Document:

<PAGE>
                                                                  Exhibit 10.1.2

            1987 PLAN OPTIONS GRANTED TO CURRENT OFFICERS - 1987 PLAN

<TABLE>
<CAPTION>
                                            NUMBER OF            EXERCISE
NAME                  GRANT DATE            OPTIONS*             PRICE *
----                  ----------            ---------            --------

<S>                   <C>                  <C>                  <C>
Laura C. Cissell      June 13, 1996         20,000               $10.75
</TABLE>

   * Split Adjusted<PAGE>
                                                                  Exhibit 10.2.3

           OPTIONS GRANTED TO CURRENT OFFICERS / DIRECTORS - 1998 PLAN

<TABLE>
<CAPTION>
                                                   NUMBER OF     EXERCISE
NAME                      GRANT DATE               OPTIONS       PRICE
----                      ----------               ---------     ---------
<S>                       <C>                     <C>           <C>
Laura C. Cissell          March 9, 1998            10,000        20.810
Randle F. Rose            March 9, 1998            20,000        20.810

Ronald H. Zech            June 11, 1998            10,000        20.250

William J. Dawson         August 17, 1998          10,000        21.688

William J. Dawson         December 22, 1999         4,000        18.250
Robert C. Hood            December 22, 1999        10,000        18.250
Ronald H. Zech            December 22, 1999         4,000        18.250

Laura C. Cissell          October 31, 2000         45,000        17.000
Randle F. Rose            October 31, 2000         30,000        17.000

William J. Dawson         November 8, 2000          4,000        15.938
Robert C. Hood            November 8, 2000          4,000        15.938
Ronald H. Zech            November 8, 2000          4,000        15.938

William J. Dawson         November 16, 2001         4,000        25.550
Robert C. Hood            November 16, 2001         4,000        25.550
Ronald H. Zech            November 16, 2001         4,000        25.550

</TABLE><PAGE>
                                                                    Exhibit 10.3

                                MCGRATH RENTCORP

                            INDEMNIFICATION AGREEMENT

        This Indemnification Agreement (the "Agreement") is entered into,
effective as of December 11, 2001, between McGrath RentCorp, a California
corporation, and Xxxxxx Xxxxxx ("Xxxxxx").

        Whereas, it is essential to McGrath RentCorp to retain and attract, as
directors, officers and other agents, the most capable persons available; and

        Whereas, Xxxxxx is a director and/or officer or other agent of McGrath
RentCorp; and

        Whereas, both McGrath RentCorp and Xxxxxx recognize the increased risk
of litigation and other claims currently being asserted against directors,
officers and other agents of corporations; and

        Whereas, in recognition of Xxxxxx's need for substantial protection
against personal liability in order to enhance Xxxxxx's continued and effective
service to McGrath RentCorp, and in order to induce Xxxxxx to provide services
to McGrath RentCorp as a director, officer or other agent, McGrath RentCorp
desires to provide in this Agreement for the indemnification of, and the
advancing of expenses to, Xxxxxx to the fullest extent (whether partial or
complete) permitted by law (regardless of any amendment to or revocation of any
Bylaws of McGrath RentCorp or any change in the ownership of McGrath RentCorp or
the composition of its Board of Directors) and, to the extent insurance is
maintained, for the coverage of Xxxxxx under McGrath RentCorp's general and/or
directors' and officers' liability insurance policies; and

        Whereas, Xxxxxx is relying upon the rights afforded him under this
Agreement in continuing in his position with McGrath RentCorp;

        NOW, THEREFORE, in consideration of the above premises and of Xxxxxx
continuing to serve McGrath RentCorp directly or, at its request, with another
enterprise, and intending to be legally bound hereby, the parties agree as
follows:

                             1. CERTAIN DEFINITIONS

        As used in this Agreement, the capitalized terms listed below shall have
the meaning ascribed to them as follows:

        1.1 "BOARD" means the Board of Directors of McGrath RentCorp.

        1.2 A "CHANGE IN CONTROL" shall be deemed to have occurred if:

               1.2.1 at any time after the effective date of this Agreement, any
"person" (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended), other than a trustee or other fiduciary
holding securities under an employee benefit plan of McGrath RentCorp or a
corporation owned directly or indirectly by the stockholders of McGrath RentCorp
in substantially the same proportions as their ownership of stock of McGrath
RentCorp, becomes the "Beneficial Owner" (as defined in Rule 13d-3 under said
Act), directly or indirectly, of securities of McGrath RentCorp representing 30%
or more of the total voting power represented by McGrath RentCorp's then
outstanding Voting Securities; or

               1.2.2 during any period of two consecutive years after the
effective date of this Agreement (or if two years have not elapsed since the
effective date of this Agreement, such shorter period), individuals who at the
beginning of such period constitute the Board and any new director whose
election by the Board or nomination for election by McGrath RentCorp's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office, who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof; or

               1.2.3 anytime after the effective date of this Agreement, the
stockholders of McGrath RentCorp approve a merger or consolidation of McGrath
RentCorp with any other corporation, other than a merger or consolidation which
results in the Voting Securities of McGrath RentCorp outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into Voting Securities of the surviving entity) at least 80% of
the total voting power represented by the Voting Securities of McGrath RentCorp
or such surviving entity outstanding immediately after such merger or
consolidation and such plan of merger or consolidation is not abandoned or
otherwise terminated before completion; or
<PAGE>

               1.2.4 anytime after the effective date of this Agreement, the
stockholders of McGrath RentCorp approve a plan of complete liquidation of
McGrath RentCorp or an agreement for the sale or disposition by McGrath RentCorp
(in one transaction or a series of transactions) of all or substantially all of
McGrath RentCorp's assets and such plan or agreement is not abandoned or
otherwise terminated before completion.

