the creation and purchase of Bankers' Acceptances or
     the purchase of completed Drafts by a Lender or by any other Person on the
     occasion of any Drawing, and (iii) the issue of a Letter of Credit by a
     Lender on the occasion of any Issue (each of which is a "TYPE" of
     Accommodation).

     "ACCOMMODATION NOTICE" means a Notice of Borrowing, a Drawing Notice, an
     Issue Notice or an Election Notice, as the case may be.

     "ACCOMMODATIONS OUTSTANDING" means, in relation to the Borrower and any
     Lender at any time under the Credit Facility, an amount equal to the sum of
     (i) the aggregate principal amount of all outstanding Advances made by the
     Lender, (ii) the aggregate Face Amount of all outstanding Bankers'
     Acceptances, completed Drafts and BA Equivalent Notes which the Lender has
     purchased or arranged to have purchased, and (iii) the then outstanding
     Letter of Credit Obligations; and in relation to the Borrower and all
     Lenders means the sum of the Accommodations Outstanding to each Lender.  In
     determining Accommodations Outstanding, the foregoing amounts shall be
     expressed in Canadian Dollars and each relevant U.S. Dollar amount shall be
     converted, for purposes of such calculation, into its Equivalent Cdn. $
     Amount, as of the relevant day.

     "ACCOUNTS" means with respect to any Borrower or any Subsidiary of the
     Borrower, "Accounts" as defined in the Security Agreement.

     "ACQUISITION" means (i) the acquisition by the Borrower or any Subsidiary
     of the Borrower of eighty percent (80%) or more of the issued and
     outstanding capital stock, or all or substantially all of the Rental
     Equipment assets, of any Person and its Subsidiaries which are in the
     equipment rental business and (ii) the amalgamation of the Borrower or any
     Subsidiary with any Person which is in the equipment rental business.
<PAGE>
 
                                      -2-

     "ADDITIONAL LOAN PARTIES" means the Parent Guarantor and all Restricted
     Subsidiaries.

     "ADVANCES" means advances made by a Lender under Article 3 and "ADVANCE"
     means any one of such advances.  Advances are denominated in Canadian
     Dollars (a "CANADIAN DOLLAR ADVANCE") or in U.S. Dollars (a "U.S. DOLLAR
     ADVANCE").  A Canadian Dollar Advance is designated a "CANADIAN PRIME RATE
     ADVANCE" and a U.S. Dollar Advance may be designated a "EURODOLLAR RATE
     ADVANCE" or a "BASE RATE (CANADA) ADVANCE".  Canadian Prime Rate Advances
     and Base Rate (Canada) Advances are referred to, collectively, as "FLOATING
     RATE ADVANCES".  Each of a Eurodollar Rate Advance, a Canadian Prime Rate
     Advance and a Base Rate (Canada) Advance is a "TYPE" of Advance.

     "AFFILIATE" has the meaning specified in the Business Corporations Act
     (Ontario) on the date of this Agreement.

     "AGENT" means BT Bank of Canada Ltd. as agent for the Lenders under this
     Agreement, and any successor appointed pursuant to Section 10.9.

     "AGENT ADVANCE PERIOD" is defined in Section 3.1(2).

     "AGENT ADVANCES" is defined in Section 3.1(1).

     "AGREEMENT" means this credit agreement and all schedules and instruments
     in amendment or confirmation of it; and the expressions "ARTICLE" and
     "SECTION" followed by a number mean and refer to the specified Article or
     Section of this Agreement.

     "APPLICABLE BASE RATE (CANADA) MARGIN" means, with respect to any
     Accommodations Outstanding accruing interest at a rate based upon the Base
     Rate (Canada) in accordance with Section 3.8, a rate per annum equal to (i)
     for the period commencing on the Effective Date and ending on December 31,
     1998, zero (-0-); and (ii) from and after January 1, 1999, 0.25%, provided
     that, from and after January 1, 1999, if the Total Indebtedness Ratio for
     the applicable period ending on the then most recent Quarterly
     Determination Date (as shown on the quarterly Compliance Certificate
     delivered pursuant to Section 8.1(a)) is within the ranges set out below
     and no Default or Event of Default exists as of such Quarterly
     Determination Date, the Applicable Base Rate (Canada) Margin shall be the
     per annum rate set out opposite the applicable range indicated below:
<PAGE>
 
                                      -3-

<TABLE>
<CAPTION>
     -------------------------------------------------------- 
                                      APPLICABLE BASE RATE 
       TOTAL INDEBTEDNESS RATIO        (CANADA) MARGIN 
     -------------------------------------------------------- 
     <S>                              <C> 
          Less than or equal                        
          to 3.00:1 and greater              
           than 2.50:1                         -0-
     -------------------------------------------------------- 
          Less than or equal                          
          to 2.50:1 and greater              
          than 2.25:1                        (0.25%)
     -------------------------------------------------------- 
          Less than or equal                          
          to 2.25:1 and greater              
          than 1.75:1                        (0.50%)
     -------------------------------------------------------- 
          Less than or equal                          
          to 1.75:1                          (0.75%)
     -------------------------------------------------------- 
</TABLE>

     In the event of the delivery of a Compliance Certificate showing an
     increase or decrease in the Total Indebtedness Ratio which requires a
     change in the Applicable Base Rate (Canada) Margin, the change in the
     Applicable Base Rate (Canada) Margin shall be effective from the first day
     of the calendar month immediately following receipt of the Compliance
     Certificate (provided that the Compliance Certificate is received by the
     Agent no later than 3:00 P.M. Toronto time at least one (1) Business Day
     prior to the first day of such calendar month) until the next such date on
     which the Applicable Base Rate (Canada) Margin is subject to change
     following the delivery of (or failure to deliver) a Compliance Certificate
     showing an increase or decrease in the Total Indebtedness Ratio which
     requires a change in the Applicable Base Rate (Canada) Margin.  The failure
     to deliver any Compliance Certificate by the date required under this
     Agreement (after giving effect to any applicable grace period) shall
     automatically cause the Applicable Base Rate (Canada) Margin to be the
     maximum per annum rate for the applicable period described above, effective
     as of the first day of the calendar month immediately following the date on
     which the delivery of the Compliance Certificate was otherwise required.

     "APPLICABLE CANADIAN PRIME RATE MARGIN" means, with respect to any
     Accommodations Outstanding accruing interest at a rate based upon the
     Canadian Prime Rate in accordance with Section 3.8, a rate per annum equal
     to (i) for the period commencing on the Effective Date and ending on
     December 31, 1998, 2.00%; and (ii) from and after January 1, 1999, 2.25%,
     provided that, from and after January 1, 1999, if the Total Indebtedness
     Ratio for the applicable period ending on the then most recent Quarterly
     Determination Date (as shown on the quarterly Compliance Certificate
     delivered pursuant to Section 8.1(a)) is within the ranges set out below
     and no
<PAGE>
 
                                      -4-

     Default or Event of Default exists as of such Quarterly Determination Date,
     the Applicable Canadian Prime Rate Margin shall be the per annum rate set
     out opposite the applicable range indicated below:

<TABLE>
<CAPTION>
     ---------------------------------------------------------
                                    APPLICABLE CANADIAN PRIME
       TOTAL INDEBTEDNESS RATIO        RATE MARGIN
     ---------------------------------------------------------
     <S>                            <C>
          Less than or equal                
          to 3.00:1 and greater
           than 2.50:1                       2.00%
     ---------------------------------------------------------
          Less than or equal                
          to 2.50:1 and greater
          than 2.25:1                        1.75%
     ---------------------------------------------------------
          Less than or equal                
          to 2.25:1 and greater
          than 1.75:1                        1.50%
     ---------------------------------------------------------
          Less than or equal                
          to 1.75:1                          1.25%  
     ---------------------------------------------------------
</TABLE>

     In the event of the delivery of a Compliance Certificate showing an
     increase or decrease in the Total Indebtedness Ratio which requires a
     change in the Applicable Canadian Prime Rate Margin, the change in the
     Applicable Canadian Prime Rate Margin shall be effective from the first day
     of the calendar month immediately following receipt of the Compliance
     Certificate (provided that the Compliance Certificate is received by the
     Agent no later than 3:00 P.M. Toronto time at least one (1) Business Day
     prior to the first day of such calendar month) until the next such date on
     which the Applicable Canadian Prime Rate Margin is subject to change
     following the delivery of (or failure to deliver) a Compliance Certificate
     showing an increase or decrease in the Total Indebtedness Ratio which
     requires a change in the Applicable Canadian Prime Rate Margin.  The
     failure to deliver any Compliance Certificate by the date required under
     this Agreement (after giving effect to any applicable grace period) shall
     automatically cause the Applicable Canadian Prime Rate Margin to be the
     maximum per annum rate for the applicable period described above, effective
     as of the first day of the calendar month immediately following the date on
     which the delivery of the Compliance Certificate was otherwise required.

     "APPLICABLE EURODOLLAR RATE MARGIN" means, with respect to any
     Accommodations Outstanding accruing interest at the Eurodollar Rate in
     accordance with Section 3.8, a rate per annum equal to (i) for the period
     commencing on the Effective Date and ending on December 31, 1998, 1.50%;
     and (ii) from and after January 1, 1999, 1.75%, provided that, from and
     after
<PAGE>
 
                                      -5-

     January 1, 1999, if the Total Indebtedness Ratio for the applicable period
     ending on the then most recent Quarterly Determination Date (as shown on
     the quarterly Compliance Certificate delivered pursuant to Section 8.1(a))
     is within the ranges set out below and no Default or Event of Default
     exists as of such Quarterly Determination Date, the Applicable Eurodollar
     Rate Margin shall be the per annum rate set out opposite the applicable
     range indicated below:

<TABLE>
<CAPTION>
     ---------------------------------------------------------------
                                          APPLICABLE EURODOLLAR
        TOTAL INDEBTEDNESS RATIO                RATE MARGIN
     --------------------------------------------------------------- 
        <S>                               <C>
          Less than or equal                           
          to 3.00:1 and greater                   
          than 2.50:1                            1.50%
     ---------------------------------------------------------------  
          Less than or equal                           
          to 2.50:1 and greater                   
          than 2.25:1                            1.25% 
     ---------------------------------------------------------------
          Less than or equal                          
          to 2.25:1 and greater                   
          than 1.75:1                            1.00%
     ---------------------------------------------------------------
          Less than or equal                           
          to 1.75:1                              0.75%
     ---------------------------------------------------------------
</TABLE>

     In the event of the delivery of a Compliance Certificate showing an
     increase or decrease in the Total Indebtedness Ratio which requires a
     change in the Applicable Eurodollar Rate Margin, the change in the
     Applicable Eurodollar Rate Margin shall be effective from the first day of
     the calendar month immediately following receipt of the Compliance
     Certificate (provided that the Compliance Certificate is received by the
     Agent no later than 3:00 P.M. Toronto time at least one (1) Business Day
     prior to the first day of such calendar month) until the next such date on
     which the Applicable Eurodollar Rate Margin is subject to change following
     the delivery of (or failure to deliver) a Compliance Certificate showing an
     increase or decrease in the Total Indebtedness Ratio which requires a
     change in the Applicable Eurodollar Rate Margin.  The failure to deliver
     any Compliance Certificate by the date required under this Agreement (after
     giving effect to any applicable grace period) shall automatically cause the
     Applicable Eurodollar Rate Margin to be the maximum per annum rate for the
     applicable period described above, effective as of the first day of the
     calendar month immediately following the date on which the delivery of the
     Compliance Certificate was otherwise required.
<PAGE>
 
                                      -6-

     "APPLICABLE MARGINS" means, collectively, the Applicable Base Rate (Canada)
     Margin, the Applicable Canadian Prime Rate Margin, the Applicable
     Eurodollar Rate Margin and the Drawing Fee.

     "APPROVED ACQUISITION" means the Fasco Acquisition, subject to the
     satisfaction of the applicable conditions set forth in Section 6.1.

     "ASSET SALE" means (i) any sale, lease, assignment, transfer or other
     disposition of assets by the Borrower or any Subsidiary (including the
     capital stock of any Subsidiary of the Borrower) which requires the consent
     of the Majority Lenders or any sale and leaseback transaction (whether
     permitted by Section 8.2(l) or otherwise consented to by the Majority
     Lenders), (ii) any sale, assignment, transfer or other disposition by the
     Parent Guarantor of any of the capital stock of the Borrower and (iii) any
     event constituting, or which is deemed to be, an "ASSET SALE" (as defined
     in the Senior Subordinated Note Indenture).

     "ASSIGNEE" has the meaning specified in Section 11.8.

     "AUDITORS" means a nationally recognized firm of independent public
     accountants selected by the Borrower and reasonably satisfactory to the
     Agent.  For purposes of this Agreement, the firm of Ernst & Young LLP shall
     be deemed to be satisfactory to the Agent.

     "BANKERS' ACCEPTANCE" has the meaning specified in Section 4.1.

     "BA EQUIVALENT NOTE" has the meaning specified in Section 4.3(3).

     "BA INSTRUMENTS" means, collectively, Bankers' Acceptances, Drafts and BA
     Equivalent Notes, and, in the singular, any one of them.

     "BASE RATE (CANADA)" means, at any time, the rate of interest per annum
     equal to the rate which the principal office of the Agent in Toronto,
     Ontario announces from time to time as the reference rate of interest for
     loans in U.S. Dollars to its Canadian borrowers.

     "BENEFICIARY" means, in respect of any Letters of Credit, the beneficiary
     named in the Letters of Credit.

     "BORROWER" means, at any time, Rental Service Corporation of Canada Ltd.
     and its successors and permitted assigns.

     "BORROWING" means a borrowing consisting of one or more Advances.

     "BORROWING BASE" means, at any time, the sum of (i) 85% of Eligible
     Accounts of the Borrower and each Designated Restricted Subsidiary, plus
     (ii) 85% of
<PAGE>
 
                                      -7-

     the aggregate value (computed at the lower of net book value (in accordance
     with the Parent Guarantor's past practices) and orderly liquidation value)
     of Eligible Rental Equipment of the Borrower and each Designated Restricted
     Subsidiary, less (iii) Priority Accounts Payable, at such time, (iv) the
     aggregate amount of all Indebtedness of the Borrower (other than
     Accommodations Outstanding incurred pursuant to this Agreement and
     Indebtedness to the Parent Guarantor or any of its Subsidiaries), and (v)
     the aggregate amount of reserves, if any, established by the Agent under
     Section 2.1 applicable to the Borrower.

     "BORROWING BASE CERTIFICATE" means a certificate of the Borrower,
     substantially in the form of Exhibit A, mathematically computing the
     Borrowing Base and signed on behalf of the Borrower by its chief financial
     officer or any other Financial Officer acceptable to the Agent.

     "BUSINESS DAY" means any day of the year, other than a Saturday, Sunday or
     other day on which banks are required or authorized to close in Toronto,
     Ontario or Edmonton, Alberta and, where used in the context of (i) a
     Eurodollar Rate Advance, also a day on which banks are not required or
     authorized to close in New York City and dealings are carried on in the
     London interbank market, and (ii) a Base Rate (Canada) Advance, also a day
     on which banks are not required or authorized to close in New York City.

     "CANADIAN DOLLARS", and "CDN. $" each means lawful money of Canada.

     "CANADIAN PRIME RATE" means, at any time, the greater of (i) the rate of
     interest per annum equal to the per annum rate of interest quoted,
     published and commonly known as the "PRIME RATE" of the Agent established
     at its main office in Toronto, Ontario as the reference rate of interest in
     order to determine interest rates for loans in Canadian Dollars to its
     Canadian borrowers, adjusted automatically with each quoted or published
     change in such rate, all without the necessity of any notice to the
     Borrower or any other Person, and (ii) the sum of (y) the average of the
     rates per annum for Canadian Dollar bankers' acceptances having a term of
     30 days that appears on the Reuters Screen CDOR Page as of 10:00 a.m.
     (Toronto time) on the date of determination, as reported by the Agent (and
     if such screen is not available, any successor or similar service as may be
     selected by the Agent), and (z) .50%.

     "CAPITAL EXPENDITURES" for a period means, the sum of all expenditures
     capitalized for Financial Statement purposes in accordance with GAAP
     (whether payable in cash or other property or accrued as a liability),
     including the capitalized portion of Capital Leases and that portion of
     Investments allocable to property, plant or equipment. Capital Expenditures
<PAGE>
 
                                      -8-

     shall exclude proceeds received in regard to a Casualty Loss applied to the
     repair or replacement of the property affected by the Casualty Loss.

     "CAPITAL LEASE" means any lease of any property (whether real, personal or
     mixed) by a Person as lessee which, in conformity with GAAP, is accounted
     for as a capital lease on the balance sheet of that Person.

     "CASH EQUIVALENTS" means any of the following:  (i) securities issued,
     guaranteed or insured by the government of Canada or any province or the
     United States or any of its agencies and having maturities of not more than
     one year; (ii) certificates of deposit having maturities of not more than
     one year issued by the Agent, Bankers Trust Company, any Lender or by a
     Canadian chartered bank or U.S. federal, state or District of Columbia
     chartered commercial bank of recognized standing whose capital and
     unimpaired surplus is in excess of $200,000,000 and whose short-term
     commercial paper rating, or that of its parent holding company, is at least
     A-1 or the equivalent by Standard & Poor's Rating Group, a division of
     McGraw Hill, Inc. ("S&P") and at least P-1 or the equivalent by Moody's
     Investors Services, Inc.; (iii) readily marketable commercial paper of any
     Lender or any corporation doing business in and incorporated under the laws
     of Canada or any province or the United States, any state thereof or the
     District of Columbia (other than commercial paper issued by the Borrower or
     any Affiliate thereof), maturing no more than one year after the date of
     issuance thereof and, at the time of acquisition, having a rating of at
     least A-1 or the equivalent by S&P and at least P-1 or the equivalent by
     Moody's Investors Services, Inc.; and (iv) Investments in money-market
     mutual funds (A) under management of an investment manager having under its
     management total assets of $250,000,000 or more, (B) substantially all of
     the assets of which are continuously invested in Investments of the type
     described in clauses (i) through (iii) above and (C) which have the highest
     rating obtainable from S&P and Moody's Investors Services, Inc.

     "CASUALTY LOSS" means (i) the loss, damage, or destruction of any asset
     owned or used by any of the Borrower or its Subsidiaries, (ii) the
     condemnation, confiscation, or other taking, in whole or in part, of any
     such asset, or (iii) the diminishment of such asset so as to render use for
     its intended purpose impracticable or unreasonable.

     "CHANGE OF CONTROL" means, (y) with respect to the Parent Guarantor, the
     occurrence of a Change of Control under the Parent Credit Agreement, or (z)
     with respect to the Borrower any of the following events: (i) the Borrower
     ceases to be a direct or indirect wholly-owned Subsidiary of the Parent
     Guarantor, (ii) the Parent Guarantor's designees no longer represent a
     majority of the Borrower's board of directors, or (iii) any sale, lease,
     exchange
<PAGE>
 
                                      -9-

     or other transfer (in one transaction or series of related transactions) of
     all or substantially all of the Borrower's property and assets.

     "CLOSING DOCUMENT LIST" is defined in Section 6.1(d)(iii).

     "COLLATERAL" means any and all property and assets in respect of which the
     Agent or any Lender has or will have an Lien pursuant to a Security
     Document to secure the Obligations.

     "COLLATERAL ACCESS AGREEMENT" means any landlord agreement containing
     substantially the terms set forth in Exhibit B (with such modifications as
     the Agent may approve in its Permitted Discretion), and any mortgagee
     waiver, bailee letter or any similar acknowledgement agreement of any
     warehouseman or processor in possession of Inventory or Equipment in each
     case in form and substance satisfactory to the Agent in its Permitted
     Discretion.

     "COLLATERAL ASSIGNMENT OF ACQUISITION AGREEMENT" means, with respect to the
     Approved Acquisition and any Acquisition permitted by Section 8.2(b)(vii)
     the consideration for which is $10,000,000 or more, a collateral assignment
     executed by the Borrower or a Subsidiary of the Borrower which is a party
     to such Acquisition in favor of the Agent, for the benefit of the Agent and
     each of the Lenders, and, if the related purchase agreement(s) or escrow
     agreement(s) do not expressly permit such assignment, acknowledged by each
     Person selling shares or property in such Acquisition or any escrow agent,
     with respect to the Borrower's or such Subsidiary's rights under such
     purchase agreement(s) and such escrow agreement(s), in each case in
     substantially the form of Exhibit C (with such modifications as may be
     necessary to reflect the structure of such Acquisition), as any of the same
     may be amended, restated, supplemented or otherwise modified in accordance
     with the terms hereof and thereof.

     "COLLECTION ACCOUNT" is defined in Section 2.12.

     "COLLECTIONS" means all cash, funds, checks, notes, instruments and any
     other form of remittance tendered by account debtors in payment of
     Accounts.

     "COMMISSION" means the Securities and Exchange Commission (United States of
     America) and any Person succeeding to the functions thereof.

     "COMMITMENT" means, at any time, in respect of the Credit Facility, Cdn.
     $28,000,000 as reduced pursuant to Article 2 and a "LENDER'S COMMITMENT"
     means, at any time, the relevant amount designated as such opposite the
     Lender's name on the signature pages, as reduced from time to time pursuant
     to Article 2.
<PAGE>
 
                                      -10-

     "COMPLIANCE CERTIFICATE" means a certificate of the Borrower substantially
     in the form of Exhibit D, signed on its behalf by its chief financial
     officer or any other Financial Officer acceptable to the Agent.

     "CONCENTRATION ACCOUNT" is defined in Section 2.12.

     "CONSUMMATION DATE" means, with respect to any Acquisition or the
     acquisition or formation of any Subsidiary of the Borrower, the date such
     Acquisition or acquisition is consummated or the date when such Subsidiary
     has been formed.

     "CONTINGENT OBLIGATION" means any direct, indirect, contingent or non-
     contingent guaranty or other obligation or liability for the Indebtedness,
     obligation or liability of another, except endorsements in the ordinary
     course of business, if the primary purpose or intent thereof by the Person
     incurring the obligation is to provide assurance to the obligee of such
     Indebtedness, obligation or liability of another that such Indebtedness,
     obligation or liability will be paid or discharged, or that any agreements
     relating thereto will be complied with, or that the holders thereof will be
     protected (in whole or in part) against loss in respect thereof.

     "CONTRACTUAL OBLIGATION", as applied to any Person, means any provision of
     any securities issued by that Person or any indenture, mortgage, deed of
     trust, security agreement, pledge agreement, guaranty, lease, contract,
     undertaking, agreement or instrument to which that Person is a party or by
     which it or any of its properties is bound, or to which it or any of its
     properties is subject.

     "CREDIT DOCUMENTS" means this Agreement, the BA Instruments, the Security
     Documents, the Hedging Agreements and all other documents in regard thereto
     to be executed and delivered to the Agent or the Lenders, or both, by the
     Borrower, the Restricted Subsidiaries and the other Additional Loan
     Parties.

     "CREDIT FACILITY" means, the credit facility to be made available to the
     Borrower pursuant to Article 2 under this Agreement for the purposes
     specified in Section 2.3.

     "DEFAULT" means an event which, with the giving of notice or passage of
     time, or both, would constitute an Event of Default.

     "DEFAULTING LENDER" is defined in Section 2.10.

     "DESIGNATED RESTRICTED SUBSIDIARY" has the meaning specified in Section
     2.5(2).
<PAGE>
 
                                      -11-

     "DISBURSEMENT ACCOUNTS" means the Borrower's Canadian Dollar and U.S.
     Dollar operating accounts maintained with the Disbursement Account Bank.

     "DISBURSEMENT ACCOUNT BANK" means The Bank of Nova Scotia.

     "DRAFT" means, at any time, a  bill of exchange, within the meaning of the
     Bills of Exchange Act (Canada), drawn by the Borrower on a Lender or any
     other Person and bearing such distinguishing letters and numbers as the
     Lender or the Person may determine, but which at such time has not been
     completed as the payee or accepted by the Lender or the Person.

     "DRAWING" means (i) the creation and purchase of Bankers' Acceptances by a
     Lender or by any other Person pursuant to Article 4, or (ii) the purchase
     of completed Drafts by a Lender or by any other Person pursuant to Article
     4.

     "DRAWING DATE" means any Business Day fixed for a Drawing pursuant to
     Section 4.3.

     "DRAWING FEE" means, with respect to each Draft drawn by the Borrower and
     purchased by any Person on any Drawing Date calculated on the basis of the
     term to maturity of the Draft and a year of 365 days, an amount equal to
     the Applicable Eurodollar Rate Margin, in each case, of the aggregate Face
     Amount of the Draft.

     "DRAWING NOTICE" has the meaning specified in Section 4.3(1).

     "DRAWING PRICE" means, in respect of Bankers' Acceptances or Drafts to be
     purchased by a Lender or any other Person, the difference between (i) the
     result (rounded to the nearest whole cent, with one-half of one cent being
     rounded up) obtained by dividing the aggregate Face Amount of the Bankers'
     Acceptances or Drafts by the sum of one plus the product of (x) the
     Reference Discount Rate multiplied by (y) a fraction the numerator of which
     is the number of days in the term of maturity of the Bankers' Acceptances
     and the denominator of which is 365, and (ii) the applicable aggregate
     Drawing Fee.

     "EFFECTIVE DATE" means the date of this Agreement.

     "ELECTION NOTICE" has the meaning specified in Section 3.6(3).

     "ELIGIBLE ACCOUNTS" means Accounts of the Borrower and any Restricted
     Subsidiary deemed by the Agent in the exercise of its Permitted Discretion
     to be eligible for inclusion in the calculation of the Borrowing Base for
     the Borrower and the Designated Restricted Subsidiaries, including without
     limitation, Accounts arising from Rental Equipment revenues which have been
     earned but not billed.  In determining the amount to be so included, the
     face amount of such Accounts shall be reduced by the amount of all returns,
<PAGE>
 
                                      -12-

     discounts, deductions, claims, credits, charges, or other allowances.
     Whenever proceeds of an Accommodation are to be used by the Borrower,
     immediately and directly, to purchase Accounts (including, without
     limitation, in any Acquisition permitted hereunder or any merger of a
     Person into the Borrower or any Designated Restricted Subsidiary
     substantially simultaneously with an Acquisition of such Person permitted
     hereunder) then, subject to (a) such arrangements as the Agent may
     reasonably request to insure that the proceeds are so used, (b) the
     Borrower's compliance with Section 1.6 of the Security Agreement, (c) in
     the case of an Acquisition (other than the Fasco Acquisition), the
     satisfaction of the conditions set forth in Section 8.2(b)(vii), and (d)
     the satisfaction of all other conditions of eligibility, such Accounts
     shall be added to Eligible Accounts for purposes of determining the
     Borrowing Base.  Unless otherwise approved in writing by the Agent, an
     Account shall not be an Eligible Account if:

     (a)  It arises out of a sale or lease made by the Borrower to an Affiliate;
          or

     (b)  Its payment terms are longer than 30 days from date of invoice; or

     (c)  It is unpaid more than 90 days after the date of invoice; or

     (d)  It is from the same account debtor or its Affiliate and fifty percent
          (50%) or more of all Accounts from that account debtor (and its
          Affiliates) are ineligible under clause (iii) above; or

     (e)  The Account, together with all other Accounts of an account debtor
          (and its Affiliates), exceeds 10% of the face value of all Accounts of
          the Borrower and its Subsidiaries in the aggregate then outstanding,
          to the extent of such excess, unless supported by an irrevocable
          letter of credit satisfactory to the Agent (as to form, substance and
          issuer) and assigned to and directly drawable by the Agent; or

     (f)  The account debtor for the Account is a creditor or supplier of the
          Borrower, has or has asserted a right of setoff, has disputed its
          liability or made any claim with respect to the Account or any other
          Account which has not been resolved, to the extent of the amount owed
          by the Borrower to the account debtor or supplier, the amount of such
          actual or asserted right of setoff or the amount of such dispute or
          claim, as the case may be; or

     (g)  The Borrower has actual knowledge that the account debtor is (or its
          assets are) the subject of an Insolvency Event; or

     (h)  The Account is not payable in U.S. Dollars or Canadian Dollars or the
          account debtor for the Account is not located within Canada or the
          continental United States, unless the Account is supported by an
<PAGE>
 
                                      -13-

          irrevocable letter of credit satisfactory to the Agent (as to form,
          substance and issuer) and assigned to and directly drawable by the
          Agent. Notwithstanding the immediately preceding sentence, an Account
          shall not be an Eligible Account if the account debtor is located in
          (i) the state of New Jersey or Minnesota and the Borrower has not
          filed and maintained effective (unless exempt from the requirements
          for filing) a current Notice of Business Activities Report with the
          State of New Jersey Division of Taxation or a Minnesota Business
          Activity Report with the Minnesota Department of Revenue, as
          applicable or, (ii) the Province of Newfoundland or the Northwest
          Territories unless the Account of such account debtor is subject to a
          valid and perfected first priority Lien in favour of the Agent and the
          Lenders; or

     (i)  The sale to the account debtor is on a bill-and-hold, guaranteed sale,
          sale-and-return, sale on approval or consignment basis or made
          pursuant to any other written agreement providing for repurchase or
          return; or

     (j)  The Agent determines by its own credit analysis that collection of the
          Account is uncertain or the Account may not be paid and so notifies
          the Borrower; or

     (k)  The account debtor is Canada, the United States of America, any
          province or state thereof or the District of Columbia or any
          department, agency or instrumentality of any of them, unless the
          Borrower duly assigns its rights to payment of such Account to the
          Agent pursuant to the Financial Administration Act (Canada), the
          Assignment of Claims Act of 1940, as amended (31 U.S.C. 3727 et seq.)
          or any similar statute in such state or the District of Columbia, as
          applicable; or

     (l)  The goods giving rise to such Account have not been shipped and
          delivered to and accepted by the account debtor, the services giving
          rise to such Account have not been performed and accepted, or the
          Account otherwise does not represent a final sale or an enforceable
          lease contract with respect to such goods; or

     (m)  The Account does not materially comply with all applicable
          Requirements of Law; or

     (n)  The Account is subject to any adverse security deposit, progress
          payment or other similar advance made by or for the benefit of the
          applicable account debtor; or
<PAGE>
 
                                      -14-

     (o)  It is not assignable, is not subject to a valid and perfected first
          priority Lien in favor of the Agent and the Lenders or does not
          otherwise conform to the representations and warranties contained in
          the Credit Documents, including, without limitation, the
          representations and warranties in Section 2.1 of the Security
          Agreement.

     "ELIGIBLE RENTAL EQUIPMENT" means the aggregate amount of Rental Equipment
     deemed by the Agent in the exercise of its Permitted Discretion to be
     eligible for inclusion in the calculation of the Borrowing Base for the
     Borrower and the Designated Restricted Subsidiaries.  In determining the
     amount to be so included, Rental Equipment shall be valued at the lower of
     net book value or orderly liquidation value on a basis consistent with the
     Parent Guarantor's current and historical accounting practice and with
     reference to the most recent appraisals delivered pursuant to Section
     8.1(b)(ii) of this Agreement.  Whenever proceeds of an Accommodation are to
     be used by the Borrower, immediately and directly, to purchase Rental
     Equipment (including, without limitation, in any Acquisition permitted
     hereunder or any merger of a Person into the Borrower or any Designated
     Restricted Subsidiary substantially simultaneously with an Acquisition of
     such Person permitted hereunder) then, subject to (a) such arrangements as
     the Agent may reasonably request to insure that the proceeds are so used,
     (b) compliance by the Borrower with Section 1.6 of the Security Agreement,
     (c) in the case of an Acquisition other than the Fasco Acquisition, the
     satisfaction of the conditions set forth in Section 8.2(b)(vii) and (d) the
     satisfaction of all other conditions of eligibility, such Rental Equipment
     shall be added to Eligible Rental Equipment for purposes of determining the
     Borrowing Base. Unless otherwise approved in writing by the Agent, an item
     of Rental Equipment shall not be included in Eligible Rental Equipment of
     the Borrower if:

     (a)  It is not owned solely by the Borrower or a Designated Restricted
          Subsidiary or the Borrower or a Designated Restricted Subsidiary does
          not have good, valid and marketable title thereto or has consigned
          such item to any other Person: or

     (b)  It is not located in the United States or Canada; or

     (c)  It is not subject to a valid and perfected first priority Lien in
          favor of the Agent and the Lenders except for Liens for unpaid rent or
          normal and customary warehousing charges with respect to Rental
          Equipment stored at a contract warehouse, subject to a Collateral
          Access Agreement executed by the mortgagee, lessor or the contract
          warehouseman, as the case may be, and segregated or otherwise
          separately identifiable from goods of others, if any, stored on the
          premises; or
<PAGE>
 
                                      -15-

     (d)  It consists of returned or rejected goods or goods in transit to third
          parties (other than goods in transit to warehouse sites covered by a
          Collateral Access Agreement or to a lessee in the ordinary course of
          business); or

     (e)  It is unmerchantable or does not otherwise conform to the
          representations and warranties contained in the Credit Documents,
          including, without limitation, the representations and warranties in
          Section 2.1 of the Security Agreement; or

     (f)  it has been delivered to the Borrower or a Designated Restricted
          Subsidiary, as the case may be, within the preceding 30 days unless
          payment has been made or the supplier has waived or lost its rights to
          repossession under the Bankruptcy and Insolvency Act (Canada) or any
          similar legislation or law of general application including, without
          limitation, in connection with rights of revindication.

     "ENVIRONMENTAL LAWS" means all applicable laws, regulations, orders,
     judgments, decisions of and agreements with a Governmental Entity and all
     other statutory requirements relating to public health or the protection of
     the environment and all authorizations, permits, consents, registrations
     and approvals issued pursuant to such laws, agreements or statutory
     requirements.

