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EXHIBIT 4.2
June 26, 2001
Mr. Thomas J. Sauer
Vice President and
Chief Financial Officer
McGrath RentCorp
5700 Las Positas Road
Livermore, CA 94550
Re: $5,000,000.00 Committed Credit Facility
Dear Mr. Sauer:
Union Bank of California, N.A. ("Bank") is pleased to offer McGrath RentCorp, a
California corporation ("Borrower") a committed credit facility ("Facility")
under which the Bank will make advances to the Borrower from time to time up to
and including June 30, 2004, not to exceed at any time the maximum principal
amount of Five Million Dollars ($5,000,000), to be governed by the terms of the
enclosed Credit Line Note ("Credit Line Note") in favor of Bank, and subject to
the conditions and agreements set forth below.
1. This Facility is made available only in connection with Borrower's use of the
Bank's sweep service for management of its checking account balances ("Sweep
Service"). Therefore, this Facility shall commence on the date ("Effective
Date") Borrower becomes a Sweep Service customer and this Facility shall
terminate, if not earlier terminated, on the date Borrower ceases to continue as
a Sweep Service customer. Upon such termination Bank shall have no further
obligation to fund advances under this Facility, and all amounts owing under the
Credit Line Note shall become immediately due and payable.
2. As provided in the Credit Line Note, the occurrence of an Event of Default
under the Multibank Agreement shall be a default under this Facility. The term
"Multibank Agreement" as used herein means that certain Amended and Restated
Credit Agreement dated as of June 28, 2001, by and among Borrower, Bank, First
Union National Bank, Bank of America, National Trust & Savings Association,
Comerica Bank - California, and Wells Fargo Bank, N.A. and shall include any
amendments thereto as are consented to by Bank as set forth herein. Each
capitalized term not otherwise defined herein shall have the meaning set forth
in the Multibank Agreement.
3. Borrower shall comply with, and repeats as if fully set forth herein as of
the date hereof, all of the representations, covenants and obligations of
Borrower set forth under Articles 6, 7, 8 and 11 (and including any definitions
and related provisions) of the Multibank Agreement. In the event the Multibank
Agreement terminates or expires prior to the termination or expiration of this
Facility, the foregoing representations, covenants and obligations of Borrower
shall nevertheless survive as between Borrower and Bank with respect to this
Facility and shall continue in effect until this Facility terminates or expires.
No amendment or waiver of any provision of the Multibank Agreement after the
date hereof shall be effective with respect to this Facility unless the Bank
consents thereto in writing.
4. Borrower acknowledges that any amount outstanding under the Credit Line Note
is included within the definition of "Debt" and "Outside Debt" under the
Agreement.
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McGrath RentCorp
Sweep Service Letter
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5. Borrower shall pay to Bank a non-refundable commitment fee for this Facility
for the period of time during which this Facility is available. Such fee shall
be payable in arrears in quarterly installments on the last day of each March,
June, September, and December, and on the last day this Facility is available,
to be computed at the rate per annum equal to 0.125% on the average unused
amount of the Facility during such period.
6. This Facility letter will be governed by the laws of the State of California.
Enclosed is the original Credit Line Note and a copy of the this Facility letter
together with an Authorization to Pay Proceeds of Note and Loan Disbursement
Instructions, and any other contract, instrument or document Bank requires to be
executed and delivered in connection with this Facility (each a "Loan
Document"). The Borrower's executing the Loan Documents and returning them to
Bank together with an appropriate corporate resolution and incumbency
certificate acceptable to Bank constitutes its agreement to the terms and
conditions of this Facility.
BORROWER AND BANK HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION ARISING UNDER THIS FACILITY LETTER, THE CREDIT LINE
NOTE OR ANY OTHER LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND ANY SUCH
CLAIM, DEMAND ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY. BORROWER OR BANK MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THIS CONSENT OF BORROWER AND
BANK TO WAIVE THEIR RIGHT TO TRIAL BY JURY.
This offer expires on June 28, 2001 unless the executed Loan Documents and the
corporate resolution and incumbency certificate are returned to the Bank by
then. If the Effective Date has not occurred by June 28, 2001 this Facility
letter and the Credit Line Note shall terminate and be of no further force and
effect on such date.
We look forward to continuing to serve you.
Yours truly,
Union Bank of California, N. A.
By: ________________________________
Peter Sitov
Senior Vice President
ACCEPTED AND AGREED:
MCGRATH RENTCORP, a
California Corporation
By: ________________________________
Thomas J. Sauer
Vice President and Chief
Financial Officer
Date: ________________________, 2001
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CREDIT LINE NOTE
======================================================================================================
Borrower Name
MCGRATH RENTCORP., a California corporation
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Borrower Address Office Loan Number
5700 Las Positas Road East Bay Commercial
Livermore, California 94550 Banking _________________
_________________ Amount
Maturity Date $5,000,000
June 30, 2004
======================================================================================================
$5,000,000 Effective as of June 28, 2001
FOR VALUE RECEIVED, on June 30, 2004, the undersigned ("Borrower") promises to
pay to the order of UNION BANK OF CALIFORNIA, N.A. ("Bank"), as indicated below,
the principal sum of FIVE MILLION DOLLARS ($5,000,000), or so much thereof as is
disbursed, together with interest on the balance of such principal sum from time
to time outstanding, at a per annum rate equal to the Reference Rate, such per
annum rate to change as and when the Reference Rate shall change.