        1.3 "EXPENSES" shall be broadly construed and shall mean any expense,
liability or loss, including but not limited to attorneys' fees, judgments,
fines, ERISA excise taxes, penalties, amounts paid or to be paid in settlement,
any interest, assessments or other charges imposed thereon, any federal, state,
local or foreign taxes imposed as a result of the actual or deemed receipt of
any payments under this Agreement, and all other costs and obligations, paid or
incurred or accrued in connection with investigating, defending, being a witness
in, or participating in (including on appeal), or preparing for any of the
foregoing in, any Proceeding relating to any Indemnifiable Event or enforcing a
right to indemnification under this Agreement, Section 317 of the California
Corporations Code or otherwise. "Expenses" shall also include the amount of any
reasonable retainer required for Xxxxxx to retain competent counsel to defend
him in any Proceeding relating to any Indemnifiable Event.

        1.4 An "INDEMNIFIABLE EVENT" is any event or occurrence that takes place
either prior to or after the execution of this Agreement, related to the fact
Xxxxxx:

               1.4.1 is or was a director, an officer, an employee or an agent
of McGrath RentCorp; or

               1.4.2 is or was serving at the request of McGrath RentCorp as a
director, officer, employee, trustee, agent or fiduciary of another foreign or
domestic corporation, partnership, joint venture, employee benefit plan, trust
or other enterprise; or

               1.4.3 is or was a director, officer, employee or agent of a
foreign or domestic corporation that is a predecessor corporation of McGrath
RentCorp or of another enterprise at the request of such predecessor
corporation; and is related to anything done or not done by Xxxxxx in any such
capacity, whether or not the basis of the Proceeding is alleged action in an
official capacity as a director, officer, employee or agent or in any other
capacity while serving as a director, officer, employee or agent of McGrath
RentCorp, as described in subsections 1.4.1 through 1.4.3 above.

        1.5 "INDEPENDENT COUNSEL" is an attorney, law firm or member of a law
firm, experienced in matters of corporate law, selected by Xxxxxx and approved
by McGrath RentCorp (which approval shall not be unreasonably withheld), and who
has not otherwise performed services for McGrath RentCorp, Xxxxxx or any other
party to the Proceeding giving rise to a claim for indemnification hereunder
(other than in connection with other indemnification matters) within the last
five years; provided, however, Independent Counsel shall not include any person
or entity who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either McGrath
RentCorp or Xxxxxx in an action to determine Xxxxxx's rights under this
Agreement. In the event that one or more persons seeking indemnification and/or
advancement of expense under indemnification agreements with McGrath RentCorp
substantially the same as this Agreement has or have selected independent
counsel, the person so selected shall serve as Independent Counsel with respect
to Xxxxxx unless Xxxxxx has a reasonable belief that the person so serving as
independent counsel with respect to such other persons has a conflict of
interest with respect to Xxxxxx, does not meet the requirement for Independent
Counsel set forth in this Section 1.5, or is otherwise not an appropriate choice
to serve as Independent Counsel with respect to Xxxxxx.

        1.6A "PROCEEDING" is any threatened, pending or completed action
(including an action by or in the right of McGrath RentCorp), suit or
proceeding, or any inquiry, hearing or investigation, whether conducted by
McGrath RentCorp or any other party, Xxxxxx in good faith believes might lead to
the institution of any such action, suit or proceeding, whether civil, criminal,
administrative, investigative or other.

        1.7 The "REVIEWING PARTY" is any appropriate person or body consisting
of a member or members of the Board or any other person or body appointed by the
Board, none of whom is a party to the particular Proceeding with respect to
which Xxxxxx is seeking indemnification; provided, however, after a Change in
Control (other than a Change in Control approved by a majority of directors of
the Board who were directors immediately prior to such Change in Control), the
Reviewing Party shall be Independent Counsel.

        1.8 "VOTING SECURITIES" are any securities of McGrath RentCorp that vote
generally in the election of directors.

                            2. AGREEMENT TO INDEMNIFY

        2.1 GENERAL AGREEMENT.

               2.1.1 In the event Xxxxxx was, is or becomes a party to, or
witness or other participant in, or is threatened to be made a party to, or
witness or other participant in, a Proceeding by reason of (or arising in part
out of) an Indemnifiable Event,
<PAGE>

McGrath RentCorp shall indemnify Xxxxxx from and against any and all Expenses to
the fullest extent permitted by law, as the same exists or may hereafter be
amended or interpreted (but in the case of any such amendment or interpretation,
only to the extent such amendment or interpretation permits McGrath RentCorp to
provide broader indemnification rights than were permitted prior thereto). The
parties hereto intend that this Agreement shall provide for indemnification and
the advancement of Expenses to the fullest extent permitted by law,
notwithstanding that such action is not specifically authorized by other
provisions of this Agreement, by McGrath RentCorp's Articles of Incorporation or
Bylaws, or by statute.