     "ENVIRONMENTAL LIABILITIES" means all liabilities imposed by, under or
     pursuant to Environmental Laws or which relate to the existence of
     contaminants on, under or about any of the properties now or previously
     used by the Borrower, any of the Restricted Subsidiaries or any Additional
     Loan Party and which, in accordance with GAAP or U.S. GAAP, as appropriate,
     must be disclosed in the consolidated financial statements of the Borrower,
     any of the Restricted Subsidiaries or any Additional Loan Party.

     "EQUIPMENT" means with respect to the Borrower or any Subsidiary of the
     Borrower, "EQUIPMENT" as defined in the Security Agreement.

     "EQUIVALENT CDN. $ AMOUNT" means, on any day with respect to any amount of
     U.S. Dollars, the amount of Canadian Dollars which would be required to buy
     such amount of U.S. Dollars using the rate quoted by the Agent in
     accordance with its normal banking practice at approximately 12:00 noon
     (Toronto time) on the day.

     "EQUIVALENT U.S. $ AMOUNT" means, on any day with respect to any amount of
     Canadian Dollars, the amount of U.S. Dollars which would be required to buy
     such amount of Canadian Dollars using the rate quoted by the Agent in
<PAGE>
 
                                      -16-

     accordance with its normal banking practice at approximately 12:00 noon
     (Toronto time) on the day.

     "EURODOLLAR INTEREST PERIOD" means, for each Eurodollar Rate Advance, a
     period which commences (i) in the case of the initial Eurodollar Interest
     Period, on the date the Advance is made or converted from another Type of
     Accommodation, and (ii) in the case of any subsequent Eurodollar Interest
     Period, on the last day of the immediately preceding Eurodollar Interest
     Period, and which ends, in either case, on the day selected by the Borrower
     in the applicable Notice of Borrowing or Election Notice.  The duration of
     each Eurodollar Interest Period shall be 1, 2, 3 or (unless a Lender shall
     have notified the Agent that the Eurodollar Rate will not adequately
     reflect the cost to such Lender of funding its Advance) 6 months (or such
     shorter or longer period as may be approved by the Lenders making
     Eurodollar Rate Advances), unless the last day of a Eurodollar Interest
     Period would otherwise occur on a day other than a Business Day, in which
     case the last day of such Eurodollar Interest Period shall be extended to
     occur on the next Business Day, or if such extension would cause the last
     day of such Eurodollar Interest Period to occur in the next calendar month,
     the last day of such Eurodollar Interest Period shall occur on the
     preceding Business Day.

     "EURODOLLAR RATE" means, with respect to the Eurodollar Interest Period for
     each Eurodollar Rate Advance comprising part of the same Borrowing, an
     interest rate per annum equal to the rate (rounded upward to the nearest
     whole multiple of one-sixteenth (1/16) of one percent (1%) per annum, if
     such rate is not such a multiple) of the offered quotation, if any, to
     first class banks in the Eurodollar market by Bankers Trust Company for
     U.S. Dollar deposits of amounts in immediate available funds comparable to
     the principal amount of the Eurodollar Rate Advance for which the
     Eurodollar Rate is being determined with maturities comparable to the
     Eurodollar Interest Period for which such Eurodollar Rate will apply as of
     approximately 10.00 am New York city time two Business Days prior to the
     commencement of such Eurodollar Interest Period.

     "EVENT OF DEFAULT" has the meaning specified in Section 9.1.

     "EXPENSES" means all reasonable costs and expenses of the Agent incurred in
     connection with the Credit Documents and the transactions contemplated
     therein, including, without limitation, (i) the costs of conducting record
     searches, examining collateral, opening bank accounts and lockboxes,
     depositing checks, receiving and transferring funds (including charges for
     checks for which there are insufficient funds), and other costs of
     administration and enforcement of the rights of the Lenders under the
     Credit Documents, (ii) the fees and expenses of legal counsel and
     paralegals (including the allocated cost of internal counsel and
     paralegals), accountants,
<PAGE>
 
                                      -17-

     appraisers and other consultants, experts or advisors retained by the
     Agent, (iii) fees and expenses incurred in connection with the assignments
     of or sales of participations in the Accommodations, (iv) the cost of title
     insurance premiums, real estate survey costs, fees and taxes in connection
     with the filing of financing statements and (v) the costs of preparing and
     recording Security, releases of Collateral, and waivers, amendments, and
     terminations of any of the Credit Documents.

     "FACE AMOUNT" means (i) in respect of a BA Instrument, the amount payable
     to the holder on its maturity, and (ii) in respect of a Letters of Credit,
     the maximum amount which the issuing Person is contingently liable to pay
     to the Beneficiary.

     "FASCO" means FASCO Rentals Ltd.

     "FASCO ACQUISITION" means the acquisition by the Borrower of all or
     substantially all of the assets of Fasco.

     "FASCO ACQUISITION AGREEMENT" means the agreement dated July 24, 1998,
     between the Borrower, Fasco and the Seller Stockholders (as defined in the
     Fasco Acquisition Agreement), relating to the Fasco Acquisition.

     "FASCO ACQUISITION DOCUMENTS" means the Fasco Acquisition Agreement and all
     other agreements, documents and instruments relating to the Fasco
     Acquisition, including, without limitation, the Ancillary Agreements (as
     defined in the Fasco Acquisition Agreement).

     "FEDERAL FUNDS RATE" means, for any day, a fluctuating interest rate per
     annum equal to the weighted average of the rates on overnight United States
     Federal funds transactions with members of the Federal Reserve System
     arranged by United States Federal funds brokers, as published for the day
     (or, if the day is not a Business Day, for the preceding Business Day) by
     the Federal Reserve Bank of New York, or, if such rate is not so published
     for any day which is a Business Day, the average of the quotations for the
     day on such transactions received by the Agent from three United States
     Federal funds brokers of recognized standing selected by it.

     "FEES" means the fees payable by the Borrower under this Agreement.

     "FINANCIAL COVENANTS" means the covenants set forth in Sections 8.1, 8.2,
     8.3 and 8.4 of the Parent Guarantor Credit Agreement.

     "FINANCIAL OFFICER" means, with respect to the Borrower or any Additional
     Loan Party, its chief financial officer, chief accounting officer,
     treasurer or other officer of such Credit Party designated as such by its
     chief financial officer, chief accounting officer or treasurer in a written
     notice to the Agent.
<PAGE>
 
                                      -18-

     "FINANCIAL STATEMENTS" means the consolidated and consolidating balance
     sheets, consolidated and consolidating statements of operations,
     consolidated and Fiscal Year end consolidating statements of cash flows and
     consolidated and Fiscal Year end consolidating statements of changes in
     shareholder's equity of each of (i) the Parent Guarantor and its
     Subsidiaries, and (ii) the Borrower and the Restricted Subsidiaries, in
     each case, for the period specified, prepared in accordance with U.S. GAAP
     or GAAP, as applicable, (and, with respect to interim statements, subject
     to year-end audit adjustments and reclassifications and month-end
     reconciliations, in each case to the extent consistent with current
     practices, and prepared without footnotes).

     "FISCAL YEAR" means the fiscal year of the Parent Guarantor and the
     Borrower for accounting and tax purposes, which shall be the 12-month
     period ending on December 31 of each calendar year.

     "GAAP" means, at any time, accounting principles generally accepted in
     Canada as recommended in the Handbook of the Canadian Institute of
     Chartered Accountants at the relevant time applied on a consistent basis
     (except for changes made with the prior written consent of the Agent and
     approved by the Borrower's independent auditors in accordance with
     promulgations of the Canadian Institute of Chartered Accountants).

     "GOODS" means tangible personal property but excluding chattel paper,
     documents of title, instruments, money and securities (as these terms are
     defined in the Personal Property Security Act (Ontario) from time to time).

     "GOVERNING DOCUMENTS" means, with respect to any corporation, limited
     liability company or partnership (i) the articles/certificate of
     incorporation (or the equivalent formation documents) of such corporation
     or limited liability company, (ii) the partnership agreement executed by
     the partners in the partnership, (iii) the by-laws (or the equivalent
     organizational documents) of the corporation, limited liability company or
     partnership and (iv) any document setting forth the designation, amount
     and/or relative rights, limitations and preferences of any class or series
     of such corporation's capital stock or such limited liability company's or
     partnership's equity or ownership interests.

     "GOVERNMENTAL AUTHORITY" means (i) any federal, provincial, state,
     municipal, local or other government, governmental or public department,
     central bank, court, commission, board, bureau, agency or instrumentality,
     domestic or foreign, (ii) any subdivision or authority of any of the
     foregoing, or (iii) any quasi-governmental or private body exercising any
     regulatory, expropriation or taxing authority under or for the account of
     any of the above, in each case having jurisdiction over the Applicable
     Persons.
<PAGE>
 
                                      -19-

     "HAZARDOUS SUBSTANCE" means any waste, pollutant, hazardous substance,
     toxic substance, hazardous waste, special waste, petroleum or petroleum-
     derived substance or waste (including, without limitation, waste oil),
     radioactive materials, asbestos (in any form or condition), polychlorinated
     biphenyls (PCBs), or any constituent of any such substance or waste, and
     includes, but is not limited to, these terms as defined in, or otherwise
     regulated by, federal, state or local Requirements of Law.

     "HEDGING AGREEMENTS" means (i) all currency exchange or interest rate swap
     agreements, currency exchange or interest rate cap agreements or currency
     exchange or interest rate collar agreements, between the Borrower or a
     Restricted Subsidiary, as the case may be, and any Lender, in form and
     substance acceptable to such Lender (ii) all other agreements or
     arrangements between the Borrower or a Restricted Subsidiary, as the case
     may be, and any Lender, in form and substance acceptable to such Lender,
     designed to protect the Borrower or a Restricted Subsidiary against
     fluctuations in currency exchange or interest rates and not for a
     speculative investment, all as they may be amended, supplemented, modified
     or restated from time to time.

     "INDEBTEDNESS OF A PERSON" means, without duplication, (i) indebtedness for
     borrowed money or for the deferred purchase price of property or services
     (other than trade liabilities incurred in the ordinary course of business
     and payable in accordance with customary practices), whether on open
     account or evidenced by a note, bond, debenture or similar instrument, (ii)
     obligations under Capital Leases, (iii) reimbursement obligations for
     letters of credit, banker's acceptances or other credit accommodations,
     (iv) liabilities, as determined by the Agent, under any Hedging Agreement,
     (v) Contingent Obligations, (vi) Mandatory Redeemable Obligations and (vii)
     obligations secured by any Lien on that Person's property, even if that
     Person has not assumed such obligations.

     "INDEMNIFIED PERSON" has the meaning specified in Section 11.6(1).

     "INSOLVENCY EVENT" means, with respect to any Person, the occurrence of any
     of the following: (i) such Person shall be adjudicated insolvent or
     bankrupt, or shall generally fail to pay or admit in writing its inability
     to pay its debts as they become due, (ii) such Person shall seek
     dissolution or reorganization or the appointment of a receiver, trustee,
     custodian or liquidator for it or a substantial portion of its property,
     assets or business or to effect a plan or other arrangement with its
     creditors, (iii) such Person shall make a general assignment for the
     benefit of its creditors, or consent to or acquiesce in the appointment of
     a receiver, trustee, custodian or liquidator for a substantial portion of
     its property, assets or business, (iv) such Person shall file a voluntary
     petition under any bankruptcy, insolvency or similar law or (v) such
     Person, or a substantial portion of its property, assets or business shall
<PAGE>
 
                                      -20-

     become the subject of an involuntary proceeding or petition for its
     dissolution, reorganization, or the appointment of a receiver, trustee,
     custodian or liquidator or shall become subject to any writ, judgment,
     warrant of attachment, execution or similar process, and any such
     proceeding, petition, writ, judgment, warrant of attachment, execution or
     similar process described in this clause (v) shall not be released, vacated
     or stayed within 60 days after commencement, filing or levy, as the case
     may be, or in any event by the date which is five days prior to the date of
     any proposed sale thereunder, or any order for relief shall be entered in
     any such proceeding.

     "INTEREST RATE AGREEMENT" means those Hedging Agreements designed to
     protect the Borrower or a Restricted Subsidiary against fluctuations in
     interest rates and not for a speculative investment, all as they may be
     amended, supplemented, modified or restated from time to time, including
     interest rate future, option, swap, collar and cap agreements.

     "INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, amendments
     thereto, successor statutes, and regulations or guidance (including
     proposed regulations) promulgated thereunder.

     "INVENTORY" means all inventory now owned or hereafter acquired by the
     Borrower or a Restricted Subsidiary, including (i) finished Goods held for
     sale or lease, raw materials, new and unused production, packing and
     shipping supplies, (ii) work in progress, (iii) all new and unused
     maintenance items, and (iv) all other materials and supplies on hand to be
     used or consumed or which might be used or consumed in the manufacture,
     packing, shipping, advertising, selling, or furnishing of Goods.

     "INVESTMENT" means all expenditures made and all liabilities incurred
     (including Contingent Obligations) for or in connection with the
     acquisition of stock or Indebtedness of a Person, loans, advances, capital
     contributions or transfers of property to a Person, or acquisition of
     assets from a Person (other than the acquisition of individual items of
     Inventory and Equipment in the ordinary course of business), including,
     without limitation, Acquisitions.  In determining the aggregate amount of
     Investments outstanding at any particular time, (i) a guaranty shall be
     valued at not less than the principal amount guaranteed; (ii) returns of
     capital (but only by repurchase, redemption, retirement, repayment,
     liquidating dividend or liquidating distribution) shall be deducted; (iii)
     earnings, whether as dividends, interest or otherwise, shall not be
     deducted; and (iv) decreases in the market value shall not be deducted.

     "ISSUE" means an issue of a Letter of Credit by a Lender pursuant to
     Article 5.
<PAGE>
 
                                      -21-

     "ISSUE DATE" has the meaning specified in Section 5.2(1).

     "ISSUE LENDER" means, Bankers Trust Company or any other Lender acceptable
     to the Agent in its capacity as issuer of any Letters of Credit which from
     time to time issues Letters of Credit, in each case for the account of the
     Borrower in accordance with Article 5, and, in the singular, any one of
     them.

     "ISSUE NOTICE" has the meaning specified in Section 5.2(1).

     "JUDICIAL ORDER" has the meaning specified in Section 5.9(1).

     "LENDERS" mean, collectively, BT Bank of Canada and The Bank of Nova
     Scotia, any Person who may become a Lender pursuant to Section 11.8 and any
     Person who may otherwise become a Lender under this Agreement and their
     respective permitted successors and assigns, and, in the singular, any one
     of them and shall include for such purposes the Agent in connection with
     any Agent Advances.

     "LENDING LIMIT" has the meaning specified in Section 2.2(1).

     "LETTER OF CREDIT OBLIGATIONS" means the sum of the aggregate undrawn
     amount of all Letters of Credit outstanding, plus the aggregate amount of
     all drawings under Letters of Credit to the extent the Issue Lender has not
     been reimbursed by the Borrower, by the Lenders or from the proceeds of
     Advances deemed requested pursuant to Section 5.5(2), plus the aggregate
     amount of all payments made by the Lenders to the Issue Lender in respect
     of participations in Letters of Credit for which the Borrower has not
     reimbursed the Lenders (other than with respect to outstanding Advances
     deemed requested pursuant to Section 5.5(2)).

     "LETTERS OF CREDIT" means a standby letter of credit issued or to be issued
     by the Issue Lender for the account of the Borrower pursuant to Article 5.

     "LIEN" means any mortgage, charge, pledge, hypothecation, security
     interest, assignment, encumbrance, lien (statutory or otherwise), title
     retention agreement or arrangement, or other encumbrance of any nature or
     any other arrangement or condition that in substance secures payment or
     performance of an obligation.

     "LOAN ACCOUNT" is defined in Section 2.8.

     "LOCKBOXES", "LOCKBOX AGREEMENTS" and "LOCKBOX BANKS" are defined in
     Section 2.12.

     "LOCKBOX AGREEMENTS" is defined in Section 2.12.
<PAGE>
 
                                      -22-

     "MAJORITY LENDERS" means, at any particular time, those Lenders whose
     Revolving Credit Proportionate Shares, in the aggregate, are greater than
     fifty percent (50%).

     "MANDATORY REDEEMABLE OBLIGATION" means an obligation of one or more of the
     Borrower or any of its Subsidiaries  (or guaranteed by any of them) which
     must be redeemed or repaid (i) at a fixed or determinable date, whether by
     operation of sinking fund or otherwise, (ii) at the option of any Person
     other than the Borrower or any of its Subsidiaries, or (iii) upon the
     occurrence of a condition not solely within the control of the Borrower or
     any of its Subsidiaries, such as a redemption required to be made out of
     future earnings.

     "MATERIAL ADVERSE EFFECT" means any change or changes or effect or effects
     that individually or in the aggregate are or are reasonably likely to be
     materially adverse to (i) the business, prospects, operations, results of
     operations, assets, liabilities or condition (financial or otherwise) of
     the Parent Guarantor and its Subsidiaries, taken as a whole, or the
     Borrower and its Subsidiaries, taken as a whole, (ii) the legality,
     validity or enforceability of this Agreement or any other material Credit
     Document, (iii) the ability of the Borrower, any of its Subsidiaries and
     any Additional Loan Party, taken as a whole, to perform any material
     obligations under the Credit Documents or of the Agent or the Lenders to
     enforce the Accommodations Outstanding or any of the other Obligations or
     to realize upon the Collateral or (iv) the value of the Collateral or the
     amount which the Agent or the Lenders would be likely to receive (after
     giving consideration to delays in payment and costs of enforcement) in the
     liquidation of such Collateral.

     "MATERIAL CONTRACT" means any Contractual Obligation to which the Borrower
     or any of its Subsidiaries is a party (other than the Credit Documents) for
     which breach, non-performance, cancellation or failure to renew could have
     a Material Adverse Effect.

     "NET CASH PROCEEDS" means, with respect to any Asset Sale, (i) the
     aggregate amount of cash consideration received by the Borrower or
     Additional Loan Party or such Subsidiary, as the case may be, in connection
     with such transaction after deduction of all reasonable and customary fees,
     costs and expenses directly incurred by the Borrower or Additional Loan
     Party or such Subsidiary in connection therewith, including, without
     limitation, reasonable and customary underwriting discount, brokerage or
     selling commissions, if any, and the reasonable fees and disbursements of
     counsel paid by the Borrower or Additional Loan Party or such Subsidiary in
     connection therewith and (ii) any other net proceeds which constitute or
     are deemed "Net Cash Proceeds" (as defined in the Senior Subordinated Note
     Indenture).
<PAGE>
 
                                      -23-

     "NOTICE OF BORROWING" means a notice with respect to the Borrowing of
     Advances substantially in the form of Exhibit E.

     "OBLIGATIONS" means all present and future obligations and liabilities of
     the Borrower and any Additional Loan Party arising under or in connection
     with this Agreement or any other Credit Document, due or to become due to
     the Agent or any Lender or any other Person entitled to indemnification
     pursuant to Section 11.6, or (to the extent permitted by the Credit
     Documents) any of their respective successors, transferees or assigns, and
     shall include, without limitation, (i) the Accommodations Outstanding and
     unpaid interest hereunder (including interest accruing on or after the
     occurrence of an Insolvency Event, whether or not allowed as a claim in any
     proceeding relating to the Insolvency Event), (ii) reimbursement
     obligations under Letters of Credit, (iii) Fees, Expenses and
     indemnification and expense reimbursement obligations arising under Section
     11.6, (iv) the Obligations of the Parent Guarantor arising under the Parent
     Guaranty, (v) the Obligations of the Restricted Subsidiaries under the
     Credit Documents to which they are a party and (vi) all obligations and
     liabilities of the Borrower to the Agent or any Lender in respect of
     Hedging Agreements permitted hereunder.

     "OPERATING LEASE" means, as applied to any Person, any lease of any
     property (whether real, personal or mixed) by that Person as lessee which
     is not a Capital Lease.

     "ORIGINAL CURRENCY" has the meaning specified in Section 11.11(1).

     "OTHER CURRENCY" has the meaning specified in Section 11.11(1).

     "PAID IN FULL", "PAY IN FULL" and "PAYMENT IN FULL" means, with respect to
     the Obligations of the Borrower and any Additional Loan Party, (i) the
     payment in full in cash of all Obligations of the Borrower and any
     Additional Loan Party (other than, as of any date of payment, the
     Obligations which are contingent and unliquidated and not due and owing and
     which pursuant to the provisions of the Credit Documents survive the
     termination of this Agreement, the repayment of the Accommodations, the
     termination of  Commitment and the expiration or cancellation of all
     Letters of Credit) and (ii) with respect to Letters of Credit issued for
     the account of the Borrower, the termination and surrender for cancellation
     of such Letters of Credit or the delivery of cash, Cash Equivalents or
     other Collateral held as security for the Obligations in respect of such
     Letters of Credit as required by this Agreement or the other Credit
     Documents.

     "PARENT GUARANTOR" means Rental Service Corporation, a Delaware
     corporation.
<PAGE>
 
                                      -24-

     "PARENT GUARANTOR CREDIT AGREEMENT" means the Second Amended and Restated
     Credit Agreement dated as of December 2, 1997 by and among RSC Center,
     Inc., RSC Alabama, Inc., RSC Duval Inc., RSC Industrial Corporation, RSC
     Rents, Inc., and Walker Jones Equipment, Inc., as Borrowers, Rental Service
     Corporation, RSC Acquisition Corp., and RSC Holdings, Inc. as Parent
     Guarantors, the Lenders set forth therein, Bankers Trust Company, as
     Issuing Bank and BT Commercial Corporation, as Agent, as amended by the
     First Amendment and Consent dated as of April 30, 1998, and as further
     amended by the Second Amendment and Consent dated as of July 20, 1998, and
     as in effect as of the Effective Date without giving effect to any further
     amendments, restatements, modifications or waivers thereof or consent to
     departures from the terms thereof following the Effective Date.

     "PARTICIPANT" has the meaning specified in Section 11.8(3).

     "PARENT GUARANTY" the guaranty of even date herewith executed by the Parent
     Guarantor with respect to the Obligations of the Borrower.

     "PERMITTED DISCRETION" means the Agent's reasonable good faith judgment
     based upon any factor which it believes in good faith:  (i) will or could
     adversely affect the value of any Collateral, the enforceability or
     priority of the Liens of the Agent and the Lenders or the amount which the
     Agent and the Lenders would be likely to receive (after giving
     consideration to delays in payment and costs of enforcement) in the
     liquidation of such Collateral; (ii) reasonably suggests that any
     collateral report or financial information delivered to the Agent by the
     Borrower or any Additional Loan Party or any Person on behalf of, and at
     the request of, such Persons is incomplete, inaccurate or misleading in any
     material respect; (iii) materially increases the likelihood of the
     occurrence of an Insolvency Event involving the Borrower or an Additional
     Loan Party or any of the Collateral or (iv) creates or reasonably could be
     expected to create a Default or an Event of Default.  In exercising such
     judgment with respect to the Borrower, the Agent may reasonably consider
     such factors already included in or tested by the definitions of "Eligible
     Accounts" or "Eligible Rental Equipment," as well as any of the following:
     (a) the financial and business climate of the Borrower's industry and
     general macroeconomic conditions, (b) changes in collection history and
     dilution with respect to the Accounts of the Borrower and its Designated
     Restricted Subsidiaries, (c) changes in demand for, and pricing of, Rental
     Equipment of the Borrower and its Designated Restricted Subsidiaries, (d)
     changes in any concentration of risk with respect to Accounts or Rental
     Equipment of the Borrower and its Subsidiaries and (e) any other factors
     that change the credit risk of lending to the Borrower on the security of
     the Accounts or Rental Equipment of the Borrower and its Designated
     Restricted Subsidiaries.  The burden of establishing lack of good faith
     shall be on the Borrower and the Additional Loan Parties.
<PAGE>
 
                                      -25-

     "PERMITTED LIEN" shall have the meaning set forth in Section 8.2(d).

     "PERMITTED SUBORDINATED INDEBTEDNESS" means the Senior Subordinated Notes
     issued by the Parent Guarantor and the unsecured guarantee(s) thereof by
     certain Persons, in each case on the terms set forth in the Senior
     Subordinated Note Indenture.

     "PERSON" means any natural person, corporation, limited liability company,
     limited partnership, general partnership, joint stock company, joint
     venture, association, company, trust, bank, trust company, land trust,
     business trust or other organization, whether or not a legal entity, and
     any Governmental Authority.

     "PLAN" means any employee benefit plan (including pension plan), program or
     arrangement maintained or contributed to by the Borrower or any of its
     Subsidiaries, or with respect to which any of them may incur any liability.

     "PPSA" means the Personal Property Security Act (Ontario) and similar
     legislation in other jurisdictions.

     "PRIORITY ACCOUNTS PAYABLE" means, at any time, the amount past due and
     owed by the Borrower or any of the Restricted Subsidiaries or which they
     have an obligation to remit to a Governmental Entity pursuant to any
     applicable law, rule or regulation in respect of pension fund obligations,
     unemployment insurance, goods and services taxes, sales taxes and other
     taxes payable or to be remitted or withheld, workers' compensation and
     other like charges and demands, in respect of which any Governmental Entity
     may claim a security interest or other claim ranking or capable of ranking
     in priority to the Security.

     "PRODUCTIVE ASSETS" means assets of a kind then used or useable in the
     business of the Borrower or its Subsidiaries as in existence on the
     Effective Date or in lines of business reasonably related thereto (which
     shall include assets consisting of the capital stock of an entity acquired
     in an Acquisition permitted hereunder).

     "PRO FORMA" means the unaudited Pro Forma opening balance sheet of the
     Borrower dated June 30, 1998, and after giving effect to the consummation
     of the Fasco Acquisition and the extensions of credit contemplated by this
     Agreement, attached hereto as Schedule 1.1.

     "PROJECTIONS" means the forecasted (i) condensed consolidated balance sheet
     of the Parent Guarantor, (ii) condensed consolidated income statements of
     the Parent Guarantor, (iii) condensed consolidated cash flow statements of
     the Parent Guarantor, (iv) consolidated capitalization statements of the
     Parent Guarantor and (v) compliance with the Financial Covenants, all
     prepared by 
<PAGE>
 
                                      -26-

     management of the Parent Guarantor on a basis consistent with the Parent
     Guarantor's historical financial statements as delivered on or prior to the
     Effective Date.

     "PURCHASE MONEY LIENS" shall have the meaning ascribed thereto in Section
     8.2(c)(iv).

     "QUARTERLY DETERMINATION DATE" means, with respect to any period, each
     March 31, June 30, September 30 and December 31 occurring during such
     period.

     "REAL PROPERTY" means, with respect to any Person, all of such Person's
     present and future right, title and interest (including, without
     limitation, any leasehold estate) in any plots, pieces or parcels of land,
     and any improvements, buildings, structures and fixtures now or hereafter
     located or erected thereon or attached thereto of every nature whatsoever.

     "REFERENCE DISCOUNT RATE" means, in respect of any Bankers' Acceptances or
     Drafts to be purchased by a Lender or any other Person pursuant to Article
     4, the arithmetic average of the discount rates (calculated on an annual
     basis and rounded to the nearest one-hundredth of 1%, with five-thousandths
     of 1% being rounded up) quoted by the Agent at 9:30 a.m. (Toronto time) as
     the discount rate at which the Agent would purchase, on the relevant
     Drawing Date, its own Bankers' Acceptances or Drafts having an aggregate
     Face Amount equal to and with a term to maturity the same as the Bankers'
     Acceptances or Drafts to be acquired by the Lender or other Person on the
     Drawing Date.  If the discount rates cannot be calculated on any Business
     Day on which they are required to be calculated the applicable discount
     rate shall be the CDOR rate in effect on such day for bankers' acceptances
     having a term to maturity the same as the applicable Bankers' Acceptances.

     "RELEVANT REPAYMENT DATE" means, in respect of the repayment of all
     Accommodations made under the Credit Facility, December 2,2002.

     "RENTAL EQUIPMENT" of any Person means all goods held for rental by such
     Person in the ordinary course of business and all used rental goods held
     for sale by such Person in the ordinary course of business.

     "RENTAL EQUIPMENT UTILIZATION" means, for any twelve-month period, the
     result (expressed as a percentage) obtained from dividing (i) the total
     revenue of the Borrower and its Subsidiaries attributable to the rental of
     Rental Equipment owned or leased by the Borrower and its Subsidiaries
     during such twelve-month period by (ii) the average amount for such twelve-
     month period of Rental Equipment owned or leased by the Borrower and its
     Subsidiaries as of the last day of each month during such twelve-month
<PAGE>
 
                                      -27-

     period, determined on the basis of the Borrower or such Subsidiary's
     original cost of such Rental Equipment.

     "RENTAL EQUIPMENT UTILIZATION CURE DATE" is defined in Section 8.2(a).

     "REQUIREMENT OF LAW" means (i) the Governing Documents of a Person, (ii)
     any law, treaty, rule, regulation, order or determination of an arbitrator,
     court or other Governmental Authority or (iii) any franchise, license,
     lease, permit, certificate, authorization, qualification, easement, right
     of way, right or approval binding on a Person or any of its property.

     "RESTRICTED ACCOUNT", "RESTRICTED ACCOUNT AGREEMENTS" and "RESTRICTED
     ACCOUNT BANKS" are defined in Section 12.

     "RESTRICTED SUBSIDIARIES" means any Subsidiary which executes and delivers
     the guarantee, security and other agreements, documents and instruments
     pursuant to Section 8.2(q).

     "REVOLVING CREDIT PROPORTIONATE SHARE" means, in respect of any Lender at
     any particular time, a fraction, expressed as a percentage, obtained by
     dividing its Lender's Commitment by the Commitment or, if the Commitment
     has then been terminated, by dividing (i) the sum of (A) the outstanding
     Advances and BA Instruments made by such Lender, plus (B) the amount of
     such Lender's unfunded participations in outstanding Letters of Credit,
     plus (C) the amount of all payments made by such Lender to the Issue Lender
     in respect of its participations in Letters of Credit for which the
     Borrower has not reimbursed such Lender (other than with respect to
     outstanding Advances deemed requested pursuant to Section 5.5), by (ii) the
     sum of (A) the aggregate amount of all Advances and BA Instruments then
     outstanding, plus (B) the aggregate amount of all Lenders' unfunded
     participations in outstanding Letters of Credit, plus (C) the aggregate
     amount of all payments made by all Lenders to the Issue Lender in respect
     of their respective participations in Letters of Credit for which the
     Borrower has not reimbursed the Lenders (other than with respect to
     outstanding Advances deemed requested pursuant to Section 5.5).

     "SECURITY" means, at any time, the encumbrances in favour of the Agent or
     the Lenders, or both, in the assets and properties of the Borrower, the
     Restricted Subsidiaries or the Additional Loan Parties securing their
     obligations under this Agreement and the other Credit Documents.

     "SECURITY AGREEMENT" means (i) the Security Agreement of even date herewith
     executed by the Borrower in favour of the Agent and the Lenders, in
     substantially the form of Exhibit F-1 or F-2, as the same may be amended,
     restated, supplemented or otherwise modified in accordance with the terms
<PAGE>
 
                                      -28-

     hereof and thereof, and (ii) any Security Agreement executed after the date
     hereof by any Restricted Subsidiary in favour of the Agent and the Lenders,
     in each case substantially in the form of Exhibit F-1 or F-2, as any of the
     same may be amended, restated, supplemented or otherwise modified from to
     time in accordance with the terms hereof and thereof.

     "SECURITY DOCUMENTS" means the agreements described as such in Exhibit G
     and any other security granted to the Agent or the Lenders, or both, as
     security for the Obligations of the Borrower and the Additional Loan
     Parties under this Agreement and the other Credit Documents.

     "SENIOR SUBORDINATED NOTE INDENTURE" means the Indenture dated May 13, 1998
     pursuant to which the Senior Subordinated Notes were issued by the Parent
     Guarantor and guaranteed by certain of its Subsidiaries.

     "SENIOR SUBORDINATED NOTES" means the unsecured Senior Subordinated Notes
     issued by the Parent Guarantor pursuant to the Senior Subordinated Note
     Indenture.

     "SETTLEMENT DATE" is defined in Section 3.4.

     "SUBSIDIARIES" means the Subsidiaries of the Borrower.

     "SUBSIDIARY OF A PERSON" means any corporation, limited liability company,
     general or limited partnership or other Person of which securities or other
     ownership interests having ordinary voting power to elect or appoint a
     majority of the board of directors, managers or other Persons performing
     similar functions with respect to such corporation, limited liability
     company, general or limited partnership or other Person are at the time
     directly or indirectly owned or controlled by such Person, one or more of
     the other subsidiaries of such Person or any combination thereof.

     "TAXES" is defined in Section 11.7(1).

     "TOTAL INDEBTEDNESS RATIO AS OF A QUARTERLY DETERMINATION DATE" means, for
     purposes of determining the Applicable Base Rate (Canada) Margin, the
     Applicable Canadian Prime Rate Margin, the Applicable Drawing Fee and the
     Applicable Eurodollar Rate Margin, the Total Indebtedness Ratio as of a
     Quarterly Determination Date as defined in the Parent Guarantor Credit
     Agreement.  The calculation of the Total Indebtedness Ratio shall be set
     forth in an attachment to the Quarterly Compliance Certificates delivered
     pursuant to Section 8.1(a)(iii) covering the periods for which such
     adjustments are applicable and shall be in form and substance, reasonably
     satisfactory to the Agent.
<PAGE>
 
                                      -29-

     "U.S. DOLLARS" and "U.S. $" means lawful money of the United States of
     America.

     "U.S. GAAP" means generally accepted accounting principles in the United
     States of America as in effect from time to time.

SECTION 1.2  GENDER AND NUMBER.

     Any reference in the Credit Documents to gender includes all genders and
words importing the singular number only include the plural and vice versa.

SECTION 1.3  HEADINGS, ETC.

     The provision of a Table of Contents, the division of this Agreement into
Articles and Sections and the insertion of headings are for convenient reference
only and are not to affect the interpretation of this Agreement.