As used herein, the term "Reference Rate" shall mean the rate announced by Bank
from time to time at its corporate headquarters as its "Reference Rate." The
Reference Rate is an index rate determined by Bank from time to time as a means
of pricing certain extensions of credit and is neither directly tied to any
external rate of interest or index nor necessarily the lowest rate of interest
charged by Bank at any given time.
All computations of interest under this note shall be made on the basis of a
year of 360 days, for actual days elapsed.
1. PAYMENTS.
1.1 INTEREST PAYMENTS. Borrower shall pay interest on the last day of
each month commencing on the first such date to occur after the first
advance under this note. Should interest not be so paid, it shall become
a part of the principal and thereafter bear interest as herein provided.
1.2 PRINCIPAL PAYMENTS. All principal outstanding on this note is due
and payable on the earlier of June 30, 2004 or any accelerated maturity
date.
Borrower shall pay all amounts due under this note in lawful money of the United
States at Bank's East Bay Commercial Banking Office, or such other office as may
be designated by Bank, from time to time.
2. INTEREST RATE FOLLOWING DEFAULT. In the event of default, at the option
of Bank, and, to the extent permitted by law, interest shall be payable on the
outstanding principal under this note at a per annum rate equal to two percent
(2%) in excess of the interest rate specified in the initial paragraph of this
note, calculated from the date of default until all amounts payable under this
note are paid in full.
3. DEFAULT AND ACCELERATION OF TIME FOR PAYMENT. Default shall include,
but not be limited to, any of the following: (a) the failure of Borrower to make
any payment required under this note when due; (b) any breach misrepresentation
or other default by Borrower, any guarantor, co-maker endorser, or any person or
entity other than Borrower providing security for this note (hereinafter
individually and collectively referred to as the "Obligor") under any security
agreement, guaranty or other agreement between Bank and any Obligor; (c) the
insolvency of any Obligor or the failure of any Obligor generally to pay such
Obligor's debts as such debts become due; (d) the commencement as to any Obligor
of any voluntary or involuntary proceeding under any laws relating to
bankruptcy, insolvency, reorganization, arrangement, debt adjustment or debtor
relief; (e) the assignment by any Obligor for the benefit of such Obligor's
creditors; (f) the appointment, or commencement of any proceedings for the
appointment, of a receiver, trustee custodian or similar official for all or
substantially all of any Obligor's property; (g) the commencement of any
proceeding for the dissolution or liquidation of any Obligor; (h) the
termination of existence or death of any Obligor; (i) the failure of any Obligor
to comply with any order,
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judgment, injunction, decree, writ or demand of any court or other public
authority; (j) the filing or recording against any Obligor, or the property of
any Obligor, of any notice of levy, notice to withhold, or other legal process
for taxes other than property taxes; (k) the default by any Obligor personally
liable for amounts owed hereunder on any obligation concerning the borrowing of
money; (I) the issuance against any Obligor, or the property of any Obligor, of
any writ of attachment, execution, or other judicial lien; (m) the deterioration
of the financial condition of any Obligor which results in Bank deeming itself,
in good faith, insecure; (n) Borrower's failure to comply with any provision of
the Multibank Agreement (as defined in that certain facility letter between
Borrower and Bank dated June 28, 2001 ("Facility Letter"), executed in
connection herewith); or (o) Borrower's failure to comply with any provision of
the Facility Letter. Upon the occurrence of any such default, Bank may declare,
in its discretion, all obligations under this note immediately due and payable;
however, upon the occurrence of an event of default under d, e, f, g, or n all
principal and interest shall automatically become immediately due and payable.
4. ADDITIONAL AGREEMENTS OF BORROWER. If any amounts owing under this note
are not paid when due, Borrower promises to pay all costs and expenses,
including reasonable attorneys' fees, incurred by Bank in the collection or
enforcement of this note. Borrower and any endorsers of this note for the
maximum period of time and the full extent permitted by law (a) waive diligence,
presentment, demand, notice of nonpayment, protest, notice of protest, and
notice of every kind; (b) waive the right to assert the defense of any statute
of limitations to any debt or obligation hereunder; and (c) consent to renewals
and extensions of time for the payment of any amounts due under this note. If
this note is signed by more than one party, the term 'Borrower" includes each of
the undersigned and any successors in interest thereof; all of whose liability
shall be joint and several. The receipt of any check or other item of payment by
Bank, at its option, shall not be considered a payment on account until such
check or other item of payment is honored when presented for payment at the
drawee bank. Bank may delay the credit of such payment based upon Bank's
schedule of funds availability, and interest under this note shall accrue until
the funds are deemed collected. In any action brought under or arising out of
this note, Borrower and any endorser of this note, including their successors
and assigns, hereby consents to the jurisdiction of any competent court within
the State of California, except as provided in any alternative dispute
resolution agreement executed between Borrower and Bank, and consents to service
of process by any means authorized by said state law. The term "Bank" includes,
without limitation, any holder of this note. This note shall be construed in
accordance with and governed by the laws of the State of California.
This note is subject to the terms of the facility letter between Borrower and
Bank executed in connection herewith but in the event of any conflict between
the terms of such facility letter and this note the terms of this note shall
prevail.
MCGRATH RENTCORP, a
California corporation
By: _____________________________
Thomas J. Sauer
Vice President and
Chief Financial Officer
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