               2.1.2 The rights to receive indemnification and the advancement
of Expenses under this Agreement are not exclusive of any other rights to which
Xxxxxx may be entitled or subsequently entitled under any law, statute or rule,
McGrath RentCorp's Articles of Incorporation or Bylaws, by vote of the
shareholders or the Board or otherwise.

               2.1.3 To the extent that a change in applicable law, statute or
rule (including without limitation by judicial decision) permits greater
indemnification by agreement than would be afforded currently under McGrath
RentCorp's Articles of Incorporation or Bylaws, applicable law or this
Agreement, it is the intent of the parties that Xxxxxx enjoy by this Agreement
the greater benefits so afforded by such change. In the event of any change in
any applicable law, statute or rule (including without limitation by judicial
decision) which narrows the right of a California corporation to indemnify a
director, officer, employee or agent of the corporation, such changes, to the
extent not otherwise required by such applicable law, statute or rule to be
applied to this Agreement, shall have no effect on this Agreement or the
parties' rights and obligations hereunder.

        2.2 PARTIAL INDEMNIFICATION. If Xxxxxx is entitled under any provision
of this Agreement to indemnification by McGrath RentCorp for some or a portion
of Expenses, but not, however, for the total amount thereof, McGrath RentCorp
shall nevertheless indemnify Xxxxxx for the portion thereof to which Xxxxxx is
entitled.

        2.3 PROHIBITED INDEMNIFICATION. Subject only to Section 2.4 below, if
applicable, no indemnification nor Expense Advance (as defined below) pursuant
to this Agreement shall be paid by McGrath RentCorp:

               2.3.1 In connection with any Proceeding initiated by Xxxxxx
against McGrath RentCorp or any director or officer of McGrath RentCorp (other
than by way of defense, counter claim or cross claim which arises by reason of
or in part out of an Indemnifiable Event), unless: (a) McGrath RentCorp has
joined in, or the Board has consented to, the initiation of such Proceeding; (b)
the Proceeding is one to enforce indemnification rights under this Agreement or
any other agreement or insurance policy or under McGrath RentCorp's Articles of
Incorporation or Bylaws; or (c) the Proceeding is instituted after a Change in
Control and Independent Counsel has approved its initiation;

               2.3.2 On account of any Proceeding in which judgment is rendered
against Xxxxxx for an accounting of profits made from the purchase or sale by
Xxxxxx of securities of McGrath RentCorp pursuant to the provisions of Section
16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions
of any federal, state or local laws;

               2.3.3 To the extent Xxxxxx settles or otherwise disposes of a
Proceeding or causes the settlement or disposal of a Proceeding without McGrath
RentCorp's express prior written consent (which shall not be unreasonably
withheld), unless Xxxxxx receives court approval for such settlement or other
disposition where McGrath RentCorp had the opportunity to oppose Xxxxxx's
request for such court approval or the settlement is approved by Independent
Counsel;

               2.3.4 With regard to any judicial award if McGrath RentCorp was
not given a reasonable and timely opportunity, at its expense, to participate in
the defense of such action unless McGrath RentCorp's participation in such
Proceeding was barred by this Agreement or the court in such Proceeding; or

               2.3.5 For any acts, omissions, transactions or circumstances for
which indemnification is prohibited by applicable state or federal law.

For convenience only, a copy of Sections 204(a)(10), 204(a)(11) and 317 of the
California Corporations Code, the principal provisions which limit Xxxxxx's
right to indemnification, is included as Appendix A hereto. Xxxxxx is cautioned
that indemnification may be further limited by any changes to such laws or any
other applicable law. MCGRATH RENTCORP IS NOT OBLIGATED TO NOTIFY XXXXXX OF ANY
SUCH CHANGES. Further, McGrath RentCorp and Xxxxxx are advised that the
Securities and Exchange Commission believes indemnification for liabilities
arising under federal securities laws is against public policy and is,
therefore, unenforceable.

        2.4 MANDATORY INDEMNIFICATION. Notwithstanding any other provision of
this Agreement, to the extent Xxxxxx has been successful on the merits (within
the meaning of Section 317(d) of the California Corporations Code) in defense of
any Proceeding relating in whole or in part to an Indemnifiable Event or in
defense of any issue or matter therein, Xxxxxx shall be indemnified against all
Expenses incurred in connection therewith.
<PAGE>

                               3. EXPENSE ADVANCES

        3.1 ADVANCE OF EXPENSES TO XXXXXX. Expenses incurred by Xxxxxx in any
Proceeding for which indemnification may be sought under this Agreement shall be
advanced by McGrath RentCorp to Xxxxxx within twenty (20) business days after
receipt by McGrath RentCorp of a statement or statements from Xxxxxx requesting
such advance and reasonably evidencing the Expenses incurred by Xxxxxx (each an
"Expense Advance" and collectively, "Expense Advances"). Any dispute as to
whether and to what extent Xxxxxx shall be entitled to Expense Advances shall be
determined by the Reviewing Party upon submission by Xxxxxx or McGrath RentCorp,
and the provisions of Sections 6.2 through 6.4 below shall apply.

        3.2 REPAYMENT OF EXPENSES BY XXXXXX. If it is ultimately determined that
Xxxxxx is not entitled to be indemnified by McGrath RentCorp, Xxxxxx hereby
agrees to repay any Expense Advances advanced by McGrath RentCorp under Section
3.1 above. Xxxxxx agrees to execute any further agreements regarding the
repayment of Expense Advances as McGrath RentCorp may reasonably request prior
to receiving any such advances. Ultimate determination as to whether or not
Xxxxxx is entitled to be indemnified shall be made in accordance with Section 6
below.