SECTION 1.4  CURRENCY.

     All references in the Credit Documents to dollars, unless otherwise
specifically indicated, are expressed in Canadian currency.

SECTION 1.5  CERTAIN PHRASES, ETC.

     In any Credit Document (i) (y) the words "INCLUDING" and "INCLUDES" mean
"INCLUDING (OR INCLUDES) WITHOUT LIMITATION" and (z) the phrase "THE AGGREGATE
OF", "THE TOTAL OF", "THE SUM OF", or a phrase of similar meaning means "THE
AGGREGATE (OR TOTAL OR SUM), WITHOUT DUPLICATION, OF", and (ii) in the
computation of periods of time from a specified date to a later specified date,
unless otherwise expressly stated, the word "FROM" means "FROM AND INCLUDING"
and the words "TO" and "UNTIL" each mean "TO BUT EXCLUDING".

SECTION 1.6  ACCOUNTING TERMS.

     All accounting terms not specifically defined in this Agreement shall be
interpreted in accordance with GAAP.

SECTION 1.7  RATEABLE PORTION OF ACCOMMODATIONS.

     References in this Agreement to a Lender's rateable portion of Advances,
Drawings, Drafts, Banker's Acceptances and Letters of Credit or rateable share
of payments of principal, interest, Fees or any other amount, shall mean and
refer to a rateable portion or share as nearly as may be rateable in the
circumstances, as determined in good faith by the Agent.  Each such
determination by the Agent shall be prima facie evidence of such rateable share.

SECTION 1.8  INCORPORATION OF SCHEDULES.

     The schedules and exhibits attached to this Agreement shall, for all
purposes of this Agreement, form an integral part of it.
<PAGE>
 
                                      -30-

SECTION 1.9  CONFLICT.

     The provisions of this Agreement prevail in the event of any conflict or
inconsistency between its provisions and the provisions of any of the other
Credit Documents.  To the extent the provisions of the agreements as to loans
and advances and security therefore dated of even date herewith made by the
Borrower to each of the Lenders for the purposes of s. 427 of the Bank Act
(Canada), conflict or are inconsistent with, or confer rights on the Lenders not
covered by this Agreement or the Borrower's Security Agreement, this Agreement
and such Security Agreement shall control, provided that such paramountcy shall
                                           -------- ----                       
not be effective upon the Obligations being declared, or becoming automatically,
immediately due and payable in accordance with the provisions of Section 9.2(a)
of this Agreement.

SECTION 1.10   CERTIFICATES.

     Any certificate required by the terms of this Agreement or any Credit
Documents to be given by an officer of the Borrower or any Additional Loan Party
for and on behalf of the Borrower or any Additional Loan Party shall be given
without any personal liability on the part of the officer giving the
certificate.

                                   ARTICLE 2
                                CREDIT FACILITY

SECTION 2.1  AVAILABILITY.

(1)  Each Lender severally agrees, on the terms and conditions of this
     Agreement, to make Accommodations rateably to the Borrower in accordance
     with its Lender's Commitment.  Accommodations shall be made available as
     (i) Advances pursuant to Article 3, (ii) Bankers' Acceptances pursuant to
     Article 4, and (iii) Letters of Credit pursuant to Article 5.

(2)  The Agent, in the exercise of its Permitted Discretion, may (i) establish
     and increase or decrease reserves against Eligible Accounts and Eligible
     Rental Equipment, (ii) reduce the advance rates provided for in the
     definition of "BORROWING BASE," or restore such advance rates to any level
     equal to or below the advance rates in effect as of the date of this
     Agreement and (iii) reasonably impose additional restrictions (or eliminate
     the same) to the standards of eligibility set forth in the definitions of
     "ELIGIBLE ACCOUNTS" and "ELIGIBLE RENTAL EQUIPMENT."  In addition, the
     Agent, in its reasonable discretion, may establish and increase reserves
     against Eligible Accounts and Eligible Rental Equipment to the extent that
     the Borrower and the Designated Restricted Subsidiaries have not obtained
     PPSA financing change discharge statements or similar termination
     statements within 90 days after the Consummation Date for any Acquisition
     with respect to each PPSA financing statement or other filing covering
     assets to be acquired, directly or indirectly, by the Borrower or any
     Designated Restricted Subsidiary in such Acquisition, 
<PAGE>
 
                                      -31-

     as shown on the PPSA searches delivered in connection with such Acquisition
     pursuant to Section 8.2(b)(vii) (other than filings certified by the
     Borrower as evidencing Liens which are permitted by Section 8.2(d)(iii) and
     which secure Indebtedness permitted by Section 8.2(c)(iv)).

(3)  The Agent shall give each Lender prompt notice of any (i) Accommodation
     Notice received from the Borrower and of each Lender's rateable portion of
     any Accommodation, and (ii) other notice received by it from the Borrower
     under the Agreement.

SECTION 2.2  COMMITMENTS AND FACILITY LIMITS.

(1)  The Accommodations Outstanding to all Lenders under the Credit Facility
     shall not at any time exceed the lesser of (i) the Commitment, and (ii) the
     Borrowing Base (the "LENDING LIMIT").  The Accommodations Outstanding to
     each Lender under the Credit Facility shall not at any time exceed the
     lesser of (iii) the Lender's Commitment, and (iv) the Lender's Revolving
     Credit Proportionate Share of the Borrowing Base.

(2)  The Credit Facility shall revolve and no payment under the Credit Facility
     shall reduce the Commitment or any Lender's Commitment.

(3)  A conversion from one Type of Accommodation or Advance to another Type of
     Accommodation or Advance shall not constitute a repayment or prepayment.

SECTION 2.3  USE OF PROCEEDS.

The Borrower shall use the proceeds of Accommodations under the Credit Facility
to provide a portion of the purchase price of substantially all the assets of
Fasco and for future Acquisitions and Capital Expenditures, together with
related fees and expenses and to provide working capital for the Borrower.

SECTION 2.4  MANDATORY REPAYMENTS AND REDUCTIONS OF COMMITMENTS.

(1)  The Borrower shall repay (subject to Section 9.1) the Accommodations
     Outstanding under the Credit Facility, together with all accrued interest
     and Fees and all other amounts payable in connection with the Credit
     Facility on the Relevant Repayment Date.

(2)  Upon consummation of any Asset Sale, the Borrower and any Additional Loan
     Party, as applicable, shall commit in writing within 240 days after the
     consummation of such Asset Sale to reinvest the Net Cash Proceeds resulting
     therefrom and/or reduce the Commitment and shall so reinvest such Net Cash
     Proceeds or reduce the Commitment within 330 days after the consummation of
     such Asset Sale, as follows:  (i) the Borrower shall, and shall cause its
     Subsidiaries to, reinvest such Net Cash Proceeds in Productive Assets or
     (ii) unless the Borrower shall have provided to the Agent evidence
<PAGE>
 
                                      -32-

     reasonably satisfactory to the Agent of the reinvestment described in
     clause (i) above prior to the date which is 330 days after the consummation
     of such Asset Sale, the Commitment shall be automatically reduced as of the
     330th day after such consummation in an amount equal to any such Net Cash
     Proceeds not reinvested pursuant to clause (i) (and the Borrower shall make
     any payment required by Section 2.5(1) after giving effect to such
     reduction).

SECTION 2.5  MANDATORY PREPAYMENT WHERE BORROWING BASE DEFICIENCY.

(1)  If, on any day, the Accommodations Outstanding under the Credit Facility
     exceed the Lending Limit (based on the most recently delivered Borrowing
     Base Certificate and the Equivalent Cdn. $ Amount of the Accommodations
     Outstanding in U.S. Dollars on that day), the Borrower shall within 2
     Business Days of such day (i) prepay Borrowings, or (ii) pay such amount to
     the Agent and irrevocably authorize and direct the Agent to apply such
     payment to Eurodollar Rate Advances or as a repayment of the Borrower's
     reimbursement obligation in respect of any Drawings or Issues on the next
     maturity date; such that the Accommodations Outstanding, after giving
     effect to the payment, do not exceed the Lending Limit.

(2)  The Borrower may designate in writing from time to time a Restricted
     Subsidiary which is (i) a wholly-owned Subsidiary of the Borrower, and (ii)
     incorporated under the laws of Canada or a province thereof, as a
     participant in the calculation of the Borrowing Base (a "DESIGNATED
     RESTRICTED SUBSIDIARY") with a view to increasing the amount of Eligible
     Accounts and Eligible Rental Equipment supporting the availability of
     Accommodations under this Agreement.

(3)  Upon receipt of a designation as provided for in Section 2.5(2) and the
     granting of the Security and delivery of the documents and opinions
     contemplated by Section 2.5(2) the Restricted Subsidiary will become a
     Designated Restricted Subsidiary for purposes of this Agreement.

SECTION 2.6  OPTIONAL PREPAYMENTS AND REDUCTIONS OF COMMITMENTS.

     If the Borrower has, upon the number of Business Days' notice to the Agent
specified in Exhibit H, delivered a notice to the Agent stating the proposed
date and aggregate principal amount of any reduction of the Lenders' Commitment,
it shall, on that date, pay to the Lenders the amount, if any, by which the
Accommodations Outstanding under the Credit Facility exceed the proposed reduced
Commitment.  Each reduction shall be in an aggregate principal amount of Cdn.
$1,000,000 and increments of Cdn. $500,000 in the case of Accommodations
denominated in Canadian Dollars, and in an aggregate principal amount of U.S.
$1,000,000 and increments of U.S. $500,000 in the case of Accommodations
denominated in U.S. Dollars.  Each reduction shall reduce each Lender's
Commitment proportionately in accordance with its Revolving Credit Proportionate
Share.  The Borrower shall 
<PAGE>
 
                                      -33-

prepay the amount of any Drawing only on the maturity date for the relevant BA
Instrument.

SECTION 2.7  FEES.

(1)  The Borrower agrees to pay to the Agent for the account of the Lenders in
     accordance with their Revolving Credit Proportionate Shares a fee (the
     "UNUSED LINE FEE"), accruing at the rate of 0.25% per annum on the average
     daily amount by which the Commitment at the close of business on such day
     exceeds the sum of Accommodations Outstanding, for the period commencing on
     the Effective Date and ending on the Relevant Repayment Date, such Unused
     Line Fee being payable monthly, in arrears, commencing on the first day of
     the calendar month immediately following the Effective Date and on the
     Relevant Repayment Date.

(2)  The Borrower shall pay to the Agent for the account of the Lenders on a
     rateable basis, an upfront fee (the "UPFRONT FEE") accruing at the rate of
     0.25% of the final allocated Commitment of each Lender, payable on the
     Effective Date.

(3)  The Borrower shall pay to the Agent such other fees as have been agreed in
     a letter agreement dated July 28, 1998, between the Agent and the Borrower.

SECTION 2.8  MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF ACCOUNT.

     The Agent shall maintain an account on its books in the name of the
Borrower (the "LOAN ACCOUNT" of the Borrower) in which the Borrower will be
charged with all Accommodations Outstanding made by the Agent or the Lenders to
the Borrower or for the Borrower's account, including the Advances, Bankers
Acceptances, completed Drafts, the Letter of Credit Obligations, the Fees, the
Expenses and any other Obligations.  The Loan Account will be credited with all
payments received by the Agent from the Borrower or for the Borrower's account,
including all amounts received in such Borrower's Concentration Account from any
Lockbox Bank or Restricted Account Bank maintained by the Borrower or its
Designated Restricted Subsidiaries.  The Agent shall send the Borrower a monthly
statement reflecting the activity in its Loan Account.  Absent manifest error,
each monthly statement shall be an account stated and shall be final, conclusive
and binding on the Borrower.

SECTION 2.9  PAYMENT PROCEDURES.

(1)  MANNER AND TIME OF PAYMENT.

     (a)  Unless otherwise expressly provided in this Agreement, all payments of
          principal of and interest on the Accommodations Outstanding and other
          Obligations (including, without limitation, Fees and Expenses) and any
          other payments required to be made by the Borrower under the Agreement
          which are payable to the Agent, the Lenders or the 
<PAGE>
 
                                      -34-

          Issue Lender shall be made without condition or reservation of right,
          and, with respect to payments made other than from application of
          deposits in the Concentration Account, in immediately available funds,
          delivered to the Agent not later than 1:00 P.M. Toronto time on the
          date and at the place due, to such account of the Agent as it may
          designate, for the account of the Agent, the Lenders or the Issue
          Lender, as the case may be; and funds received by the Agent not later
          than 1:00 P.M. Toronto time on any given Business Day shall be
          credited against payment to be made that day and funds received by the
          Agent after that time shall be deemed to have been paid on the
          immediately following Business Day. The Borrower shall make each such
          payment (i) in Canadian Dollars, if the Accommodation or other
          Obligation was originally made in or has been converted to Canadian
          Dollars, and (ii) in U.S. Dollars, if the Accommodation or other
          Obligation was originally made in or has been converted to U.S.
          Dollars. Payments actually received by the Agent for the account of
          the Lenders or the Issue Lender, or any of them, shall be paid to them
          by the Agent promptly after receipt thereof.

     (b)  Unless otherwise expressly provided in this Agreement, the Agent shall
          make Accommodations and other payments to the Borrower under this
          Agreement by crediting the relevant Disbursement Account (or causing
          such Disbursement Account to be credited) with the amount of the
          payment on the date the payment is to be made.

(2)  APPORTIONMENT AND APPLICATION OF PAYMENTS.

     (a)  Subject to the provisions of Sections 3.5, 2.9(2)(b), 2.9(2)(c) and
          2.10, all payments of principal and interest in respect of
          Accommodations Outstanding, all payments of Fees and Expenses and all
          other payments in respect of any other Obligations, shall be allocated
          among such of the Lenders and the Issue Lender as are entitled
          thereto, in proportion to their respective Revolving Credit
          Proportionate Shares, or as otherwise provided herein;

     (b)  Except as provided in Section 2.9(2)(c) and subject to the provisions
          of Section 2.10, all such payments and any other amounts received by
          the Agent from or for the benefit of a Borrower shall be applied
          first, (A) if such payment or amount is in respect of principal or
          interest on the Accommodations Outstanding, to pay principal of and
          interest on any portion of the Accommodations to the Borrower which
          the Agent may have advanced on behalf of any Lender (including Agent
          Advances) for which the Agent has not then been reimbursed by such
          Lender or the Borrower or (B) second, to pay the principal of the
          Accommodations Outstanding (or any installment thereof) advanced 
<PAGE>
 
                                      -35-

          to the Borrower which are then due and payable in the order described
          hereinbelow and interest on such Accommodations Outstanding then due
          and payable, ratably, based on the then outstanding balances of such
          Accommodations Outstanding, third, to pay all other Obligations then
          due and payable by the Borrower, ratably, and fourth, as the Borrower
          so designates. All such principal and interest payments in respect of
          Accommodations Outstanding shall be applied first, to repay
          outstanding Floating Rate Advances, and then to repay outstanding
          Eurodollar Rate Advances with those Eurodollar Rate Advances which
          have earlier expiring Eurodollar Interest Periods being repaid prior
          to those which have later expiring Eurodollar Interest Periods, and
          then to repay any other unpaid Accommodations Outstanding then due and
          payable;

     (c)  Except as provided in Section 9.5, upon the termination of the
          Commitment or the acceleration of the Obligations pursuant to Section
          9.2 and until such time, if any, as such termination or acceleration
          has been rescinded pursuant to Section 9.3, all payments and all
          proceeds of Collateral received by the Agent shall be applied in the
          following order:  first, to the payment of any Fees, Expenses or other
          Obligations due and payable to the Agent (in its capacity as such)
          under any of the Credit Documents, including Agent Advances and any
          other amounts advanced by the Agent on behalf of the Lenders; second,
          to the payment of any Fees, expenses or other Obligations due and
          payable to the Issue Lender (in its capacity as such) under any of the
          Credit Documents; third, to the payment of any Fees, Expenses or
          indemnification Obligations due and payable to the Lenders under any
          of the Credit Documents, ratably, based on the outstanding balances of
          such Fees, Expenses and indemnification Obligations; fourth, to the
          payment of interest due on the Accommodations Outstanding, ratably, in
          accordance with the Lenders' respective Revolving Credit Proportionate
          Share; fifth, to the payment of principal due on the Accommodations
          Outstanding, ratably, in accordance with the Lenders' respective
          Revolving Credit Proportionate Shares; sixth, to the payment of all
          other Obligations due and payable to the Lenders, ratably, based on
          the outstanding balances of such Obligations; and seventh, to the
          payment of all other Obligations owing to any of the Agent, the Issue
          Lender or any Lender, ratably, based on the outstanding balances of
          such Obligations; and
     
     (d)  Subject to Sections 2.10 and 3.4, the Agent shall promptly distribute
          to each Lender and the Issue Lender at its primary address set forth
          on the signature page of this Agreement or in the Assignment and
          Assumption Agreement by which it became a Lender or the Issue 
<PAGE>
 
                                      -36-

          Lender, or at such other address as such Person may request in
          writing, such funds as such Person may be entitled to receive;
          provided, however, that the Agent shall under no circumstances be
          bound to inquire into or determine the validity, scope or priority of
          any interest or entitlement of any such Person and may suspend all
          payments or seek appropriate relief (including, without limitation,
          instructions from the Majority Lenders or an action in the nature of
          interpleader) in the event of any doubt or dispute as to any
          apportionment or distribution contemplated hereby.

(3)  CHARGING OF LOAN ACCOUNT.  The Agent, in its sole discretion subject only
     to the terms of Section 2.9(2)(c) and this Section 2.9(3), may pay from the
     proceeds of Advances and BA Instruments made to the Borrower hereunder,
     whether made following a request by the Borrower pursuant to Section 3.1 or
     Article 4 or a deemed request for an Advance as provided in this Section
     2.9(3), all interest, Fees, Expenses and other payments to be made to the
     Lenders hereunder and under the other Credit Documents if and to the extent
     such payment is not made when due hereunder; provided, however, that the
     Agent shall give the Borrower at least three days' written notice of the
     amount payable prior to the payment date of any such payment, the payment
     date of which is not otherwise specified hereunder.  The Borrower hereby
     irrevocably authorizes the Lenders to make Advances, which Advances shall
     be Canadian Prime Rate Advances for such Obligations denominated in
     Canadian Dollars and Base Rate (Canada) Advances for such Obligations
     denominated in U.S. Dollars, in each case, upon notice from the Agent as
     described in the following sentence for the purpose of paying such
     Obligations, and agrees that all such Advances so made shall be deemed to
     have been requested by it pursuant to Section 3.1 as of the date of the
     aforementioned notice.  The Agent shall request Advances on behalf of the
     Borrower as described in the immediately preceding sentence by notifying
     the Lenders by telecopy, telegram or other similar form of transmission
     (which notice the Agent shall thereafter promptly transmit to the
     Borrower), of the amount and date of the proposed Borrowing and that such
     Borrowing is being requested on the Borrower's behalf pursuant to this
     Section 2.9(3).  On the proposed Borrowing date for such Advance, the
     Lenders shall make the requested Advance in accordance with the procedures
     and subject to the conditions specified in Section 3.1(3).  The Borrower's
     obligations to the Agent and the Lenders with respect to such payments
     shall be discharged by the Agent's receipt of the proceeds of such
     Advances.

(4)  PAYMENTS ON NON-BUSINESS DAYS.  Whenever any payment to be made by the
     Borrower hereunder is stated to be due on a day which is not a Business
     Day, the payment shall instead be due on the immediately following Business
     Day (except as set forth in the proviso to the third sentence of the
     definition of 
<PAGE>
 
                                      -37-

     "EURODOLLAR INTEREST PERIOD" with respect to payments due on the
     immediately preceding Business Day), and any such extension of time shall
     be included in the computation of the payment of interest and Fees
     hereunder.

SECTION 2.10   DEFAULTING LENDERS.

(1)  A Lender who fails to pay the Agent its Revolving Credit Proportionate
     Share of Accommodations (including Agent Advances) made available by the
     Agent on such Lender's behalf, or who fails to pay any other amount owing
     by it to the Agent (in either case, in accordance with the terms of this
     Agreement), is a "DEFAULTING LENDER."  The Agent may recover all such
     amounts owing by a Defaulting Lender on demand.  If the Defaulting Lender
     does not pay such amounts on the Agent's demand, the Agent shall promptly
     notify the Borrower and the Borrower shall pay such amounts within five
     Business Days.  In addition, the Defaulting Lender or the Borrower shall
     pay the Agent interest on such amount for each day from the date it was
     made available by the Agent to the Borrower to the date it is recovered by
     the Agent at a rate per annum equal to (i) the prevailing interbank rate
     for late payments, if paid by the Defaulting Lender or (ii) the then
     applicable rate of interest calculated under Section 3.8, if paid by the
     Borrower; plus, in each case, the Expenses and losses, if any, incurred as
     a result of the Defaulting Lender's failure to perform its obligations.

(2)  The failure of any Lender to fund its Revolving Credit Proportionate Share
     of Accommodations (including Agent Advances) shall not relieve any other
     Lender of its obligation to fund its Revolving Credit Proportionate Share
     of Accommodations.  Conversely, no Lender shall be responsible for the
     failure of another Lender to fund its Revolving Credit Proportionate Share
     of Accommodations.

(3)  The Agent shall not be obligated to transfer to a Defaulting Lender any
     payments made by the Borrower or any Additional Loan Party to the Agent for
     the Defaulting Lender's benefit; nor shall a Defaulting Lender be entitled
     to the sharing of any payments hereunder.  Amounts payable to a Defaulting
     Lender shall instead be paid to or retained by the Agent.  The Agent may
     hold and, in its discretion, re-lend to the Borrower the amount of all such
     payments received or retained by it for the account of such Defaulting
     Lender.  For purposes of voting or consenting to matters with respect to
     the Credit Documents and determining Revolving Credit Proportionate Shares,
     such Defaulting Lender shall be deemed not to be a "LENDER" and, for such
     purposes solely, such Lender's Commitment shall be deemed to be zero (-0-).
     This Section 2.10 shall remain effective with respect to such Lender until
     the earlier of (w) such Lender shall have cured such default, (x) the
     Obligations under this Agreement shall have been declared or shall have
     become 
<PAGE>
 
                                      -38-

     immediately due and payable, (y) the Commitment shall have been terminated
     or (z) the Majority Lenders, the Agent and the Borrower shall have waived
     such Lender's default in writing. The operation of this Section 2.10 shall
     not be construed to increase or otherwise affect the Commitment of any
     Lender, or relieve or excuse the performance by the Borrower or any
     Additional Loan Party of its duties and obligations hereunder.

SECTION 2.11   SHARING OF PAYMENTS.

     Subject to Sections 2.10 and 2.9(2), if any Lender obtains any payment in
excess of its Revolving Credit Proportionate Share, as applicable, of payments
on account of the Accommodations Outstanding owing to such Lender, or interest
thereon, it will immediately purchase, without warranty or recourse, from the
other Lenders, as applicable, an undivided interest and participation (which it
shall be deemed to have done simultaneously upon the receipt of such payment) in
their respective Accommodations Outstanding, as applicable, sufficient to cause
that Lender to share the excess payment ratably with all the other Lenders, as
applicable; provided, however, that if all or part of such excess payment
received by the purchasing party is thereafter recovered from it, those
purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such party to the extent necessary to adjust
for such recovery, but without interest except to the extent the purchasing
party is required to pay interest in connection with such recovery.  The
Borrower and the Additional Loan Parties agree that any Lender so purchasing a
participation from another Lender pursuant to this Section 2.11 may, to the
fullest extent permitted by law, exercise all its rights of payment (including,
subject to Section 9.5, the right of setoff) with respect to such participation
as fully as if such Lender were the direct creditor of the Borrower and the
Additional Loan parties in the amount of such participation.

SECTION 2.12   COLLECTION OF ACCOUNTS.

     The Borrower shall, and shall cause each of its Designated Restricted
Subsidiaries to, maintain at all times a lockbox (individually, a "LOCKBOX" and
collectively, the "LOCKBOXES") and shall have instructed all account debtors on
its Accounts and all obligors with respect to any proceeds of Collateral to
remit all Collections and all such proceeds to such Lockboxes (and the Borrower
shall, and shall cause each of its Designated Restricted Subsidiaries to, use
its best efforts to cause all account debtors and all obligors with respect to
proceeds of Collateral to remit Collections and such proceeds to such
Lockboxes).  The Borrower, its Designated Restricted Subsidiaries, the Agent and
the financial institutions selected by the Borrower and acceptable to the Agent
(the "LOCKBOX BANKS") shall enter into agreements substantially in the form of
Exhibit I, or such other form as the Agent may approve (the "LOCKBOX
AGREEMENTS"), which among other things shall provide for the opening of an
account for the deposit of Collections and proceeds of Collateral (a "COLLECTION
ACCOUNT") at a Lockbox Bank; provided, however, that from the date on which the
Borrower or a Designated Restricted Subsidiary opens 
<PAGE>
 
                                      -39-

for business (whether through an Acquisition or otherwise) a new rental yard in
an area not previously served by a rental yard of the Borrower or a Designated
Restricted Subsidiary until the earlier of (i) the 120th day thereafter and (ii)
the date a Lockbox for such new rental yard is established, the Borrower or such
Designated Restricted Subsidiary may maintain accounts into which the Borrower
or such Designated Restricted Subsidiary deposits Collections and proceeds of
Collateral for the new rental yard (individually, a "RESTRICTED ACCOUNT" and
collectively, the "RESTRICTED ACCOUNTS") with the financial institutions
selected by the Borrower and acceptable to the Agent (the "RESTRICTED ACCOUNT
BANKS"), and, within 15 Business Days after the opening of any such Restricted
Account, the Borrower or such Designated Restricted Subsidiary, as the case may
be, the Agent and such financial institutions shall enter into agreements with
respect to the respective Restricted Accounts substantially in the form of
Exhibit J (the "RESTRICTED ACCOUNT AGREEMENTS"). All Collections and other
amounts received or receivable by the Borrower or a Designated Restricted
Subsidiary from any account debtor, in addition to all other cash and proceeds
of Collateral received from any other source, shall upon receipt be deposited
into a Collection Account or a Restricted Account, as the case may be, of the
Borrower or such Designated Restricted Subsidiary. Except with respect to the
replacement of a Restricted Account Agreement with a Lockbox Agreement,
termination or modification of such arrangements shall be subject to approval by
the Agent. Upon the terms and subject to the conditions set forth in the Lockbox
Agreements or the Restricted Account Agreements, as the case may be, all
available amounts held in each Collection Account or Restricted Account, as the
case may be, of the Borrower or a Designated Restricted Subsidiary shall be
wired each Business Day into the Borrower's concentration account maintained by
the Agent with the Disbursement Bank (such concentration account or such other
account as the Agent may approve in writing, the "CONCENTRATION ACCOUNT"). All
amounts received in the Concentration Account from the Lockbox Banks or the
Restricted Account Banks, in each case of the Borrower or a Designated
Restricted Subsidiary, shall be credited to the account of such Borrower and
applied and apportioned in accordance with Section 2.9. All Collections and
other proceeds of Collateral which are received directly by the Borrower or a
Designated Restricted Subsidiary shall be deemed to have been received by the
Borrower or such Designated Restricted Subsidiary as the Agent's trustee and,
upon the Borrower's or such Designated Restricted Subsidiary's receipt thereof,
such Person shall immediately transfer or cause to be transferred, all such
amounts into such Person's Collection Accounts (or, with respect to rental yards
for which a Lockbox has not yet been established, into such Person's Restricted
Accounts for those rental yards) in their original form, together with such
endorsements thereon as are necessary or appropriate to permit their immediate
deposit into such Collection Accounts or Restricted Accounts, as the case may
be.
<PAGE>
 
                                      -40-

SECTION 2.13   COMPUTATIONS OF INTEREST AND FEES.

(1)  All computations of interest shall be made by the Agent taking into account
     the actual number of days occurring in the period for which such interest
     is payable and (i) if based on the Canadian Prime Rate, on the basis of a
     year of 365 days, or (ii) if based on the Base Rate (Canada) or the
     Eurodollar Rate, on the basis of a year of 360 days.

(2)  All computations of Fees shall be made by the Agent on the basis of a year
     of 360 days taking into account the actual number of days (including the
     first day but excluding the last day) occurring in the period for which the
     fees are payable.

(3)  For purposes of the Interest Act (Canada), (i) whenever any interest or Fee
     under this Agreement is calculated using a rate based on a year of 360 days
     or 365 days, as the case may be, the rate determined pursuant to such
     calculation, when expressed as an annual rate, is equivalent to (x) the
     applicable rate based on a year of 360 days or 365 days, as the case may
     be, (y) multiplied by the actual number of days in the calendar year in
     which the period for which such interest or fee is payable (or compounded)
     ends, and (z) divided by 360 or 365, as the case may be, (ii) the principle
     of deemed reinvestment of interest does not apply to any interest
     calculation under this Agreement, and (iii) the rates of interest
     stipulated in this Agreement are intended to be nominal rates and not
     effective rates or yields.

                                   ARTICLE 3

                                   ADVANCES

SECTION 3.1  THE ADVANCES.

(1)  GENERALLY.  Each Lender severally agrees, on the terms and conditions of
     this Agreement, to make Advances to the Borrower under the Credit Facility,
     from time to time on any Business Day prior to the Relevant Repayment Date.
     Advances may be made available to the Borrower upon request (or deemed
     request) by the Lenders pursuant to Section 3.1(3) ("LENDER ADVANCES") and
     by the Agent acting on behalf of the Lenders pursuant to Section 3.1(2)
     ("AGENT ADVANCES").  Except as provided in Sections 3.1(2)(ii), 2.9(3), 3.6
     and 3.7, all Borrowings shall be made only after receipt by the Agent of a
     Notice of Borrowing, (i) not later than 1:00 P.M. Toronto time on the
     Business Day prior to the proposed Borrowing date with respect to Lender
     Advances of Canadian Prime Rate Advances and Base Rate (Canada) Advances
     made after the Effective Date, (ii) not later than 1:00 P.M. Toronto time
     on the third Business Day prior to the proposed Borrowing date with respect
     to Lender Advances of Eurodollar Rate Advances after the Effective Date and
     (iii) not later than 1:00 P.M. Toronto time on the Business Day prior to
     the proposed Borrowing date with respect to Agent Advances of Canadian
     Prime Rate 
<PAGE>
 
                                      -41-

     Advances and Base Rate (Canada) Advances made after the Effective Date,
     (ii) not later than 1:00 P.M. Toronto time on the third Business Day prior
     to the proposed Borrowing date with respect to Lender Advances of
     Eurodollar Rate Advances after the Effective Date and (iii) not later than
     1:00 P.M. Toronto time on the Business Day prior to the proposed Borrowing
     date with respect to Agent Advances of Canadian Prime Rate Advances and
     Base Rate (Canada) Advances made after the Effective Date. Each Borrowing
     shall, unless otherwise specifically provided herein, consist entirely of
     the same Types of Advances made to the Borrower on the same day rateably by
     the Lenders in accordance with their Revolving Credit Proportionate Shares.
     Each Borrowing of Canadian Prime Rate Advances and Base Rate (Canada)
     Advances for the Borrower requesting that Advances be made as, or converted
     into, Canadian Prime Rate Advances and Base Rate (Canada) Advances, as the
     case may be, shall be in an aggregate principal amount of not less than
     $500,000 or an integral multiple of $100,000 in excess thereof. Each
     Borrowing of Eurodollar Rate Advances for the Borrower requesting that
     Advances be made or continued as, or converted into, Eurodollar Rate
     Advances with the same Eurodollar Interest Period shall be in an aggregate
     principal amount of not less than $1,000,000 or an integral multiple of
     $500,000 in excess thereof. Subject to the foregoing limits, the Borrower
     may request one or more Borrowings of Prime Rate Advances on the same
     Business Day, but may request only one Borrowing of Eurodollar Rate
     Advances (excluding continuations of Eurodollar Rate Advances) for any
     Business Day;

(2)  AGENT ADVANCES.  After the Effective Date, the Agent is authorized by the
     Lenders, but is not obligated, to make Agent Advances for its own account
     (i) upon receiving any Notice of Borrowing requesting Lender Advances or
     Agent Advances constituting Canadian Prime Rate Advances or Base Rate
     (Canada) Advances within the applicable time limits set forth in Section
     3.1(1) or (ii) upon advice received by the Agent on a Business Day from the
     Disbursement Account Bank that the face amount of checks drawn on the
     Disbursement Account, which have been or will be presented for payment on
     that day exceeds the amount of funds then available in the Disbursement
     Account.  All Agent Advances will be Canadian Prime Rate Advances or Base
     Rate (Canada) Advances and may be made, at the election of the Agent,
     without regard to the minimum principal amounts in Section 3.1(1).  Agent
     Advances will be subject to periodic settlement with the Lenders under
     Section 3.4.  For administrative convenience, the Agent may, but is not
     obligated to, make Agent Advances in reliance upon the Borrower's actual or
     deemed representations under Section 6.2 that the conditions for Borrowing
     are satisfied.  If the conditions for Borrowing under Section 6.2 cannot be
     fulfilled, the Borrower shall in its Notice of Borrowing or otherwise give
     immediate notice thereof (specifying the circumstances which prevent the
     conditions from being fulfilled) to the Agent, with a copy to each of the
     Lenders, and the Agent may, but is not obligated to, continue to make Agent
     Advances for 20 Business Days from the date the Agent first receives such
     Notice of Borrowing, or until sooner instructed by the Majority Lenders to
     cease (the "AGENT ADVANCE PERIOD").  Once notice is given by a Borrower
     that circumstances exist which prevent the conditions to borrowing from
     being
<PAGE>
 
                                      -42-

     fulfilled, no additional notice with respect to the same circumstances will
     be effective to commence a new Agent Advance Period; and

(3)  LENDER ADVANCES.  If the Agent receives a Notice of Borrowing within the
     applicable time limits for Lender Advances pursuant to Section 3.1(1) and
     does not intend to fund such requested Borrowing as an Agent Advance, the
     Agent shall give each Lender prompt notice by telephone or facsimile
     transmission of a Notice of Borrowing that requests Lender Advances.
     Subject to the reasonable determination by the Agent and Lenders that the
     applicable conditions for borrowing contained in Article 6 are satisfied,
     each Lender shall make available to the Agent at the Agent's address
     specified on the signature page of this Agreement its Revolving Credit
     Proportionate Share of such Borrowing in immediately available funds no
     later than 2:00 P.M. Toronto time on the date of receipt of the Notice of
     Borrowing.  Unless the Agent receives contrary written notice prior to the
     date of any such Borrowing, it is entitled to assume that each Lender will
     make available its Revolving Credit Proportionate Share of the Borrowing
     and in reliance upon that assumption, but without any obligation to do so,
     may advance such Revolving Credit Proportionate Share on behalf of the
     Lender.

