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EXHIBIT 4.1



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                                                           Date:  June 23, 1998




Mr. Thomas J. Sauer
Vice President and Treasurer/Controller
McGrath RentCorp.
5700 Las Positas Road
Livermore, CA 94550

     Re: Credit extended to Borrower pursuant to that certain $3,000,000
Committed Credit Facility Letter ("Facility Letter") from Union Bank of
California, N.A., formerly The Bank of California, N.A. ("Bank" to McGrath
RentCorp, a California corporation ("Borrower") dated July 24, 1997, and further
evidenced by that certain Credit Line Note dated July 24, 1997, executed by
Borrower to the order of Bank ("Credit Line Note"). Capitalized terms used
herein shall have the meanings given to them in the Facility Letter.

Dear Tom:

This letter is to confirm that Union Bank of California, N.A. has agreed to
extend the maturity date of that certain facility ("Committed Credit Facility")
in the maximum principal amount of $3,000,000, granted by Bank to Borrower
pursuant to the terms and conditions of the Facility Letter and Credit Line
Note. References in the Facility Letter to the Credit Line Note shall mean the
Credit Line Note as amended from time to time, and references in the Credit Line
Note to the Facility Letter shall mean the Facility Letter as amended from time
to time. A copy of the note is attached to this letter.

The maturity date of the Committed Credit Facility is hereby extended to
September 30, 1998 ("New Maturity Date"). The Facility Letter and the Credit
Line Note shall be deemed modified as of the date of this letter to reflect the
New Maturity Date. All other terms and conditions of the Facility Letter and
Credit Line Note remain in full force and effect, without waiver or
modification. This extension is further conditioned on (i) Borrower's continued
payment of interest as provided in the Facility Letter and Credit Line Note, and
(ii) any principal instalments which Borrower was obligated to make prior to the
extension provided for herein.

Each advance request, or Borrower's continued payments of principal or interest
on the outstanding balance of any loan, constitutes Borrower's warranty that no
event of default as defined in the Facility Letter or Credit Line Note and no
condition, event or act which, with the giving of notice or the passage of time
or both, would constitute such an event of default, shall have occurred and be
continuing or shall exist.

BANK HAS NOT COMMITTED TO MAKE ANY FURTHER EXTENSION OF THE MATURITY DATE, OR TO
RENEW THE COMMITTED CREDIT FACILITY OR OPTIONAL ADVANCE NOTE BEYOND THE NEW
MATURITY DATE. ANY FURTHER EXTENSION OR RENEWAL REMAINS IN THE SOLE AND
ABSOLUTE DISCRETION OF THE BANK.

Except as specifically provided herein, all terms and conditions of the Facility
Letter and the Credit Line Note shall remain in full force and effect and area
hereby ratified and confirmed. This letter shall not constitute a waiver of any
existing or future default or a waiver of a breach of a condition or covenant
unless specified herein.

Very Truly Yours,

UNION BANK OF CALIFORNIA, N.A.


By:
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        Robert John Vernagallo
        Vice President