                   4. INDEPENDENT COUNSEL; THE REVIEWING PARTY

        4.1 WRITTEN OPINIONS. Any opinion required in this Agreement to be given
by the Reviewing Party or by Independent Counsel shall be given in writing to
McGrath RentCorp and Xxxxxx concurrently.

        4.2 EXPENSES OF INDEPENDENT COUNSEL. McGrath RentCorp agrees to bear the
reasonable fees and expenses of Independent Counsel, irrespective of the
determination as to Xxxxxx's entitlement to indemnification. McGrath RentCorp
further agrees to indemnify such counsel fully against any and all expenses
(including attorneys' fees), claims, liabilities, losses and damages arising out
of or relating to this Agreement or the engagement of such Independent Counsel
pursuant to this Agreement.

                    5. NOTIFICATION AND DEFENSE OF PROCEEDING

        5.1 NOTICE OF CLAIM. Xxxxxx shall give written notice to McGrath
RentCorp promptly after Xxxxxx has actual knowledge of any Proceeding as to
which indemnity may be sought under this Agreement. The failure of Xxxxxx to
give written notice, as provided in this Section 5.1, shall not relieve McGrath
RentCorp of its obligations to provide indemnification under this Agreement or
otherwise, unless and only to the extent that such failure or delay materially
prejudices McGrath RentCorp.

        5.2 DEFENSE. With respect to any Proceeding, McGrath RentCorp will be
entitled to participate in the Proceeding at its own expense. Except as
otherwise provided below, to the extent McGrath RentCorp so desires, it may,
upon delivery of written notice to Xxxxxx, assume the defense of any Proceeding
with counsel reasonably satisfactory to Xxxxxx. However, McGrath RentCorp shall
not be entitled to assume the defense of any Proceeding (i) brought by or on
behalf of McGrath RentCorp, or (ii) as to which Xxxxxx has reasonably determined
there may be a conflict of interest between Xxxxxx and McGrath RentCorp in the
defense of the Proceeding and Xxxxxx does in fact assume and conduct the
defense.

               5.2.1 If McGrath RentCorp assumes the defense, Xxxxxx shall
furnish such information as he may possess regarding Xxxxxx or the Proceeding in
question that McGrath RentCorp may reasonably request and as may be required in
connection with the defense or settlement of such Proceeding and shall fully
cooperate with McGrath RentCorp in every other respect. Except as provided in
Section 5.3 below, if McGrath RentCorp assumes the defense of the Proceeding,
McGrath RentCorp shall take all necessary steps in good faith to defend, settle
or otherwise dispose of the Proceeding.

               5.2.2 After written notice from McGrath RentCorp to Xxxxxx of its
election to assume the defense of any Proceeding, McGrath RentCorp will not be
liable to Xxxxxx under this Agreement or otherwise for any Expenses subsequently
incurred by Xxxxxx in connection with the defense of such Proceeding other than
reasonable costs of investigation or as otherwise provided in clauses (i)
through (iv) below. Xxxxxx shall have the right to employ Xxxxxx's own counsel
in such Proceeding, but all Expenses related thereto incurred after written
notice from McGrath RentCorp of its assumption of the defense shall be at
Xxxxxx's expense, unless: (i) the employment of counsel by Xxxxxx has been
authorized by McGrath RentCorp; (ii) Xxxxxx has reasonably determined there may
be a conflict of interest between Xxxxxx and McGrath RentCorp in the defense of
the Proceeding; (iii) after a Change in Control, the employment of counsel by
Xxxxxx has been approved by Independent Counsel; or (iv) McGrath RentCorp shall
not, in fact, assume and conduct the defense of such Proceeding within a
reasonable time after giving written notice of its election to assume the
defense of such Proceeding.

               5.2.3 Any Expenses incurred by McGrath RentCorp in defense of the
Proceeding under this Section 5.2 (except in a situation described in clause
(i), (ii) or (iv) of Section 5.2.2) shall be considered Expenses advanced by
McGrath RentCorp to Xxxxxx under Section 3 above.
<PAGE>

        5.3 LIMITATION ON MCGRATH RENTCORP'S DISPOSITION OF ANY PROCEEDING.
McGrath RentCorp may consent to a settlement or other disposition of all or any
part of any Proceeding which McGrath RentCorp is defending under Section 5.2
above without first obtaining the written consent of Xxxxxx, provided (i)
McGrath RentCorp shall not settle any Proceeding in any manner that would impose
any penalty or limitation on Xxxxxx without Xxxxxx's written consent, except for
a monetary obligation fully indemnified by McGrath RentCorp, and (ii) any
settlement or other disposition does not cause Xxxxxx to lose any material right
to indemnification under this Agreement.

                      6. INDEMNIFICATION PROCESS AND APPEAL

        6.1 INITIAL REQUEST AND DETERMINATION.

               6.1.1 To obtain payment(s) of Expenses under this Agreement,
Xxxxxx shall submit to McGrath RentCorp a written request(s) therefor, including
such documentation and information as is reasonably available to Xxxxxx and is
reasonably necessary to determine whether and to what extent Xxxxxx is entitled
to such payment(s). A determination as to whether and to what extent a requested
payment is proper shall be made by the Reviewing Party as soon as practicable,
and (if applicable) payment thereof shall be made by McGrath RentCorp as soon as
practicable thereafter, but in each case no later than thirty (30) business days
after receipt of the initial written request, except in the case of Expense
Advances, the determination and payment of which (if applicable) shall be made
no later than twenty (20) business days after written request by Xxxxxx is
presented to McGrath RentCorp.