SECTION 3.2  DISBURSEMENT OF ADVANCES.

     The proceeds of Advances shall be transmitted by the Agent (i) to the
Disbursement Account upon advice received by the Agent from the Disbursement
Account Bank, as described in Section 3.1(2)(ii), directly to the Disbursement
Account, (ii) in the circumstances described in Section 5.5 directly to the
Issue Lender, (iii) in the circumstances described in Section 2.9(3), directly
to the applicable Lender and (iv) in all other circumstances, as requested by
the Borrower in its Notice of Borrowing.

SECTION 3.3  NOTICES OF BORROWING.

(1)  GENERALLY.  Notices of Borrowing may be given by telephone or facsimile
     transmission or in writing, and, if by telephone, confirmed by a written
     Notice of Borrowing delivered to the Agent by facsimile transmission
     promptly, but in no event later than 4:00 P.M. Toronto time on the same
     day.  Once given, a Notice of Borrowing that requests a Lender Advance is
     irrevocable by and binding on the Borrower.

(2)  ADVANCES.  Each Notice of Borrowing with respect to Advances shall specify
     (i) the proposed Borrowing date (which shall be a Business Day), (ii) the
     amount of the proposed Borrowing, (iii) the aggregate principal amount of
     all Accommodations Outstanding of the Borrower as of the date of such
     Notice of Borrowing, (iv) whether the proposed Borrowing will consist of
     Agent Advances or Lender Advances, (v) the Type of Advances comprising the
     Borrowing, together with the aggregate principal amount of all Advances of
<PAGE>
 
                                      -43-

     the Type requested by the Borrower to be made or continued as, or converted
     into, Advances of such Type on the proposed Borrowing date, (vi) in the
     case of Eurodollar Rate Advances, the requested Eurodollar Interest Period,
     (vii) instructions for the disbursement of the proceeds of the proposed
     Borrowing and (viii) whether the conditions for the requested Borrowing are
     satisfied.

SECTION 3.4  PERIODIC SETTLEMENT OF AGENT ADVANCES AND REPAYMENTS.

(1)  THE SETTLEMENT DATE.  The amount of each Lender's Revolving Credit
     Proportionate Share of Advances shall be computed weekly (or more
     frequently in the Agent's discretion) and shall be adjusted upward or
     downward based on all Advances (including Agent Advances) and repayments
     received by the Agent as of 5:00 P.M. Toronto time on the last Business Day
     of the period specified by the Agent (such date, the "SETTLEMENT DATE").

(2)  SUMMARY STATEMENTS; SETTLEMENTS OF PRINCIPAL.  The Agent shall deliver to
     each of the Lenders promptly after the Settlement Date a summary statement
     of the amount of outstanding Advances (including Agent Advances) for the
     period and the amount of repayments received for the period.  As reflected
     on the summary statement, subject to Section 2.10, each Lender shall
     transfer to the Agent, or the Agent shall transfer to each Lender, such
     amounts as are necessary to insure that, after giving effect to all such
     transfers (including each Lender's Revolving Credit Proportionate Share of
     repayments received by the Agent during the period covered by the summary
     statement), the amount of Advances made by each Lender shall be equal to
     such Lender's Revolving Credit Proportionate Share  of the aggregate amount
     of Advances outstanding as of such Settlement Date.  If the summary
     statement requires transfers to be made to the Agent by the Lenders and is
     received prior to 12:00 Noon Toronto time on a Business Day, such transfers
     shall be made in immediately available funds no later than 3:00 P.M.
     Toronto time that day; and, if received after 12:00 Noon Toronto time, then
     no later than 3:00 P.M. Toronto time on the next Business Day.  The
     obligation of each Lender to transfer such funds is irrevocable,
     unconditional and without recourse to or warranty by the Agent.

(3)  DISTRIBUTION OF INTEREST AND UNUSED LINE FEES.  Interest on the Advances
     (including Agent Advances) together with the amount of the Unused Line Fee,
     shall be allocated by the Agent to each Lender in accordance with the
     Revolving Credit Proportionate Share of Advances actually advanced by and
     repaid to each Lender, and shall accrue from the date such Advances are so
     advanced and to the date such Advances are either repaid by the Borrower or
     actually settled under this Section 3.4.  Promptly after the end of each
     month, the Agent shall distribute to each Lender its Revolving Credit
     Proportionate Share of the interest and Unused Line Fee accrued and paid
     (or deemed paid)
<PAGE>
 
                                      -44-

     to the Agent during that month; provided, however, that the Agent shall
     distribute interest on Eurodollar Rate Advances promptly after it is
     received.

SECTION 3.5  AUTHORIZED OFFICERS AND AGENTS.

     On the Effective Date, the Borrower shall deliver, and from time to time
thereafter the Borrower may deliver, to the Agent a certificate setting forth
the names of the officers, employees and agents authorized to request
Accommodation for the Borrower and to request a conversion or continuation of
any Accommodation, in each instance containing a specimen signature of each such
officer, employee or agent.  The officers, employees and agents so authorized
shall also be authorized to act for the Borrower in respect of all other matters
relating to the Credit Documents.  The Agent, Lenders and Issue Lender shall be
entitled to rely conclusively on such officer's, employee's, or agent's
authority to request any such Accommodation, conversion or continuation until
the Agent receives written notice to the contrary.  None of the Agent, any
Lender or the Issue Lender shall have any duty to verify the authenticity of the
signature appearing on any such certificate, written Notice of Borrowing, notice
of conversion, notice of continuation, or any other document, and, with respect
to an oral request for such Accommodation, conversion or continuation, the Agent
shall have no duty to verify the identity of any Person representing himself or
herself as one of the officers, employees or agents authorized to make such
request or otherwise to act on behalf of the Borrower.  None of the Agent, any
Lender or the Issue Lender shall incur any liability to the Borrower or any
other Person in acting upon any telephonic or facsimile notice referred to above
which the Agent, such Lender, or the Issue Lender believes to have been given by
a duly authorized officer or other person authorized to borrow on behalf of a
Borrower.

SECTION 3.6  CONVERSIONS AND ELECTIONS REGARDING ADVANCES.

(1)  Each Advance shall initially be the Type of Advance specified in the
     applicable Notice of Borrowing and shall bear interest at the rate
     applicable to that Type of Advance until (i) in the case of a Eurodollar
     Rate Advance, the end of the initial Eurodollar Interest Period specified
     in the Borrowing Notice, (ii) in the case of a Floating Rate Advance, the
     date on which the Advance is repaid in full or is changed to another Type
     of Advance pursuant to Section 3.6(2) or (iii) in the case of any Advance,
     it is converted to another Type of Accommodation pursuant to Section
     3.6(2).

(2)  The Borrower may elect to (i) change any Advance to another Type of Advance
     in accordance with Section 3.6(3) or convert an Advance to another Type of
     Accommodation upon the number of days notice specified in Exhibit K (y) in
     the case of a Floating Rate Advance, as of any Business Day, and (z) in the
     case of a Eurodollar Advance, as of the last day of the Eurodollar Interest
     Period applicable to the Eurodollar Rate Advance and in a principal amount
     equal to its equivalent currency amount (as determined by
<PAGE>
 
                                      -45-

     the Agent as of the date of the Accommodation Notice in accordance with the
     relevant definitions of Equivalent Cdn. $ Amount and Equivalent U.S. $
     Amount), or (ii) continue any Eurodollar Rate Advance for a further
     Eurodollar Interest Period beginning on the last day of the then current
     Eurodollar Interest Period in accordance with Section 3.6(3).

(3)  Each election to change from one Type of Advance to another Type of Advance
     or to continue a Eurodollar Rate Advance for a further Eurodollar Interest
     Period shall be made on the number of days prior notice specified in
     Exhibit K given, in each case, not later than 10:30 a.m. (Toronto time) by
     the Borrower to the Agent.  Each such notice (an "ELECTION NOTICE") shall
     be given substantially in the form of Exhibit K and shall be irrevocable
     and binding upon the Borrower.  If the Borrower fails to deliver an
     Election Notice to the Agent for any Eurodollar Rate Advance as provided in
     this Section 3.6(3) the Eurodollar Rate Advance shall be converted (as of
     the last day of the applicable Eurodollar Interest Period) to and be
     outstanding as a Base Rate (Canada) Advance.  The Borrower shall not select
     a Eurodollar Interest Period which conflicts with the definition of
     Eurodollar Interest Period in Section 1.1 or, in the opinion of the Agent,
     with the repayment schedule in Section 2.4.

SECTION 3.7  CIRCUMSTANCES REQUIRING PRIME RATE PRICING.

     If (i) by reason of circumstances affecting financial markets generally,
deposits of U.S. Dollars are unavailable to the Lenders in Canada, (ii) adequate
and fair means do not exist for ascertaining the applicable interest rate on the
basis provided in the definition of Eurodollar Rate or Base Rate (Canada), as
the case may be, (iii) the making or continuation of any U.S. Dollar Advances
has been made impracticable or unlawful (y) by the occurrence of a contingency
(other than a mere increase in rates payable by the Lender to fund the Advances)
affecting financial markets or institutions generally and which materially
adversely affects the funding of the Credit Facility at any interest rate
computed on the basis of the Eurodollar Rate or the Base Rate (Canada), as the
case may be, or (y) by reason of a change since the date of this Agreement in
any applicable law, order, treaty or official direction, or in the
interpretation thereof by any Governmental Entity (whether or not having the
force of law but, if not having the force of law, one with which a responsible
Canadian chartered bank would comply) affecting financial markets or
institutions generally and which results in the Eurodollar Rate or the Base Rate
(Canada), as the case may be, no longer representing the effective cost to the
Lenders of deposits in the market, then:

     (a)  The right of the Borrower to select any affected Type of Advance shall
          be suspended until the circumstances causing the suspension no longer
          exist and the Agent so notifies the Borrower;
<PAGE>
 
                                      -46-

     (b)  If any affected Type of Advance is not yet outstanding, any applicable
          Accommodation Notice shall be cancelled and the requested Advance
          shall not be made;

     (c)  If a Eurodollar Rate Advance is already outstanding at any time when
          the right of the Borrower to select Eurodollar Rate Advances is
          suspended, it and all other Eurodollar Rate Advances in the same
          Borrowing shall become Base Rate (Canada) Advances on the last day of
          the then current Interest Period (or on such earlier date as may be
          required to comply with any applicable law, rule, regulation, judgment
          or order) or, if the Borrower does not have the right to select Base
          Rate (Canada) Advances at such time, the Eurodollar Rate Advance shall
          become a Canadian Prime Rate Advance on the last day of the then
          current Eurodollar Interest Period applicable to it (or on such
          earlier date as may be required to comply with any applicable law,
          rule, regulation, judgment or order) in a principal amount equal to
          the Equivalent Cdn. $ Amount of the Eurodollar Rate Advance determined
          on the date on which the Advance becomes denominated in Canadian
          Dollars; and

     (d)  If any U.S. Dollar Advance is already outstanding at any time when the
          right of the Borrower to select U.S. Dollar Advances is suspended, it
          and all other U.S. Dollar Advances included in the same Borrowing
          shall become Canadian Prime Rate Advances (i) in the case of a
          Eurodollar Rate Advance, on the last day of the then current
          Eurodollar Interest Period (or on such earlier date as may be required
          to comply with any applicable law, rule or regulation), and (ii) in
          the case of a Base Rate (Canada) Advance, immediately, in a principal
          amount equal, in each case, to the Equivalent Cdn. $ Amount of the
          related U.S. Dollar Advance determined on the date on which the
          Advance becomes denominated in Canadian Dollars.

SECTION 3.8  INTEREST ON ADVANCES.

(1)  The Borrower shall pay interest on the unpaid principal amount of each
     Advance from the date of the Advance until the principal amount of the
     Advance is repaid in full, at the following rates per annum:

     (a)  If and so long as the Advance is a Canadian Prime Rate Advance, at a
          rate per annum equal at all times to the sum of the Canadian Prime
          Rate in effect from time to time plus the Applicable Canadian Prime
          Rate Margin;

     (b)  If and so long as the Advance is a Base Rate (Canada) Advance, at a
          rate per annum equal at all times to the Base Rate (Canada) in effect
          from time to time plus the Applicable Base Rate (Canada) Margin;
<PAGE>
 
                                      -47-

     (c)  If and so long as the Advance is a Eurodollar Rate Advance, at a rate
          per annum equal, at all times during each Eurodollar Interest Period
          for such Eurodollar Rate Advance, to the sum of the Eurodollar Rate
          for such Eurodollar Interest Period plus the Applicable Eurodollar
          Rate Margin; and

     (d)  Interest on Canadian Prime Rate Advances and Base Rate (Canada)
          Advances shall be calculated and payable in arrears (i) on the first
          Business Day of each month, and (ii) when the Advance becomes due and
          payable in full, is repaid, or is converted to another Type of Advance
          or Accommodation.  Interest on Eurodollar Rate Advances shall be
          calculated and payable (iii) on the ninetieth day, if any, of the
          Eurodollar Interest Period, and (iv) on the last day of the Eurodollar
          Interest Period.

                                   ARTICLE 4

                             BANKERS' ACCEPTANCES

SECTION 4.1  ACCEPTANCES AND DRAFTS.

(1)  Each Lender severally agrees, on the terms and conditions of this Agreement
     and from time to time on any Business Day prior to the Relevant Repayment
     Date (i) in the case of the Lender which is willing and able to accept
     Drafts, to create acceptances ("BANKERS' ACCEPTANCES") by accepting Drafts
     and to purchase such Bankers' Acceptances in accordance with Section
     4.3(2), (ii) in the case of the Lender which is unwilling or unable to
     accept Drafts, to purchase completed Drafts (which have not and will not be
     accepted by the Lender or any other Lender) in accordance with Section
     4.3(2), (iii) in the case of the Lender which has participated or assigned
     all or any part of its interest in the Credit Facility to a Participant
     which is willing and able to accept Drafts, to arrange for the creation of
     Bankers' Acceptances by such Participant and for their purchase by such
     Participant, to the extent of the participation or assignment, in
     accordance with Section 4.3(2), and(iv) in the case of the Lender which has
     participated or assigned all or any part of its interest in the Credit
     Facility to a Participant which is unwilling or unable to accept Drafts, to
     arrange for the purchase by the Participant of completed Drafts (which have
     not and will not be accepted by such Lender or any other Lender), to the
     extent of the participation or assignment, in accordance with Section
     4.3(2).

(2)  Each Drawing shall be in a minimum Face Amount and in an integral multiple
     of the amount in Section 4.2 and shall consist of the creation and purchase
     of Bankers' Acceptances or the purchase of Drafts on the same day, in each
     case for the Drawing Price, effected or arranged by the Lenders in
     accordance with Section 4.3 and their respective Lender's Commitment.
<PAGE>
 
                                      -48-

(3)  If the Agent determines that the Bankers' Acceptances to be created and
     purchased or Drafts to be purchased on any Drawing (upon a conversion or
     otherwise) will not be created and purchased rateably by the Lenders (or
     any of their respective Participants) in accordance with Section 4.1(2) and
     Section 4.3, then the requested Face Amount of Bankers' Acceptances and
     Drafts shall be reduced to such lesser amount as the Agent determines will
     permit rateable sharing and the amount by which the requested Face Amount
     shall have been so reduced shall be converted or continued, as the case may
     be, as a Canadian Prime Rate Advance under the Credit Facility to be made
     contemporaneously with the Drawing.

SECTION 4.2  FORM OF DRAFTS.

     Each Draft presented by the Borrower shall (i) be in a minimum amount of
Cdn. $1,000,000 and in an integral multiple of Cdn. $100,000, (ii) be dated the
date of the Drawing, and (iii) mature and be payable by the Borrower (in common
with all other Drafts presented in connection with such Drawing) on a Business
Day which occurs approximately 30, 60, 90 or 180 days (or longer period with the
consent of the Agent) at the election of the Borrower after the Drawing Date and
on or prior to the Relevant Repayment Date.

SECTION 4.3  PROCEDURE FOR DRAWING.

(1)  Each Drawing shall be made on notice (a "DRAWING NOTICE") given by the
     Borrower to the Agent not later than 11:00 a.m. (Toronto time) on the third
     business day prior to the day of the proposed drawing.  Each Drawing Notice
     shall be in substantially the form Exhibit L, shall be irrevocable and
     binding on the Borrower and shall specify (i) the Drawing Date, (ii) the
     aggregate Face Amount of Drafts to be accepted and purchased (or purchased,
     as the case may be), and (iii) the contract maturity date for the Drafts.

(2)  Not later than 2:00 p.m. (Toronto time) on an applicable Drawing Date, each
     Lender shall complete one or more Drafts in accordance with the Drawing
     Notice and either accept the Drafts and purchase the Bankers' Acceptances
     so created for the Drawing Price, or purchase the Drafts for the Drawing
     Price.  In each case, upon receipt of the Drawing Price and upon fulfilment
     of the applicable conditions set forth in Article 6, the Agent shall make
     funds available to the Borrower in accordance with Article 2.

(3)  The Borrower shall, at the request of the Lender, issue one or more non-
     interest bearing promissory notes (each a "BA EQUIVALENT NOTE") payable on
     the date of maturity of the unaccepted Draft referred to below, in such
     form as the Lender may specify and in a principal amount equal to the Face
     Amount of, and in exchange for, any unaccepted Drafts which the Lender has
     purchased or has arranged to have purchased in accordance with Section
     4.3(2).
<PAGE>
 
                                      -49-

(4)  Bankers' Acceptances purchased by the Lender may be held by it for its own
     account until the contract maturity date or sold by it at any time prior to
     that date in any relevant Canadian market in such Person's sole discretion.

SECTION 4.4  PRESIGNED DRAFT FORMS.

     To enable the Lenders and Participants to create Bankers' Acceptances or
complete Drafts in the manner specified in this Article 4, the Borrower shall in
accordance with the request of each Lender either (i) provide a power of
attorney to complete, sign, endorse and issue Bankers' Acceptances,
substantially in the form of Exhibit M; or (ii) supply each Lender with such
number of Drafts as it may reasonably request, duly endorsed and executed on
behalf of the Borrower.  Each Lender will exercise such care in the custody and
safekeeping of Drafts as it would exercise in the custody and safekeeping of
similar property owned by it and  will, upon request by the Borrower, promptly
advise the Borrower of the number and designations, if any, of uncompleted
Drafts held by it for the Borrower.  The signature of any officer of the
Borrower on a Draft may be mechanically reproduced and BA Instruments bearing
facsimile signature shall be binding upon the Borrower as if they had been
manually signed.  Even if the individuals whose manual or facsimile signature
appears on any BA Instrument no longer hold office at the date of signature, at
the date of its acceptance by the Lender or at any time after such date, any BA
Instrument so signed shall be valid and binding upon the Borrower.

SECTION 4.5  PAYMENT, CONVERSION OR RENEWAL OF BA INSTRUMENTS.

(1)  Upon the maturity of a BA Instrument, the Borrower may (i) elect to issue a
     replacement BA Instrument by giving a Drawing Notice in accordance with
     Section 4.3(1), (ii) elect to have all or a portion of the Face Amount of
     the BA Instrument converted to an Advance by giving a Notice of Borrowing
     in accordance with Section 3.3, or (iii) pay, on or before 10:00 a.m.
     (Toronto time) on the maturity date for the BA Instrument, an amount in
     Canadian Dollars equal to the Face Amount of the BA Instrument
     (notwithstanding that the Lender may be the holder of it at maturity).  Any
     such payment shall satisfy the Borrower's obligations under the BA
     Instrument to which it relates and the relevant Lender or Participant shall
     then be solely responsible for the payment of the BA Instrument.

(2)  If the Borrower fails to pay any BA Instrument when due or issue a
     replacement in the Face Amount of such BA Instrument pursuant to Section
     4.5(1), the unpaid amount due and payable shall be converted to a Canadian
     Prime Rate Advance made by the Lenders rateably under the applicable Credit
     Facility and shall bear interest calculated and payable as provided in
     Article 3.  This conversion shall occur as of the due date and without any
     necessity for the Borrower to give a Notice of Borrowing.
<PAGE>
 
                                      -50-

SECTION 4.6  CIRCUMSTANCES MAKING BANKERS' ACCEPTANCES UNAVAILABLE.

(1)  If, by reason of circumstances affecting the money market generally, there
     is no market for Bankers' Acceptances (i) the right of the Borrower to
     request a Drawing shall be suspended until the circumstances causing a
     suspension no longer exist, and (ii) any Drawing Notice which is
     outstanding shall be deemed to be a Notice of Borrowing requesting a
     Borrowing comprised of Canadian Prime Rate Advances.

(2)  The Agent shall promptly notify the Borrower of the suspension of the
     Borrower's right to request a Drawing and of the termination of any
     suspension.

                                   ARTICLE 5

                               LETTERS OF CREDIT

SECTION 5.1  LETTERS OF CREDIT.

(1)  The Issue Lender severally agrees, on the terms and conditions of this
     Agreement and in reliance on the agreements of the other Lenders set forth
     in Sections 5.4, 5.5 and 5.6, to issue Letters of Credit under the Credit
     Facility for the account of the Borrower from time to time on any Business
     Day prior to the fifth Business Day before the Relevant Repayment Date.

(2)  The Issue Lender shall not be obligated to issue any Letter of Credit if
     (i) the issuance of the requested Letter of Credit would cause the Letter
     of Credit Obligations then outstanding to exceed Cdn. $2,000,000.00, or
     (ii) the issuance of the Letter of Credit is enjoined, restrained or
     prohibited by any Governmental Authority, Requirement of Law or any request
     or directive of any Governmental Authority (whether or not having the force
     of law) or would impose upon the Agent or the Issue Lender any material
     restriction, reserve, capital requirement, loss, cost or expense (for which
     the Agent or the Issue Lender is not otherwise compensated) not in effect
     or known as of the Effective Date.

SECTION 5.2  PROCEDURE FOR ISSUE.

(1)  Each Issue shall be made on notice (an "ISSUE NOTICE") given by the
     Borrower to the Agent not later than 11:00 a.m. (Toronto time) on the
     number of days notice specified in Exhibit N.  The Issue Notice shall be in
     substantially the form of Exhibit N shall be irrevocable and binding on the
     Borrower and shall specify (i) the requested date of Issue (the "ISSUE
     DATE"), (ii) the Face Amount of the Letter of Credit, (iii) the expiration
     date, and (iv) the name and address of the Beneficiary.  The Borrower shall
     not request any maturity date for any Letter of Credit which would be later
     than 5 Business Days prior to the
<PAGE>
 
                                      -51-

     Relevant Repayment Date. The Agent shall, upon receipt of an Issue Notice,
     provide a copy of the Issue Notice to the Issue Lender.

(2)  Not later than 11:00 a.m. (Toronto time) on the Issue Date, the Issue
     Lender shall issue a Letter of Credit completed in accordance with the
     Issue Notice in the appropriate form.  Upon receipt of the Letter of Credit
     and upon fulfilment of the conditions set forth in Article 6, the Agent
     shall deliver the Letter of Credit to or to the order of the Borrower.

(3)  No Letters of Credit shall require that payment against a conforming draft
     is to be made on the same Business Day upon which the draft was presented,
     unless such presentation is made before 11:00 a.m. (Toronto time) on such
     Business Day.

(4)  Prior to the Issue Date, the Borrower shall provide a precise description
     of the documents and the verbatim text of any certificates to be presented
     by the Beneficiary which, if presented by the Beneficiary, would require
     the Issue Lender, to make payment under the Letters of Credit.  The Issue
     Lender may, acting reasonably, require changes in any such document or
     certificate for a Letter of Credit issued by it.

SECTION 5.3  FORM OF LETTERS OF CREDIT.

     Each Letter of Credit (i) shall be dated the Issue Date, (ii) shall have an
expiration date on a Business Day which occurs no more than 360 days after the
Issue Date (but may be subject to renewal), and (iii) shall comply with the
definition of Letters of Credit.

SECTION 5.4  REVOLVING CREDIT LENDERS' PARTICIPATION.

     Immediately upon issuance or amendment of any Letter of Credit, each Lender
shall be deemed to have irrevocably and unconditionally purchased and received
from the Issue Lender, without recourse or warranty, an undivided interest and
participation in all rights and obligations under such Letter of Credit (other
than fees and other amounts owing to the Issue Lender) in accordance with such
Lender's Revolving Credit Proportionate Share.

SECTION 5.5  REIMBURSEMENTS OF AMOUNTS DRAWN.

     Upon notice from the Issue Lender of any drawing under any Letter of
Credit, the Agent shall notify the Borrower of such drawing not later than 11:00
a.m. (Toronto time) on the Business Day immediately prior to the date on which
the Issue Lender intends to honour such drawing, provided that the Agent's
failure to notify the Borrower shall not affect the obligations of the Borrower
hereunder.  The Borrower will be deemed to have concurrently given a Notice of
Borrowing to the Agent pursuant to Section 3.2 for (i) a Canadian Prime Rate
Advance, in the case of a Letter of Credit denominated in Canadian Dollars, and
(ii) a Base Rate (Canada)
<PAGE>
 
                                      -52-

Advance, in the case of a Letter of Credit denominated in U.S. Dollars, in each
case, in the amount of and at the time of such drawing, which Advances shall not
be subject to the conditions set forth in Section 6.2. The proceeds of such
Advances shall be applied directly by the Agent to reimburse the Issue Lender
for the amount of such drawing.

SECTION 5.6  PAYMENT BY LENDERS.

     If the Advances referred to in Section 5.5 are not made in an amount
sufficient to reimburse the Issue Lender in full for the amount of any draw, the
Agent shall promptly notify each Lender of the unreimbursed amount of such
drawing and of such Lender's respective participation therein.  Each Lender
shall make available to the Agent, for the account of the Issue Lender, the
amount of its participation in immediately available funds not later than 1:00
P.M. Toronto time on the next Business Day.  If any Lender fails to make
available to the Agent the amount of such Lender's participation, the Issue
Lender shall be entitled to recover such amount on demand from such Lender
together with interest at the prevailing interbank rate for the first three
Business Days and thereafter at the Canadian Prime Rate in the case of a Letter
of Credit denominated in Canadian Dollars and at the Base Rate (Canada) in the
case of a Letter of Credit denominated in U.S. Dollars.  For each Letter of
Credit, the Agent shall promptly distribute to each Lender which has funded the
amount of its participation its Revolving Credit Proportionate Share of all
payments subsequently received by the Agent from the Borrower in reimbursement
of honored drawings, including any interest thereon.  If an Issue Lender
receives any such payment, the Issue Lender shall promptly pay the same to the
Agent, and the Agent shall distribute such payment in accordance with the
immediately preceding sentence.

SECTION 5.7  RISK OF LETTERS OF CREDIT.

(1)  In determining whether to pay under a Letter of Credit, each Lender and the
     Issue Lender shall be responsible only to determine that the documents and
     certificates required to be delivered under the Letters of Credit have been
     delivered and that they comply on their face with the requirements of the
     Letter of Credit.

(2)  The reimbursement obligation of the Borrower under any Letter of Credit
     shall be unconditional and irrevocable and shall be paid strictly in
     accordance with the terms of this Agreement under all circumstances,
     including (i) any lack of validity or enforceability of a Letter of Credit,
     (ii) the existence of any claim, set-off, defence or other right which the
     Borrower may have at any time against a Beneficiary, the Issue Lender or
     any other Person, whether in connection with the Credit Documents and the
     transactions contemplated therein or any other transaction (including any
     underlying transaction between the Borrower and the Beneficiary), (iii) any
     certificate or other document presented with a Letter of Credit proving to
     be forged, fraudulent
<PAGE>
 
                                      -53-

     or invalid or any statement in it being untrue or inaccurate, (iv) the
     existence of any act or omission or any misuse of, a Letter of Credit or
     misapplication of proceeds by the Beneficiary, including any fraud in any
     certificate or other document presented with a Letter of Credit in each
     case (unless, before payment of a Letter of Credit, (x) the Borrower has
     delivered to the Issue Lender a written notice of the fraud together with a
     written request that it refuse to honour such drawing, (y) the fraud by the
     Beneficiary has been established to the knowledge of the Issue Lender so as
     to make the fraud clear or obvious to the Issue Lenders, and (z) in the
     case of fraud in the underlying transaction between the Borrower and the
     Beneficiary, the fraud is of such character as to make the demand for
     payment by the Beneficiary under the Letter of Credit a fraudulent one),
     (v) payment by the Issue Lender under the Letter of Credit against
     presentation of a certificate or other document which does not comply with
     the terms of the Letter of Credit unless such payment constitutes gross
     negligence or wilful misconduct of the Issue Lender, or (vi) the existence
     of a Default or Event of Default.

(3)  The Issue Lender shall not be responsible for (i) the validity or
     sufficiency of any instrument transferring or assigning or purporting to
     transfer or assign a Letter of Credit or the rights or benefits under it or
     proceeds of it, in whole or in part, which may prove to be invalid or
     ineffective for any reason, (ii) errors, omissions, interruptions or delays
     in transmission or delivery of any messages by mail, facsimile or
     otherwise, (iii) errors in interpretation of technical terms, (iv) any loss
     or delay in the transmission of any document required in order to make a
     drawing, and (v) any consequences arising from causes beyond the control of
     the Issue Lender, including the acts or omissions, whether rightful or
     wrongful, of any Governmental Authority.  None of the above shall affect,
     impair, or prevent the vesting of any of the Issue Lender's rights or
     powers under this Agreement.  Any action taken or omitted by the Issue
     Lender under or in connection with any Letter of Credit or the related
     certificates, if taken or omitted in good faith, shall not put the Issue
     Lender under any resulting liability to the Borrower provided that the
     Issue Lender acts in accordance with the standards of reasonable care
     specified in the Uniform Customs and Practice for Letters of Credit (1993
     Revision), ICC Publication 500 (or any replacement publication).

SECTION 5.8  FEES.

(1)  The Borrower shall pay to the Agent, for the benefit of the Lenders in
     accordance with their respective Revolving Credit Proportionate Shares on
     the first day of each month a fee (the "LETTER OF CREDIT FEE"), calculated
     at a rate per annum equal to the Applicable Eurodollar Rate Margin on the
     daily weighted average amount of Letter of Credit Obligations outstanding
     during the immediately preceding month with respect to Letters of Credit
     issued for the account of the Borrower.  The rate hereunder shall change
     each day the
<PAGE>
 
                                      -54-

     Applicable Eurodollar Rate Margin changes. Notwithstanding the foregoing,
     Letter of Credit Fees on Letter of Credit Obligations outstanding after the
     occurrence and during the continuance of an Event of Default shall be
     payable on demand at a rate equal to 3.75 % per annum.

(2)  The Borrower shall pay to the Issue Lender, upon the issuance, amendment or
     transfer of each Letter of Credit issued by the Issue Lender and each
     drawing made under it, the Issue Lender's standard and prevailing
     documentary and administrative charges for issuing, amending, transferring
     or drawing under, as the case may be, Letters of Credit of similar amount,
     term and risk.

SECTION 5.9  REPAYMENTS.

(1)  If the Borrower is required to repay the Accommodation in full pursuant to
     Article 2 or Article 9, then the Borrower shall pay to the Agent an amount
     equal to each Lender's contingent liability in respect of (i) any
     outstanding Letter of Credit, and (ii) any Letter of Credit which is the
     subject matter of any order, judgment, injunction or other such
     determination (a "JUDICIAL ORDER") restricting payment under and in
     accordance with such Letter of Credit or extending the Lender's liability
     under such Letter of Credit beyond its stated expiration date.  Payment in
     respect of each Letter of Credit shall be due in the currency in which the
     Letter of Credit is denominated.

(2)  The Issue Lender shall, with respect to any Letter of Credit, upon the
     later of:

     (a)  The date on which any final and non-appealable order, judgment or
          other such determination has been rendered or issued either
          terminating the applicable Judicial Order or permanently enjoining the
          Lender from paying under such Letter of Credit; and

     (b)  The earlier of (i) the date on which either (x) the original
          counterpart of the Letter of Credit is returned to the Lender for
          cancellation, or (y) the Lender is released by the Beneficiary from
          any further obligations, and (ii) the expiry (to the extent permitted
          by any applicable law) of the Letter of Credit,

     pay to the Borrower an amount equal to the difference between the amount
     paid to the Issue Lender pursuant to Section 5.9(1) and the amounts paid by
     the Issue Lender under the Letters of Credit.
<PAGE>
 
                                     -55-

                                   ARTICLE 6

                             CONDITIONS OF LENDING

SECTION 6.1  CONDITIONS PRECEDENT TO THE INITIAL ACCOMMODATION.