               6.1.2 McGrath RentCorp may initiate a determination from the
Reviewing Party as to whether and to what extent Xxxxxx is entitled to
indemnification at any time after final resolution of the Proceeding for which
indemnity is claimed hereunder, subject to Xxxxxx's rights to require such
determination as set forth above.

               6.1.3 Xxxxxx shall cooperate with the Reviewing Party making the
determination with respect to Xxxxxx's entitlement to indemnification, including
providing to such person(s) or body any documentation or information which is
not privileged or otherwise protected from disclosure and which is reasonably
available to Xxxxxx and reasonably necessary for such determination. All
reasonable Expenses incurred by Xxxxxx in so cooperating with the person(s) or
body making such determination shall be borne by McGrath RentCorp, irrespective
of the determination as to Xxxxxx's entitlement to indemnification.

        6.2 SUIT TO ENFORCE RIGHTS. Regardless of any action or inaction by the
Reviewing Party, if Xxxxxx has not received payment of an Expense Advance after
making a request therefor in accordance with Section 3.1 above or full
indemnification of Expenses after making a demand therefor in accordance with
Section 6.1 above within sixty (60) days of such request or demand, Xxxxxx shall
have the right to enforce his indemnification rights under this Agreement by
commencing litigation in any court in the State of California having subject
matter jurisdiction thereof and in which venue is proper seeking an initial
determination by the court or challenging any determination by the Reviewing
Party or any aspect thereof. Likewise, McGrath RentCorp may seek an initial
determination by the court or challenge any determination by the Reviewing Party
in the manner set forth above. McGrath RentCorp and Xxxxxx each hereby consent
to service of process and to appear in any such proceeding. Any determination by
the Reviewing Party not challenged by Xxxxxx or McGrath RentCorp through legal
action within two years after final resolution of the Proceeding shall be
binding on McGrath RentCorp and Xxxxxx. The remedy provided for in this Section
6 shall be in addition to any other remedies available to Xxxxxx or McGrath
RentCorp in law or equity.

        6.3 DEFENSE TO INDEMNIFICATION, BURDEN OF PROOF, PRESUMPTIONS AND
EQUITABLE RELIEF.

               6.3.1 It shall be a defense to any action brought by Xxxxxx or
McGrath RentCorp concerning enforceability of this Agreement that it is not
permissible under applicable law for McGrath RentCorp to indemnify Xxxxxx for
the amount claimed.

               6.3.2 In connection with any action or determination by any
Reviewing Party or otherwise as to whether Xxxxxx is entitled to be indemnified
hereunder, the burden of proving such a defense or determination shall be on
McGrath RentCorp.

               6.3.3 Neither the failure of the Reviewing Party or McGrath
RentCorp (including its Board, Independent Counsel or stockholders) to have made
a determination prior to the commencement of such action by Xxxxxx that
indemnification of the claimant is proper under the circumstances because he has
met any particular standard of conduct or had any particular belief, nor an
actual determination by the Reviewing Party or McGrath RentCorp (including its
Board, Independent Counsel or stockholders) that Xxxxxx has not met such
applicable standard of conduct or did not have such belief, shall be a defense
to the action or create a presumption Xxxxxx has not met the applicable standard
of conduct.
<PAGE>

               6.3.4 For purposes of this Agreement, the termination of any
claim, action, suit or proceeding by judgment, order, settlement (whether with
or without court approval) or conviction, or upon a plea of nolo contendere or
its equivalent shall not create a presumption Xxxxxx did not meet any particular
standard of conduct or have any particular belief or that a court has determined
indemnification is not permitted by applicable law.

               6.3.5 McGrath RentCorp agrees that its failure to make
indemnification payments or Expense Advances to Xxxxxx shall cause irreparable
damage to Xxxxxx, the exact amount of which is impossible to ascertain, and for
this reason agrees that Xxxxxx shall be entitled to such injunctive or other
equitable relief as shall be necessary to adequately provide for such reasonably
anticipated payments, said right to be in addition to all other rights or
remedies available to Xxxxxx hereunder.

        6.4 INDEMNIFICATION FOR EXPENSES INCURRED IN ENFORCING RIGHTS. McGrath
RentCorp shall indemnify Xxxxxx against any and all Expenses and, if requested
by Xxxxxx, shall (within twenty (20) business days of such request) advance such
Expenses to Xxxxxx that are incurred by Xxxxxx in connection with any claim
asserted against or action brought by Xxxxxx against McGrath RentCorp for:

               6.4.1 indemnification of Expenses or payment of Expense Advances
by McGrath RentCorp under this Agreement or any other agreement or under
applicable law or McGrath RentCorp's Articles of Incorporation or Bylaws now or
hereafter in effect relating to indemnification for Indemnifiable Events; or

               6.4.2 recovery under directors' and officers' liability insurance
policies maintained by McGrath RentCorp; regardless of whether Xxxxxx ultimately
is determined to be entitled to such indemnification, Expense Advances or
insurance recovery, as the case may be.

                            7. INSURANCE; SUBROGATION

        7.1 LIABILITY INSURANCE. To the extent McGrath RentCorp maintains an
insurance policy or policies providing general and/or directors' and officers'
liability insurance, Xxxxxx shall be covered by such policy or policies, in
accordance with its or their terms, to the maximum extent of the coverage
available for any director, officer, employee or agent of McGrath RentCorp and
to the extent Xxxxxx occupies any such positions with McGrath RentCorp or any
other entity at the request of McGrath RentCorp.

        7.2 NO DUPLICATION OF PAYMENTS. McGrath RentCorp shall not be liable
under this Agreement to make any payment in connection with any claim made
against Xxxxxx to the extent Xxxxxx has otherwise received payment (under any
insurance policy, the Bylaws of McGrath RentCorp or otherwise) of the amounts
otherwise indemnifiable hereunder.

        7.3 SUBROGATION. In the event of payment under this Agreement, McGrath
RentCorp shall be subrogated to the extent of such payment to all of the rights
of recovery of Xxxxxx, who shall execute all papers required and shall do
everything that may be necessary to secure such rights, including the execution
of such documents necessary to enable McGrath RentCorp effectively to bring suit
to enforce such rights.

                             8. STANDARD PROVISIONS

        8.1 CONTINUING COVERAGE. The indemnification and the payment of Expense
Advances provided under this Agreement shall continue as to Xxxxxx for any
action taken or not taken while serving in an indemnified capacity pertaining to
an Indemnifiable Event even though Xxxxxx may have ceased to serve in such
capacity at the time of any Proceeding.

        8.2 ENTIRE AGREEMENT; REMEDIES CUMULATIVE. This Agreement constitutes
the entire agreement between the parties pertaining to the subject matter
contained herein and supersedes all prior and contemporaneous agreements,
representations and understandings of the parties, including in particular, that
certain Indemnification Agreement by and between the parties hereto dated
November 27, 2001. The rights and remedies provided in this Agreement and by law
shall be cumulative and the exercise of any particular right or remedy shall not
preclude the exercise of any other right or remedy in addition to, or as an
alternative of, such right or remedy.

        8.3 NOTICES. All notices, requests, demands and other communications
required or permitted under this Agreement shall be made in writing and shall be
deemed to have been duly given (i) on the date of service if served personally,
(ii) on the date of transmission if sent by facsimile transmission with printed
proof of electronic receipt, (iii) on the date of delivery if delivered by a
courier service with proof of delivery, or (iv) on the third business day after
mailing if mailed by first class mail, certified--return receipt requested,
postage prepaid, to the following addresses:
<PAGE>

        If to McGrath RentCorp, then to:    McGrath RentCorp
                                            5700 Las Positas Road
                                            Livermore, CA 94550
                                            Attn:  President
                                            Fax:   1-925-453-3200

        With a copy to:                     Christopher Ream, Esq.
                                            2600 El Camino Real, Suite 410
                                            Palo Alto, CA 94306-1719
                                            Fax:   1-650-856-8448

        If to Xxxxxx, then to:              Xxxxxx Xxxxxx
                                            McGrath RentCorp
                                            5700 Las Positas Road
                                            Livermore, CA 94550
                                            Fax:   1-925-453-3200

Any party hereto may change its address set forth above for notices by giving
notice to the other party hereto in accordance with the terms of this Section.

        8.4 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors (including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
and/or assets of McGrath RentCorp), assigns, spouses, heirs and personal and
legal representatives. McGrath RentCorp shall require and cause any successor
(whether direct or indirect by purchase, merger, consolidation or otherwise) to
all, or substantially all, of the business and/or assets of McGrath RentCorp
expressly to assume and agree to perform this Agreement in the same manner and
to the same extent that McGrath RentCorp would be required to perform if no such
succession had taken place. This Agreement may not be assigned without the prior
written consent of the other parties hereto, which consent shall not be
unreasonably withheld.

        8.5 MODIFICATION; WAIVER; SUPERSEDURE. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed, or shall constitute, a waiver of any other provision hereof, whether or
not similar, nor shall any waiver constitute a continuing waiver. No waiver of
any of the provisions of this Agreement shall be binding unless in the form of a
writing signed by the party against whom enforcement of the waiver is sought.
Except as specifically provided herein, neither the failure to exercise nor any
delay in exercising any right or remedy hereunder shall constitute a waiver
thereof.

        8.6 CONSTRUCTION.

               8.6.1 The titles and subtitles used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting
this Agreement.

               8.6.2 A reference herein to any section shall be deemed to
include a reference to every section the number of which begins with the number
of the section specifically referred to (e.g., a reference to Section 1.2
includes a reference to Sections 1.2, 1.2.1, 1.2.2, 1.2.3 and 1.2.4).

               8.6.3 Any reference in this Agreement to the indemnity provisions
of the Bylaws of McGrath RentCorp, to the California Corporations Code or to any
applicable law shall refer to such provisions as they shall be amended from time
to time or to any successor provision(s).

               8.6.4 Any ambiguous terms in this Agreement will not be construed
against McGrath RentCorp for drafting this Agreement.

        8.7 APPLICABLE LAW. This Agreement, and all rights, remedies,
liabilities, powers and duties of the parties to this Agreement, is to be
construed in accordance with and governed by the internal laws of the State of
California without giving effect to any choice of law rule that would cause the
application of the laws of any jurisdiction other than the internal laws of the
State of California to the rights and duties of the parties.