     The obligation of each Lender to make its initial Accommodation under the
Credit Facility is subject to fulfilment, on or before the date hereof of the
following conditions precedent at the time the initial Accommodation is made
available:

     (a)  No Default or Event of Default has occurred or is continuing or would
          arise immediately after giving effect to or as a result of the
          Accommodation;

     (b)  The Accommodation will not violate any applicable law, order or
          judgment binding on the Borrower or any Lender;

     (c)  The representations and warranties of the Borrower contained in
          Article 7 and of the Additional Loan Parties contained in any other
          Credit Document are true and correct on the date of the Accommodation
          as if such representations and warranties were made on that date;

     (d)  The Agent has received, in form, substance, scope and dated a date
          satisfactory to the Agent and its counsel and in sufficient quantities
          for each Lender:

          (i)   Certified copies of (i) the charter documents and extracts from
                the by-laws of the Borrower and each other Additional Loan Party
                relating to the execution of documents, (ii) all resolutions of
                the board of directors of the Borrower and each other Additional
                Loan Party approving the borrowing and other matters
                contemplated by this Agreement and the other Credit Documents,
                and (iii) a list of the officers and directors authorized to
                sign agreements together with their specimen signatures;

          (ii)  A certificate of status, compliance or like certificate with
                respect to the Borrower and each Additional Loan Party issued by
                the appropriate Governmental Authority of the jurisdiction of
                its incorporation and of each jurisdiction in which it owns any
                material assets or carries on any material business;

          (iii) The Credit Documents specified in Exhibit O (the "CLOSING
                DOCUMENT LIST");
<PAGE>
 
                                      -56-

          (iv)   Evidence of registration of the Security Documents in such
                 jurisdictions as the Agent may require;

          (v)    All discharges, subordination agreements, waivers and
                 confirmations as may be required to ensure that all obligations
                 under the Credit Documents are secured by first priority Liens
                 on the property and assets of the Borrower, each Restricted
                 Subsidiary and, to the extent required by this Agreement, each
                 Additional Loan Party, with such exceptions as are permitted
                 pursuant to this Agreement or any of the other Credit
                 Documents;

          (vi)   Copies of the insurance policies required pursuant to Section
                 8.1(f) together with certificates of insurance showing the
                 Agent and Lenders as loss payees and named insured;

          (vii)  Complete and accurate copy of the Pro Forma and Projections;

          (viii) Favourable opinions of counsel to the Borrower and each other
                 Additional Loan Party;

          (ix)   All environmental audits and reports obtained by the Borrower
                 or any Additional Loan Party in connection with the Fasco
                 Acquisition;

          (x)    appraisals of all Rental Equipment acquired in the Fasco
                 Acquisition; and

          (xi)   Such other certificates and documentation as the Agent may
                 reasonably request;

     (g)  The Lenders shall be satisfied upon a review of the Pro Forma and the
          Projections that (i) the financial condition of the Borrower does not
          differ in any material adverse respect from the conditions evidenced
          by the financial information provided to the Agent prior to the date
          hereof; (ii) the Borrower and each Additional Loan Party will be able
          to comply with the covenants set forth in this Agreement; and (iii)
          the Parent Guarantor will be able to comply with the Financial
          Covenants;

     (h)  With respect to the Fasco Acquisition, the Agent shall be satisfied:

          (i)  in all material respects with the terms, conditions, form and
               substance of the Fasco Acquisition and the Fasco Acquisition
               Documents, including, without limitation, the equity and
               corporate structure of the Borrower and its Subsidiaries after
               giving effect thereto and the resolutions with respect to the
<PAGE>
 
                                      -57-

               Fasco Acquisition adopted by the respective boards of directors
               (or equivalent) and, if applicable, the shareholders (or
               equivalent) of the Borrower and Fasco and the other parties to
               the respective Fasco Acquisition Agreements; and

          (ii) that prior to or substantially simultaneously with the funding of
               the Credit Facility, the Borrower shall have acquired all or
               substantially all of the assets of Fasco pursuant to the Fasco
               Acquisition Documents, in each case in compliance in all material
               respects with all applicable Requirements of Law, and the Agent
               shall have received such evidence as it may reasonably request
               (A) of the consummation of the Fasco Acquisition for a purchase
               price equal to approximately $10,580,000, (B) that the parties to
               the Fasco Acquisition Agreements have complied in all material
               respects with all applicable Requirements of Law in connection
               with the Fasco Acquisition, (C) that all conditions precedent to,
               and all consents necessary to permit, the Fasco Acquisition
               pursuant to the Fasco Acquisition Documents shall have been
               satisfied or delivered, or waived with the prior written consent
               of the Agent to the extent the waiver of such conditions
               precedent or the absence of such consents could reasonably be
               expected to affect adversely the rights of the Agent, the Issue
               Lender or any Lender, (D) that all representations and warranties
               in the Fasco Acquisition Documents are true and correct in all
               material respects and (E) that the Fasco Acquisition Agreements
               have not been amended or modified without the prior written
               consent of the Agent, to the extent such amendment or
               modification could reasonably be expected to affect adversely the
               rights of the Agent, the Issue Lender or any Lender, and are in
               full force and effect.

     (i)  The Lenders have completed, to their satisfaction, a due diligence
          review of the Borrower, the Restricted Subsidiaries and the business
          of the Borrower, including a review of the capital structure of the
          Borrower and the Material Contracts;

     (j)  All fees and other amounts (but as to Expenses, only those for which
          the Borrower has received an invoice) then payable under the Credit
          Documents have been paid in full; and

     (k)  There has not occurred, developed or come into effect or existence any
          event, action, state, condition or major financial occurrence of
          national or international consequence or any law, judgment, order,
          inquiry or other occurrence of any nature whatsoever which materially
          adversely 
<PAGE>
 
                                      -58-

          affects, or is reasonably likely to materially adversely affect, the
          financial, banking (including syndication markets) or capital markets
          in Canada or the United States of America.

SECTION 6.2  CONDITIONS PRECEDENT TO ACCOMMODATIONS AND CONVERSIONS.

(1)  The obligation of each Lender to make Accommodations or otherwise give
     effect to any Accommodation Notice is subject to fulfilment of the
     following conditions at the time of any Accommodation Notice or
     Accommodation, as the case may be:

     (a)  No Default or Event of Default has occurred or is continuing or would
          arise immediately after giving effect to or as a result of the
          Accommodation or Accommodation Notice;

     (b)  The Accommodation will not violate any applicable law, judgment or
          order;

     (c)  The representations and warranties of the Borrower contained in this
          Credit Agreement and the other Credit Documents are true and correct
          on the date of the Accommodation or Accommodation Notice as if they
          were made on that date, except to the extent such representations and
          warranties relate to an earlier date;

     (d)  No change, occurrence, event or development or event involving a
          prospective change that is reasonably likely to have a Material
          Adverse Effect shall have occurred and be continuing; and

     (e)  To the extent all or any portion of the proceeds of any Accommodation
          shall be used to finance, in full or in part, any Acquisition, the
          Agent shall have received on or before the date such Acquisition is
          consummated, all documents which, pursuant to Section 8.2(b)(vii) are
          required to be delivered on or before such date, in each case in form
          and substance reasonably satisfactory to the Agent (and to the extent
          that the consent of the Majority Lenders is required for the
          consummation of such Acquisition, such consent has been obtained and
          the Agent shall have received evidence that all other conditions
          precedent set forth in such consent have been satisfied).

(2)  Each of the giving of any Accommodation Notice by the Borrower and the
     acceptance by the Borrower of any Accommodation shall be deemed to
     constitute a representation and warranty by the Borrower that, on the date
     of such Accommodation Notice or Accommodation, as the case may be, and
     after giving effect to it and to the application of any proceeds from it,
     the statements set forth in Section 6.2(1)(a) to (e) are true and correct.
     Each issuance by the Borrower of a cheque drawn against, or request for
     transfer
<PAGE>
 
                                      -59-

     from, the Disbursement Account shall constitute a representation and
     warranty that the statements set forth in Section 6.2(1)(a) to (e) are true
     and correct.

(3)  All references to Accommodation Notice in Sections 6.2(1)(c) to (e) and
     6.2(2) (except as it relates to Section 6.2(1)(a) and (b)) are deemed to
     exclude Election Notices.

SECTION 6.3  NO WAIVER.

     The making of an Accommodation or otherwise giving effect to any
Accommodation Notice, without the fulfilment of one or more conditions set forth
in Section 6.1 or Section 6.2, shall not constitute a waiver of any condition
and the Agent and the Lenders reserve the right to require fulfilment of such
condition in connection with any subsequent Accommodation Notice or
Accommodation.

                                   ARTICLE 7

                        REPRESENTATIONS AND WARRANTIES

SECTION 7.1  REPRESENTATIONS AND WARRANTIES.

     The Borrower represents and warrants to each Lender, acknowledging and
confirming that each Lender is relying on such representations and warranties
without independent inquiry in entering into this Agreement and providing
Accommodations that:

     (a)  ORGANIZATION AND QUALIFICATION.  The Borrower and each Restricted
          Subsidiary (i) is a corporation duly organized, validly existing and
          in good standing under the laws of the jurisdiction of its
          incorporation, (ii) has the power and authority to own its properties
          and assets and to transact the businesses in which it presently is, or
          proposes to be, engaged and (iii) is duly qualified and is authorized
          to do business and is in good standing in each jurisdiction where it
          presently is, or proposes to be, engaged in business, except in
          jurisdictions where the failure to be so qualified, authorized or in
          good standing has not had and could not reasonably be expected to have
          a Material Adverse Effect.  Schedule 7.1(a) lists all jurisdictions in
          which the Borrower and each Restricted Subsidiary is incorporated and
          qualified to do business as a foreign corporation as of the Effective
          Date;

     (b)  AUTHORITY. The Borrower and each of the Restricted Subsidiaries has
          the requisite corporate power and authority to execute, deliver and
          perform each of the Credit Documents to which it is a party.  All
          corporate action necessary for the execution, delivery and performance
          by the Borrower and each of the Restricted Subsidiaries of any of the
          Credit Documents has been taken;
<PAGE>
 
                                      -60-

     (c)  ENFORCEABILITY.  This Agreement is (and, upon execution and delivery
          thereof, each other Credit Document will be) the legal, valid and
          binding obligation of the Borrower and each of the Restricted
          Subsidiaries which is a party thereto, enforceable in accordance with
          their respective terms;

     (d)  NO CONFLICT.  The execution, delivery and performance by the Borrower
          and each of the Restricted Subsidiaries of each Credit Document to
          which it is a party are not in contravention of any Requirement of Law
          or any Contractual Obligation to which it is a party or by which it or
          any of its properties are bound, except, in each case, for such
          Requirements of Law or Contractual Obligations the non-compliance with
          which will not result in a Material Adverse Effect, and will not,
          except as permitted hereby, result in the imposition of any Liens upon
          any of its properties;

     (e)  CONSENTS AND FILINGS.  No consent, authorization, permit, notice or
          filing is required in connection with the execution, delivery and
          performance of this Agreement, any Credit Document or the continuing
          operations of the Borrower and each of its Restricted Subsidiaries,
          except (i) those that have been obtained or made and (ii) filings
          necessary to create, perfect or retain the perfection or priority of
          Liens of the Agent and the Lenders against the Collateral;

     (f)  RIGHTS IN COLLATERAL; PRIORITY OF LIENS. On the Effective Date, the
          Borrower and its Restricted Subsidiaries have good and marketable
          title to all property which constitutes part of the Collateral, free
          and clear of any and all Liens in favor of third parties, other than
          Permitted Liens.  The Liens granted to the Agent, for the benefit of
          the Lenders, pursuant to the Credit Documents constitute valid and
          enforceable first, prior and perfected Liens on the Collateral
          securing the Obligations, subject only to Permitted Liens.  Except for
          filings in favor of the Agent relating to this Agreement and as
          otherwise identified on Schedule 7.1(f), no financing statement,
          registration, notation of Lien on certificate of title or ownership,
          filing or other instrument similar in effect covering all or any part
          of the Collateral is on file with any Governmental Authority on the
          Effective Date;

     (g)  FINANCIAL DATA. The Borrower and the Restricted Subsidiaries have
          provided to the Agent and each of the Lenders complete and accurate
          copies of (a) the audited consolidated financial statements for the
          Parent Guarantor and its Subsidiaries as of December 31, 1997, (b) the
          unaudited financial statements of the Parent Guarantor and its
          Subsidiaries as of March 31, 1998, (c) the Pro Forma and (d) the
          Projections.  The Financial Statements described in clauses (a) and
          (b)
<PAGE>
 
                                      -61-

          have been prepared in accordance with U.S. GAAP consistently applied
          throughout the periods involved except as stated therein and fairly
          present the respective consolidated financial positions, results of
          operations and cash flows of the Parent Guarantor and its Subsidiaries
          for each of the periods covered, subject in the case of clause (b) to
          audit adjustments and reclassification and month-end reconciliations.
          None of the Borrower or Restricted Subsidiaries or any Additional Loan
          Party has any Contingent Obligation, contingent liability or liability
          for taxes, long-term leases or commitments, which is not reflected (to
          the extent required by U.S. GAAP consistently applied) in such
          Financial Statements (other than the guarantee(s) of the Senior
          Subordinated Notes by certain Subsidiaries of the Parent Guarantor).
          The Pro Forma fairly presents on a pro forma basis the financial
          condition of the Borrower on June 30, 1998, but after giving effect to
          the consummation of the acquisitions and transactions described
          therein and therein, and reflects on a pro forma basis those
          liabilities reflected in the notes thereto and resulting from
          consummation of the acquisitions and transactions described therein
          and the transactions contemplated by the Credit Documents. The
          Projections and the assumptions expressed in the Pro Forma are
          reasonable based on the information available to the Credit Parties at
          the time so furnished;

     (h)  SUBSIDIARIES; OWNERSHIP OF STOCK.  As of the Effective Date the
          Borrower has no direct or indirect Subsidiaries.  The Parent Guarantor
          is the record and beneficial owner of all of the shares of capital
          stock of the Borrower.  There are no proxies, irrevocable or
          otherwise, with respect to the shares of capital stock of the Borrower
          or the Restricted Subsidiaries, and no equity securities of the
          Borrower or any of the Restricted Subsidiaries are or may become
          required to be issued by reason of any options, warrants, scrip,
          rights to subscribe to, calls or commitments of any character
          whatsoever relating to, or securities or rights convertible into or
          exchangeable for, shares of any capital stock of any such Person, and
          there are no contracts, commitments, understandings or arrangements by
          which any such Person is or may become bound to issue additional
          shares of its capital stock or securities convertible into or
          exchangeable for such shares.  To the best of the Borrower's
          knowledge, all of the shares in its capital so owned by the Parent
          Guarantor are owned by the Parent Guarantor free and clear of any
          Liens, other than Liens granted to the Agent and the Lenders pursuant
          to the Credit Documents and Liens granted to the agent under the
          Parent Guarantor Credit Agreement;

     (i)  NO JUDGMENTS OR LITIGATION. Except as set forth on Schedule 7.1(i), no
          judgments, orders, writs or decrees are outstanding against the
<PAGE>
 
                                      -62-

          Borrower or any of the Restricted Subsidiaries nor is there now
          pending or, to the best of the Borrower's knowledge after diligent
          inquiry, threatened, any litigation, contested claim, investigation,
          arbitration, or governmental proceeding by or against the Borrower or
          any Restricted Subsidiary, in each case, except for such judgments,
          orders, writs, decrees, litigation, contested claims, investigations,
          arbitrations or governmental proceedings that (i) in the aggregate
          could not reasonably be expected to result in a Material Adverse
          Effect and (ii) occurred within the ordinary course of business;

     (j)  NO DEFAULTS.  None of the Borrower nor any of the Restricted
          Subsidiaries is in default under any term of any material indenture,
          contract, lease, agreement, instrument or other commitment to which
          any of them is a party or by which any of them is bound.  None of the
          Borrower nor any of the Restricted Subsidiaries knows of any dispute
          regarding any such material indenture, contract, lease, agreement,
          instrument or other commitment to which such Person is a party;

     (k)  LABOR MATTERS.  Schedule 7.1(k), accurately sets forth all material
          labor contracts to which any of the Borrower or a Restricted
          Subsidiary is a party and their dates of expiration.  There are no
          existing or threatened strikes, lockouts or other disputes relating to
          any collective bargaining or similar agreement to which the Borrower
          or any Restricted Subsidiary is a party;

     (l)  COMPLIANCE WITH LAW.  None of the Borrower nor any Restricted
          Subsidiary has violated or failed to comply with any Requirement of
          Law, including, without limitation, environmental, health and safety
          Requirements of Law, except for such Requirements of Law, the non-
          compliance with which, in the aggregate, could not reasonably be
          expected to result in a Material Adverse Effect;

     (m)  PENSION PLANS.  All contributions required pursuant to any Requirement
          of Law have been made in respect of all pension plans of the Borrower
          and each of the Restricted Subsidiaries and each such pension plan is
          fully funded on an ongoing and termination basis;

     (n)  COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as disclosed on Schedule
          7.1(n), (i) none of the Borrower nor any Restricted Subsidiary is the
          subject of any proceeding by any Governmental Authority or citizens
          group or investigation relating to the violation of any environmental,
          health or safety Requirement of Law, or asserting potential liability
          arising from the actual or threatened disposal by any Person of any
          Hazardous Substance; (ii) none of the Borrower nor any Restricted
          Subsidiary has filed any notice under any Requirement of 
<PAGE>
 
                                      -63-

          Law with respect to the treatment, storage, disposal, spill or release
          of a Hazardous Substance other than storage of petrochemical products
          in the ordinary course of business, as disclosed to the Agent; and
          (iii) none of the Borrower nor any Restricted Subsidiary has knowledge
          of any liability of the Borrower or a Restricted Subsidiary
          (contingent or otherwise) for any release of any Hazardous Substance.
          The Borrower and each Restricted Subsidiary has exercised reasonable
          care and made such investigations as are reasonably necessary to
          accurately complete all reports and questionnaires listed on Schedule
          7.1(n), and provide all information, requested by the Agent or its
          counsel;

     (o)  INTELLECTUAL PROPERTY; REAL PROPERTY. Each of the Borrower and the
          Restricted Subsidiaries possesses such material assets, licenses,
          patents, patent applications, copyrights, service marks, trademarks
          and trade names as are necessary or advisable to continue to conduct
          its present and proposed business activities.  Schedule 7.1(o) sets
          forth all Real Property of the Borrower and the Restricted
          Subsidiaries as of the Effective Date;

     (p)  LICENSES AND PERMITS. Each of the Borrower and the Restricted
          Subsidiaries has obtained and holds in full force and effect, all
          franchises, licenses, leases, permits, certificates, authorizations,
          qualifications, easements, rights of way and other rights and
          approvals which are necessary or advisable for the operation of its
          business as presently conducted and as proposed to be conducted;

     (q)  TAXES AND TAX RETURNS.

          (i)  Except as set forth on Schedule 7.1(q), each of the Borrower and
               the Restricted Subsidiaries has timely filed all tax returns it
               is required to file.  The information filed is complete and
               accurate in all material respects.  All deductions taken in such
               tax returns are appropriate and in accordance with applicable
               laws and regulations, except deductions that may have been
               disallowed but are being challenged in good faith and for which
               adequate reserves have been made in accordance with GAAP;

          (ii) All taxes (including gross receipts, capital and franchise
               taxes), assessments, fees and other governmental charges for
               periods beginning prior to the Effective Date in regard to the
               Borrower and the Restricted Subsidiaries have been timely paid
               and none of the Borrower nor any of the Restricted Subsidiaries
               has any material liability for such taxes (including penalties
               and interest thereon) in excess of the amounts so paid or
               reserves so established;
<PAGE>
 
                                      -64-

          (iii)  Except as set forth in Schedule 7.1(q), no deficiencies for
                 such taxes have been claimed, proposed or assessed by any
                 taxing or other Governmental Authority against any of the
                 Borrower or the Restricted Subsidiaries and no tax liens have
                 been filed. Except as set forth in Schedule 7.1(q), there are
                 no pending or threatened audits, investigations or claims for
                 or relating to any liability for taxes and there are no matters
                 under discussion with any Governmental Authority which could
                 result in a material additional liability of the Borrower or
                 any of the Restricted Subsidiaries for taxes (including
                 penalties and interest thereon). Except as set forth in
                 Schedule 7.1(q), no material extension of a statute of
                 limitations relating to taxes, assessments, fees or other
                 governmental charges is in effect with respect to any of the
                 Borrower or the Restricted Subsidiaries;

          (iv)   Except as set forth on Schedule 7.1(q), none of the Borrower
                 nor any Restricted Subsidiaries has any material obligation
                 under any written tax sharing agreement or agreement regarding
                 payments in lieu of taxes;

     (r)  MATERIAL CONTRACTS.  Schedule 7.1(r), contains a true, correct and
          complete list of all the Material Contracts currently in effect on the
          date hereof.  Except as described on Schedule 7.1(r), none of the
          Material Contracts contains any material burdensome restrictions on
          any of the Borrower or any of the Restricted Subsidiaries or any of
          their respective properties, all of the Material Contracts are in full
          force and effect, and no defaults currently exist thereunder;

     (s)  FASCO ACQUISITION.  As of the Effective Date, all conditions precedent
          to, and all consents necessary to permit, the Fasco Acquisition
          pursuant to the Fasco Acquisition Documents have been satisfied or
          delivered (except for such conditions precedent and consents which, if
          not satisfied or obtained, could not reasonably be expected to affect
          adversely the rights of the Agent, the Issue Lender or any Lender),
          and no material breach of any term or provision of any Fasco
          Acquisition Document has occurred and no action has been taken by any
          competent authority which restrains, prevents or imposes material
          adverse conditions upon, or seeks to restrain, prevent or impose
          material adverse conditions upon, the Fasco Acquisition or the making
          of any Accommodations Outstanding in connection therewith.  As of the
          Effective Date, the Borrower has acquired or will acquire
          substantially all of the assets of Fasco in compliance in all material
          respects with all applicable Requirements of Law;
<PAGE>
 
                                      -65-

     (t)  ACCURACY AND COMPLETENESS OF INFORMATION.  All factual information
          furnished by or on behalf of any of the Borrower or any Restricted
          Subsidiary in writing to the Agent, any Lender, or the Auditors for
          purposes of or in connection with this Agreement or any Credit
          Documents, or any transaction contemplated hereby or thereby is or
          will be true and accurate in all material respects on the date as of
          which such information is dated or certified and not incomplete by
          omitting to state any material fact necessary to make such information
          not misleading at such time; and

     (u)  NO CHANGE.  There has been no development or event or any prospective
          development or event, which has had or could reasonably be expected to
          have a Material Adverse Effect.

SECTION 7.2  SURVIVAL OF REPRESENTATIONS AND WARRANTIES.

     The representations and warranties in this Agreement and in any
certificates or documents delivered to the Agent and the Lenders shall not merge
in or be prejudiced by and shall survive any Accommodation and shall continue in
full force and effect so long as any amounts are owing by the Borrower to the
Lenders under this Agreement.

SECTION 7.3  REPRESENTATIONS AND WARRANTIES OF THE AGENT AND LENDERS.
     The Agent and each of the Lenders represents and warrants that it is not a
non-resident within the meaning of the Income Tax Act (Canada).

                                   ARTICLE 8
                           COVENANTS OF THE BORROWER

SECTION 8.1  AFFIRMATIVE COVENANTS.

     So long as any amount owing under this Agreement or any other Obligation
remains unpaid or any Lender has any obligation under this Agreement or any
other Credit Document, and unless consent is given in accordance with Section
11.1, the Borrower shall and, where required, shall cause each of its
Subsidiaries to comply with the following covenants:

     (a)     FINANCIAL REPORTING. The Borrower shall timely deliver to each
             Lender the following information:

             (i)    ANNUAL FINANCIAL STATEMENTS. As soon as available, but not
                    later than 120 days after the end of each Fiscal Year: (i)
                    annual unaudited consolidating and audited consolidated
                    Financial Statements; (ii) a comparison in reasonable detail
                    to the prior year audited Financial Statements; (iii) the
                    Auditors' unqualified opinion, "MANAGEMENT LETTER" and
                    statement indicating that 
<PAGE>
 
                                      -66-

               the Auditors have not obtained knowledge of the existence of any
               Default or Event of Default during their audit; (iv) a narrative
               discussion of the Parent Guarantor's consolidated financial
               condition and results of operations for such Fiscal Year
               (including in respect of the Borrower for such period) and a
               comparison in reasonable detail to the Projections (or the then
               most recent financial forecasts delivered pursuant to Section
               8.1(a)(ii)) for such Fiscal Year, prepared by a Financial Officer
               of the Parent Guarantor and the Borrower; and (v) a certificate
               substantially in the form of Exhibit D with respect to the
               Borrower and the Parent Guarantor together with attached
               schedules of calculations demonstrating (A) compliance of the
               Parent Guarantor with the Financial Covenants and determining
               whether the Applicable Base Rate (Canada) Margin, Applicable
               Canadian Prime Rate Margin, Applicable Eurodollar Rate Margin and
               the Applicable Drawing Fee are to be adjusted due to a change in
               the Total Indebtedness Ratio and (B) compliance of the Borrower
               with subsections (a), (b)(vi), (b)(vii), (c), (f)(vi), (g) and
               (k) of Section 8.2 (the "COMPLIANCE CERTIFICATE");

         (ii)  ANNUAL PROJECTIONS.  Not later than 45 days after the end of each
               Fiscal Year, beginning with the Fiscal Year ended 1998, (i) a
               monthly budget and consolidating income statement of each of the
               Borrower and the Parent Guarantor for the then current Fiscal
               Year and (ii) a consolidated plan and financial forecast
               (including the assumptions on which the plan and financial
               forecast are based), prepared in accordance with the Borrower's
               and Parent Guarantor's normal accounting procedures applied on a
               consistent basis and in substantially the form of the
               Projections, for the then current Fiscal Year and each succeeding
               Fiscal Year of each of the Borrower and the Parent Guarantor up
               to and including the Fiscal Year following the Relevant Repayment
               Date, including, without limitation, forecasted (A) consolidated
               condensed balance sheets, (B) condensed consolidated and
               consolidating income statements, (C) condensed consolidated cash
               flow statements, and (D) consolidated capitalization statements
               and (E) calculations of the Financial Covenants, in each case for
               such Fiscal Years;

         (iii) QUARTERLY COMPLIANCE CERTIFICATE. As soon as available, but not
               later than 45 days after the end of each fiscal quarter in each
               Fiscal Year, a Compliance Certificate of each of the Borrower and
               the Parent Guarantor, together with a certification by a
<PAGE>
 
                                      -67-

               Financial Officer of the Borrower and the Parent Guarantor, as
               appropriate, that the Financial Statements for the then most
               recently ended three calendar months delivered pursuant to
               Section 8.1(a)(iv) have been prepared in accordance with U.S.
               GAAP in respect of the Parent Guarantor's Financial Statements
               and GAAP in respect of the Borrower's Financial Statements
               (prepared without footnotes and subject to year-end audit
               adjustments and reclassifications and month-end reconciliations,
               in each case, to the extent consistent with the Parent
               Guarantor's and the Borrower's current practices, as
               appropriate); and

          (iv) MONTHLY FINANCIAL STATEMENTS.  As soon as available, but not
               later than 30 days after the end of each calendar month in each
               Fiscal Year: (i) Financial Statements as of the end of such month
               and for the Fiscal Year through the end of such month; (ii) a
               comparison in reasonable detail to the Financial Statements for
               the corresponding periods of the prior Fiscal Year; and (iii) a
               narrative discussion of the Parent Guarantor's consolidated
               financial condition and results of operations for such calendar
               month and Fiscal Year to date (including in respect of the
               Borrower for such periods) and a comparison in reasonable detail
               to the budget and Projections (or the then most recent financial
               forecasts delivered pursuant to Section 8.1(a)(ii)) for such
               period, prepared by a Financial Officer of the Parent Guarantor
               and the Borrower, as applicable;

     (b)  COLLATERAL AND OTHER REPORTING.  The Borrower shall timely deliver to
          the Agent the following certificates and reports:

          (i)  MONTHLY BORROWING BASE CERTIFICATES.  Monthly, within ten days
               after the last day of each month, and at any other time requested
               by the Agent:  a borrowing base certificate for the Borrower and
               the Designated Restricted Subsidiaries substantially in the form
               of Exhibit A (the "BORROWING BASE CERTIFICATE"), which shall (i)
               detail the Eligible Accounts and the Eligible Rental Equipment,
               in each case, of the Borrower and the Designated Restricted
               Subsidiaries, as of the last day of each month (or as of such
               other date as the Agent may request); (ii) be prepared by or
               under the supervision of a Financial Officer of the Borrower and
               certified by such officer subject only to adjustment upon
               completion of the normal year-end and interim audits of physical
               Inventory and Rental Equipment; and (iii) have attached thereto
               such additional schedules and other information as the Agent may
               request;
<PAGE>
 
                                      -68-


         (ii)  APPRAISALS.  When requested by the Agent, and in any event at
               least once during each 365-day period after the Effective Date
               and each anniversary thereof, a report of Rental Equipment of the
               Borrower and the Designated Restricted Subsidiaries by Daley-
               Hodkin or another appraiser reasonably satisfactory to the Agent
               and consented to by the Borrower (which consent shall not
               unreasonably be withheld), which shall describe the Borrower's
               and each Designated Restricted Subsidiary's Rental Equipment by
               category and by item (in reasonable detail) and report the
               original cost, net book value, fair market value, auction value
               and orderly liquidation value thereof;

         (iii) MONTHLY ACQUISITION REPORTS. As soon as available, but not later
               than 30 days after the end of each calendar month in each Fiscal
               Year, and at any other time requested by the Agent, a report
               summarizing each Acquisition consummated by the Borrower or any
               Restricted Subsidiary during such calendar month, which report
               shall include the following information with respect to each such
               Acquisition: (i) any corporate, trade or fictitious trade name to
               be used by the Borrower or such Restricted Subsidiary as a result
               of such Acquisition and the jurisdictions in which such
               corporate, trade or fictitious name shall be used; (ii) exact
               street addresses of all offices and locations of all property
               acquired by the Borrower or such Restricted Subsidiary
               (including, without limitation, records with respect to Accounts
               and general intangibles and originals of chattel paper) (other
               than locations of customers of the Borrower or such Restricted
               Subsidiary); (iii) to the extent located in jurisdictions
               different from those described in clause (ii) above, each
               jurisdiction where lessees of the Rental Equipment acquired by
               the Borrower or such Restricted Subsidiary are located (to the
               best knowledge of the Borrower); (iv) names and addresses of any
               lessor or sublessor (other than the Borrower or Restricted
               Subsidiary) of any location of the Borrower or any Restricted
               Subsidiary described in clause (ii) above or of any mortgagee
               holding a Lien on real property owned by the Borrower or any
               Restricted Subsidiary with respect to any location described in
               clause (ii) above; (v) legal name and address of each bailee,
               processor, warehouseman, consignee, carrier, shipper or other
               Person in possession with respect to any Equipment or Inventory
               acquired, together with the address where such Equipment or
               Inventory is held (other than Equipment or Inventory described in
               clause (i) of Section 2.1(3) of the Security Agreement); and (vi)
               any registered 
<PAGE>
 
                                      -69-


               trademarks, trademark applications, service marks, service mark
               applications, patents, patent applications, copyrights or other
               intellectual property acquired in such Acquisition. The
               information reported by the Borrower shall be deemed to modify
               Exhibit F-1 and F-2, as applicable to this Agreement and the
               exhibits to the Security Agreement. Notwithstanding the
               foregoing, no such report shall be required for any Acquisition
               for which the Borrower has delivered to the Agent the related
               acquisition agreement and related schedules;

          (iv) OTHER REPORTS.  The Borrower shall deliver or cause to be
               delivered to the Agent and the Lenders copies of all Financial
               Statements, reports and notices, if any, sent or made available
               generally by the Parent Guarantor, the Borrower or any Restricted
               Subsidiary to holders of their respective Indebtedness or
               securities or filed with the Commission or any similar
               Governmental Authority or any stock exchange and all press
               releases made available generally by the Parent Guarantor, the
               Borrower or any Restricted Subsidiary to the public concerning
               material developments in the business of any such Person, and all
               notifications received by the Parent Guarantor, the Borrower or
               any Restricted Subsidiary pursuant to the Securities Exchange Act
               of 1934, as amended, and the rules promulgated thereunder and
               applicable securities legislation of any other jurisdiction; and

          (v)  FURTHER ASSURANCES.  When requested by the Agent, any further
               information regarding the Collateral, business affairs and
               financial condition of any of the Borrower or any Restricted
               Subsidiary;

     (c)  NOTIFICATION REQUIREMENTS.  The Borrower shall timely give the Agent
          and each of the Lenders the following notices:

          (i)  NOTICE OF DEFAULTS.  Promptly, and in any event within five days
               after becoming aware of the occurrence of a Default or Event of
               Default, a certificate of the chief executive officer or
               Financial Officer of the Borrower specifying the nature thereof
               and the Borrower's proposed response thereto, each in reasonable
               detail;

          (ii) PROCEEDINGS OR ADVERSE CHANGES.  Promptly, and in any event
               within five Business Days after the Borrower becomes aware of (i)
               any proceeding being instituted or threatened to be instituted by
               or against the Borrower or any Restricted Subsidiary in any
<PAGE>
 
                                      -70-

               federal, provincial, state, local or foreign court or before any
               commission or other regulatory body (federal, provincial, state,
               local or foreign), except for threatened or pending proceedings
               which in the aggregate could not reasonably be expected to result
               in an Event of Default or a Material Adverse Effect, (ii) any
               order, judgment or decree being entered against the Borrower or
               any Restricted Subsidiary or any of their respective properties
               or assets, if the amount which is or may become payable by the
               Borrower or any of the Restricted Subsidiaries in connection with
               all such orders, judgments or decrees then outstanding, exceeds
               confirmed insurance coverage by more than $1,000,000, or (iii)
               any actual or prospective change, development or event which has
               had or could reasonably be expected to have a Material Adverse
               Effect other than general economic conditions, a written
               statement describing such proceeding, order, judgment, decree,
               change, development or event and any action being taken with
               respect thereto by the Borrower or any such Restricted
               Subsidiary;

        (iii)  ENVIRONMENTAL AND HEALTH AND SAFETY NOTICES. Promptly, and in any
               event within 10 Business Days after receipt by the Borrower or
               any Restricted Subsidiary of any notice, complaint or order
               alleging actual or prospective violation of any environmental,
               health or safety Requirement of Law or alleging responsibility
               for costs of a cleanup, together with a copy of such notice,
               complaint, or order and a written statement describing any action
               being taken with respect thereto by the Borrower or such
               Restricted Subsidiary;

        (iv)   MATERIAL CONTRACTS.  Promptly, and in any event within 10
               Business Days after any Material Contract of the Borrower or any
               Restricted Subsidiary is terminated or amended or any new
               Material Contract is entered into, a written statement describing
               such event and explaining any actions being taken with respect
               thereto (and, if requested by the Agent, copies of such
               amendments or new contracts); and

        (v)    GOVERNING DOCUMENTS.  Subject to Section 8.2(q), within 10
               Business Days after the filing thereof with any Governmental
               Authority, copies of any new Governing Document (or any amendment
               or modification of an existing Governing Document).