        8.8 SEVERABILITY. If any provision (or portion thereof) of this
Agreement shall be held by a court of competent jurisdiction to be invalid, void
or otherwise unenforceable, the remaining provisions shall remain enforceable to
the fullest extent
<PAGE>

permitted by law. Furthermore, to the fullest extent possible, the provisions of
this Agreement (including, without limitation, each portion of this Agreement
containing any provision held to be invalid, void or otherwise unenforceable,
that is not itself invalid, void or unenforceable) shall be construed so as to
give effect to the intent manifested by the provision held invalid, void or
unenforceable.

        8.9 LEGAL ADVICE. XXXXXX IS AWARE THAT THIS AGREEMENT WAS PREPARED BY
COUNSEL FOR MCGRATH RENTCORP. BY SIGNING BELOW, XXXXXX ACKNOWLEDGES THAT HE HAS
BEEN ADVISED TO SEEK INDEPENDENT COUNSEL TO REVIEW THIS AGREEMENT ON HIS BEHALF
PRIOR TO THE EXECUTION OF THIS AGREEMENT AND HAS HAD ADEQUATE TIME TO DO SO.

        8.10 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but both of which
together shall constitute one and the same instrument.

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.

                                     MCGRATH RENTCORP

                                     by
----------------------                  ---------------------------------------
XXXXXX  XXXXXX                       Robert P. McGrath, Chief Executive Officer

                                   APPENDIX A

                          CALIFORNIA CORPORATIONS CODE

SECTION 204(a)(10) Provisions eliminating or limiting the personal liability of
a director for monetary damages in an action brought by or in the right of the
corporation for breach of a director's duties to the corporation and its
shareholders, as set forth in Section 309, provided, however, that (A) such a
provision may not eliminate or limit the liability of directors (i) for acts or
omissions that involve intentional misconduct or a knowing and culpable
violation of law, (ii) for acts or omissions that a director believes to be
contrary to the best interests of the corporation or its shareholders or that
involve the absence of good faith on the part of the director, (iii) for any
transaction from which a director derived an improper personal benefit, (iv) for
acts or omissions that show a reckless disregard for the director's duty to the
corporation or its shareholders in circumstances in which the director was
aware, or should have been aware, in the ordinary course of performing a
director's duties, of a risk of serious injury to the corporation or its
shareholders, (v) for acts or omissions that constitute an unexcused pattern of
inattention that amounts to an abdication of the director's duty to the
corporation or its shareholders, (vi) under Section 310, or (vii) under Section
316, (B) no such provision shall eliminate or limit the liability of a director
for any act or omission occurring prior to the date when the provision becomes
effective, and (C) no such provision shall eliminate or limit the liability of
an officer for any act or omission as an officer, notwithstanding that the
officer is also a director or that his or her actions, if negligent or improper,
have been ratified by the directors.

SECTION 204(a)(11) A provision authorizing, whether by bylaw, agreement, or
otherwise, the indemnification of agents (as defined in Section 317) in excess
of that expressly permitted by Section 317 for those agents of the corporation
for breach of duty to the corporation and its stockholders, provided, however,
that the provision may not provide for indemnification of any agent for any acts
or omissions or transactions from which a director may not be relieved of
liability as set forth in the exception to paragraph (10) or as to circumstances
in which indemnity is expressly prohibited by Section 317.

SECTION 317

    (a) For the purposes of this section, "agent" means any person who is or was
a director, officer, employee or other agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another foreign or domestic corporation, partnership, joint venture,
trust or other enterprise, or was a director, officer, employee or agent of a
foreign or domestic corporation which was a predecessor corporation of the
corporation or of another enterprise at the request of the predecessor
corporation; "proceeding" means any threatened, pending or completed action or
proceeding, whether civil, criminal, administrative or investigative; and
"expenses" includes without limitation attorneys' fees and any expenses of
establishing a right to indemnification under subdivision (d) or paragraph (4)
of subdivision (e).

    (b) A corporation shall have power to indemnify any person who was or is a
party or is threatened to be made a party to any proceeding (other than an
action by or in the right of the corporation to procure a judgment in its favor)
by reason of the fact that the person is or was an agent of the corporation,
against expenses, judgments, fines, settlements, and other amounts actually and
reasonably incurred in connection with the proceeding if that person acted in
good faith and in a manner the person reasonably believed to be in the best
interests of the corporation and, in the case of a criminal proceeding, had no
reasonable cause to believe
<PAGE>

the conduct of the person was unlawful. The termination of any proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which the person reasonably believed to be
in the best interests of the corporation or that the person had reasonable cause
to believe that the person's conduct was unlawful.

    (c) A corporation shall have power to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending, or
completed action by or in the right of the corporation to procure a judgment in
its favor by reason of the fact that the person is or was an agent of the
corporation, against expenses actually and reasonably incurred by that person in
connection with the defense or settlement of the action if the person acted in
good faith, in a manner the person believed to be in the best interests of the
corporation and its shareholders.

    No indemnification shall be made under this subdivision for any of the
following:

        (1) In respect of any claim, issue or matter as to which the person
shall have been adjudged to be liable to the corporation in the performance of
that person's duty to the corporation and its shareholders, unless and only to
the extent that the court in which the proceeding is or was pending shall
determine upon application that, in view of all the circumstances of the case,
the person is fairly and reasonably entitled to indemnity for expenses and then
only to the extent that the court shall determine.

        (2) Of amounts paid in settling or otherwise disposing of a pending
action without court approval.

        (3) Of expenses incurred in defending a pending action which is settled
or otherwise disposed of without court approval.

    (d) To the extent that an agent of a corporation has been successful on the
merits in defense of any proceeding referred to in subdivision (b) or (c) or in
defense of any claim, issue, or matter therein, the agent shall be indemnified
against expenses actually and reasonably incurred by the agent in connection
therewith.

    (e) Except as provided in subdivision (d), any indemnification under this
section shall be made by the corporation only if authorized in the specific
case, upon a determination that indemnification of the agent is proper in the
circumstances because the agent has met the applicable standard of conduct set
forth in subdivision (b) or (c), by any of the following:

        (1) A majority vote of a quorum consisting of directors who are not
parties to such proceeding.

        (2) If such a quorum of directors is not obtainable, by independent
legal counsel in a written opinion.

        (3) Approval of the shareholders (Section 153), with the shares owned by
the person to be indemnified not being entitled to vote thereon.

        (4) The court in which the proceeding is or was pending upon application
made by the corporation or the agent or the attorney or other person rendering
services in connection with the defense, whether or not the application by the
agent, attorney or other person is opposed by the corporation.

    (f) Expenses incurred in defending any proceeding may be advanced by the
corporation prior to the final disposition of the proceeding upon receipt of an
undertaking by or on behalf of the agent to repay that amount if it shall be
determined ultimately that the agent is not entitled to be indemnified as
authorized in this section. The provisions of subdivision (a) of Section 315 do
not apply to advances made pursuant to this subdivision.

    (g) The indemnification authorized by this section shall not be deemed
exclusive of any additional rights to indemnification for breach of duty to the
corporation and its shareholders while acting in the capacity of a director or
officer of the corporation to the extent the additional rights to
indemnification are authorized in an article provision adopted pursuant to
paragraph (11) of subdivision (a) of Section 204. The indemnification provided
by this section for acts, omissions, or transactions while acting in the
capacity of, or while serving as, a director or officer of the corporation but
not involving breach of duty to the corporation and its shareholders shall not
be deemed exclusive of any other rights to which those seeking indemnification
may be entitled under any bylaw, agreement, vote of shareholders or
disinterested directors, or otherwise, to the extent the additional rights to
indemnification are authorized in the articles of the corporation. An article
provision authorizing indemnification "in excess of that otherwise permitted by
Section 317" or "to the fullest extent permissible under California law" or the
substantial equivalent thereof shall be construed to be both a provision for
additional indemnification for breach of duty to the corporation and its
shareholders as referred to in, and with the limitations required by, paragraph
(11) of subdivision (a) of Section 204 and a provision for additional
indemnification as referred to in the second sentence of this subdivision. The
rights to indemnity hereunder shall continue as to a person who has ceased to be
a director, officer, employee, or agent and shall inure to the benefit of the
heirs, executors, and administrators of the person. Nothing contained in this
section shall affect any right to indemnification to which persons other than
the directors and officers may be entitled by contract or otherwise.

<PAGE>

    (h) No indemnification or advance shall be made under this section, except
as provided in subdivision (d) or paragraph (4) of subdivision (e), in any
circumstance where it appears:

        (1) That it would be inconsistent with a provision of the articles,
bylaws, a resolution of the shareholders, or an agreement in effect at the time
of the accrual of the alleged cause of action asserted in the proceeding in
which the expenses were incurred or other amounts were paid, which prohibits or
otherwise limits indemnification.

        (2) That it would be inconsistent with any condition expressly imposed
by a court in approving a settlement.

    (i) A corporation shall have power to purchase and maintain insurance on
behalf of any agent of the corporation against any liability asserted against or
incurred by the agent in that capacity or arising out of the agent's status as
such whether or not the corporation would have the power to indemnify the agent
against that liability under this section. The fact that a corporation owns all
or a portion of the shares of the company issuing a policy of insurance shall
not render this subdivision inapplicable if either of the following conditions
are satisfied: (1) if the articles authorize indemnification in excess of that
authorized in this section and the insurance provided by this subdivision is
limited as indemnification is required to be limited by paragraph (11) of
subdivision (a) of Section 204; or (2) (A) the company issuing the insurance
policy is organized, licensed, and operated in a manner that complies with the
insurance laws and regulations applicable to its jurisdiction of organization,
(B) the company issuing the policy provides procedures for processing claims
that do not permit that company to be subject to the direct control of the
corporation that purchased that policy, and (C) the policy issued provides for
some manner of risk sharing between the issuer and purchaser of the policy, on
one hand, and some unaffiliated person or persons, on the other, such as by
providing for more than one unaffiliated owner of the company issuing the policy
or by providing that a portion of the coverage furnished will be obtained from
some unaffiliated insurer or reinsurer.

        (j) This section does not apply to any proceeding against any trustee,
investment manager, or other fiduciary of an employee benefit plan in that
person's capacity as such, even though the person may also be an agent as
defined in subdivision (a) of the employer corporation. A corporation shall have
power to indemnify such a trustee, investment manager, or other fiduciary to the
extent permitted by subdivision (f) of Section 207.

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