    (d) CORPORATE EXISTENCE. The Borrower shall, and shall cause each of its
        Restricted Subsidiaries to, (i) maintain its corporate existence (except
        to 
<PAGE>
 
                                      -71-

          the extent permitted by Sections 8.2(f) or 8.2(h)), (ii)
          maintain in full force and effect all licenses, bonds, franchises,
          leases, trademarks and qualifications to do business, and all patents,
          contracts and other rights necessary or advisable to the profitable
          conduct of its businesses, provided, however, that any such licenses,
          bonds, franchises, leases, trademarks, qualifications, patents,
          contracts and other rights may be terminated if such termination does
          not have a Material Adverse Effect and (iii) continue in, and limit
          its operations to, the same general lines of business as conducted by
          the Borrower and such Subsidiaries on the Effective Date and lines of
          business reasonably related thereto.

     (E)  BOOKS AND RECORDS; INSPECTIONS.  The Borrower agrees to maintain, and
          to cause each of its Restricted Subsidiaries to maintain, books and
          records pertaining to the Collateral in such detail, form and scope as
          is consistent with good business practice.  The Borrower agrees that
          the Agent or its agents may enter upon the premises of the Borrower or
          any of its Subsidiaries at any time and from time to time, during
          normal business hours and upon 24 hours' prior notice, and at any time
          at all on and after the occurrence of a Default which continues beyond
          the expiration of any grace or cure period applicable thereto, and
          which has not otherwise been waived pursuant to Section 11.1 or cured,
          for the purposes of (i) inspecting and verifying the Collateral, (ii)
          inspecting and/or copying (at the Borrower's expense) any and all
          records pertaining thereto and (iii) discussing the affairs, finances
          and business of the Borrower or such Subsidiary with any officers,
          employees and directors of the Borrower or such Subsidiary or with the
          Auditors.

     (F)  INSURANCE.  The Borrower agrees to maintain, and to cause each of its
          Restricted Subsidiaries to maintain, general liability insurance,
          third party property damage insurance and replacement value insurance
          on the Collateral under the insurance policies and programs listed on
          Schedule 8.1(f) or substantially similar policies and programs with
          insurance companies maintaining a Best's Rating of A or better (or, as
          to workers' compensation or similar insurance, insurance in an
          insurance fund or by self-insurance authorized by the jurisdiction in
          which its operations are carried on) and in such amounts and covering
          such risks as are at all times satisfactory to the Agent in its
          commercially reasonable judgment.  All such policies shall contain
          such provisions as the Agent may reasonably require to fully protect
          the Agent's and the Lender's interest in the Collateral and to any
          payments to be made under such policies, including, without
          limitation, the following: (i) all policies covering the Collateral
          shall contain an endorsement, in form and substance acceptable to the
<PAGE>
 
                                      -72-

          Agent, naming the Agent and the Lenders as loss payee thereunder and,
          if required by the Agent, naming the Agent and the Lenders as
          additional insureds under such policy; (ii) all policies relating to
          general liability coverage shall contain an endorsement naming the
          Agent and the Lenders as additional insureds under such policy; (iii)
          all such policies shall contain an endorsement which negates the
          "OTHER INSURANCE" clause in the policy and a statement that the
          insurance being provided is primary and any insurance carried by the
          Agent or the Lenders is neither primary nor contributory; and (iv) all
          such policies, endorsements thereto or an independent instrument
          furnished to the Agent shall provide that the applicable insurance
          company will give the Agent at least 30 days' written notice (or, in
          the case of non-payment of premiums, at least 10 days' written notice)
          before any such policy or policies of insurance shall be altered
          adversely to the interests of the Agent and the Lenders or cancelled,
          except for notices of annual renewals which do not adversely affect
          the rights of the Agent or the Lenders, and that no act, whether
          willful or negligent, or default of the Borrower or any other Person
          shall affect the right of the Agent to recover under such policy or
          policies of insurance in case of loss or damage.  In the event the
          Borrower or any of its Subsidiaries at any time or times hereafter
          shall fail to obtain or maintain any of the policies or insurance
          required herein or to pay any premium in whole or in part relating
          thereto, then the Agent and the Lenders, without waiving or releasing
          any obligations or resulting Event of Default hereunder, may at any
          time or times thereafter (but shall be under no obligation to do so)
          obtain and maintain such policies of insurance and pay such premiums
          and take any other action with respect thereto which the Agent deems
          advisable.  All sums so disbursed by the Agent and the Lenders shall
          constitute Accommodations Outstanding hereunder and be part of the
          Obligations, payable as provided in this Agreement.

     (G)  TAXES AND CLAIMS.  The Borrower agrees to pay, when due, and to cause
          each of its Restricted Subsidiaries to pay when due, (a) all taxes
          lawfully levied or assessed against the Borrower or any of its
          Restricted Subsidiaries or any of the Collateral before any penalty or
          interest accrues thereon and (b) all claims (including, without
          limitation, claims for labor, services, materials and supplies) for
          sums which have become due and payable and which by law have or may
          become a Lien (other than a Permitted Lien) upon any of the Borrower's
          or such Restricted Subsidiary's assets, prior to the time when any
          penalty or fine shall be incurred with respect thereto; provided,
          however, that no such taxes, assessments and governmental charges
          referred to in clause (a) above or claims referred to in clause
<PAGE>
 
                                      -73-

          (b) above (unless such taxes, assessments, governmental charges or
          claims have become a federal or state tax or ERISA Lien on any of the
          assets of the Borrower or any of its Restricted Subsidiaries) need be
          paid so long as (w) being contested in good faith by appropriate
          proceedings diligently instituted and conducted, (x) the Agent has
          been notified thereof, and (y) such reserve or other appropriate
          provision, if any, as shall be required in conformity with GAAP shall
          have been made therefor.

     (H)  COMPLIANCE WITH LAWS.  The Borrower agrees to comply, and to cause
          each of its Restricted Subsidiaries to comply, with all Requirements
          of Law applicable to the Collateral or any part thereof, or to the
          operation of its business or its assets generally, unless (i) the
          Borrower or such Restricted Subsidiary contests any such Requirements
          of Law in a reasonable manner and in good faith or (ii) such failure
          to comply with such Requirements of Law could not, in the aggregate,
          reasonably be expected to result in a Material Adverse Effect.

     (I)  FISCAL YEAR.  The Borrower agrees, and shall cause each of its
          Subsidiaries, to maintain their respective Fiscal Year as a year
          ending December 31.

     (J)  MAINTENANCE OF PROPERTY.  The Borrower agrees to keep, and to cause
          each of its Restricted Subsidiaries to keep, all property useful and
          necessary to their respective businesses in good working order and
          condition (ordinary wear and tear excepted) in accordance with their
          past operating practices and not to commit or suffer any waste with
          respect to any of their properties.

     (K)  COMPLIANCE WITH ENVIRONMENTAL LAWS.

          (i)  The Borrower shall comply, and cause each of its Restricted
               Subsidiaries to comply, with all environmental, health and safety
               Requirements of Law applicable to its operations and properties
               other than such non-compliance of which would have no Material
               Adverse Effect; obtain, and cause each of its Restricted
               Subsidiaries to obtain, all environmental permits necessary for
               its operations and properties; and conduct, and cause each of its
               Restricted Subsidiaries to conduct, any investigation, study,
               sampling and testing, and undertake any cleanup, removal,
               remedial or other action necessary to remove and clean up all
               Hazardous Substances from any of its properties, to the extent
               required under any such Requirements of Law; provided, however,
               that neither the Borrower nor any Restricted Subsidiary shall be
               required to undertake any such 
<PAGE>
 
                                      -74-

               cleanup, removal, remedial or other action to the extent that its
               obligation to do so is being contested in good faith and by
               proper proceedings and appropriate reserves are being maintained
               with respect to such circumstances.

          (ii) The Borrower shall (i) employ, and cause each of its Restricted
               Subsidiaries to employ, in connection with its use of Real
               Property, appropriate technology to maintain compliance in all
               material respects with any applicable environmental, health and
               safety Requirements of Law, (ii) maintain in all material
               respects, and cause each of its Restricted Subsidiaries to obtain
               and maintain in all material respects, any and all permits
               required by applicable environmental, health and safety
               Requirements of Law in connection with its or its Restricted
               Subsidiaries, operations and (iii) dispose of, and cause each of
               its Restricted Subsidiaries to dispose of, any and all Hazardous
               Substances only at facilities and with carriers that in the
               reasonable belief of the Borrower are maintaining valid permits
               where required under any applicable federal, provincial, state
               and local environmental, health and safety Requirements of Law.
               The Borrower shall obtain, and cause each of its Restricted
               Subsidiaries to obtain, if required by any Requirement of Law,
               certificates of disposal or similar certificates from all
               contractors employed by the Borrower or any of its Restricted
               Subsidiaries in connection with the transport or disposal of any
               Hazardous Substances.

     (L)  COMPLIANCE WITH OPERATING LEASES.  The Borrower shall make all
          payments and otherwise perform, and cause each of its Restricted
          Subsidiaries to make all payments and otherwise perform, in all
          material respects, all of its obligations in respect of all Operating
          Leases of the Borrower or any of its Restricted Subsidiaries, and use
          its best efforts, and cause each of its Restricted Subsidiaries to use
          its best efforts, to keep, and to take all action to keep, such
          Operating Leases in full force and effect and not allow any such
          Operating Leases to lapse or be terminated or any rights to renew such
          Operating Leases to be forfeited or cancelled other than any such
          failure which would have no Material Adverse Effect.  The Borrower
          will give the Agent prompt notice of any lapse, termination,
          forfeiture or cancellation of any material Operating Lease to which it
          or any of its Restricted Subsidiaries is a party (whether or not in
          accordance with the terms of such Operating Lease or this Agreement).

     (M)  COMPLIANCE WITH MATERIAL CONTRACTS.  The Borrower shall perform and
          observe, and cause each of its Restricted Subsidiaries to perform 
<PAGE>
 
                                      -75-

          and observe, all material terms and provisions of the Material
          Contracts to be performed or observed by it, maintain, and cause each
          of its Restricted Subsidiaries to maintain, the Material Contracts to
          which it is a party in full force and effect during their respective
          stated terms, enforce, and cause each of its Restricted Subsidiaries
          to enforce, the Material Contracts to which it is a party in
          accordance with their terms, and take, and cause each of its
          Restricted Subsidiaries to take, all such action to such ends as may
          from time to time be reasonably requested by the Agent other than any
          such failure which would have no Material Adverse Effect.

     (N)  REAL PROPERTY; LANDLORD WAIVERS.  The Borrower shall use its best
          efforts to deliver, or cause to be delivered, to the Agent, Collateral
          Access Agreements from the landlords on all Real Property leasehold
          interests of the Borrower and each of its Restricted Subsidiaries
          acquired after the Effective Date.

     (O)  DELIVERY OF DOCUMENTS AFTER EFFECTIVE DATE.  The Borrower shall
          execute and deliver, or shall cause the execution and delivery of, (a)
          the agreements, documents, instruments, certificates and opinions
          designated on the Closing Document List as items to be delivered after
          the Effective Date within the time periods with respect to such items,
          as set forth on the Closing Document List and (b) the agreements,
          documents, instruments, certificates and opinions required to be
          delivered after the Consummation Date of an Acquisition, within the
          time periods with respect to such items, as required by Section
          8.2(b)(vii), and any other agreements, documents, instruments,
          certificates and opinions which the Agent may reasonably request in
          connection with such Acquisition which are not required to be
          delivered pursuant to Section 8.2(b)(vii) (including, without
          limitation, in response to the information delivered by the Borrower
          pursuant to Section 8.1(b)(iii)), within the time periods specified by
          the Agent in such request.

     (P)  YEAR 2000 COMPLIANCE.  Borrower will forthwith (i) initiate a review
          and assessment of its and its Subsidiaries' business and operations
          (including those affected by customers, suppliers and vendors) that
          Borrower believes could be adversely affected by the "Year 2000
          Problem" (that is, the risk that computer applications used by the
          Borrower or its Subsidiaries (or customers, suppliers and vendors) may
          be unable to recognize and perform properly date-sensitive functions
          involving certain dates prior to and any date after December 31,
          1999), (ii) develop a plan and time-line for addressing the Year 2000
          Problem on a timely basis, and (iii) implement that plan substantially
          in accordance with that time table.  Borrower represents and warrants
<PAGE>
 
                                      -76-

          that its own computer applications that are material to its and its
          Subsidiaries' business and operations will on a timely basis be able
          to perform date-sensitive functions for all dates before and after
          January 1, 2000 (that is be, "Year 2000 Compliant").  Borrower will
          promptly notify the Agent in the event that Borrower discovers or
          determines that any computer application (including those of its
          customers, suppliers and vendors) that is material to its or its
          Subsidiaries' business and operations will not be Year 2000 Compliant
          as of January 1, 2000.

     (Q)  FURTHER ASSURANCES.  The Borrower shall take, and shall cause each of
          its Subsidiaries to take, all such further actions and execute all
          such further documents and instruments as the Agent may at any time
          reasonably determine in its sole discretion to be necessary or
          desirable to further carry out and consummate the transactions
          contemplated by the Credit Documents, to cause the execution, delivery
          and performance of the Credit Documents to be duly authorized and to
          perfect or protect the Liens (and the priority status thereof) of the
          Agent and the Lenders on the Collateral.

SECTION 8.2  NEGATIVE COVENANTS.

     So long as any amount owing under this Agreement or any other Obligation
remains unpaid or the Lender or the Agent has any obligation under this
Agreement or any other Credit Document and, unless consent is given in
accordance with Section 11.1, the Borrower shall comply with, and shall cause
each of its Subsidiaries, as applicable, to comply with, the following
covenants:

     (A)  MINIMUM RENTAL EQUIPMENT UTILIZATION.  The Borrower shall not permit
          Rental Equipment Utilization, as determined as of each Quarterly
          Determination Date in each Fiscal Year for the twelve-month period
          ending on such Quarterly Determination Date (the Borrower shall be
          permitted to use the relevant historical financial information
          included in the Fasco Acquisition Documents, determined in accordance
          with GAAP, pertaining to Fasco's equipment rental business for the
          portion of the initial twelve month period prior to the Consummation
          Date of the Fasco Acquisition), to be less than 54%.  Notwithstanding
          the foregoing, any non-compliance with the previous sentence shall be
          deemed to be cured if, as of the last day of the calendar month
          immediately following the fiscal quarter with respect to which such
          non-compliance occurred (the "RENTAL EQUIPMENT UTILIZATION CURE
          DATE"), the Borrower causes Rental Equipment Utilization, as
          determined for the twelve-month period ending on the Rental Equipment
          Utilization Cure Date, to be at least 54%.
<PAGE>
 
                                      -77-

     (B)  CAPITAL EXPENDITURES AND INVESTMENTS.  None of the Borrower or its
          Subsidiaries shall, directly or indirectly, make or incur any Capital
          Expenditures or make any Investment in any Person, whether in cash,
          securities, or other property of any kind including, without
          limitation, any Subsidiary or Affiliate of the Parent Guarantor, the
          Borrower or any of its Subsidiaries, other than:

          (i)    Advances or loans made in the ordinary course of business not
                 to exceed $250,000 outstanding at any one time to any one
                 Person and $1,000,000 in the aggregate outstanding at any one
                 time;

          (ii)   Investments arising from (i) intercompany loans permitted by
                 Section 8.2(c)(vii), (ii) dividends and distributions permitted
                 by Section 8.2(q) and (iii) transfers permitted by Section
                 8.2(f)(iv);

          (iii)  Subject to the limits set forth in Section 8.2(o), Cash
                 Equivalents, provided that the Agent and the Lenders (i) have a
                 perfected Lien therein, or (ii) have a perfected Lien in any
                 deposit account in which the same are maintained;

          (iv)   Subject to the limits set forth in Section 8.2(o), deposits
                 with financial institutions, disclosed in Schedule 8.2(n) and
                 which are insured by the Canada Deposit Insurance Corporation
                 ("CDIC") or a similar federal insurance program;

          (v)    Subject to the limits set forth in Section 8.2(o),
                 contributions to and payments of benefits under any Plan (in
                 accordance with the terms of the Plan) permitted by this
                 Agreement;

          (vi)   Capital Expenditures and Investments (other than Acquisitions),
                 in each case, directly related to, or in the same line of, the
                 business as conducted by the Borrower and its Subsidiaries as
                 of the Effective Date, the aggregate amount of which shall not
                 exceed, in any Fiscal Year set out below, the amount set out
                 opposite such Fiscal Year (the "MAXIMUM EXPENDITURE AMOUNT"):
<PAGE>
 
                                      -78-

<TABLE>
<CAPTION>
        -------------------------------------------
          Fiscal Year              Maximum Amount
        ------------------------------------------- 
          <S>                      <C>
             1998                    $ 7,000,000
        ------------------------------------------- 
             1999                    $10,000,000
        ------------------------------------------- 
             2000                    $15,000,000
        ------------------------------------------- 
             2001                    $20,000,000
        ------------------------------------------- 
             2002                    $25,000,000
        ------------------------------------------- 
</TABLE>

                 provided, however, that the Maximum Expenditure Amount for any
                 Fiscal Year may be increased by (i) the aggregate amount of
                 cash proceeds (net of any bona fide costs of sale with respect
                 thereto) received by the Borrower and its Subsidiaries during
                 such Fiscal Year with respect to the sale of Rental Equipment
                 (whether through the actual sale of such Rental Equipment or
                 the sale of stock of the Person owning such Rental Equipment)
                 and (ii) an amount equal to twenty-five percent (25%) of the
                 excess, if any, of (x) the Maximum Expenditure Amount for the
                 immediately preceding Fiscal Year, over (y) the actual amount
                 of Capital Expenditures and Investments (other than
                 Acquisitions) made by the Borrower and its Subsidiaries under
                 this clause (f) in such immediately preceding Fiscal Year;

          (vii)  The Fasco Acquisition and other Acquisitions directly related
                 to, or in the same line of, the business as conducted by the
                 Borrower as of the Effective Date (after giving effect to the
                 Fasco Acquisition), provided that, with respect to Acquisitions
                 other than the Fasco Acquisition, the Borrower shall not, and
                 shall cause its Subsidiaries not to, without the approval of
                 the Majority Lenders:

                 (A)  Make any Acquisition without giving the Agent written
                      notice thereof within three Business Days after the
                      execution of a letter of intent or other agreement of the
                      Borrower or such Subsidiary, as applicable, with respect
                      thereto, together with (A) a copy of the related letter of
                      intent or such other agreement (which, in either case,
                      shall contain, or be accompanied by, substantially the
                      same information as letters of intent delivered to the
                      agent under the Parent Guarantor Credit Agreement) and (B)
                      a list of all locations of the assets which will become
                      property of the Borrower or such Subsidiary, as
                      applicable, after giving effect to such Acquisition (other
                      than locations of Persons which will become customers of
<PAGE>
 
                                      -79-

                      the Borrower or such Subsidiary after giving effect to
                      such Acquisition);

                 (B)  Make any Acquisition unless the Borrower obtains each of
                      the following in connection therewith and delivers the
                      same to the Agent within the time periods set out below,
                      in each case in form and substance reasonably satisfactory
                      to the Agent: (A) each of the agreements, documents and
                      instruments set forth on Exhibit P which are required to
                      be delivered on or before the Consummation Date of such
                      Acquisition, within the time periods set forth thereon,
                      (B) to the extent any new Subsidiary of the Borrower is
                      formed or acquired in connection with such Acquisition,
                      all of the agreements, documents and instruments required
                      to be delivered pursuant to Section 8.2(q), within the
                      time periods set forth therein and (C) any other
                      agreements, documents, instruments, certificates or
                      opinions which the Agent may reasonably request prior to
                      the Consummation Date of such Acquisition;

                 (C)  Make any Acquisition unless any new Subsidiary acquired or
                      formed in connection with such Acquisition is incorporated
                      under the laws of Canada or a province thereof;

                 (D)  Make any single Acquisition (or series of related
                      Acquisitions) in any Fiscal Year in excess of $10,000,000;
                      and

                 (E)  Make Acquisitions during the period from the Effective
                      Date until the Relevant Repayment Date, in an aggregate
                      amount in excess of the sum of $50,000,000 (excluding
                      consideration consisting of the common stock of the Parent
                      Guarantor and cash proceeds received by the Borrower from
                      the Parent Guarantor in consideration for common stock of
                      the Borrower issued to the Parent Guarantor);

          (viii) Such other Investments as the Agent may approve in writing in
                 its reasonable discretion.

     (C)  ADDITIONAL INDEBTEDNESS.  None of the Borrower or its Subsidiaries
          shall directly or indirectly incur, create, assume or suffer to exist
          any Indebtedness other than:
<PAGE>
 
                                      -80-

          (i)    Indebtedness under the Credit Documents;

          (ii)   Indebtedness under Hedging Agreements entered into in the
                 ordinary course of business, provided that, with respect to
                 Interest Rate Agreements, the aggregate notional amount thereof
                 does not exceed an amount equal to 50% of the then outstanding
                 Indebtedness of the Borrower which is floating rate debt;

          (iii)  Indebtedness described on Schedule 8.2(c)(iii) and any
                 refinancing of such Indebtedness, so long as (A) the aggregate
                 principal amount of the Indebtedness so refinanced shall not be
                 increased, (B) the Indebtedness is incurred for the same
                 purpose as the Indebtedness so refinanced, (C) the refinancing
                 shall be on terms and conditions no more restrictive than the
                 terms and conditions of the Indebtedness to be refinanced and
                 (D) with respect to Indebtedness under Capital Leases and
                 Indebtedness secured by Purchase Money Liens, the principal
                 amount of such refinanced Indebtedness is permitted by Section
                 8.2(c)(iv);

          (iv)   In addition to the Indebtedness permitted under Section
                 8.2(c)(iii), (i) Indebtedness under Capital Leases and
                 Indebtedness secured by purchase money Liens on Equipment
                 acquired after the Effective Date ("PURCHASE MONEY LIENS") so
                 long as (A) each Purchase Money Lien shall attach only to the
                 property to be acquired and any sale or insurance proceeds
                 thereof (but excluding rental contracts covering such property
                 or any proceeds thereof) and (B) the Indebtedness incurred
                 shall not exceed eighty percent (80%) of the purchase price of
                 the item or items of Equipment purchased and (ii) any
                 refinancing of Indebtedness secured by Purchase Money Liens so
                 long as (A) the Liens granted in connection with such
                 Indebtedness shall attach only to the Equipment formerly
                 subject to the Purchase Money Lien and any sale or insurance
                 proceeds thereof (but excluding rental contracts covering such
                 property or any proceeds thereof), (B) the aggregate principal
                 amount of the Indebtedness so refinanced shall not be
                 increased, (C) the Indebtedness is incurred for the same
                 purpose as the Indebtedness so refinanced and (D) the
                 refinancing shall be on terms and conditions no more
                 restrictive than the terms and conditions of the Indebtedness
                 to be refinanced; provided, however, that the Indebtedness
                 permitted by clauses (i) and (ii) of this Section 8.2(c)(iv) or
                 described in Section 8.2(c)(iii)(D) shall not exceed
                 $15,000,000 in the aggregate outstanding at any one time;
<PAGE>
 
                                      -81-

          (v)    Indebtedness in respect of taxes, assessments, governmental
                 charges and claims for labor, materials or supplies, to the
                 extent that payment thereof is not required pursuant to Section
                 8.1(g);

          (vi)   Indebtedness constituting Contingent Obligations permitted by
                 Section 8.2(e);

          (vii)  Indebtedness arising from intercompany loans (i) from any
                 Person which is a Restricted Subsidiary to the Borrower, (ii)
                 from any Restricted Subsidiary to another Restricted
                 Subsidiary; and (iii) from the Borrower to any Restricted
                 Subsidiary, provided, that (A) in the case of loans under
                 clauses (ii) and (iii) the aggregate principal amount of all
                 such loans shall not exceed $5,000,000 at any time outstanding,
                 (B) all such Indebtedness shall be evidenced by a promissory
                 note executed by the Person receiving such intercompany loans,
                 pursuant to a promissory note substantially in the form of
                 Exhibit Q, and (C) such Indebtedness shall be subordinated in
                 right of payment to the Obligations when due and payable; and

          (viii) Indebtedness arising from intercompany loans from the Parent
                 Guarantor or any of its Subsidiaries, provided that the Parent
                                                       -------------
                 Guarantor or such Subsidiary, as the case may be, has first
                 executed and delivered to the Agent and the Lenders an
                 intercreditor agreement, in form and substance satisfactory to
                 the Agent and the Lenders acting reasonably, providing, inter
                 alia, that such Indebtedness is subordinated in right of
                 payment to the prior payment of the Accommodations Outstanding
                 and other Obligations when due and payable to the Agent, the
                 Issue Lender, the Lenders and any other Person under this
                 Agreement;

          provided, however, that, the aggregate amount of all Indebtedness
          --------  -------                                                
          permitted to be incurred under any of clauses (i) through (vi) above,
          to the extent such Indebtedness constitutes "Indebtedness" under (and
          as defined in) the Senior Subordinated Note Indenture, shall not
          exceed the "Borrowing Base" (as defined in the Senior Subordinated
          Note Indenture).

     (d)  LIENS.  None of the Borrower or its Subsidiaries shall directly or
          indirectly create, incur, assume, or suffer to exist any Lien on any
          of its property now owned or hereafter acquired except (each of the
          following being referred to herein as a "PERMITTED LIEN"):
<PAGE>
 
                                      -82-

          (i)    Liens granted to the Agent and the Lenders under the Credit
                 Document;

          (ii)   Liens listed on Schedule 7.1(f);

          (iii)  Purchase Money Liens and Liens securing Indebtedness permitted
                 by Section 8.2(c)(iv), provided, that such Purchase Money Liens
                 and other Liens are created within 90 days after the incurrence
                 of the related indebtedness;

          (iv)   Liens of warehousemen, mechanics, materialmen, builders,
                 workers, repairmen, common carriers, or landlords, liens for
                 taxes, assessments or other governmental charges, and other
                 similar Liens arising by operation of law for amounts that are
                 not yet due and payable, to the extent that payment thereof is
                 not required by Section 8.1(g), or which secure Indebtedness
                 permitted under Section 8.2(c)(v);

          (v)    Attachment or judgment Liens not to exceed an aggregate of
                 $1,000,000, excluding amounts (i) bonded to the reasonable
                 satisfaction of the Agent or (ii) covered by insurance to the
                 reasonable satisfaction of the Agent so long as any appropriate
                 legal proceedings which may have been duly initiated for the
                 review of such judgment shall not have been finally terminated
                 or the period within which such proceedings may be initiated
                 shall not have expired;

          (vi)   Deposits or pledges to secure obligations under workmen's
                 compensation, social security or similar laws, or under
                 unemployment insurance, not to exceed an aggregate of
                 $1,000,000;

          (vii)  Deposits or pledges to secure bids, tenders, contracts (other
                 than contracts for the payment of money), leases, statutory
                 obligations, surety and appeal bonds and other obligations of
                 like nature arising in the ordinary course of business not to
                 exceed an aggregate of $1,000,000;

          (viii) Easements, rights-of-way, restrictions and other similar
                 encumbrances incurred in the ordinary course of business which,
                 in the aggregate, are not substantial in amount and which do
                 not materially detract from the value of the property subject
                 thereto or materially interfere with the ordinary conduct of
                 the business of the Borrower or any of its Subsidiaries;
<PAGE>
 
                                      -83-

          (ix)   Leasehold interests of lessees of Rental Equipment leased in
                 the ordinary course of business;

          (x)    Interests of landlords in real property leased by the Borrower
                 or any of its Subsidiaries; and

          (xi)   Extensions, renewals, refundings or replacements of any of the
                 foregoing, provided that (A) any such extension, renewal,
                 refunding or replacement of a Lien shall be limited to the
                 property covered by the Lien extended, renewed, refunded or
                 replaced, (B) the obligations secured by any such extension,
                 renewal, refunding or replacement Lien shall be in an amount
                 not greater than the amount, and on terms and conditions no
                 more restrictive than the terms and conditions, of the
                 obligations then secured by the Lien extended, renewed,
                 refunded or replaced and (C) any Liens permitted under Section
                 8.2(d)(ii) securing Indebtedness described in Section
                 8.2(c)(iii)(D) shall be extended, renewed, refunded or replaced
                 only to the extent permitted by Section 8.2(c)(iv).

     (e)  CONTINGENT OBLIGATIONS.  None of the Borrower or its Subsidiaries
          shall directly or indirectly incur, assume, or suffer to exist any
          Contingent Obligation, other than (i) indemnities entered into in the
          ordinary course of business, consistent with past practice of the
          Parent Guarantor and its Subsidiaries, given in connection with the
          sale, purchase or lease of assets in transactions permitted by this
          Agreement, and (ii) Contingent Obligations described on Schedule
          8.2(e).

     (f)  SALE OF ASSETS.  None of the Borrower or its Subsidiaries shall,
          directly or indirectly, sell, lease, assign, transfer or otherwise
          dispose of any assets other than (i) Inventory and Equipment in the
          ordinary course of business, (ii) items of property (other than
          capital stock of the Borrower and its Subsidiaries) with a book value
          of less than $500,000 in the aggregate for the Borrower and its
          Subsidiaries during any Fiscal Year, (iii) obsolete or worn out
          property disposed of in the ordinary course of business, (iv)
          transfers of property from any Subsidiary of the Borrower to the
          Borrower, provided that all such property remains subject to the
          perfected, first priority Lien of the Agent and the Lenders, (v) cash
          transfers from the Borrower to the Parent Guarantor, to the extent
          permitted by Section 8.2(g) and (vi) other dispositions of assets of
          the Borrower and its Subsidiaries, provided that (A) such dispositions
          are made within the reasonable business judgment of the Borrower, (B)
          at the time of such disposition, no Default or Event of Default has
          occurred and is then continuing or 
<PAGE>
 
                                      -84-

          would result therefrom, (C) the aggregate consideration shall be paid
          at the time of disposition and (I) 80% of such consideration shall be
          in cash and Cash Equivalents and (II) all consideration consisting of
          promissory notes (the principal amount of which shall not exceed
          $2,500,000 in the aggregate outstanding at any one time) and Cash
          Equivalents shall be pledged and delivered to, or subject to a Lien in
          favour of, the Agent, for the benefit of the Lenders, and (D) the
          aggregate amount of all such dispositions (determined on the basis of
          net book value) does not exceed (I) $2,000,000 in the aggregate for
          Fiscal Year 1998 and (II) $3,000,000 in the aggregate for any Fiscal
          Year thereafter; provided, further, that, with respect to any
          disposition of the capital stock of any Restricted Subsidiary
          permitted by this Section 8.2(f), (x) any such disposition shall be
          for 100% of the issued and outstanding capital stock of such
          Restricted Subsidiary and (y) all Obligations of such Restricted
          Subsidiary shall be Paid In Full and all intercompany obligations of
          such Restricted Subsidiary shall be paid in full, prior to, or
          concurrently with (subject to such arrangements as the Agent may
          reasonably request to insure that the proceeds of such disposition are
          so used), the consummation of such disposition.

     (g)  RESTRICTED PAYMENTS.

          (i)  None of the Borrower or its Subsidiaries shall, directly or
               indirectly, declare or pay any dividend (other than dividends
               payable solely in common stock of the Borrower or its
               Subsidiaries) on, or make any payment on account of, or set apart
               assets for a sinking or other analogous fund for, the purchase,
               redemption, defeasance, retirement or other acquisition of, any
               shares of any class of capital stock of the Borrower or its
               Subsidiaries or any warrants, options or rights to purchase any
               such capital stock, whether now or hereafter outstanding, or make
               any other distribution in respect thereof, either directly or
               indirectly, whether in cash or property or in obligations of the
               Borrower or its Subsidiaries; provided, however, that to the
               extent permitted by applicable law:

               (A)  So long as no Default or Event of Default shall have
                    occurred and be continuing or occurs as a result thereof,
                    and only to the extent permitted by applicable Requirements
                    of Law, the Borrower may repurchase shares of capital stock
                    of the Parent Guarantor or warrants, options or rights to
                    purchase such shares issued to employees or directors of the
                    Borrower or its Subsidiaries or declare and pay a dividend
                    to the Parent Guarantor to allow it to make repurchases,
                    provided that 
<PAGE>
 
                                      -85-

                    the aggregate amount paid by the Borrower for such
                    repurchases shall not exceed $2,500,000 in any Fiscal Year;

               (B)  Any Subsidiary of the Borrower may declare and pay cash to
                    the Borrower or any Restricted Subsidiary (provided that to
                    the extent the payment is a loan, the loan is permitted by
                    Section 8.2(c)(vii);

               (C)  The Borrower may declare and pay to the Parent Guarantor
                    cash to the extent necessary to pay (I) general corporate,
                    accounting, legal, consulting, corporate reporting and
                    administrative expenses incurred in the ordinary course of
                    the Borrower's business consistent with past practice of the
                    Parent Guarantor and its Subsidiaries, (II) income and
                    franchise taxes, (III) costs and expenses and other amounts
                    payable in connection with this Agreement, the Fasco
                    Acquisition and any other Acquisition permitted hereby and
                    (IV) amounts permitted to be paid by the Borrower under
                    clause (A) above; provided that the cash payments permitted
                    to be made by the Borrower under this clause (C) shall not
                    exceed, in the aggregate, $1,000,000 in any Fiscal Year;

               (D)  The Borrower may declare and pay cash to the Parent
                    Guarantor, and any Subsidiary may declare and pay cash to
                    the Borrower or any Restricted Subsidiary (provided that to
                    the extent the payment is a loan, the loan is permitted by
                    Section 8.2(c)(vii)) to the extent necessary to enable the
                    Parent Guarantor to pay scheduled payments of principal and
                    interest (including additional interest at the rate
                    described in the definition of "Senior Subordinated Notes")
                    on the Senior Subordinated Notes, provided, that any payment
                    permitted under this clause (D) is payable and is paid no
                    earlier than one Business Day prior to the date when such
                    cash interest payment is due.

          (ii) None of the Borrower or its Subsidiaries shall, directly or
               indirectly, make any payment or prepayment of principal or,
               premium, if any, or interest on, or redemption (including,
               without limitation, by making payments to a sinking or analogous
               fund) or repurchase of, or deposit to defease fully or partially
               any of their respective covenants or obligations with respect to
               any Mandatory Redeemable Obligation.
<PAGE>
 
                                      -86-

     (h)  FUNDAMENTAL CHANGES.  None of the Borrower or its Subsidiaries shall
          enter into any merger or consolidation, liquidate, wind-up or dissolve
          (or suffer any liquidation or dissolution), or convey, lease, sell,
          transfer or otherwise dispose of, in one transaction or a series of
          transactions, all or substantially all of such Person's business or
          Property, whether now or hereafter acquired; provided, however, that
          (a) the Borrower may amalgamate with or be wound-up or liquidated into
          a Restricted Subsidiary and a Restricted Subsidiary may amalgamate
          with or be wound-up or liquidated into another Restricted Subsidiary
          if the Agent receives at least 30 Business Days' prior written notice
          thereof and all actions required to be taken pursuant to the
          Collateral Documents have been taken and (b) the Borrower and each of
          its Restricted Subsidiaries may enter into the transactions permitted
          for such Persons under Section 8.2(f) and Section 8.2(p).

     (i)  ACCOUNTING CHANGES.  None of the Borrower or its Subsidiaries shall
          make any significant change in accounting treatment and reporting
          practices except as required by GAAP.

     (j)  TERMINATION OF MATERIAL CONTRACTS; MODIFICATIONS OF GOVERNING
          DOCUMENTS.  None of the Borrower or its Subsidiaries shall (a) cancel
          or terminate any Material Contract or amend or otherwise modify any
          Material Contract, or waive any default or breach of any Material
          Contract, or take any other action in connection with any Material
          Contract that in each case would have a Material Adverse Effect, or
          (b) amend or otherwise modify any of its Governing Documents as in
          effect on the Effective Date (or, in the case of Subsidiaries of the
          Borrower formed or acquired after the Effective Date, as in effect on
          the date the related Governing Documents are delivered to the Agent
          pursuant to Section 8.2(c)), except (i) amendments to effect a change
          of name of the Borrower or any of its Subsidiaries which are permitted
          by the Security Agreement or (ii) other amendments which could not
          reasonably be expected to impair the rights of the Agent or any of the
          Lenders under the Credit Documents or with respect to the Collateral.

     (k)  RESTRICTION ON OPERATING LEASES.  None of the Borrower or its
          Subsidiaries shall become or remain liable in any way, whether
          directly or by assignment or as a guarantor or other surety, for the
          obligations of the lessee under any Operating Lease, if the aggregate
          annual amount of all rents paid by the Borrower and its Subsidiaries
          under all such leases would exceed (i) $1,000,000 in Fiscal Year 1998
          and (ii) $2,000,000 in each Fiscal Year thereafter.

     (l)  SALE AND LEASEBACK TRANSACTIONS.  None of the Borrower or its
          Subsidiaries shall, directly or indirectly, become or remain liable as
<PAGE>
 
                                      -87-

          lessee or as guarantor or other surety with respect to any lease of
          any property whether real or personal or mixed or whether now owned or
          hereafter acquired which the Borrower or any of its Subsidiaries has
          sold or transferred or intends to sell or transfer to any other
          Person, except for transactions involving Real Property owned by the
          Borrower or any of its Subsidiaries on the Effective Date with respect
          to which the documents executed in connection therewith do not provide
          the purchaser/lessor with recourse to any property other than the
          property being purchased and leased.

     (m)  AFFILIATE TRANSACTIONS.  None of the Borrower or its Subsidiaries
          shall, directly or indirectly, enter into any transaction (including,
          without limitation, the purchase, sale or exchange of property or the
          rendering of any service) with any Subsidiary or Affiliate of the
          Parent Guarantor, the Borrower or their respective Subsidiaries,
          except in the ordinary course of, and pursuant to the reasonable
          requirements of, the business of such Person, and upon fair and
          reasonable terms no less favorable to such Person, than could be
          obtained in a comparable arm's-length transaction with an unaffiliated
          Person. Nothing contained in this Section 8.2(m) shall prohibit (i)
          transactions permitted by Section 8.2(b)(ii), Section 8.2(c)(vii),
          Section 8.2(f)(iv), Section 8.2(f)(v), or Section 8.2(g) and (ii)
          customary directors' indemnifications and payment of customary
          directors' fees.

     (n)  ADDITIONAL DEPOSIT AND SECURITIES ACCOUNTS.  None of the Borrower or
          its Subsidiaries shall, directly or indirectly, open, maintain or
          otherwise have any checking, savings or other deposit accounts at any
          bank or other financial institution, or any other account where money
          is or may be deposited or maintained with any Person (including,
          without limitation, any securities accounts), other than the
          Disbursement Account and the accounts set forth on Schedule 8.2(n);
          provided, however, that any Borrower or Restricted Subsidiary may
          establish such an account upon 10 Business Days' prior written notice
          thereof, and, except to the extent otherwise permitted by the Agent,
          subject such account and the related financial institution to a
          Lockbox Agreement, a Restricted Account Agreement or an agreement that
          grants Control over such account to the Agent, as applicable.

     (o)  EXCESS CASH.  None of the Borrower or its Subsidiaries shall, directly
          or indirectly, maintain in the aggregate in all deposit accounts and
          securities accounts of the Borrower and its Subsidiaries (other than
          the Disbursement Account and payroll accounts), total cash balances
          and Investments permitted by Section 8.2(b)(iii), Section 8.2(b)(iv)
          or Section 8.2(b)(v), in excess of $3,000,000 at any time during which
          there 
<PAGE>
 
                                      -88-

          are Accommodations Outstanding hereunder or the Agent or the Lenders
          have any obligations under this Agreement.

     (p)  ADDITIONAL NEGATIVE PLEDGES.  None of the Borrower or its Subsidiaries
          shall, directly or indirectly, create or otherwise cause or suffer to
          exist or become effective, directly or indirectly, (i) any prohibition
          or restriction (including any agreement to provide equal and rateable
          security to any other Person in the event a Lien is granted to or for
          the benefit of the Agent and the Lenders) on the creation or existence
          of any Lien upon the assets of the Borrower or its Subsidiaries or
          (ii) any Contractual Obligation which may restrict or inhibit the
          Agent's and the Lenders' rights or ability to sell or otherwise
          dispose of, or exercise rights conferred pursuant to the Credit
          Documents with respect to, the Collateral or any part thereof after
          the occurrence of an Event of Default except (A) in each case, (I)
          with respect to specific Equipment encumbered to secure the Borrower's
          or such Subsidiary's Indebtedness permitted by Section 8.2(c)(iv) or
          obligations under an Operating Lease with respect to such Equipment
          permitted by Section 8.2(k), (II) with respect to Real Property which
          is the subject of an Operating Lease permitted by Section 8.2(k) or
          (III) with respect to licenses and permits entered into or obtained in
          the ordinary course of the Borrower's or such Subsidiary's business
          which, by their terms, prohibit Liens of third parties and (B) the
          terms of Indebtedness under the Parent Guarantor Credit Agreement (or
          any replacement credit facility) or any Permitted Subordinated
          Indebtedness may contain the prohibitions and restrictions described
          in clause (i) above (other than an agreement to provide equal and
          rateable security to the holders thereof in the event a Lien is
          granted to or for the benefit of the Agent, for the benefit of the
          Lenders)).

     (q)  ADDITIONAL SUBSIDIARIES.  None of the Borrower or its Subsidiaries
          shall, directly or indirectly, form or acquire any Subsidiaries,
          except that the Borrower may form or acquire, Subsidiaries, provided,
          that:

          (i)   The Borrower shall give the Agent written notice thereof (A) in
                the case of a formation of new Subsidiary (other than in
                connection with an Acquisition) at least 30 Business Days prior
                to the Consummation Date of such formation, together with a list
                of all locations of the assets of such Subsidiary after giving
                effect to such formation or (B) in the case of an Acquisition,
                within three Business Days after the execution of a letter of
                intent or other agreement of the Borrower or the applicable
                Subsidiary, together with (I) a copy of the related letter of
                intent or such other agreement, and (II) a list of all locations
                of the
<PAGE>
 
                                      -89-

                assets which will become property of the Borrower or such
                applicable Subsidiary after giving effect to such Acquisition
                (other than locations of Persons which will become customers of
                the Borrower or its Restricted Subsidiaries after giving effect
                to such Acquisition);

          (ii)  The Parent Guarantor or Borrower shall deliver to the Agent, or
                cause its Subsidiary to deliver to the Agent, each of the
                agreements, documents and instruments set forth on Exhibit R
                within the time periods set forth thereon, provided that a
                                                           -------------  
                Subsidiary acquired in an Acquisition shall not be required to
                become a Restricted Subsidiary if (A) the Borrower notifies the
                Agent at least ten (10) Business Days prior to the Consummation
                Date of such Acquisition that such Subsidiary will be
                amalgamated into the Borrower or another Restricted Subsidiary,
                or that such Subsidiary will be liquidated, dissolved or wound-
                up and the assets of such Subsidiary transferred to the Borrower
                or a Restricted Subsidiary, in each case, within five Business
                Days after such Consummation Date and (B) such amalgamation,
                liquidation, winding-up or dissolution is consummated within
                five (5) Business Days after such Consummation Date;

          (iii) Such Subsidiary is incorporated under the laws of Canada or a
                province thereof;

          (iv)  Promptly upon the Agent's reasonable request therefor, the
                Parent Guarantor or Borrower shall deliver any other
                documentation pertaining to the Borrower and such Subsidiary,
                taken as a whole; and

          (v)   Any other agreements, documents, instruments, certificates or
                opinions which the Agent may reasonably request.

All agreements, documents, instruments, certificates and opinions delivered
pursuant to this Section 8.2(q) shall be in form and substance reasonably
satisfactory to the Agent.  The Borrower expressly agrees that its Obligations
shall not be affected or diminished by the addition or release of any Restricted
Subsidiary hereunder, nor by any election by the Majority Lenders not to cause
any Subsidiary of the Borrower to become a Restricted Subsidiary.  This
Agreement and the other Credit Documents shall be fully effective as to the
Borrower and any other Person which is or becomes a party hereto or thereto
regardless of whether any other Person becomes, fails to become or ceases to be
a party hereto or thereto.
<PAGE>
 
                                      -90-

SECTION 8.3  SECURITY COVENANTS.

     So long as any amount owing under this Agreement or any other Obligation
remains unpaid or the Lender has any obligation under this Agreement or any
other Credit Document, and unless consent is given in accordance with Section
11.1, the Borrower shall:

     (a)  STATUS OF ACCOUNTS COLLATERAL.  With respect to the Collateral (i)
          maintain books and records pertaining to the Collateral in such
          detail, form and scope as the Majority Lenders reasonably require,
          (ii) execute any instruments and take any steps required by the
          Majority Lenders in order that all moneys due or to become due under
          the contract are assigned to the Lenders and notice of such assignment
          be given to the Governmental Entity, (iii) report immediately to the
          Agent any matters materially adversely affecting the value,
          enforceability or collectibility of the Collateral, taken as a whole,
          and (iv) if any amount payable under or in connection with any account
          in excess of Cdn. $25,000 is evidenced by a promissory note or other
          instrument, immediately pledge, endorse, assign and deliver to the
          Agent the promissory note or instrument, as additional Collateral;

     (b)  BUSINESS OUTSIDE CERTAIN JURISDICTIONS.  At least 30 days prior to any
          of the following changes becoming effective, notify the Agent in
          writing of (i) any proposed change in the location of (w) any place of
          business of the Borrower or any Restricted Subsidiary, (x) the chief
          executive office or head office of the Borrower or any Restricted
          Subsidiary, and (y) any place where tangible property of the Borrower
          or any Restricted Subsidiary is stored or located (other than Rental
          Equipment leased to a customer of the Borrower in the ordinary course
          of business and located at all times in the jurisdictions set forth in
          Schedule 7.1(a) as may be amended from time to time, and (ii) any
          proposed change in the name of the Borrower or any Restricted
          Subsidiary; and

     (c)  PERFECTION AND PROTECTION OF SECURITY INTEREST.  Promptly cure or
          cause to be cured any defects in the execution and delivery of any of
          the Credit Documents or any defects in the validity or enforceability
          or perfection of any of the Security and at its expense, execute and
          deliver or cause to be executed and delivered, all such agreements,
          instruments and other documents (including the filing of any financing
          statements or financing change statements) as the Majority Lenders may
          consider necessary or desirable to protect or otherwise perfect the
          Security Interest.
<PAGE>
 
                                     -91-

                                   ARTICLE 9

                               EVENTS OF DEFAULT

SECTION 9.1  EVENTS OF DEFAULT.

     The occurrence of any of the following events (each an "EVENT OF DEFAULT")
shall constitute an Event of Default under this Agreement:

     (a)  FAILURE TO PAY.  The Borrower, any of its Subsidiaries or any
          Additional Loan Party shall fail to pay (i) all or any portion of the
          principal amount of any Accommodations Outstanding when due or (ii)
          any other Obligation within five days after such Obligation is due and
          payable;

     (b)  BREACH OF CERTAIN COVENANTS.  The Borrower, any of its Subsidiaries,
          or the Parent Guarantor shall fail to comply with any covenant
          contained in (i) Section 8.1 and such failure continues for five days
          after the occurrence thereof or (ii) Section 8.2, provided, that any
          non-compliance with the first sentence of Section 8.2(a) shall not be
          an Event of Default unless and until the Borrower have failed to cure
          such non-compliance as of the Rental Equipment Utilization Cure Date
          applicable thereto;

     (c)  BREACH OF REPRESENTATION OR WARRANTY.  Any representation or warranty
          made or deemed to be made by the Borrower or any of its Subsidiaries
          or any Additional Loan Party in this Agreement or in any other Credit
          Document (or in any statement or certificate given under this
          Agreement or any other Credit Document), shall be false or misleading
          in any material respect when made or deemed to be made;

     (d)  OTHER DEFAULTS.  The Borrower, or any of its Subsidiaries or any
          Additional Loan Party shall fail to comply with any provisions
          contained in any Credit Document to which such Person is a party,
          other than as set forth in Sections 9.1(a), 9.1(b) or 9.1(c), and such
          failure shall not have been remedied or waived within 10 days after
          receipt by the Borrower of notice thereof from the Agent or any
          Lender;

     (e)  DISSOLUTION.  The Borrower, or any of its Subsidiaries or any
          Additional Loan Party shall dissolve, wind up or otherwise cease its
          business unless permitted hereunder;

     (f)  JUDGMENTS AND ATTACHMENTS.  Any money judgment, arbitration award
          (other than a money judgement or award covered by insurance, but only
          if the insurer has admitted liability with respect to such money
          judgment), writ or warrant of attachment, or similar process 
<PAGE>
 
                                      -92-

          involving in any case an amount in excess of $1,000,000 shall be
          entered or filed against the Borrower, any of its Subsidiaries or any
          Additional Loan Party or any of their respective assets and shall
          remain undischarged, unvacated, unbonded or unstayed for a period of
          60 days;

     (g)  INSOLVENCY EVENT.  Any of the Borrower, any of its Subsidiaries or any
          Additional Loan Party shall become the subject of an Insolvency Event;

     (h)  CHANGE OF CONTROL.  A Change of Control shall occur;

     (i)  CROSS DEFAULT.  Any of the Borrower, any of its Subsidiaries or any
          Additional Loan Parties shall fail to make any payment when due
          (whether by scheduled maturity, required prepayment, acceleration,
          demand or otherwise) with respect to any Indebtedness (other than an
          Obligation) of any such Person aggregating $1,000,000 or more; or any
          breach, default or event of default shall occur, or any other
          condition shall exist under any Contractual Obligation pertaining to
          any such Indebtedness, if the effect thereof is to cause an
          acceleration, mandatory redemption or other required repurchase of
          such Indebtedness, or permit the holder(s) of such Indebtedness to
          accelerate the maturity of any such Indebtedness or require a
          redemption or other repurchase of such Indebtedness; or any such
          Indebtedness shall be otherwise declared to be due and payable (by
          acceleration or otherwise) or required to be prepaid, redeemed or
          otherwise repurchased by the Borrower, any of its Subsidiaries or any
          Additional Loan Party (other than by a regularly scheduled required
          prepayment) prior to the stated maturity thereof; or the holder of any
          Lien (other than Liens upon property leased to the Borrower, any of
          its Subsidiaries or any Additional Loan Party which were created by
          the lessor prior to the commencement of the lease), in any amount,
          shall commence foreclosure of such Lien upon property of the Borrower,
          any of its Subsidiaries or any Additional Loan Party having an
          aggregate value in excess of $1,000,000 and such foreclosure shall
          continue against such property to a date less than thirty days prior
          to the date of the proposed foreclosure sale;

     (j)  FAILURE OF ENFORCEABILITY OF CREDIT DOCUMENTS; SECURITY.  Any
          covenant, agreement or obligation of the Borrower, any of its
          Subsidiaries, or any Additional Loan Party contained in or evidenced
          by any of the Credit Documents shall cease to be enforceable, or shall
          be determined to be unenforceable, in accordance with its terms; the
          Borrower, any of its Subsidiaries, or any Additional Loan Party shall
          deny or disaffirm its obligations under any of the Credit Documents or
          any Liens granted in connection therewith; or, any Liens granted to
          the 
<PAGE>
 
                                      -93-

          Agent and the Lenders in any of the Collateral shall be determined
          to be void, voidable, invalid or (unless (i) such Liens cannot, under
          applicable law, be perfected by the filing of financing statements,
          the recording of security agreements and the required cover sheets
          with the Canadian Federal Trademark and Patent Office and the United
          States Patent and Trademark Office or, to the extent required to be
          delivered on the Effective Date or thereafter pursuant to the Security
          Agreement, the taking of possession of Negotiable Collateral (as
          defined in the Securities Agreement (or any combination thereof) and
          (ii) the Borrower, any of its Subsidiaries or any Additional Loan
          Party, as applicable, is not expressly required, or has not been
          notified by the Agent that it is expressly required, in accordance
          with the Credit Documents, to take such other actions under applicable
          law which would be sufficient to perfect such Liens) unperfected, are
          subordinated or not given the priority contemplated by this Agreement;
          or

     (k)  PARENT GUARANTOR DEFAULTS.  Without limiting in any manner Section
          9.1(i), the Parent Guarantor shall fail to perform or comply with any
          Financial Covenant, without giving effect to the benefit of any waiver
          or consent to departure from such covenants by the Agent and/or the
          Lenders under the Parent Guarantor Credit Agreement.

SECTION 9.2    ACCELERATION AND CASH COLLATERALIZATION.

     Upon the occurrence and during the continuance of an Event of Default, the
Agent may take any or all of the following actions, without prejudice to the
rights of the Agent or any Lender to enforce its claims against the Borrower or
any Additional Loan Parties:

     (a)  ACCELERATION.

          (i)  With respect to any Event of Default described in Section 9.1(g),
               all Obligations shall automatically and without notice be
               immediately due and payable without presentment, demand, protest
               or any other action or obligation of the Agent or any Lender;

          (ii) With respect to any Event of Default described in Section 9.1(a),
               upon the written request, or with the written consent , of the
               Majority Lenders, and by delivery of written notice to the
               Borrower from the Agent, all Obligations shall be declared to be
               immediately due and payable without presentment, demand, protest
               or any other action or obligation of the Agent or any Lender; and
<PAGE>
 
                                      -94-

          (iii)  With respect to any other Event of Default, upon the written
                 request, or with the written consent, of the Majority Lenders,
                 and by delivery of written notice to the Borrower from the
                 Agent, all Obligations shall be declared to be immediately due
                 and payable without presentment, demand, protest or any other
                 action or obligation of the Agent or any Lender.

     (b)  TERMINATION OF COMMITMENTS.  Upon the written request of the Majority
          Lenders, and by delivery of written notice to the Borrower from the
          Agent, the Commitments of each of the Lenders shall be immediately
          terminated (except with respect to any Event of Default described in
          Section 9.1(g), in which case the Commitment shall automatically be
          terminated without the necessity of any request of the Majority
          Lenders or notice or other demand to any Borrower).

     (c)  CASH COLLATERALIZATION.  On demand of the Agent or the Majority
          Lenders, the Borrower shall immediately deposit with the Agent cash or
          Cash Equivalents in an amount equal to 110% of the Letters of Credit
          Obligations then outstanding.

SECTION 9.3    RESCISSION OF ACCELERATION AND TERMINATION.

     After acceleration of the maturity of the Obligations or the termination of
the Commitment, if the Borrower pays all accrued interest and all principal due
on the Accommodations Outstanding (other than by reason of the acceleration) and
all Defaults and Events of Default are otherwise remedied or waived in
accordance with Section 11, (a) the Majority Lenders may elect, in their sole
discretion, to rescind the acceleration and (b) the Majority Lenders may elect,
in their sole discretion, to rescind the termination and return any cash
collateral.  This Section 9.3 is intended only to bind all of the Lenders to a
decision of the Majority Lenders (in the case of an acceleration of the
Obligations) and not to confer any right on the Borrower, even if the described
conditions for the election of the Majority Lenders may be met.

SECTION 9.4    REMEDIES.

     Upon the occurrence and during the continuance of an Event of Default, the
Agent shall at the request of, or may the consent of, the Majority Lenders,
commence such legal action or other proceedings as the Majority Lenders, in
their sole discretion, deem expedient including, the commencement of enforcement
proceedings under the Credit Documents all without any additional notice,
presentation, demand, protest, notice of dishonour, entering into of possession
of any property or assets, or any other action or notice, all of which are
expressly waived by the Borrower and without limitation to the foregoing, may do
any or all of the following:
<PAGE>
 
                                      -95-

     (a)  Remove all documents, instruments, files and records (including the
          copying of any computer records) relating to the Collateral or use (at
          the expense of the Borrower) such supplies or space of the Borrower,
          any of its Subsidiaries or any Additional Loan Party at such Person's
          place of business necessary to properly administer and collect the
          Accounts thereon;

     (b)  Accelerate or extend the time of payment, compromise, issue credits,
          or bring suit on the Accounts (in the name of the Borrower, any of its
          Subsidiaries or any Additional Loan Party or the Lenders) and
          otherwise administer and collect the Accounts;

     (c)  Sell, assign and deliver the Collateral and any returned, reclaimed or
          repossessed merchandise, with or without advertisement, at public or
          private sale, for cash, on credit or otherwise; and

     (d)  Foreclose the Liens created pursuant to the Credit Documents by any
          available procedure, or take possession of any or all of the
          Collateral without judicial process and enter any premises where any
          Collateral may be located for the purpose of taking possession of or
          removing the same.

The Majority Lenders may instruct the Agent to exercise, or to refrain from
exercising, any right, remedy or power with respect to the Collateral available
to or conferred on the Agent hereunder or under any Collateral Document and in
connection therewith, to direct the time, method and place of conducting any
proceeding for any such right or remedy or exercising any such right or remedy,
or for the appointment of a receiver, or to instruct the Agent to take or
refrain from taking any other action with respect to the Collateral authorized
by this Agreement or any Collateral Document.  Subject to provisions of Section
2.11, any Lender may bid or become a purchaser at any sale, free from any right
of redemption, which right is expressly waived by the Borrower.  If notice of
intended disposition of any Collateral is required by law, it is agreed that
five Business Days' notice shall constitute reasonable notification.  The
Borrower will and will cause each of its Subsidiaries to assemble the Collateral
and make it available to the Agent at such locations as the Agent may specify,
whether at the premises of the Borrower, its Restricted Subsidiaries, or
elsewhere, and will make available to the Agent the premises and Facility of the
Borrower and its Restricted Subsidiaries for the purpose of the Agent's taking
possession of, removing or putting the Collateral in saleable form.

SECTION 9.5    RIGHT OF SETOFF.

     In addition to and not in limitation of all rights of offset and any other
rights and remedies that the Agent or any Lender may have under applicable law,
upon the occurrence and during the continuance of any Event of Default, and
whether or 
<PAGE>
 
                                      -96-

not the Agent or any Lender has made any demand or the Obligations of the
Borrower have matured or are contingent, the Agent and each Lender shall have
the right to the fullest extent permitted by law (including general principles
of common-law) to set-off and to appropriate and apply to the payment of the
Obligations of the Borrower and its Subsidiaries (a) all deposits (general or
special, time or demand, provisional or final) and other obligations then or
thereafter owing by the Agent or such Lender to the Borrower or its
Subsidiaries, and (b) any moneys, credits or other property belonging to the
Borrower or its Subsidiaries, at any time held by or coming into the possession
of such Lender, the Agent or any of their respective Affiliates. If an
obligation is unascertained the Lender may, in good faith, estimate the
obligation and exercise its right of set-off in respect of the estimate, subject
to providing the Borrower with an accounting when the obligation is finally
determined. Each Lender exercising such rights shall notify the Agent thereof,
provided that the failure to give such notice shall not affect the validity of
the set-off and application and any amount received as a result of the exercise
of such rights shall be shared in accordance with Section 2.11.

SECTION 9.6    LICENSE FOR USE OF SOFTWARE AND OTHER INTELLECTUAL PROPERTY.

     Unless expressly prohibited by the licensor thereof, if any, the Agent is
hereby granted a license to use, without charge, the Borrower and its
Subsidiaries computer programs, software, printouts and other computer
materials, technical knowledge or processes, data bases, materials, trademarks,
registered trademarks, trademark applications, service marks, registered service
marks, service mark applications, patents, patent applications, trade names,
rights of use of any name, labels, fictitious names, inventions, designs, trade
secrets, goodwill, registrations, copyrights, copyright applications, permits,
licenses, franchises, customer lists, credit files, correspondence, and
advertising materials or any property of a similar nature, as it pertains to the
Borrower and its Subsidiaries Collateral, or any rights to any of the foregoing,
in completing production of, advertising for sale, and selling any of the
Borrower and its Subsidiaries Collateral, and the Borrower and its Subsidiaries
rights under all licenses and franchise agreements shall inure to the Agent's
benefit.  The Agent agrees not to use any such license prior to the occurrence
of an Event of Default without giving the Borrower and its Subsidiaries prior
written notice.

SECTION 9.7    NO MARSHALLING; DEFICIENCIES; REMEDIES CUMULATIVE.

     None of the Agent or the Lenders shall be under any obligation to marshal
any assets in favor of the Borrower, its Subsidiaries or Additional Loan Party
or any other party or against or in payment of any or all of the Obligations.
The net cash proceeds resulting from the Agent's exercise of any of the
foregoing rights to liquidate all or substantially all of the Collateral (after
deducting all of the Agent's Expenses related thereto) shall be applied by the
Agent to the payment of the Obligations, whether due or to become due, in the
order specified in Section 2.9(2)(c). The Borrower shall remain liable to the
Agent and the Lenders for any 
<PAGE>
 
                                      -97-

deficiencies, and the Agent and the Lenders in turn agree to remit to the
Borrower or its successors or assigns, any surplus resulting therefrom. The
foregoing remedies are not intended to be exhaustive and the full or partial
exercise of any of them shall not preclude the full or partial exercise of any
other available remedy under this Agreement, under any other Credit Document, at
equity or at law.

                                  ARTICLE 10

                           THE AGENT AND THE LENDERS

SECTION 10.1   AUTHORIZATION AND ACTION.

(1)  Each Lender irrevocably appoints and authorizes the Agent to take such
     action as agent on its behalf and to exercise such powers under this
     Agreement as are delegated to it by the terms of this Agreement, together
     with all powers reasonably incidental thereto.  As to any matters not
     expressly provided for by this Agreement, the Agent shall act or refrain
     from acting (and shall be fully protected in so doing) upon the joint
     instructions of the Majority Lenders which instructions shall be binding
     upon all Lenders.  The Agent shall not be required to take any action which
     (i) would expose it to personal liability, (ii) is contrary to this
     Agreement or any applicable law, rule, regulation, judgment or order, (iii)
     would require it to become registered to do business in any jurisdiction,
     or (iv) would subject it to taxation.

(2)  The Lenders appoint the Agent as the holder of an irrevocable power of
     attorney (within the meaning of the Civil Code of Quebec) for the purposes
     of holding security on the properties and assets of the Borrower, the
     Restricted Subsidiaries and the other Additional Loan Parties pursuant to
     the laws of Quebec for the due payment and performance of their respective
     obligations under the Credit Documents.  The Agent agrees to act in such
     capacity.

(3)  The Agent shall have no duties or obligations other than as set out in this
     Agreement and there shall not be construed against the Agent any implied
     duties (including fiduciary duties), obligations or covenants.  The Agent
     may execute or perform, and may delegate the execution and performance of,
     any of its powers, rights, discretions and duties under the Credit
     Documents through or to any Persons designated by it.  References in any
     Credit Document to the Agent shall include references to any such Persons.

(4)  The Agent is not obliged to (i) take or refrain from taking any action or
     exercise or refrain from exercising any right or discretion under the
     Credit Documents, or (ii) incur or subject itself to any cost in connection
     with the Credit Documents, unless it is first specifically indemnified or
     furnished with security by the Lenders, in form and substance satisfactory
     to it (which may include further agreements of indemnity or the deposit of
     funds).
<PAGE>
 
                                      -98-

(5)  The Agent shall promptly deliver to each Lender any notices, reports or
     other communications contemplated in this Agreement which are intended for
     the benefit of the Lenders.

SECTION 10.2   NO LIABILITY.

     Neither the Agent nor its directors, officers, agents or employees shall be
liable to the Lender for any action taken or omitted to be taken by it or them
in connection with the Credit Documents except for its or their own gross
negligence or wilful misconduct.  Without limiting the generality of the
foregoing, the Agent (i) may treat the Lender as the payee of amounts
attributable to its Commitment unless and until the Agent receives an agreement
in the form contemplated in Section 11.8(5), (ii) may consult with legal counsel
(including legal counsel for the Borrower), independent accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken by it in accordance with their advice, (iii) makes no warranty or
representation to the Lender and shall not be responsible to the Lender for the
form, substance, accuracy or completeness of any Credit Document or any other
documents or information made available to the Lenders, (iv) has no duty to
inspect the property or assets (including books and records) of the Borrower or
any other Person, (v) has no duty to ascertain or inquire as to the existence of
a Default or an Event of Default or the observance of any of the terms or
conditions of the Credit Documents, (vi) is not responsible to the Lender for
the execution, enforceability, genuineness, sufficiency or value of any of the
Credit Documents, and (vii) shall incur no liability by acting upon any notice,
certificate or other instrument believed by it to be genuine and signed or sent
by the proper Person.

SECTION 10.3   ACCOMMODATIONS BY AGENT.

     The Agent has the same rights and powers under this Agreement with respect
to its Commitment as any other Lender and may exercise such rights and powers as
though it were not the Agent.  The term "LENDER" or "LENDERS" shall, unless
otherwise expressly indicated, include the Agent in its individual capacity.
The Agent and its Affiliates may accept deposits from, lend money to, act as
trustee under indentures of, and generally engage in any kind of business with,
the Borrower, any of its subsidiaries, any Additional Loan Party or any Person
who may do business with or own securities of such Persons, all as if it were
not the Agent and without any duty to account to the Lenders.

SECTION 10.4   HOLDING OF SECURITY; SHARING OF PAYMENTS, ETC.

(1)  The Security shall be held by the Agent for the rateable benefit of the
     Lenders in accordance with its terms and any proceeds from any realization
     of the Security shall be applied to the Accommodations Outstanding to each
     Lender rateably (whether such Security is held in the name of the Agent or
     in the name of any one or more of the Lenders and without regard to any
     priority to which the Lender may otherwise be entitled under applicable
     law).
<PAGE>
 
                                      -99-

(2)  Each Lender agrees with the other Lenders that (i) it will not, without the
     prior consent of the other Lenders, take or obtain any Lien on any
     properties or assets of the Borrower or any Additional Loan Party to secure
     the Obligations of the Borrower under this Agreement, except for the
     benefit of all Lenders or as may otherwise be required by law, and (ii)
     notwithstanding the provisions of Section 32 of the Special Corporate
     Powers Act (Quebec), the Agent may, as the Person holding the power of
     attorney for the Lenders, acquire title to indebtedness secured by a
     hypothec in its favour related to the Credit Documents.

(3)  The Agent is authorized to release any Lien granted to or held by the
     Agent, for the benefit of the Lenders, upon any Collateral (i) upon
     termination of the Commitment and Payment In Full of all of the
     Obligations, (ii) upon receipt of the proceeds of sales of the Collateral
     permitted hereunder, together with a certificate of the Borrower or
     Additional Loan Party, as appropriate, certifying, with appropriate
     calculations where necessary, that such sale is permitted by this Agreement
     or (iii) if the release can be and is approved by the Majority Lenders.  At
     such time, the Agent shall, upon the written request and at the expense of
     the Borrower or Additional Loan Party, as appropriate, deliver to such
     Person such instruments as are necessary to terminate the Liens on the
     Collateral subject to such release or otherwise evidence and effectuate
     such release.  Any such delivery shall be without warranty by or recourse
     to the Agent, except as to the absence of any prior assignments by the
     Agent of its interest in the Collateral subject to such release, and shall
     be at the expense of the Borrower or Additional Loan Party, as appropriate.
     In addition, to the extent necessary upon the sale of the capital stock of
     a Restricted Subsidiary in accordance with Section 3.2(f)(vi), the Agent is
     authorized to release such Restricted Subsidiary from its Obligations under
     the Credit Documents to which it is a party.  The Agent may request, and
     thereupon the Majority Lenders shall provide, confirmation of the Agent's
     authority to execute and deliver releases with respect to the Collateral
     and such Obligations of a Restricted Subsidiary  whose capital stock has
     been sold in accordance with Section 3.2(f)(vi), in each case as herein set
     forth, and upon receipt of such approvals from the Majority Lenders, the
     Agent shall execute and deliver such releases to the Borrower or Additional
     Loan Party, as appropriate.

SECTION 10.5   LENDER CREDIT DECISIONS.

     Each Lender acknowledges that it has, independently and without reliance
upon the Agent, made its own credit analysis and decision to enter into this
Agreement.  Each Lender also acknowledges that it will, independently and
without reliance upon the Agent and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement.
<PAGE>
 
                                     -100-

SECTION 10.6   INDEMNIFICATION.

     Each Lender shall indemnify and save the Agent harmless (to the extent not
reimbursed by the Borrower) rateably in accordance with its Revolving Credit
Proportionate Share from any claim or loss suffered by, imposed upon or asserted
against the Agent as a result of, or arising out of, the Credit Documents or any
action taken or omitted by the Agent under the Credit Documents provided that no
Lender shall be liable for any part of such loss resulting from the gross
negligence or wilful misconduct of the Agent in its capacity as agent.  Without
limiting the foregoing, each Lender shall reimburse the Agent upon demand for
its rateable share of any out-of-pocket expenses incurred by the Agent in
connection with the preparation, execution, administration or enforcement of, or
legal advice in respect of rights or responsibilities under, the Credit
Documents (to the extent not reimbursed by the Borrower).

SECTION 10.7   LIABILITY OF THE LENDERS INTER SE.

     Each of the Lenders agrees with each of the other Lenders that, except as
otherwise expressly provided in this Agreement, none of the Lenders has or shall
have any duty or obligation, or shall in any way be liable to any of the other
Lenders in respect of the Credit Documents or any action taken or omitted to be
taken in connection with them.

SECTION 10.8   SUCCESSOR AGENTS.

     The Agent may resign at any time by giving written notice to the Lenders
and the Borrower, such resignation to be effective upon the appointment of a
successor Agent.  Upon notice of any resignation, the Majority Lenders have the
right to appoint a successor Agent who (at any time that no Event of Default has
occurred and is continuing) shall be acceptable to the Borrower, acting
reasonably.  If no successor Agent is appointed or has accepted the appointment
within thirty days after the retiring Agent's notice of resignation, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent, which
is a Lender.  Upon the acceptance of the appointment by a successor Agent, the
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent and the retiring Agent shall be
discharged from its duties and obligations under this Agreement.  After any
retiring Agent's resignation, the provisions of this Article 10 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent.

                                  ARTICLE 11

                                 MISCELLANEOUS

SECTION 11.1   AMENDMENTS, ETC.

(1)  Subject to Section 11.1(2) and Section 11.1(3) no amendment or waiver of
     any provision of any of the Credit Documents, nor consent to any departure
     by 
<PAGE>
 
                                     -101-

     the Borrower or any other Person from such provisions, is effective unless
     in writing and approved by the Majority Lenders. Any amendment, waiver or
     consent is effective only in the specific instance and for the specific
     purpose for which it was given.

(2)  Only written amendments, waivers or consents signed by all the Lenders
     shall (i) increase the Lender's Commitment or subject the Lender to any
     additional obligation, (ii)  increase the Commitment, (iii) reduce the
     principal or amount of, or interest on, any Accommodation Outstanding or
     any Fees, (other than Fees that are exclusively for the account of the
     Agent), (iv) postpone any date fixed for any scheduled payment of principal
     of, or interest on, any Accommodation Outstanding or any Fees, (other than
     Fees that are exclusively for the account of the Agent), (v) extend the
     Relevant Repayment Date, (vi) change (y) the percentage of the Commitments
     or outstanding Obligations, or any minimum requirement necessary for the
     Majority Lenders to take action, or (z) the number or percentage of Lenders
     required for the Lenders, or any of them, or the Agent to take any
     action,(vii)  change the definition of Majority Lenders or Revolving Credit
     Proportionate Share, (viii) except as otherwise provided in this Agreement,
     amend, any or consent to the departure of any provision of any of the
     Security Documents or release any Liens in favour of the Agent or the
     Lenders on all or substantially all of the Collateral, (vix) release the
     Parent Guarantor from the Parent Guaranty (x) consent to any assignment by
     the Borrower or Parent Guarantor of their respective rights or obligations
     under the Credit Documents to which it is a party, or (xi) amend this
     Section 11.1(2).

(3)  Only written amendments, waivers or consents signed by the Agent in
     addition to the Majority Lenders, shall affect the rights or duties of the
     Agent under the Credit Documents.

SECTION 11.2   WAIVER.

(1)  No failure on the part of any  Lender or the Agent to exercise, and no
     delay in exercising, any right under any of the Credit Documents shall
     operate as a waiver of such right; nor shall any single or partial exercise
     of any right under any of the Credit Documents preclude any other or
     further exercise of such right or the exercise of any other right.

(2)  Except as otherwise expressly provided in this Agreement, the covenants,
     representations and warranties shall not merge on and shall survive the
     initial Accommodation and, notwithstanding such initial Accommodation or
     any investigation made by or on behalf of any party, shall continue in full
     force and effect.  The closing of this transaction shall not prejudice any
     right of one party against any other party in respect of anything done or
     omitted under this Agreement or in respect of any right to damages or other
     remedies.
<PAGE>
 
                                     -102-

SECTION 11.3   EVIDENCE OF DEBT AND ACCOMMODATION NOTICES.

(1)  The indebtedness of the Borrower resulting from Accommodations under the
     Credit Facility shall be evidenced by the records of the Lenders (or the
     Agent acting on behalf of the Lenders) which shall constitute prima facie
     evidence of such indebtedness, absent manifest error.

(2)  Prior to the receipt of any Accommodation Notice, the Agent may act on the
     basis of a notice by telephone (containing the same information as would be
     contained in the Accommodation Notice) believed by it to be from an
     authorized person representing the Borrower.  In the event of a conflict
     between the Agent's record of any Accommodation and the Accommodation
     Notice, the Agent's record shall prevail, absent manifest error.

SECTION 11.4   NOTICES, ETC.

     Any notice, direction or other communication to be given under this
Agreement shall, except as otherwise permitted, be in writing and given by
delivering it or sending it by facsimile or other similar form of recorded
communication addressed:

 
     (a)  To the Borrower at:


          c/o Rental Service Corporation
          6929 E. Greenway Parkway
          Suite 200
          Scottsdale,  Arizona  85254

          Attention:     Rosemary Strunk, Corporate Counsel

          Telephone:     (602) 348-5913
          Facsimile:     (602) 483-4024
<PAGE>
 
                                     -103-

          with a copy to:

          Bennett Jones Verchere
          4500 Bankers Hall East
          855 2/nd/ Street S.W.
          Calgary, Alberta  T2P 4K7

          Attention:     Garnet M. Schulhauser, Attorney

          Telephone:     (403) 298-3008
          Facsimile:     (403) 265-7219

          with a copy to:

          Latham & Watkins
          633 West Fifth Street
          Suite 4000
          Los Angeles, California  90071

          Attention:     Mary Ruhl, Attorney

          Telephone:     (213) 891-8182
          Facsimile:     (213) 891-8763
 
     (b)  To the Agent at:

          BT Bank of Canada
          Royal Bank Plaza
          200 Bay Street
          North Tower, Suite 1700
          Toronto, Ontario  M5J 2J2

          Attention:     Karyn Curran

          Telephone:     (416) 865-2234
          Facsimile:     (416) 941-9587
<PAGE>
 
                                     -104-

          with a copy to:

          BT Commercial Corporation
          300 South Grand Avenue, 41/st/ Floor
          Los Angeles, California  90071

          Attention:     Richard Faulkner

          Telephone:     (213) 620-8103
          Facsimile:     (213) 620-8131

and, if to the Lenders, to them at the addresses shown on the signature pages.
Any such communication shall be deemed to have been validly and effectively
given if (i) personally delivered, on the date of such delivery if such date is
a Business Day and such delivery was made prior to 4:00 p.m. (Toronto time),
otherwise on the next Business Day, (ii) transmitted by facsimile or similar
means of recorded communication on the Business Day following the date of
transmission.  Any party may change its address for service from time to time by
notice given in accordance with the foregoing and any subsequent notice shall be
sent to the party at its changed address.

SECTION 11.5   CONFIDENTIALITY.

     Each Lender agrees that it will not disclose without the prior consent of
the Borrower or the Applicable Additional Loan Party any information with
respect to such Person or their  Subsidiaries which is furnished pursuant to
this Agreement and which is designated by such Person to the Lenders in writing
as confidential, provided, that any Lender may disclose any such information (a)
to its Affiliates, employees, auditors, or counsel, or to another Lender if the
disclosing Lender or such disclosing Lender's holding or parent company in its
sole discretion determines that any such party should have access to such
information, (b) as has become generally available to the public, (c) as may be
required or appropriate in any report, statement or testimony submitted to any
Governmental Authority having or claiming to have jurisdiction over such Lender,
(d) as may be required or appropriate in response to any summons or subpoena or
in connection with any litigation, (e) in order to comply with any Requirement
of Law and (f) to any prospective or actual transferee or participant in
connection with any contemplated transfer or participation of any of the
Accommodations or  Commitments or any interest therein by such Lender, provided,
further, that, unless specifically prohibited by applicable law or court order
or unless such disclosure is made in connection with an examination or audit by
a governmental agency in the ordinary course of such Lender's business, each
Lender revealing confidential information pursuant to clause (c), (d) or (e) of
this Section 11.5 shall notify, as applicable, the Borrower or the relevant
Additional Loan Party of any request, summons or subpoena by any governmental
agency or representative thereof, or in connection 
<PAGE>
 
                                     -105-

with any litigation, for the disclosure of any such confidential information
prior to the disclosure of such information

SECTION 11.6   COSTS, EXPENSES AND INDEMNITY.

(1)  The Borrower hereby indemnifies and agrees to defend and hold harmless the
     Agent, the Issue Lender, and each of the Lenders and their respective
     directors, officers, agents, employees and counsel (each an "INDEMNIFIED
     PERSON") from and against any and all losses, claims, damages, liabilities,
     deficiencies, judgments or expenses incurred by any of them (except to the
     extent that it is finally judicially determined to have resulted from their
     own gross negligence or willful misconduct) arising out of or by reason of
     (a) any litigation, investigations, claims or proceedings which arise out
     of or are in any way related to (i) this Credit Agreement, any other Credit
     Document or the transactions contemplated hereby, (ii) the issuance of the
     Letters of Credit, (iii) the failure of the Issue Lender to honor a drawing
     under any Letter of Credit, as a result of any act or omission, whether
     rightful or wrongful, of any present or future de jure or de facto
     government or Governmental Authority, (iv) any actual or proposed use by
     the Borrower of the proceeds of the Accommodations, or (v) the Agent's or
     the Lenders' entering into this Credit Agreement, the other Credit
     Documents or any other agreements and documents relating hereto, (b) any
     remedial or other action taken by the Borrower or any Additional Loan Party
     or any of the Lenders in connection with compliance by the Borrower or any
     Additional Loan Party or any of their Subsidiaries, or any of their
     respective properties, with any federal, provincial or local environmental
     laws, acts, rules, regulations, orders, directions, ordinances, criteria or
     guidelines, (c) the presence of contaminants at, on or under, or the
     discharge or reasonably likely discharge of contaminants from any of the
     properties now or previously used by the Borrower or any Addition Loan
     Party, or the breach or non-compliance with any Environmental Law by any
     mortgagor, owner or lessee of such properties.  In addition, the Borrower
     shall, upon demand, pay to the Agent and any Lender all costs and expenses
     (including the reasonable fees and disbursements of counsel and other
     professionals) paid or incurred by the Agent or such Lender in (w)
     enforcing or defending its rights under or in respect of this Credit
     Agreement, the other Credit Documents or any other document or instrument
     now or hereafter executed and delivered in connection herewith, (x) in
     collecting all or any part of the Obligations, (y) in foreclosing or
     otherwise collecting upon the Collateral or any part thereof (including,
     without limiting the foregoing, in preserving the security interest in,
     possession of, repairing, protecting, ensuring, preparing for disposition,
     foreclosing, realizing, collecting, selling, transferring, delivering or
     obtaining payment of the Collateral) and (z) obtaining any legal,
     accounting or other advice (including remuneration of receivers) in
     connection with any of the foregoing.
<PAGE>
 
                                     -106-

(2)  The Borrower agrees to reimburse the Agent's Expenses promptly on demand.

(3)  If, with respect to the Lender, (i) any change in any law, rule,
     regulation, judgment or order of general application, or any change in the
     interpretation or application of such law, rule, regulation, judgment or
     order, occurring or becoming effective after this date, or (ii) compliance
     by the Lender with any direction, request or requirement (whether or not
     having the force of law) of any Governmental Authority made or becoming
     effective after the date, has the effect of causing any loss to the Lender
     or reducing the Lender's rate of return by (w) increasing the cost to the
     Lender of performing its obligations under this Agreement or in respect of
     any Accommodations Outstanding (including the costs of maintaining any
     capital, reserve or special deposit requirements but other than a reduction
     resulting from a higher rate or from a change in the calculation of income
     or capital tax relating to the Lender's income or capital in general), (x)
     requiring the Lender to maintain or allocate any capital or additional
     capital or affecting its allocation of capital in respect of its
     obligations under this Agreement or in respect of any Accommodations
     Outstanding,  (y) reducing any amount payable to the Lender under this
     Agreement or in respect of any Accommodations Outstanding by any material
     amount, (z) causing the Lender to make any payment or to forego any return
     on, or calculated by reference to, any amount received or receivable by the
     Lender under this Agreement or in respect of any Accommodations
     Outstanding, then the Lender may give notice to the Borrower specifying the
     nature of the event giving rise to the loss and the Borrower shall, subject
     to Section 11.9, on demand, pay such amounts as the Lender specifies is
     necessary to compensate it for any such loss.  A certificate as to the
     amount of any such loss submitted in good faith by the Lender to the
     Borrower shall be conclusive and binding for all purposes, absent manifest
     error.

(4)  The Borrower shall pay to each Lender on demand any amounts required to
     compensate the Lender for any loss suffered or incurred by it as a result
     of (i) any payment or prepayment being made in respect of a BA Instrument,
     Letter of Credit or Advance other than on the maturity or expiration or on
     the last day of an Eurodollar Interest Period applicable to it, or (ii) the
     failure of the Borrower to make a payment or a mandatory repayment in the
     manner and at the time specified in this Agreement.  A certificate as to
     the amount of any loss submitted in good faith by the Lender to the
     Borrower shall be conclusive and binding for all purposes, absent manifest
     error.

(5)  The provisions of this Section 11.6 shall survive the termination of this
     Agreement and the repayment of all Accommodations Outstanding.  The
     Borrower acknowledges that neither its obligation to indemnify nor any
     actual indemnification by it of the Lender, the Agent or any other
<PAGE>
 
                                     -107-

     Indemnified Person in respect of such Person's losses for the legal fees
     and expenses shall in any way affect the confidentiality or privilege
     relating to any information communicated by such Person to its counsel.

SECTION 11.7   TAXES AND OTHER TAXES.

(1)  All payments to the Lenders by the Borrower under any of the Credit
     Documents shall be made free and clear of and without deduction or
     withholding for any and all taxes, levies, imposts, deductions, charges or
     withholdings and all related liabilities (all such taxes, levies, imposts,
     deductions, charges, withholdings and liabilities being referred to as
     "TAXES") imposed by Canada or the United States of America or any other
     applicable jurisdiction (or any political subdivision or taxing authority
     of it), unless such Taxes are required by applicable law to be deducted or
     withheld.  If the Borrower shall be required by applicable law to deduct or
     withhold any such Taxes from or in respect of any amount payable under any
     of the Credit Documents except, as provided in the next sentence, (i) the
     amount payable shall be increased (and for greater certainty, in the case
     of interest, the amount of interest shall be increased) as may be necessary
     so that after making all required deductions or withholdings (including
     deductions or withholdings applicable to any additional amounts paid under
     this Section 11.7), the Lenders receive an amount equal to the amount they
     would have received if no such deduction or withholding had been made, (ii)
     the Borrower shall make such deductions or withholdings, and (iii) the
     Borrower shall immediately pay the full amount deducted or withheld to the
     relevant Governmental Entity in accordance with applicable law.

(2)  The Borrower agrees to immediately pay any present or future stamp or
     documentary taxes or any other excise or property taxes, charges, financial
     institutions duties, debits taxes or similar levies (all such taxes,
     charges, duties and levies being referred to as "OTHER TAXES") which arise
     from any payment made by the Borrower under any of the Credit Documents or
     from the execution, delivery or registration of, or otherwise with respect
     to, any of the Credit Documents.

(3)  The Borrower shall indemnify the Lenders and the Agent for the full amount
     of Taxes or Other Taxes (including, without limitation, any Taxes or Other
     Taxes imposed by any jurisdiction on amounts payable by the Borrower under
     this Section 11.7) paid by the Lenders or the Agent and any liability
     (including penalties, interest and expenses) arising from or with respect
     to such Taxes or Other Taxes, whether or not they were correctly or legally
     asserted.  The Borrower will not be required to indemnify the Lenders for
     any Taxes or Other Taxes imposed by reason of the Lender being connected
     with Canada otherwise than merely by lending money to the Borrower pursuant
     to this Agreement.  Payment under this indemnification shall be made within
     30 
<PAGE>
 
                                     -108-

     days from the date the Agent or the relevant Lender, as the case may be,
     make written demand for it.  A certificate as to the amount of such Taxes
     or Other Taxes submitted to the Borrower by the Agent or the relevant
     Lender shall be conclusive evidence, absent manifest error, of the amount
     due from the Borrower to the Agent or the Lenders, as the case may be.

(4)  The Borrower shall furnish to the Agent and the Lenders the original or a
     certified copy of a receipt evidencing payment of Taxes or Other Taxes made
     by the Borrower within 30 days after the date of any payment of Taxes or
     Other Taxes.

(5)  The provisions of this Section 11.7 shall survive the termination of the
     Agreement and the repayment of all Accommodations Outstanding.

SECTION 11.8   SUCCESSORS AND ASSIGNS.

(1)  This Agreement shall become effective when executed by the Borrower, the
     Agent and each Lender and after that time shall be binding upon and enure
     to the benefit of the Borrower, the Lenders and the Agent and their
     respective successors and permitted assigns.

(2)  The Borrower shall not have the right to assign its rights or obligations
     under this Agreement or any interest in this Agreement without the prior
     consent of all the Lenders, which consent may be arbitrarily withheld.

(3)  Any Lender may grant participations in all or any part of its interest in
     the Credit Facility to one or more Persons (each a "PARTICIPANT") provided
                                                                       --------
     that (a) such interest or part of its interest, as the case may be, is not
     ----                                                                      
     less than $5,000,000, unless it is to another Lender (b) the Borrower, the
     Parent Guarantor, the Agent, and the other Lenders shall continue to deal
     solely and directly with such Lender and (c) no Participant shall have any
     rights to approve any amendment or waiver or consent to any departure from
     any provisions of this Agreement or any other Credit Document except to the
     extent such amendment or waiver or departure would (i) increase the
     Lender's Commitment of the Lender from whom the participant purchased its
     participation interest, (ii) reduce the principal or amount of, or rate or
     amount of interest on, any Accommodations Outstanding or any Fees subject
     to such participation (other than by the payment or prepayment thereof),
     (iii) postpone any date fixed for any scheduled payment of principal of, or
     interest on, any Accommodations Outstanding or any Fees subject to the
     participation interest or (iv) release all or a substantial portion of the
     Collateral, other than when otherwise permitted under this Agreement.  The
     Lender may with the prior written consent of the Agent, and the payment of
     $2,500 to the Agent assign all or any part of its interest in the Credit
     Facility to one or more Persons (each an "ASSIGNEE"), provided that such
     interest or part of its interest, as the case may be, is not less than
     $5,000,000 unless it is to another 
<PAGE>
 
                                     -109-

     Lender. The Lender granting a participation shall, unless otherwise
     expressly provided in this Agreement, act on behalf of all of its
     Participants in all dealings with the Borrower in respect of the Credit
     Facility and no Participant shall have any voting or consent rights with
     respect to any matter requiring the Lenders' consent. In the case of an
     assignment, the Assignee shall have the same rights and benefits and be
     subject to the same limitations under the Credit Documents as it would have
     if it was the Lender.

(4)  The Borrower shall at its cost and expense provide such certificates,
     acknowledgements and further assurances in respect of this Agreement and
     the Credit Facility as such Lender may reasonably require in connection
     with any participation or assignment pursuant to this Section 11.8.

(5)  In the case of an assignment, the Lender shall deliver to the Borrower and
     the Borrower shall execute an assignment and assumption agreement
     substantially in the form of Exhibit S by which the Assignee assumes the
     obligations of the Lender and agrees to be bound by all the terms and
     conditions of this Agreement, all as if the Assignee had been an original
     party.  Upon receipt by the Agent of the fee set forth in Section 11.8(3)
     above, the assignment and assumption agreement, the assigning Lender and
     the Borrower shall be released from their respective obligations under this
     Agreement (to the extent of such assignment and assumption) and shall have
     no liability or obligations to each other to such extent, except in respect
     of matters arising prior to the assignment.

(6)  Any assignment or grant of participation pursuant to this Section 11.8 will
     not constitute a repayment by the Borrower to the assigning or granting
     Lender of any Accommodation, nor a new Accommodation to the Borrower by the
     Lender or by the Assignee or Participant, as the case may be, and the
     parties acknowledge that the Borrower's obligations with respect to any
     such Accommodations will continue and will not constitute new obligations.

SECTION 11.9  OBLIGATION OF LENDERS TO MITIGATE: REPLACEMENT OF LENDERS.

(1)  Each Lender agrees that, as promptly as practicable after the officer of
     such Lender responsible for administering the Accommodations of such Lender
     becomes aware of any event or condition that would entitle such Lender to
     receive payments under Section 11.6(3) or 11.7(1) or to cease making U.S.
     Dollar Advances or Bankers' Acceptances available under Sections 3.7 and
     4.6, respectively, such Lender will, to the extent not inconsistent with
     the internal policies of such Lender and any applicable legal or regulatory
     restrictions, use reasonable efforts (i) to make, issue, fund or maintain
     the Commitments of such Lender or the affected Accommodations of such
     Lender through another lending or letter of credit office of such Lender or
     (ii) take such other measures as such Lender may deem reasonable, if as a
     result thereof the additional amounts which would otherwise be required to
     be paid 
<PAGE>
 
                                     -110-

     to such Lender pursuant to Sections 11.6(3) or 11.7(1) would be materially
     reduced or the conditions rendering such Lender incapable of making U.S.
     Dollar Advances or Bankers' Acceptances available under Sections 3.7 and
     4.6, respectively, no longer would be applicable, and if, as determined by
     such Lender in its sole discretion, the making, issuing, funding or
     maintaining of such Commitments or Accommodations through such other
     lending or letter of credit office or in accordance with such other
     measures, as the case may be, would not otherwise materially adversely
     affect such Commitments or Accommodations or the interests of such Lender;
     provided that such Lender will not be obligated to utilize such other
     lending or letter of credit office pursuant to this Section 11.9 unless the
     Borrower agrees to pay all incremental expenses incurred by such Lender as
     a result of utilizing such other lending or letter of credit office. A
     certificate as to the amount of any such expenses payable by the Borrower
     pursuant to this Section 11.9 (setting forth in reasonable detail the basis
     for requesting such amount) submitted by such Lender to the Borrower (with
     a copy to Agent) shall be conclusive absent manifest error.

(2)  If the Borrower receives a notice pursuant to Section 11.6(3) or 11.7(1)
     or a notice pursuant to Section 3.7 or 4.6 stating that a Lender is unable
     to extend U.S. Dollar Advances or Bankers' Acceptances (for reasons not
     generally applicable to the Majority  Lenders ) so long as (i) no Default
     or Event of Default shall have occurred and be continuing, (ii) the
     Borrower has obtained a commitment from another Lender or an Assignee to
     purchase at par such Lender's Accommodations Outstanding, obligations to
     make settlements of advances made by the Agent on such Lender's behalf
     (including Agent Advances), accrued interest and Fees and to assume all
     obligations of the Lender to be replaced under the Credit Documents, (iii)
     at such time the Lender to be replaced is not the Issue Lender with respect
     to any Letters of Credit outstanding and (iv) such Lender to be replaced is
     unwilling to withdraw the notice delivered to the Borrower, upon 30 days'
     prior written notice to such Lender and the Agent, the Borrower may
     require, at the Borrowers' expense, the Lender giving such notice to
     assign, without recourse, all of its Accommodations Outstanding,
     obligations to make settlements of advances made by the Agent on such
     Lender's behalf (including Agent Advances), accrued interest and Fees to
     such other Lender or Assignee pursuant to the provisions of Section 11.8;
     provided that, prior to or concurrently with such replacement (w) such
     assignee shall have paid (I) to the Lender being replaced, an amount equal
     to the sum of the principal amount of, and all accrued interest on, all
     outstanding Advances and Bankers' Acceptances, and all accrued and
     theretofore unpaid, Fees owing to, such replaced Lender, (II) to the Agent,
     all amounts as to which the replaced Lender is then in default to the Agent
     in respect of advances made by the Agent on such Lender's behalf (including
     Agent Advances) and (III) to the 
<PAGE>
 
                                     -111-

     Issue Lender, all amounts as to which the replaced Lender is then in
     default to the Issue Lender in respect of participations in Letters of
     Credit, (x) the Borrower shall have paid to the Lender giving such notice
     all amounts owing under Sections 11.6(2), 11.6(3), 11.6(4), 11.7(1) and
     11.7(3), and all outstanding Obligations (other than obligations required
     to be paid by such assignee and Obligations which, as of the date of
     assignment, are contingent and unliquidated and not due and owing and which
     pursuant to the provisions of the Credit Documents survive the repayment of
     such replaced Lender's Accommodations and the termination of such replaced
     Lender's Commitment) through such date of replacement, (y) the Borrower or
     the applicable assignee shall have paid to the Agent the processing and
     recordation fee required to be paid by Section 11.8(3) and (z) all of the
     requirements for such assignment contained in Section 11.8, including,
     without limitation, the consent of the Agent and the receipt by the Agent
     of an executed Assignment and Assumption Agreement and other supporting
     documents, shall have been fulfilled.

SECTION 11.10  ACCOMMODATIONS BY LENDERS.

     The failure of the Lender to make an Accommodation shall not relieve any
other Lender of its obligations in connection with such Accommodation, but no
Lender is responsible for any other Lender's failure in respect of an
Accommodation.  Unless the Agent receives notice from the Lender prior to the
date of any Accommodation that the Lender will not make its rateable portion of
the Accommodation available to the Agent, the Agent may assume that the Lender
has made its portion so available on the date of the Accommodation and may, in
reliance upon such assumption, make a corresponding amount available to the
Borrower.  If the Lender has not made its rateable portion available to the
Agent, the Lender shall pay the corresponding amount to the Agent immediately
upon demand.  If the Lender pays the corresponding amount to the Agent, the
amount so paid shall constitute the Lender's part of the Accommodation for
purposes of this Agreement.  If the Lender does not pay the amount to the Agent
immediately upon demand and such amount has been made available to the Borrower,
the Borrower shall pay the corresponding amount to the Agent immediately upon
demand and any amount received and so reimbursed would not and will not
constitute an Accommodation.  The Agent shall also be entitled to recover from
the Lender or the Borrower, as the case may be, interest on the corresponding
amount, for each day from the date the amount was made available to the Borrower
until the date it is repaid to the Agent, at a rate per annum equal to the
Agent's cost of funds.

SECTION 11.11  RATEABLE PAYMENTS.

     Unless the Agent receives notice from the Borrower prior to the date on
which any payment is due to the Lenders that the Borrower will not make the
payment in full, the Agent may assume that the Borrower has made the payment in
full on that date and may, in reliance upon that assumption, distribute to each
<PAGE>
 
                                     -112-

Lender on the due date an amount equal to the amount then due to the Lender.  If
the Borrower has not made the payment in full, each Lender shall repay to the
Agent immediately upon demand the amount distributed to it together with
interest for each day from the date such amount was distributed to the Lender
until the date the Lender repays it to the Agent, at a rate per annum equal to
the Agent's cost of funds.

SECTION 11.12  JUDGMENT CURRENCY.

(1)  If, for the purposes of obtaining judgment in any court, it is necessary to
     convert a sum due to a Lender in any currency (the "ORIGINAL CURRENCY")
     into another currency (the "OTHER CURRENCY"), the parties 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,
     such Lender could purchase the Original Currency with the Other Currency on
     the Business Day preceding the day on which final judgment is given or, if
     permitted by applicable law, on the day on which the judgment is paid or
     satisfied.

(2)  The obligations of the Borrower in respect of any sum due in the Original
     Currency from it to the Lender under any of the Credit Documents shall,
     notwithstanding any judgment in any Other Currency, be discharged only to
     the extent that on the Business Day following receipt by the Lender of any
     sum adjudged to be so due in the Other Currency, the Lender may, in
     accordance with normal banking procedures, purchase the Original Currency
     with such Other Currency.  If the amount of the Original Currency so
     purchased is less than the sum originally due to the Lender in the Original
     Currency, the Borrower agrees, as a separate obligation and notwithstanding
     the judgment, to indemnify the Lender, against any loss, and, if the amount
     of the Original Currency so purchased exceeds the sum originally due to the
     Lender in the Original Currency, the Lender shall remit such excess to the
     Borrower.

SECTION 11.13  INTEREST ON AMOUNTS.

     Except as may be expressly provided otherwise in this Agreement, all
amounts owed by the Borrower to the Agent and to any of the Lenders, which are
not paid when due (whether at stated maturity, on demand, by acceleration or
otherwise) shall bear interest (both before and after default and judgment),
from the date on which such amount is due until such amount is paid in full,
payable on demand, at a rate per annum equal at all times to (i) in the case of
an amount payable in U.S. Dollars, the sum of the Base Rate (Canada) in effect
from time to time, the maximum Applicable Base Rate (Canada) Margin and 2%, and
(ii) in the case of an amount payable in Canadian Dollars, the sum of the
Canadian Prime Rate in effect from time to time, the maximum Applicable Canadian
Prime Rate Margin and 2%.
<PAGE>
 
                                     -113-

SECTION 11.14  GOVERNING LAW.

     This Agreement shall be governed by and interpreted and enforced in
accordance with the laws of the Province of Ontario and the federal laws of
Canada applicable therein.

SECTION 11.15  COUNTERPARTS.

     This Agreement may be executed in any number of counterparts and all of
such counterparts taken together shall be deemed to constitute one and the same
instrument.
<PAGE>
 
                                     -114-

     IN WITNESS WHEREOF the parties have executed this Agreement.

                                             RENTAL SERVICE CORPORATION OF 
                                             CANADA LTD.

                                             By: /s/  Doug Bonnette
                                                 ----------------------------- 
                                                 Authorized Signing Officer

COMMITMENTS                                  THE LENDERS

Commitment:                                  BT BANK OF CANADA
     Cdn. $17,000,000
                                             By: /s/  Michael Pullella
                                                 -----------------------------  
                                                 Authorized Signing Officer

                                             By: /s/  James E. Kellar
                                                 ----------------------------- 
                                                 Authorized Signing Officer

                                                 Address:  Royal Bank Plaza, 
                                                 North Tower, 200 Bay Street,
                                                 Suite 1700, Toronto, Ontario
                                                 M5J 2J2

                                                 Telephone:  (416) 865-2234
                                                 Facsimile:  (416) 941-9587

                                                 Attention:  Karyn Curran
<PAGE>
 
                                     -115-


Commitment:                            THE BANK OF NOVA SCOTIA
Cdn. $11,000,000
                                       By: /s/  Mike Jackson
                                           --------------------------  
                                           Authorized Signing Officer

                                       By: /s/  Doug Foster
                                           --------------------------  
                                           Authorized Signing Officer

                                           Address: 3820 Scotia Centre, 
                                           700-2nd Street S.W., Calgary, Alberta
                                           T2P 2N7

                                           Telephone:  (403) 221-6669
                                           Facsimile:  (403) 221-6497

                                           Attention:  Samuel W.T. Myers

                                       THE AGENT

                                       BT BANK OF CANADA

                                       By: /s/  Brian S. Strauss
                                           --------------------------  
                                           Authorized Signing Officer

                                       By: /s/ Susan Ross
                                           --------------------------  
                                           Authorized Signing Officer

                                           Address: Royal Bank Plaza, North
                                           Tower, 200 Bay Street, Suite 1700,
                                           Toronto,    Ontario     M5J 2J2

                                           Telephone:  (416) 865-2234
                                           Facsimile:  (416) 941-9587

                                           Attention:  Karyn Curran